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Christus Health Southwest Louisiana v. All About You Home Healthcare, Inc.

Court of Appeals of Louisiana, Third Circuit

December 6, 2017

CHRISTUS HEALTH SOUTHWEST LOUISIANA D/B/A CHRISTUS ST. PATRICK HOSPITAL
v.
ALL ABOUT YOU HOME HEALTHCARE, INC., ET AL.

         APPEAL FROM THE OFFICE OF WORKERS' COMPENSATION - DISTRICT 03 PARISH OF CALCASIEU, NO. 16-04524 DIANNE MARIE MAYO, WORKERS' COMPENSATION JUDGE

          Thomas Allen Filo Cox, Cox, Filo, Camel & Wilson, L.L.C. Plaintiff/Appellee - Christus Health Southwest Louisiana d/b/a Christus St. Patrick Hospital

          Kevin Andrew Marks Melchiode, Defendants/Appellants - Bridgefield Casualty Insurance Company and All About You Home Healthcare, Inc.

          Court composed of Ulysses Gene Thibodeaux, Chief Judge, Billy Howard Ezell, and John E. Conery, Judges.

          ULYSSES GENE THIBODEAUX, CHIEF JUDGE.

         In this workers' compensation dispute, the claimant, Christus Health Southwest Louisiana d/b/a Christus St. Patrick Hospital (Christus), filed a 1008, Disputed Claim for Compensation in the Office of Workers' Compensation (disputed claim) against the employer, All About You Home Healthcare, Inc., and its insurer, Bridgefield Casualty Insurance Company (Defendants), alleging the nonpayment and underpayment of medical charges. Related to this matter is a motion filed by a class of Louisiana hospitals and ambulatory surgery centers, of which Christus is a member, that sought to enforce a class action settlement agreement between the class and FairPay Solutions, Inc. (FairPay), the Defendants' billing review service (settlement agreement).[1] After the trial court granted the motion in favor of the class (enforcement judgment), FairPay appealed to this court.[2] Thereafter, the Defendants filed exceptions of res judicata, lack of subject matter jurisdiction, and nonjoinder of an indispensible party, all of which the WCJ denied. The workers' compensation judge (WCJ) then rendered judgment in favor of Christus on the merits, awarding Christus the unpaid and underpaid amounts due under our Louisiana Workers' Compensation Act (LWCA) as regulated by the Louisiana Reimbursement Schedule (fee schedule), together with penalties and attorney fees. The Defendants now appeal that judgment, and Christus has answered the appeal, seeking an increase in attorney fees for work done on appeal. Finding no error or abuse of discretion in the WCJ's judgment, we affirm the judgment and award Christus $5, 000.00 in fees for work necessitated by this appeal.

         I.

         ISSUES

         The Defendants ask this court to decide:

(1) whether the WCJ legally erred in refusing to recognize the prior confected settlement agreement provisions, which dictate the payment of this medical bill that, if paid according to Christus's claim, was overpaid, and nevertheless held that the Defendants underpaid the medical bill pursuant to the fee schedule, which had no application to the initial determination in this case;
(2) whether it was legal error to find that payment of a medical bill, which was more than Christus contends it was entitled to under the settlement agreement, permitted the imposition of penalties and attorney fees despite no provision in the settlement agreement for penalties and when these defendants acted reasonably;
(3) whether it was legal error to find the Defendants solidarily liable with a non-party for penalties and attorney fees absent a finding of fault on the employer and insurer when the statute clearly states that penalties are only imposed based upon a party's fault;
(4) whether the WCJ legally erred in not dismissing the claim pursuant to the exception of nonjoinder of indispensible party as a necessary party to the litigation, FairPay, was not and could not be made a party to the suit;
(5) whether the WCJ legally erred in denying the Defendants' exception of lack of subject matter jurisdiction as it involves the interpretation of a contract and not a claim arising under the LWCA as was previously determined by this circuit in an earlier companion case, Opelousas General Hospital Authority, 118 So.3d 1269; and
(6) whether the WCJ legally erred in denying the Defendants' exception of res judicata as the claim concerns a matter previously compromised between the same parties in a prior lawsuit?

         II.

         FACTS AND PROCEDURAL HISTORY

         This matter involves the unpaid/underpaid charges for treatment rendered by Christus to Brandi Vital on July 17, 2013, for injuries sustained in an accident that occurred in the course and scope of her employment. Christus submitted a bill to the Defendants for nine separate charges. The three charges at issue herein were coded and billed as follows:

(1) J2360 orphenadrine injection $198.00
(2) J1885 ketorolac tromethamine $8.40
(3) 70450 CT Scan/Brain $2, 076.00.

         The Defendants, in turn, submitted the bill to FairPay. Pursuant to FairPay's recommendations, the Defendants did not reimburse Christus for the J-coded prescriptions at all and only reimbursed $656.13 for the CT scan. The remaining six charges were reimbursed at either the fee schedule rate (90% of billed charges)[3]or at the rate specified by the Future FairPay Pricing Methodology (FFPM) contained in the settlement agreement reached in the class action brought against FairPay.

         In that action, the class sued FairPay under the Louisiana Racketeering Act, asserting that FairPay's recommendations to workers' compensation insurance providers were fraudulently low. Although FairPay denied the allegations, the action was eventually settled on August 17, 2012. Section 11 of the settlement agreement referenced the FFPM, which specifically detailed how FairPay would review and reprice future medical bills submitted by member providers in workers' compensation claims for an agreed-upon target reimbursement rate of 72%:

11.1 In addition to the consideration paid in Section 10 above, the FairPay Settling Parties have agreed to a new Future FairPay Pricing Methodology to be utilized in connection with FairPay's recommendations for payment of Louisiana hospital and ambulatory surgery center outpatient workers' compensation medical bills.
11.2 The new methodology will be considered FairPay's proprietary methodology and will be kept confidential and under seal. . . .
11.3 The Future FairPay Pricing Methodology is designed to reflect the mean of the usual and customary charge as set forth in LSA-R.S. 23:1203(B) and the Class and each Class Member agrees, that for purposes of this settlement only, the Future FairPay Pricing Methodology does yield the mean of the usual and customary charges for workers' compensation outpatient and ambulatory surgery center medical bills in the Class Member's geographic area and satisfies the obligation of the employer to pay for medical treatment under the Louisiana Workers' Compensation Act.
11.4 The Future FairPay Pricing Methodology is anticipated to result in an excepted average reimbursement to the Class of approximately 72% of billed charges for all bills processed by FairPay.

         Paragraph 11.5 of the settlement agreement explicitly provided that if either FairPay or its clients did not correctly utilize the FFPM, then neither would be provided the protections of the settlement agreement:

It is expressly agreed that neither FairPay nor its clients nor other parties directly or indirectly contractually entitled to utilize FairPay's payment recommendations are required to utilize the Future FairPay Pricing Methodology to reprice or pay any bills in the future, provided, however, that none of the protections afforded by this settlement and Agreement (including but not limited to the Release from ...

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