2011-156. George Miller Construction Inc. and Alaska National Insurance Company Appellants vs. Harborview Medical Center and Lee L. Lawless Appellees.

• Case Date: October 04, 2011
• Court: Alaska

Alaska Workers Compensation Decisions 2011. Workers' Compensation Appeals Commission 2011-156. George Miller Construction Inc. and Alaska National Insurance Company Appellants vs. Harborview Medical Center and Lee L. Lawless Appellees Alaska Workers' Compensation Appeals Commission George Miller Construction, Inc. and Alaska National Insurance Company, Appellants, vs. Harborview Medical Center and Lee L. Lawless, Appellees.Decision No. 156 October 4, 2011AWCAC Appeal No. 10-029 AWCB Decision No. 10-0155 AWCB Case No. 200605810Final Decision Final decision on appeal from Alaska Workers' Compensation Board Decision No. 10-0155, issued at Fairbanks on September 13, 2010, by northern panel members Amanda Eklund, Chair, Jeff Bizzarro, Member for Labor, Sarah Lefebvre, Member for Industry. Appearances: Richard L. Wagg, Russell, Wagg, Gabbert and Budzinski, P.C., for appellants, George Miller Construction, Inc. and Alaska National Insurance Company. Joseph A. Kalamarides, Law Offices of Kalamarides and Lambert, for appellee, Harborview Medical Center. Robert M. Beconovich, The Law Office of Robert M. Beconovich, LLC, filed a Notice of Non-Participation on behalf of appellee, Lee L. Lawless. Commission proceedings: Appeal filed October 4, 2010, with a Motion for Stay of Award; Stipulation for Stay of Award filed November 30, 2010; Order on Stipulation for Stay issued November 30, 2010; briefing completed May 18, 2011; oral argument was waived.Commissioners: David Richards, S. T. Hagedorn, Laurence Keyes, Chair.By: Laurence Keyes, Chair. 1. Introduction. Lee L. Lawless (Lawless) was injured while working for George Miller Construction, Inc. (Miller Construction). When complications developed during his medical treatment, Lawless was transferred to and hospitalized at Harborview Medical Center (Harborview) in King County, Washington. Miller Construction and its workers' compensation carrier, Alaska National Insurance Company (Alaska National), dispute the amount Alaska National owes Harborview for its treatment of Lawless. This appeal requires the commission to interpret and apply a subsection of a statute, AS 23.30.097(a),(fn1) and, if appropriate, interpret and apply a subsection of a regulation adopted by the Alaska Workers' Compensation Board (board), 8 AAC 45.082(i).(fn2) Both the statute and the regulation provide alternatives for limits on permissible fees or charges for medical treatment of injured Alaskan workers. On reviewing the statute, regulation, relevant case law, the board's decision,(fn3) and the parties' briefing, we affirm the board. Harborview is entitled to an additional payment for treating Lawless in the amount of $199,432.91.(fn4) 2. Factual background and proceedings. This appeal presents questions of law; the facts are not at issue. The underlying facts, as found by the board, are:(fn5) 1) On April 19, 2006, [Lawless] was working for [Miller Construction] when he stepped off the back of a truck and injured his left ankle. [Miller Construction] accepted liability for [Lawless's] injury, and provided temporary total disability (TTD) benefits and medical benefits. 2) [Lawless] developed necrotizing fasciitis, a life-threatening complication resulting from his injury, and received extensive medical treatment at Harborview, including left leg and right foot amputation, medication to treat systemic infection, [over] a total of 76 days of inpatient hospitalization. 3) The Alaska Workers' Compensation Medical Fee Schedule (Alaska Fee Schedule) in place at the time of [Lawless's] injury and treatment became effective December 1, 2004. 4) [Lawless] was in intensive care for 20 days and medical/surgical care for 56 days. Per the Alaska Fee Schedule, the medical services provided are assigned a per diem rate of $13,207.50 and $7,586 respectively. Therefore, the cost assigned to the medical treatment [Lawless] received from Harborview, according to the Alaska Fee Schedule, is $688,966.00 (20 days x $13,207.50 + 56 days x $7,586 = $688,966.00), before applying the geography adjustment factor (GAF). 5) It is undisputed Harborview is located in King County, Washington. Applying the GAF for King County from the Alaska Fee Schedule (.926), the medical services provided [Lawless] total $637,982.52 ($688,966.00 x .926 = $637,982.52). 6) Harborview's charge for the services [Lawless] received, when provided to the general public, total $442,201.58. 7) The Hospital Fee Schedule issued by the Washington State Department of Labor and Industries, the applicable fee schedule for workers' compensation claims arising in Washington, states the Percentage of Allowable Charge (POAC) rate for Harborview is 54.9%. 8) After [Lawless's] discharge on August 11, 2006, Harborview submitted an itemized bill to [Alaska National] for $442,201.58. 9) On September 12, 2006, Harborview received payment from [Alaska National] totaling $242,768.67. This amount was calculated by applying the 54.9% POAC designated for injured workers treated at Harborview in the state of Washington to the submitted invoice ($442,201.58 x .549 = [$]242,768.67). 10) The 2009 Ingenix National Fee Analyzer identifies the data used in assigning fee amounts to particular procedures as follows: Ingenix Charge Data

The data used in the National Fee Analyzer is actual provider charge data collected from health insurance payers. This national charge data is aggregated and combined with a relative value and conversion factor methodology. The relative value clinically compares and ranks medical procedures by difficulty, work, risk, and the material costs of these procedures. The conversion factor is the dollar amount developed for each charge by dividing the charge by the code's relative value. Please note that while insurance payers contribute billed charges to the data used in this product, no individual physician or clinic is identified in the data. Additionally, no allowed amounts or insurance company paid amounts are used in the product.(fn6)

11) On June 4, 2009, Chad G., on behalf of Harborview, submitted a "Provider Appeal" to [Alaska National] seeking additional payment beyond the $242,768.67. Harborview asserted it was entitled to payment under the Alaska Fee Schedule, not the Washington Fee Schedule. 12) On June 29, 2009, counsel for [Miller Construction] responded to Harborview, stating its position:

All medical providers, including hospitals, who treat injured workers in the state of Washington, are compensated in accordance with the POAC factor assigned to them. As such, the usual, customary, and reasonable fee for the treatment in the community would be that fee. While the Alaska Fee Schedule might allow for a greater fee amount than that, the Alaska Act specifically provides that it is the lesser fee that is paid.

13) On January 4, 2010, Harborview filed a Workers' Compensation Claim dated December 22, 2009, claiming medical benefits totaling $442,201.58, penalty and interest. 14) On January 22, 2010, [Miller Construction] filed an Answer dated January 20, 2010. [Miller Construction] denied the claim, asserting it had already paid for medical treatment [Lawless] received at Harborview, Harborview is not entitled to payment calculated under the Alaska Fee Schedule, and Harborview had admitted it had...