UPDATE: Please see summary of Minnesota Supreme Court Decision of August 13, 2014 Reversing and Remanding the decision of the Workers’ Compensation Court of Appeals
On May 24, 2010, the Employee fell while performing his job duties for the Employer. Employer and Insurer admitted that the incident occurred, but denied that the incident substantially contributed to the Employee’s low back condition and medical treatment. On or about November 18, 2010, the Employee filed a Claim Petition alleging entitlement to various workers’ compensation benefits, among them, medical benefits, including a two-level fusion done at Lakeview Hospital on April 20, 2011.
The case went to hearing before Judge Mesna in June 2011. At the time of the hearing, Lakeview Hospital had not been put on notice of its right to intervene. Several other parties had been put on notice, but only MN Laborers Health & Welfare Fund actually intervened in the case. The Health & Welfare Fund had paid for medical expenses related to Employee’s fusion surgery. At the hearing, Judge Mesna found that the work injury was a substantial contributing cause of the Employee’s low back condition and need for the surgery. However, he found that the fusion surgery was not reasonable or necessary.
Medical expenses related to the April 20, 2011 fusion surgery had been paid by the Health & Welfare Fund. Judge Mesna ruled that although the surgery was not reasonable and necessary, the Employer and Insurer were still required to reimburse the Health & Welfare Fund, and he ordered the Employer and Insurer to reimburse the Health & Welfare Fund accordingly. He did not order any of the providers to reimburse the Employer and Insurer, but instead noted in his findings that after the Employer and Insurer reimbursed the Health & Welfare Fund, the Employer and Insurer could then seek reimbursement from the providers who had been paid by the Health & Welfare Fund for treatment that was not reasonable and necessary. The Insurer fully reimbursed the Health & Welfare Fund for the payments it had made toward the Employee’s medical treatment of his work injury.
On December 19, 2011, Lakeview filed a Motion for Rule 1420.1850 Subp. 4 Hearing. It also filed a motion to intervene, but that motion was denied on December 28, 2012 because there were no disputes pending in which Lakeview could intervene. On February 7, 2012, the Employer and Insurer filed a Medical Request seeking reimbursement of medical expenses from Lakeview and other providers. Now that there was a pending dispute, Lakeview filed a second motion to intervene on March 2, 2012. The Medical Request and the Motion for Rule 1420.1850 Subp. 4 Hearing were consolidated.
On September 5, 2012, a second hearing was held before Judge Mesna. Each party made legal arguments regarding the proper procedure to follow in the case, since Judge Mesna had heard the case previously and issued a Findings and Order in which he found that the April 20, 2011 fusion surgery at Lakeview was not reasonable and necessary, but Lakeview had not been put on notice of its right to intervene. Lakeview argued that it should be automatically paid in full, while the Employer, Insurer, and Employee argued that Lakeview should not automatically be paid in full but should instead have an opportunity to present additional evidence regarding the reasonableness and necessity of the April 20, 2011 fusion surgery. After making these arguments, additional testimony was heard. Lakeview called two witnesses.
In his Findings and Order of September 21, 2012, Judge Mesna ruled that Lakeview was not automatically entitled to full payment of its Spaeth claim just because it has not been put on notice prior to the June 7, 2011 hearing. He further ruled that after reevaluating the evidence in the case and considering additional evidence, his finding was still that the April 20, 2011 fusion surgery was not reasonable and necessary. Judge Mesna ordered that Lakeview reimburse the Health & Welfare Fund in the amount of $52,809.36, and that it was not entitled to its Spaeth balance. Lakeview appealed to the Workers’ Compensation Court of Appeals.
On appeal, Lakeview argued that it was entitled to payment in full for its bill for the fusion surgery because they were not given timely notice of their right to intervene prior to the first hearing in June 2011. The W.C.C.A. agreed with Lakeview, and reversed the compensation judge’s decision. The court stated that, where a potential intervenor is excluded from settlement negotiations or other proceedings resulting in a final resolution of the employee’s claim, the potential intervenor is entitled to full reimbursement of its claim. The court cited a bunch of prior cases to support their decision. It is important to note that both the Employee and Employer and Insurer were aware of Lakeview’s interest prior to the hearing. Prior to the hearing in June 2011, the fusion had already been performed and Lakeview had provided the bill to the Employee and the Fund had made payments to them. The Employer and Insurer had reviewed an itemization from the Fund, prior to the hearing, which listed these payments to Lakeview. Although the parties knew of Lakeview’s potential interest, no action was taken to provide notice to Lakeview or protect their interests or to possibly continue the hearing.
The Employer and Insurer argued on appeal that because the compensation judge determined that the surgery was not reasonable or necessary, that Lakeview was not entitled to payment. The Employer and Insurer further argued that Lakeview had an opportunity to present its position at the September 2012 hearing. The W.C.C.A. stated that, in examining whether an intervenor has been precluded from exercising its intervention rights, the ultimately compensability of the treatment is irrelevant and has no bearing on the question of whether the intervenor had in fact been excluded. Despite the second hearing in September 2012, the W.C.C.A. found that Lakeview had already effectively lost at the time of the June 2011 hearing without ever having been given an opportunity to present its interest at the hearing. The court found that an award of full payment to Lakeview is consistent with the policy of protecting an intervenor’s interest.