Court overturns denial of medication provider’s petition to strike judgment

The Commonwealth Court of Pennsylvania overturned the denial of a medication provider’s petition to strike a judgment against it, ruling that the provider was not and could not be a party to billing review proceedings in which a judge found it had been overpaid.

The case, Pioneer Construction Co. Inc. v. Insight Pharmaceuticals LLC, arose from Patricia Warnock suffering injuries in 2011 while working for Pioneer Construction Co. Inc.

In 2020, Pioneer filed a billing review petition, asserting that a utilization review had determined that certain compounded pain creams prescribed for Ms. Warnock were neither reasonable nor necessary for treatment after December 2014. Insight Pharmaceuticals LLC had supplied the creams to Ms. Warnock.

Insight submitted bills to Pioneer in October 2018, and Pioneer’s insurer paid Insight $30,767.14 even though it had already settled with Ms. Warnock. When the insurer realized it had made a mistake, it asked Insight for a refund, which Insight refused.

The insurer petitioned for a billing review and to join Insight as a party to the proceedings.

Insight did not respond to the billing review or joinder petitions, but an attorney entered an appearance on its behalf. Counsel argued that the workers compensation judge lacked jurisdiction to order reimbursement because Insight could not be a party to the proceedings and that the Workers’ Compensation Act contains no reimbursement remedy for an insurer that overpays a provider.

The WCJ found that the insurer had overpaid Insight and ordered the company to reimburse the insurer the $30,767.14.

The insurer requested in the trial court that judgment be entered against Insight for $31,242.55, representing the award of $30,767.14 plus $475.41 in statutory interest. Insight filed a petition to open judgment based on the WCJ’s decision.

A trial judge denied Insight’s petition.

The Commonwealth Court of Pennsylvania said that regardless of whether Insight was a named party in the judgment proceeding in the trial court, it received all the notice civil rules require.

The court said Insight’s decision not to appeal from the WCJ’s decision did not preclude its challenge to the judge’s subject matter jurisdiction, since it can be raised as an issue at any time.

The court then said the fee review process only permits providers to challenge underpayments or denials of payment. It does not permit insurers to obtain reimbursement of an overpayment.

The court also said the General Assembly did not include any mechanism in the Workers’ Compensation Act, either expressly or by implication, for the insurer to recoup money it mistakenly paid or overpaid to a pharmacy.

Even though the WCJ had jurisdiction over the underlying utilization review matter, that did not confer jurisdiction relative to the billing review and joinder petitions, the court said.

Because the reimbursement awarded by the WCJ was not contemplated by the act, the court said there was no viable basis for the judge to join Insight as a party to the billing review petition, even as a matter of equity.

Further, because Insight was not and could not be a party to the utilization review and workers compensation proceedings against which the insurer could seek judgment, the trial court erred as a matter of law by not striking the judgment against Insight on that basis, the Commonwealth Court said.

The Commonwealth Court also said the trial court disregarded the plain language of the act by permitting the insurer, an entity against which judgment may be entered, to become an entity requesting that judgment be entered against an entity not statutorily liable.

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