Few State Board of Workers’ Compensation Rules (“the Rules”) cause the high level of debate surrounding current Board Rule 205, which addresses preauthorization
Few State Board of Workers’ Compensation Rules (“the Rules”) cause the high level of debate surrounding current Board Rule 205, which addresses preauthorization of medical treatment. The Georgia Supreme Court’s February 7, 2011 grant of certiorari in Selective HR Solutions, Inc. v. Mulligan, 305 Ga. App. 147, 699 S.E.2d 119 (2010) has only heightened the buzz surrounding the future of Rule 205 with regard to preauthorization of medical treatment in non-managed care organization (“non-MCO”) claims. The scope of this article is limited to advance authorization in non-MCO claims.
A brief look at the history of Rule 205 is necessary for a full understanding of the Rule and the implications of the Supreme Court’s grant of certiorari in Mulligan. First and foremost, it is important to recognize that an authorized treating physician (“ATP”) has never been required under Georgia law to obtain preauthorization from an employer/insurer for medical treatment or testing of a worker with a compensable work injury as a condition precedent for payment of services rendered. In practice, however, a growing number of ATPs will not treat injured workers without advance authorization.
Prior to July 1, 1997, there was no provision in the Georgia Workers’ Compensation Act (“the Act”) or the Rules requiring an employer/insurer to respond to an ATP’s request for preauthorization, and as a result, delivery of healthcare to Georgia’s injured workers was anything but expeditious. Consequently, former Rule 205 went into effect July 1, 1997, requiring such a response, which if not verbal, must have been given within thirty (30) days of receipt of a written request for preauthorization. While the enactment of the Rule certainly improved delivery of medical service, it remained far from efficient.
Current Rule 205 went into effect July 1, 2001. Rule 205 (b)(3)(a) mandates that an employer/insurer respond to an ATP’s Form WC-205 request by completing Section 3 of Form WC-205 and faxing or emailing same to the ATP within five (5) business days of receipt of the form from the ATP. Pursuant to subsection (b)(3)(b), if the employer/insurer deny preauthorization in writing within five business days of receipt, they are also required, within twenty-one (21) days of initially receiving the WC-205, to either authorize the requested treatment or test in writing or file a Form WC-3 controverting the treatment or test, indicating the specific grounds for the denial.
There are several consequences of an employer/insurer’s non-compliance with Rule 205’s five-business-day deadline (or an unreasonable denial of preauthorization): 1) assessed attorney fees and costs payable to the claimant’s attorney; 2) civil penalties payable to the Board itself for violation of its own rule; and 3) at the core of the Rule 205 controversy, the employer/insurer’s obligation to pay, “in accordance with the Chapter,” for the requested medical test or treatment, pursuant to Rule 205(b)(4). In Mulligan, the Georgia Court of Appeals found that creation of such a conclusive presumption of liability for medical treatment or testing was clearly outside the scope of the Board’s rule-making authority.
In September, 2005, Maria Mulligan injured her back while working at Selective HR Solutions, received treatment under workers’ compensation, and returned to work in July, 2006. Ms. Mulligan subsequently re-injured her back while at home, and returned to Dr. Banit, her ATP for the 2005 work injury, who recommended lumbar surgery. On October 26, 2007, Dr. Banit submitted a properly completed WC-205 request to the workers’ compensation carrier. On December 7, 2007, the carrier faxed a note to Dr. Banit denying the surgery, and on December 11, 2007, returned the WC-205 denying the surgery to Dr. Banit.
Despite the denial, Dr. Banit performed the surgery several days later. Ms. Mulligan filed a hearing request seeking temporary total disability benefits and payment for her December, 2007 surgery due to the carrier’s non-compliance with Rule 205’s five-business-day deadline.
The Administrative Law Judge (“ALJ”) and Appellate Division determined that Ms. Mulligan was not entitled to income or medical benefits, as she failed to show both a change in condition for the worse and that the surgery was related to her work injury. The Georgia Superior Court affirmed as to Ms. Mulligan’s failure to show a change in condition, reasoning the condition resulted from a subsequent, intervening traumatic injury. However, it reversed the denial of payment for surgery, reasoning that an employer/insurer’s non-compliance with Rule 205’s five-business-day deadline automatically triggered a right to payment for the surgery, regardless of whether the underlying injury was work-related.
The Court of Appeals affirmed the Superior Court’s holding that Ms. Mulligan failed to show a change in condition, but reversed the lower court’s holding that Ms. Mulligan was entitled to have the carrier pay for her surgery. The Court of Appeals found that the Superior Court correctly interpreted Rule 205; however, it emphasized that the State Board is a creature of statute, and as such, its rulemaking authority is limited to procedural and administrative matters. The Board cannot enlarge, reduce or otherwise affect parties’ substantive rights by rule.
The Court of Appeals found Rule 205(b)(4) invalid as substantive rule-making, because it effectively established a conclusive presumption that medical treatment was compensable if the carrier failed to comply with the time deadline. The court noted that Rule 205 must be read in conjunction with O.C.G.A. 34-9-200(a) and Rule 205(b)(1), which limit the employer’s responsibility for medical treatment to that which the claimant proves is related to an “on the job injury.”
Mulligan is significant because it makes clear that an employer/insurer’s failure to comply with Rule 205’s five-business-day deadline does not automatically make them liable for medical treatment unrelated to a claimant’s work injury, but it seems the Court of Appeals reached the right result for the wrong reasons. Both the Superior Court and the Court of Appeals overlooked one significant detail: Rule 205, on its face, does not require an employer/insurer’s payment of unrelated medical treatment based on failure to timely respond to a WC-205. Rule 205(b)(4) states only that medical treatment for which a request for pre-authorization is properly made via WC-205 but which is not denied timely shall be paid “in accordance with the Chapter.” In other words, only treatment within the Act – treatment which the claimant proves is related to an on-the-job injury – must be paid if not timely denied in response to a WC-205.
According to Thomas M. Finn, co-chair of the Medical Committee of the Governor’s Workers’ Compensation Advisory Commission, an entity created by former Governor Roy Barnes that had significant involvement in shaping current Rule 205, subsections (b)(c) and (d) apply only in a claim already deemed compensable for purposes of authorized treatment. The sole purpose of these subsections is to assist the ATP in expediting delivery of statutorily-required medical care while simultaneously discouraging excessive medical treatment – they were not intended to determine the underlying compensability of any part of a claim or to place a burden on the employer/insurer to prove non-compensability.
Claimant’s argue that Mulligan is form over substance. If the Supreme Court affirms the Court of Appeals’ conclusion that the Board engaged in substantive rule-making and so exceeded its authority, then Rule 205(b)(4) is invalid, and an employer/insurer who fail to comply with the time deadline will not be liable for non-work-related medical treatment. Similarly, if the Supreme Court reverses the Court of Appeals, finding that the Board did not engage in substantive rule-making, then Rule 205(b)(4) is valid, but the outcome is the same because pursuant to the text and purpose of Rule 205, an employer/insurer’s failure to comply with the deadline does not make them liable for medical treatment unrelated to a claimant’s work injury.
Although the non-complying employer/insurer prevailed in Mulligan, Rule 205 should not be taken lightly. It is essential that employer/insurers do not overlook the fact that in Mulligan, the Court of Appeals reinforced its prior holding in the first case to reach that court in which a specific attack was made on Rule 205(b)(3)(a), Caremore, Inc./Wooddale Nursing Home v. Hollis, 283 Ga. App. 681, 642 S.E.2d 375 (2007). In that case, the Court of Appeals found the Board does have authority to assess civil penalties and attorney fees against an employer/insurer for failure to timely respond to an ATP’s proper WC-205 request where compensability of treatment is not at issue. Significantly, failure to follow procedure carries negative consequences, and the Supreme Court’s upcoming decision will not alter that fact. Compliance with Rule 205 is crucial to avoid unnecessary expenses.