Newport News Shipbuilding & Dry Dock Co. v. Loxley
Opinion of the Court
The Newport News Shipbuilding and Dry Dock Company (“NNS”) appeals from an Order of the United States Department of Labor Benefits Review Board pursuant to Section 21 of the Longshore and Harbor Workers’ Compensation Act, 33 U.S.C.A. § 921 (West 1986) (“the Longshore Act”). Because we find that the Administrative Law Judge’s decision was supported by substantial evidence, we reverse the decision of the Benefits Review Board.
I.
The parties’ dispute arose over payment for medical services which Dr. Loxley rendered to NNS employees. Under the Long-shore Act, workers can select their own doctor; however, the Act limits the Employer’s liability for the ensuing medical charges to the “prevailing rate.”
The issue before the administrative law judge was whether Loxley’s charges were within the prevailing rate limitation pursuant to section 7 of the Act. At the hearing, NNS introduced evidence explaining that it determined the prevailing rate by using figures from its health benefits plan, a plan which was negotiated with the Shipyard Union and covers some 77,000 workers and dependents. Under this plan, NNS agreed to pay the insured medical charges in full if the fee for a specified service, defined by CPT codes,
At the administrative hearing, Loxley tendered his own testimony and that of Dr. Taylor, his expert. Besides admitting that he did not know what he, or other doctors in the area, charged for the disputed CPT codes, Loxley also presented no data which, challenged use of the 80th percentile standard by NNS. Likewise, Dr. Taylor could not give either his charges or an estimate of the prevailing rate for the services at
After hearing all of the evidence, the administrative law judge wrote an extensive opinion concluding that Dr. Loxley's charges exceeded the prevailing rate. He indicated that “the testimony of Drs. Lox-ley and Taylor fell far short of establishing that Dr. Loxley's charges fall within the [prevailing community rate].”
The Benefits Review Board (“the Board”) reversed the administrative law judge’s decision and disregarded his findings of fact. The Board disagreed with the lower court’s determination that Loxley, as the proponent of an order requiring that NNS pay his charges in full, bore the burden of proof on the prevailing rates issue. After holding that NNS carried the burden of proof, the Board further disagreed with the administrative law judge’s statement that, even if the burden fell on NNS, the employer had in fact met its burden. The Board concluded that “the employer’s evidence is wholly insufficient to establish prevailing community charges for the medical services performed by Dr. Loxley.”
II.
According to section 21 of the Longshore Act, the standard of review for an administrative law judge’s decision is whether the record contains sufficient evidence to support the decision. If the evidence meets this standard, the administrative law judge’s findings of fact are “conclusive upon the Board” and “the Board is not free to disregard them or draw other inferences which it thinks may be more reasonable.” Newport News Shipbuilding & Dry Dock Co. v. Director, 681 F.2d 938 (4th Cir. 1982).
Reserving for the moment the issue of which party bore the burden of proof, we will first examine whether the Board exceeded its powers of review by disregarding the administrative law judge’s findings of fact. Contrary to the administrative law judge’s determination that its conclusion would have been the same even if NNS carried the burden of proof, the Board found the employer’s evidence lacking. We do not agree with the Board’s interpretation of the evidence presented at the hearing, and we find that the Board erroneously expanded its scope of review by its independent analysis of the facts.
Contrary to the rule that the administrative law judge’s findings of fact are conclusive upon the Board, the appellate panel nonetheless attacked the conclusion that the process by which NNS determined the prevailing rate was adequate. The Board found the evidence submitted by NNS lacking in several respects. First, the Board found that the data offered by NNS did not “represent a true sample of medical fees charged by physicians practicing in the community.” The record shows, however, that NNS made a broad survey of fees which included at least 46,700 charges submitted by approximately 70 percent of the doctors in the Hampton Roads area. That NNS utilized data from its negotiated health benefits plan is of no consequence. Citing the Act’s provision that the employer shall furnish all medical, surgical, and other related treatment, 33 U.S.C.A. § 907(a) (West 1986), the Board concluded that using the 80th percentile to determine the prevailing rate did not satisfy the Act’s requirements. However, the Board’s analysis neglects provisions in the Act and the regulations that an employer’s obligation for medical charges is limited to the prevailing rate. Id. at § 907(g); 20 C.F.R. § 702.413 (1990).
The Board also found that the survey of fees by NNS was “inherently flawed” because it did not distinguish on
Based on the evidence produced at the hearing,
A series of factors supports this conclusion. First, the CPT codes were designed by the medical profession as a uniform reference to designate medical, surgical and diagnostic services. The codes do not differentiate by specialist. That each code encompasses “same or similar” services is apparent from their very definitions. Furthermore, the Act and regulations discuss comparable treatment; they do not distinguish between medical providers.
We also find improper the Board’s statement that NNS did not submit evidence demonstrating the charges to patients in the relevant geographical area who are covered under any other type of plan. The data used by NNS included over
Because the Act and regulations give no guidance on how to ascertain the prevailing rate, employers must devise their own means of doing so. Absent more definitive directions for determining the prevailing rate, we believe that an administrative law judge’s conclusion that the employer met its burden of defining such a rate should be given great credence by the Board. The evidence submitted at the hearing sufficiently supported the finding of the administrative law judge that NNS sustained its burden of proving the prevailing rates.
III.
The administrative law judge found that Dr. Loxley carried the burden of proving that his rates were within the Act’s prevailing rate limitation. The Board reversed, assigning the burden to the Employer. Because we affirm the conclusion of the administrative law judge that Loxley’s charges exceeded the prevailing rate regardless of who carried the burden of proof, we need not decide on whom the burden falls in disposing of this appeal. However, the parties have properly raised the issue and, finding it in the better interests of the parties to resolve the matter, we hold that a physician who seeks an order compelling full payment of his charges carries the burden of proof at the administrative hearing.
The regulations under the Act provide as follows: If an employer refuses fully to compensate a physician for medical care provided under the Act, the physician can request the Director of the Office of Workers’ Compensation Programs (“the Director”) to investigate the unpaid charges. 20 C.F.R. §§ 702.407(b), 702.414(a) (1990). Upon such investigation, the Director makes a finding on “whether the fee exceeded the prevailing community charges or the provider’s customary charges” and advises the parties of his decision. Id. at § 702.414(c). If a party disputes this finding, it has a right to request an administrative hearing pursuant to 5 U.S.C. § 556. Id. at § 702.415. The necessary parties at such a hearing include “the person whose fee or cost charge is in question and the Director, or their representatives. The employer or carrier may also be represented ... in the discretion of the administrative law judge.” Id. at § 702.416.
Neither Section 7 of the Act nor the regulations assign the burden of proof at the administrative hearing. However, for the following reasons we find that the burden is on the physician claiming that his charges are within the prevailing community rates. As the Board properly noted, under section 702.415 a party may request an administrative hearing pursuant to 5 U.S.C. § 556. Therefore, subsection (d) of that provision, which states “Except as otherwise provided by statute, the proponent of a rule or order has the burden of proof”, is applicable. This placing of the burden of proof is consistent with the traditional common law rule, noted by the administrative law judge, that the proponent — the one who seeks to establish the affirmative of an issue — carries the burden of proof. Selma, Rome & C. Railroad v. United States, 139 U.S. 560, 567, 11 S.Ct. 638, 640, 35 L.Ed. 266 (1891); Fleming v. Harrison, 162 F.2d 789, 792 (8th Cir. 1947).
Although the Board identified the proper rule regarding the burden of proof,
The regulations which govern the administrative hearing before the administrative law judge also support these conclusions. Section 702.416, a provision which the Board did not address in reaching its conclusion, states that “[a]t formal hearings held pursuant to § 702.415, the necessary parties shall be the person whose fee or cost charge is in question and the Director, or their representatives.” The language of this regulation gives credence to our conclusion that one of the “necessary parties” must bear the burden of proof, and that language identifies a “necessary” party as “the person whose fee or cost charge is in question.” Whether the burden is assigned to “the Director” or to the “person whose fee or cost charge is in question” under the portion of the regulations, it is a reasonable conclusion that such burden is not assigned to one in the position of NNS.
In making this conclusion as to the burden of proof, we do not purport to determine how a physician should or could sustain this burden at an administrative hearing. In the context of the record before us, however, we find that Loxley did not offer sufficient evidence to prove that his charges fell within the prevailing rate. As previously discussed, Loxley offered little if any useful information as to what constitutes the prevailing rate. At the hearing, he did not offer any evidence attacking the methodology used by NNS. Although Taylor testified that he thought the resulting prevailing rates were low, when asked whether he “had a particular problem” with the use of the 80th percentile, he responded, “I don’t, personally, and I don’t think the peer review group has any problem with that.” Taylor commented that NNS should inform physicians in the area of its practice in determining the prevailing rate, but he testified that he could not dispute the documentation underlying NNS’s statistical analysis. At the hearing, counsel for Loxley was willing to stipulate that “Dr. Loxley has not made an exhaustive statistical analysis, and I further stipulate that it would be illegal for him to do so.” The only testimony Loxley and Taylor submitted against the NNS determinations of the prevailing rate was their respective comments, unsupported by any evidence, that Loxley’s fees were fair.
Upon hearing the testimony and examining the evidence, the administrative law judge was not persuaded by Loxley’s attempt to show that his rates were within those that prevailed in the community. We find that the record contained sufficient evidence to support the findings of fact of the. administrative law judge which thus became “conclusive upon the Board.” The Board erred in disregarding these findings of fact.
For the reasons indicated, the judgment of the Board is
REVERSED.
. The Act limits fees payable "to such charges as prevail in the community for such treatment.” 33 U.S.C.A. § 907(g) (West 1986). Under the governing regulation, such charges "shall not exceed the customary charges of the medical care provider for the same or similar services.” 20 C.F.R. § 702.413 (1990).
. The services at issue are coded according to the Current Procedural Terminology (CPT), a uniform coding used in "identifying, describing, and coding medical, surgical, and diagnostic services performed by practicing physicians.” A.M.A. Physicians' Current Procedural Terminology at iii (4th ed. 1986). The coding system is "the most widely accepted nomenclature for the reporting of physician procedures and services under government and private health insurance programs.” Id.
.Using charges for specific CPT codes which were submitted under its health benefits plan during the previous year, NNS calculated the amount below which 80 percent of the charges fell. NNS reimbursed in full only those fees at or below the 80th percentile.
. The evidence on this point included Taylor’s testimony that orthopedic surgeons’ charges differ from those of other specialists or primary care physicians for the services that fall within the same CPT codes, and documents submitted by NNS showing that other carriers, such as Blue Cross Blue Shield, do not differentiate by specialists.
. For the purposes of the hearing, NNS conducted a survey of fees submitted only by “specialists” to its health care plan. NNS defined "specialists” by selecting names listed under "orthopedic surgeons” in the yellow pages. The results of this survey indicated that the rate at the 80th percentile for the specialists charges was below the same rate calculated with respect to all fees submitted in two of the three CPT codes at issue.
We do not base our conclusion that differentiation by specialty is not mandated by the Act on the results of this second survey by NNS. The Board disregarded the survey, stating that it was insufficient because it was limited to those charges submitted to the NNS health benefit plan. We simply find that the results of the survey are immaterial as the nature of the services performed, not’ the status of the medical care provider, are relevant in determining the prevailing rate under the Act.
. See 33 U.S.C.A. § 907(g) (West 1986) (“All fees ... shall be limited to such charges as prevail in the community for such treatment....”); 20 C.F.R. § 702.413 (1990) (“All fees ... shall be limited to such charges for the same or similar care (including supplies) as prevail in the community ... and shall not exceed the customary charges of the medical care provider for the same or similar services.”); and 20 C.F.R. § 702.414 (1990) (discussing "similar treatment”).
. At the hearing, Taylor indicated the difficulty in defining "specialist.” Although he indicated that one determining factor would be whether a physician was "Board-certified” or "Boardeligi-ble," he stated that if he had to determine who in the area was "Board-eligible,” he would "Simply go around and talk to people.” The burdensome task of defining "specialist" is, moreover, unnecessary, given the fact that the CPT code system allows for the use of modifiers which help to distinguish a type of medical care. By using a modifier, a physician can indicate that a particular service was altered in some respect even though its code number was not changed. See A.M.A. Physicians’ Current Procedural Terminology at xi-xiii (4th ed. 1986).
. Use of the prior year’s rates does not account for the effects of inflation or other factors which might increase fees. However, as the administrative law judge noted, Blue Cross Blue Shield also uses rates from the previous year, in what is the most practicable way to establish such rates. Trying to do so on a monthly, or other short-term, basis could well not produce enough billing to constitute a valid sample.
Dissenting Opinion
dissenting:
I respectfully dissent.
I would affirm on the opinion of the Benefits Review Board, which I find it difficult to improve upon.
First. The setting of this case is that Newport News, the employer, refused to make payment in full for bills submitted in 1985 for treatment of work-related injuries sustained by ten of its employees.
Second. As a result of this non-payment, Dr. Loxley complained to Deputy Commissioner B.A. Voultsides, who initiated an investigation on the unpaid charges. In the course of his investigation, the Deputy Commissioner requested the opinion of Dr. Jervis S. Taylor, an ortho-paedic surgeon and Chairman of the Medical Peer Review Committee of the Eastern Virginia Area, as to the appropriateness of the fees charged by Dr. Loxley. Dr. Taylor’s response to the Deputy Commissioner was that he was of the opinion that the charges were low or low/normal. The Deputy Commissioner subsequently advised Newport News that he found Dr. Loxley’s charges to be appropriate as reasonable charges in the community where he practices and recommended that payment be made in full.
Third. Newport News then requested a hearing challenging the Deputy Commissioner’s determination that the fees charged did not exceed the prevailing community rate.
Fourth. Thus, Newport News was the moving party in this case and properly assigned the burden of proof under 5 U.S.C. § 556(d), which provides in pertinent part that “the proponent of a rule or order has the burden of proof.” Since Newport News is the proponent of an order deciding that the Deputy Commissioner's ruling was in error, it is at once apparent to me that it had the burden of proof and that the Benefits Review Board properly assigned the burden to Newport News.
Fifth. Newport News and the Steel Workers Union agreed by contract that the employer would only pay the prevailing rate for physicians’ fees, which the contract defined as the 80th percentile of those fees. But Newport News used a data base of all physicians’ fees, not physicians’ fees of orthopaedic surgeons, of which specialty Dr. Loxley was a member. Thus, the fees which Newport News was willing to pay to Dr. Loxley for medical care, I think, were patently in violation of 33 U.S.C. § 907(g), which provides that such charges are limited “to such charges as prevailing in the community for such treatment,” and 20 C.F.R. § 702.413, which provides that the physician’s fees “shall not exceed the customary charges of the medical care provider for the same or similar services.”
While it is true that under § 907(g) a physician's charges are subject to regulation by the Secretary, it is not true that physicians’ charges are subject to regulation by Newport News and the employees’ union. The Secretary has not regulated the same. Indeed, it does not require any stretching to find that the decision of the Deputy Commissioner, that Dr. Loxley’s fees met statutory and regulatory requirements, is an administrative action presumed to be regular and not subject to overturning except for the most extraordinary reasons not present here.
I have attached a copy of the decision of the Benefits Review Board to this opinion and subscribe to it.
APPENDIX
U.S. DEPARTMENT OF LABOR
Benefits Review Board
1111 20th Street, N.W.
Washington, D.C. 20036
PUBLISHED
BRB No. 87-1666
Dr. Sidney S. Loxley and Dr. Lawrence D. Bourgard Health Care Providers-Petitioners v. Newport News Shipbuilding and Dry Dock Company Self-Insured Employer-Respondent
DECISION AND ORDER
Appeal of the Decision and Order of John C. Bradley, Administrative Law Judge, United States Department of Labor.
PER CURIAM:
Dr. Sidney S. Loxley and Dr. Lawrence D. Bourgard appeal the Decision and Order (86-LHC-1235; 86-LHC-1232; 86-LHC-1227; 86-LHC-1233; 84-LHC-1644; 85-LHC-1760; 86-LHC-1229; 86-LHC-789; 86-LHC-1234; 86-LHC-1248) of Administrative Law Judge John C. Bradley rendered pursuant to the provisions of the Longshore and Harbor Workers’ Compensation Act, as amended, 33 U.S.C. § 901 et seq. (the Act). Pursuant to the Board’s Order dated August 31, 1989, oral argument was held in Norfolk, Virginia, on October 11, 1989.
The sole issue on appeal is whether the administrative law judge properly determined that the fees charged by Dr. Loxley and his associate Dr. Bourgard (hereinafter, collectively referred to as Dr. Lox-ley), orthopedic surgeons who rendered medical service to injured employees pursuant to the Act, exceed the prevailing community charges for the same or similar services in violation of the Act. See 33 U.S.C. § 907(b), (g) (Supp. V 19867); 20 C.F.R. §§ 702.413-702.417. We must affirm the findings and conclusions of the administrative law judge which are rational, supported by substantial evidence, and in accordance with law. 33 U.S.C. § 921(b)(3); O’Keeffe v. Smith, Hinchman & Grylls Associates, Inc., 380 U.S. 359, 85 S.Ct. 1012, 13 L.Ed.2d 895 (1965).
The instant appeal arises from a dispute concerning charges for medical services rendered by Dr. Loxley to injured employees pursuant to Section 7 of the Act, 33 U.S.C. § 907.
CPT Code Description of Service
90060 Office Services, Established Patient, intermediate.
90070 Office Services, Established Patient, extended.
90220 Initial Hospital Care, Comprehensive history and examination, initiation of diagnostic and treatment programs, and preparation of hospital records.
Rather than paying Dr. Loxley’s charges in full, employer paid Dr. Loxley only what it determined to be the prevailing; rate for such services. In making its determination as to what was an appropriate prevailing community charge, employer adopted medical fee data from its self-insured health benefit plan for its employees and their dependents. Under its health benefit plan, employer pays only the prevailing rate, defined as the 80th percentile, or the level at which 80 percent of the medical charges received by the insurance plan for a particular service are below. In extending its self-insured health benefit plan’s prevailing rate limitation to medical charges in compensation claims, employer utilized survey data on the fees charged in 1984 by physicians in the community for the three relevant CPT Codes in insurance claims submitted to employer’s health benefit plan. Employer’s data base does not distinguish among physicians on the basis of medical specialty; thus, the 80th percentile prevailing rate is based on charges submitted by all physicians across the board and is not confined to charges submitted by only
After being advised that employer would not make payment in full, Dr. Loxley contacted Deputy Commissioner B.E. Voult-sides, who initiated an investigation of the unpaid medical charges. See 20 C.F.R. §§ 702.407, 702.414(a). In the course of his investigation, the deputy commissioner requested the opinion of Dr. Gervas S. Taylor, an orthopedic surgeon and chairman of the Medical Peer Review Committee for the Eastern Virginia Area, as to the appropriateness of the fees charged by Dr. Loxley. Dr. Taylor responded that each of the charges was normal or low/normal. The deputy commissioner subsequently advised employer that he found Dr. Loxley’s charges to be appropriate as reasonable charges in the community where he practices and recommended that payment be made in full. See 20 C.F.R. § 702.414(c).
Employer requested a hearing, challenging the deputy commissioner’s determination that the fees charged do not exceed the prevailing community rate. See 20 C.F.R. § 702.415. Subsequent to the referral for hearing, employer compiled additional fee data in an attempt to extract charges by orthopedic surgeons for the relevant CPT Codes. After an unsuccessful attempt to obtain a list of Board-certified and Board-eligible orthopedic specialists from local medical societies, employer relied on the listing of orthopedic surgeons in the Peninsula and Norfolk telephone directory yellow pages. Employer isolated the fee data on these orthopedic surgeons contained in its original data base of physicians who had submitted bills under employer’s health benefit plan for services described in the relevant CPT Codes,
In his Decision and Order issued May 27, 1987, the administrative law judge noted that fees for medical care rendered under the Act must meet a dual standard, in that they “shall be limited to such charges for the same or similar care ... as prevails in the community in which the medical care provider is located” and “shall not exceed the customary charges of the medical care provider for the same or similar services.” See 20 C.F.R. § 702.413.
On appeal, Dr. Loxley contends that employer’s definition of prevailing community charges is arbitrary and constitutes an unauthorized and illegal mandatory fee schedule; that the administrative law judge erroneously found that Dr. Loxley bears the burden of proof as to whether a medical charge exceeds the prevailing community charge; that the administrative law judge’s finding that Dr. Loxley’s charges exceed prevailing community rates is not - supported by substantial evidence; and that the administrative law judge erroneously found it unnecessary to distinguish between fees charged by orthopedic surgeons and fees charged by other physicians in determining prevailing community rates. Employer responds that the administrative law judge’s Decision and Order should be affirmed.
The relevant provisions of the Act are as follows:
SEC.7 (a) The employer shall furnish such medical, surgical, and other attendance or treatment, nurse and hospital service, medicine, crutches, and apparatus, for such period as the nature of the injury or the process of recovery may require.
(b) The employee shall have the right to choose an attending physician authorized*522 by the Secretary to provide medical care under this Act as hereinafter provided.
The Secretary shall actively supervise the medical care rendered to injured employees, * * * and may, on his own initiative or at the request of the employer, order a change of physicians or hospitals when in his judgment such change is desirable or necessary in the interest of the employee or where the charges exceed those prevailing within the community for the same or similar services or exceed the provider’s customary charges. * * # * * *
(g) All fees and other charges for medical examinations, treatment or service shall be limited to such charges as prevail in the community for such treatment, and shall be subject to regulation by the Secretary. The Secretary shall issue regulations limiting the nature and extent of medical expenses chargeable against the employer without authorization by the employer or the Secretary.
33 U.S.C. § 907(a), (b), (g) (Supp. V 1987). The pertinent regulation provides:
All fees charged by medical care providers for persons covered by this Act shall be limited to such charges for the same or similar care (including supplies) as prevails in the community in which the medical care provider is located and shall not exceed the customary charges of the medical care provider for the same or similar services. Official state medical fee schedules for workers’ compensation charges may be used as guidelines in determining the prevailing community rate where available and to the extent appropriate. The opinion of the OWCP district medical director that a charge by a medical care provider disputed under the provisions of § 702.414 exceeds the charge which prevails in the community in which said medical care provider is located shall constitute sufficient evidence to warrant further proceedings pursuant to § 702.414 and to permit the Director to direct the claimant to select another medical provider for care to the claimant.
20 C.F.R. § 702.413.
Proceedings concerning medical fees are initiated by the complaint of an interested party that a medical charge appears to exceed prevailing community charges for similar services, which is filed with the Director, Office of Workers’ Compensation Programs (the Director), or upon the Director’s own initiative. The Director is granted the authority to conduct an investigation and to make specific findings as to whether the disputed fee exceeds the prevailing community charges or the provider’s customary charges. 20 C.F.R. § 702.414. Section 702.415 of the Act’s regulations provides that, following issuance of the Director’s findings and proposed action, any interested party has the right to a hearing to be conducted in accordance with 5 U.S.C. § 556 and with the procedures pertaining to adjudication of compensation claims found at 20 C.F.R. Part 702, Subpart C. See also 20 C.F.R. §§ 702.416, 702.417.
As a threshold matter, we hold that the administrative law judge erroneously placed the burden of proof on Dr. Loxley to establish that his fees do not exceed the prevailing community charges. While Section 7 of the Act does not directly address the question of the burden of proof in fee disputes, Section 702.415 of the regulations, 20 C.F.R. § 702.415, provides for the right to a hearing pursuant to 5 U.S.C. § 556. Thus, our disposition of the burden of proof issue under Section 7 and the applicable regulations must be consistent with 5 U.S.C. § 556(d), which provides, in pertinent part, that “[ejxcept as otherwise provided by statute, the proponent of a rule
We further hold that employer has failed to sustain its burden of proving that Dr. Loxley’s fees exceed the prevailing community rate, inasmuch as employer’s evidence is wholly insufficient to establish prevailing community charges for the medical services performed by Dr. Loxley. Employer’s approach to defining prevailing community charges is vulnerable to attack on a number of grounds. First, employer has provided no evidence that the medical fee data relied upon by employer represent a true sample of the medical fees charged by physicians practicing in the community since the charges used in employer’s data base were compiled exclusively from medical bills submitted under employer’s selfin-sured health benefit plan, a contractually negotiated plan between employer and the United Steel Workers, the employee’s union bargaining agent. According to the agreement, employer would pay only those charges below the 80th percentile of all billings. Indeed, the administrative law judge recognized that the fees reflected in employer’s sample would be distorted in employer’s favor if physicians limited the charges submitted to employer’s health benefit plan to the maximum 80th percentile level employer would pay.
It is interesting, as noted by the administrative law judge, that the purpose of setting a percentile by a health care provider, whether 75, 80, or 90, was to set the portion of a charge that the provider would pay, with liability to pay the balance on the patient. Decision and Order at 6,17; Transcript of the Hearing at 111, 113, 128. This, of course, is a proper subject for negotiation between a health care provider and a union for the payment of charges under a health benefit plan. It is not applicable, however, under a workers’ compensation system such as the Longshore Act which provides that the employer shall furnish all medical, surgical, and other related treatment. 33 U.S.C. § 907(a). Also, as noted by Dr. Loxley on appeal, employer’s use of 1984 as a base year for 1985 billings fails to account for any intervening fee increases brought about by inflation or otherwise affecting the prevailing community rates for 1985.
Second, employer’s initial survey of fees charged to its health benefit plan fails to distinguish on the basis of medical specialization and, thus, is inherently flawed as a method of determining prevailing community charges. The Act and its regulations provide that medical fees shall be limited to prevailing community charges for “the same or similar” care. See 33 U.S.C. § 907(b), (g) (Supp. V 1987); 20 C.F.R. §§ 702.413, 702.414. Employer thus bears the burden of proving that fee data relied upon to establish the prevailing community rates are limited to charges for services which are, in fact, the same as or similar to those services rendered by Dr. Loxley. In the case at bar, employer merely compared Dr. Loxley’s charges for the services codified by CPT Codes 90060, 90070 and 90220 with charges made by all physicians in the data base for services classified according to the same three broad CPT Codes, without presenting any evidence that services performed by these other physicians, in fact, constituted the same or similar care
Accordingly, the Decision and Order of the administrative law judge is reversed.
SO ORDERED.
/s/ James F. Brown
JAMES F. BROWN
Administrative Appeals Judge
/s/ Nancy S. Polder
NANCY S. DOLDER
Administrative Appeals Judge
/s/ Regina C. McGranery
regina c. McGranery
Administrative Appeals Judge
Dated this 28th day of February 1990.
. The parties stipulated that Dr. Loxley did, in fact, perform the services for which charges were submitted and that the medical services rendered were for work-related injuries.
.Dr. Loxley's charges and payment received are as follows:
CPT Code Dr. Loxley’s Charge Employer’s Payment
90060 $ 38.50 ; 25.00
90070 52.00 35.00
90220 122.00 110.00
.Employer's data base includes approximately 1,700 physicians. The survey includes 38,792 charges for CPT Code 90060, 4,834 charges for CPT Code 90070, and 3,097 charges for CPT Code 90220.
.The subsequent survey of orthopedic surgeons contains 520 charges for CPT Code 90060, 650 charges for CPT Code 90070, and 74 charges for CPT Code 90220.
. Employer's fee data on orthopedic surgeons are as follows:
Dr. Loxley's Amount Paid CPT Code Charge by Employer Fees 80th Percentile-Orthopedic Surgeons
90060 I 38.50 $ 25.00 $ 30.00
90070 52.00 35.00 30.00
90220 122.00 110.00 100.00
. It is noted that the administrative law judge in the instant case found that Dr. Loxley's charges exceeded the prevailing community rate, the first prong of the standard, not that they exceeded his customary charges, the second prong. Employer does not contend on appeal that the administrative law judge also should have found that Dr. Loxley’s charges exceeded his customary charges.
. The definition of "community" applied by the administrative law judge is not challenged by Dr. Loxley on appeal.
. Dr. Loxley, in his reply brief, contends that the statement of facts contained in employer’s response brief misrepresents Dr. Taylor’s hearing testimony. We agree. First, Dr. Loxley correctly asserts that, contrary to employer's contention that Dr. Taylor changed his opinion as to the charge for an intermediate office visit, the record is clear that the confusion over this charge was due to an error on the part of the deputy commissioner. Next, as pointed out by Dr. Loxley, employer’s conclusion that Dr. Taylor was of the opinion that physicians’ charges should be the same irrespective of their medical specialty is wholly unsupported by the testimony of Dr. Taylor cited by employer. Finally, as Dr. Loxley correctly maintains, Dr. Taylor’s testimony that he could not dispute the documentation underlying employer’s statistical analysis but that employer’s figures seem extremely low does not support employer’s conclusion that Dr. Taylor was in agreement with employer’s method of statistical analysis.
. It is noted that 20 C.F.R. § 702.413 provides that official state medical fee schedules for workers’ compensation charges may be used as guidelines in determining the prevailing community rate. Section 702.413 additionally provides for the issuance of opinions of the OWCP district medical director whether charges exceed the prevailing charges in the community. The parties agreed at oral argument that Virginia law has no medical fee schedule and that no opinion was rendered by the OWCP district medical director.
. The increase in the cost of medical care in 1984 was 6.4 percent and in 1985 was 6.1 percent. Consumer Price Index (CPI-U) Medical Care, U.S. Department of Labor, Bureau of Labor Statistics,
Reference
- Full Case Name
- NEWPORT NEWS SHIPBUILDING AND DRY DOCK COMPANY v. Dr. Sidney S. LOXLEY, Dr. Lawrence D. Bourgard, Director, Office of Workers' Compensation Programs, United States Department of Labor
- Cited By
- 9 cases
- Status
- Published