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Court orders fee determination for $5K compound cream

Posted On: Jan. 17, 2020 12:32 PM CST

compound cream

An employer may be required to reimburse a pharmacy for a nearly $5,000 compound cream prescribed to a worker for his shoulder injury because it failed to seek utilization review.

In Workers’ First Pharmacy Services LLC v. Bureau of Workers Compensation Fee Review Hearing Office, a three-judge panel of the Commonwealth Court of Pennsylvania in Harrisburg unanimously held Thursday to vacate and remand a decision finding that a medical fee review of the compound cream was premature.

On Dec. 18, 2016, an employee of Philadelphia-based Bayada Home Health Care Inc. sustained a shoulder injury and his subsequent workers compensation claim was accepted. His physician prescribed a compound cream containing a nonsteroidal anti-inflammatory drug that he was to apply to the strain two to four times daily. Workers' First Pharmacy Services, based in Haverford, Pennsylvania, dispensed the cream and billed Bayada $4,869. The employer refused to pay the bill on the basis that the “diagnosis” was “inconsistent with the procedure.”

The pharmacy filed a medical fee review application with the Pennsylvania Bureau of Workers Compensation, and Bayada was ordered to pay for the cream plus interest. Bayada appealed, arguing that the cream had never been adjudicated as related to the employee’s work injury and that the fee review was premature. The Bureau’s hearing office found that Bayada denied payment because it did not believe the compound cream was related to the work injury and that fact had to be established either by the employer’s acceptance of the cream or a workers compensation judge, and dismissed the directive to pay.

The pharmacy appealed to the Pennsylvania Commonwealth Court, asserting that a complaint, asserting that the hearing office erred. The court agreed and vacated and remanded the case.

Under the Pennsylvania Workers Compensation Act, employers or insurers must make payments to providers for treatment within 30 days unless there is a dispute as to the reasonableness or necessity of the treatment, in which case the payer may seek utilization review.

The pharmacy argued that Bayada waived its right to challenge the cream as not related to the accepted work injury because it did not seek UR. The court agreed, finding that had the employer sought UR, it would not have been required to pay the pharmacy until UR had been completed. However, because the employer did not challenge the compound cream via the proper channels, the hearing office erred in finding the pharmacy’s fee review petition premature. The court, therefore, vacated the hearing office’s decision and remanded for a fee review determination.