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State high court to decide whether billing agencies are comp ‘providers’

Pennsylvania Supreme Court

The Pennsylvania Supreme Court agreed last week to hear what experts are calling a unique case involving a medical billing agency that is suing workers compensation insurers over nonpayment for prescription medications in injured worker claims.

The case centers around a dispute between Oviedo, Florida-based Elite Care RX LLC, the billing agency, and several comp insurers.

The Pennsylvania Superior Court, an appellate court, in May ruled in Elite Care RX LLC v. Premier Comp Solutions LLC, that the case could be litigated in civil court because the suit contains claims of unjust enrichment, fraud and civil conspiracy. The insurers argued the matter is a dispute over fees and should come before the Pennsylvania Bureau of Workers’ Compensation because of comp exclusivity.

The defendants in the suit are Premier Comp Solutions LLC, Laundry Owners’ Mutual Liability Insurance Association, Lackawanna Casualty Co., BrickStreet Mutual Insurance Co. and UPMC Benefit Management Services Inc., which does business as UPMC Work Partners.

Elite Care RX says it is still owed more than $548,000 and counting for outstanding payments for the prescriptions.  

“For over five years now, these insurers have failed to pay anyone for medications provided,” Aaron Weiss, an attorney with Pittsburgh-based Zimmer Kunz PLLC, who represents Elite Care RX, said in an emailed comment.

Experts say the case is unique, as disputes over comp claims typically come before a comp appeals board and then, if appealed further, the Commonwealth Court, an intermediate appellate court that handles appeals out of the comp system.  

But in this case disagreements arose over whether Elite Care RX, a billing agency, is a “provider” under the comp statute that would make the matter exclusive to comp.

The case highlights the need for the Pennsylvania legislature to step in and clarify statutory language governing who is a comp provider, said Karl P. Voigt IV, a claimants attorney with Bechtelsville, Pennsylvania-based Prince Law Offices P.C.

“There is a real deficit in (Pennsylvania’s) workers comp law,” he said. “Every decade or more, the legislature steps in and makes amendments to the Workers’ Compensation Act, and it’s probably that time because things in general have changed.”

Mr. Weiss said the only reason provided by the insurers for nonpayment was Elite Care RX’s agency status.

“It’s a fascinating case,” said Brian Allen, Salt Lake City-based vice president of government affairs for Enlyte Pharmacy Solutions.

Mr. Allen highlighted past Pennsylvania legislation restricting physician prescription dispensing in comp, and he said this case appears to highlight a possible loophole to circumvent restrictions.

According to the lawsuit, injured workers can choose to have prescriptions filled through home-delivery pharmacy Patient Direct RX, after which medical providers buy back from Patient Direct the claims arising from the prescriptions, giving providers a right to then bill and collect from comp insurers.

Elite Care RX serves as the billing agent for the providers, ensuring their accounts receivable are properly paid.

“So, they (providers) are still making money on the drugs that they prescribe, they’re just not dispensing,” Mr. Allen said.

The question, he said, then becomes, does this process place the matter outside the realm of comp.

“I think that’s an interesting question for the court to answer, and I think that’s why the Supreme Court took it up,” Mr. Allen said.

To Steven Bennett, the answer is obvious: “It is clear that the medical providers’ claims for reimbursement in this proceeding relate to medical services provided pursuant to the laws and procedures of workers compensation,” said Mr. Bennett, Washington-based vice president, workers compensation programs, and counsel for the American Property Casualty Insurance Association.

Any issues related to payments and penalties “must be processed under the applicable workers compensation provisions and are not subject to civil actions,” he said.  

It was not yet clear when oral arguments in the case would be scheduled before the state Supreme Court.