Mitee Enterprises v. Yates

Citations: 865 S.W.2d 654; 1993 Ky. LEXIS 163; 1993 WL 482050Docket: 93-SC-435-WC

Court: Kentucky Supreme Court; November 24, 1993; Kentucky; State Supreme Court

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Claimant Andrew Allen Yates sustained a back injury at work on August 7, 1986, leading to a settlement that included permanent partial disability benefits and the employer's obligation to pay reasonable medical expenses. The employer refused payment for medical bills incurred starting August 8, 1988, prompting Yates to take no action until the employer filed a motion to reopen on March 22, 1989, to contest these bills. At a prehearing conference, the only contested issue was the reasonableness of the medical care provided by Dr. Aaron, particularly the necessity of continuous narcotic injections. The Administrative Law Judge (ALJ) ruled these injections unreasonable and ordered the employer to pay for medical expenses incurred prior to February 22, 1989, as the employer failed to challenge the bills promptly. The ALJ's decision was upheld by the Workers' Compensation Board and the Court of Appeals. Kentucky Revised Statutes (KRS) 342.020 mandates that employers pay for reasonable medical expenses within 30 days of receiving a statement, placing the burden on employers to contest bill reasonableness in a timely manner. An amendment to KRS 342.020(1) enacted on October 26, 1987, aimed to reduce payment delays, which contradict the Workers' Compensation Act's intent for prompt resolution of claims. The precedent set in Phillip Morris v. Poynter emphasized that the employer, not the employee, is the party responsible for disputing the reasonableness of medical bills.

The court determined that without penalties for non-compliance with Westvaco, employers would have no incentive to adhere to the ruling. It concluded that the employer waived its right to contest medical bills by failing to reopen the claim, forcing the worker to compel payment. The 30-day timeframe outlined in KRS 342.020(1) was deemed irrelevant due to the employer's inaction. The court emphasized that employers must object to medical bills within 30 days of receipt to preserve their rights, as established in National Pizza Co. v. Curry. The burden of proof regarding the reasonableness of medical treatment rests with the employer, who must demonstrate that disputed bills were received within the specified timeframe.

The 1992 amendment to KRS 342.020(1) requires medical service providers to submit statements within 45 days of treatment initiation, reinforcing the need for prompt resolution of workers’ compensation claims. The court viewed the amendment as remedial, applying to all medical bills post-effective date, and confirmed that the employer bears the burden of proof regarding the reasonableness and timing of disputed bills. The court rejected the employer's assertion that the 30-day period functions as a statute of limitations. Instead, this interpretation aligns with the legislative intent to hold employers accountable for disputing medical expenses promptly.

In the present case, the employer did not provide evidence of when the disputed bills were received, leading to an inference that many were received over 30 days before the motion to reopen was filed. Although the Administrative Law Judge (ALJ) erred in determining the payment order without establishing the receipt date of the bills, the employer failed to seek reconsideration of these errors. Consequently, the Court of Appeals' decision was affirmed, with one justice concurring in the result only.