Thanks for visiting! Welcome to a new way to research case law. You are viewing a free summary from Descrybe.ai. For citation and good law / bad law checking, legal issue analysis, and other advanced tools, explore our Legal Research Toolkit — not free, but close.
Rebel Distributors Corp. v. LUBA Workers' Comp.
Citations: 137 So. 3d 91; 12 La.App. 3 Cir. 909; 2014 La. App. LEXIS 855; 2014 WL 1317609Docket: Nos. 12-909
Court: Louisiana Court of Appeal; April 2, 2014; Louisiana; State Appellate Court
The court, following a remand from the supreme court, addressed unresolved issues from the case Rebel Distributors Corp. Inc. v. LUBA Workers’ Compensation. The court affirmed the workers’ compensation judge's judgment, adopting the facts from prior opinions. It found that a 2007 assignment between Rebel Distributors and Dr. Heard/Clinic violated La.R.S. 23:1205(A)'s anti-assignment clause, and the 2010 agreement intended to retroactively convert this assignment into an agency agreement did not constitute a valid novation due to existing obligations under the original agreement. The court ruled that the WCJ's declaration of the 2007 agreement as null voided any possibility of novation under La.Civ. Code art. 1883, leaving Rebel Distributors without the right to sue. Following this decision, Rebel Distributors sought writs from the supreme court, which reversed the lower court's ruling, determining that the anti-assignment language did not prevent the assignment of healthcare claims to a third party, that a valid novation occurred, and that an agent can be recognized as a healthcare provider under relevant statutes. Rebel Distributors filed a motion to strike several assignments of error from LUBA, arguing that certain assignments were not addressed in LUBA's answer to the appeal and should be dismissed, as well as others that had been resolved against LUBA by the supreme court. Rebel Distributors cited La.Code Civ. P. art. 2133(A), which outlines the conditions under which an appellee must respond to an appeal. An appellee can respond to an appeal by seeking modification or reversal of a judgment related to any relief not considered from an incidental action in the trial court. If the appellee files such a response, other parties to the incidental demand have 15 days to respond similarly. LUBA raised several assignments of error, including the trial court's failure to recognize the employer/insurer's right to select a pharmacy, the existence of an illegal kickback scheme between Rebel and Dr. Heard, and the improper allowance of arbitrary AWP setting by packagers. In its Answer to Appeal, the defendant claimed errors related to the trial court's decision to allow a new trial, deny an Exception of Res Judicata, and regarding the cause of action for worker’s compensation benefits and agency relationships. The appellate court noted that an answer to an appeal only contests specific judgment aspects and found that LUBA's answer did not adequately address the issues in its fifth, seventh, and eighth assignments of error, resulting in a motion to strike these assignments. The court also struck arguments concerning causation against LUBA and the retroactive nature of novation, which had been ruled favorably for Rebel Distributors/Physician Partner by the supreme court. The remaining issues for consideration on remand include Rebel Distributors/Physician Partner's claims regarding the right to pharmacy choice for injured workers, limits on pharmacy bill payments, and the entitlement to penalties and attorney fees against LUBA for unpaid necessary prescription medications. LUBA is addressing two primary issues on remand regarding Rebel Distributors/Physician Partner's appeal. First, Rebel Distributors/Physician Partner contends that the Workers' Compensation Judge (WCJ) erred by denying Ms. Doucet her choice of pharmacy. However, it is determined that the pleadings do not establish a right of action for Rebel Distributors/Physician Partner in this matter, as only Ms. Doucet or her employer/insurer may raise this issue. Ms. Doucet is not a party to the claim, leading to the conclusion that this assignment lacks merit. Second, Rebel Distributors/Physician Partner argues that the WCJ improperly capped the payment for an outstanding pharmacy bill at $750 instead of applying La.R.S. 23:1203, which would allow reimbursement of the actual cost or the cost under the prescribed medication reimbursement schedule. The ruling affirms the application of La.R.S. 23:1142, which regulates nonemergency care and sets the $750 limit without mutual consent from the payor and employee. Additionally, the statute outlines conditions under which healthcare providers can demand payment and sets penalties for violations. Ultimately, this argument is also found to lack merit. Louisiana Revised Statutes Article 23:1203 mandates that employers provide necessary medical care and services for employees injured during employment. This includes drugs, hospital services, and treatments, which can be sourced from out-of-state providers if not reasonably available in-state or if costs are comparable. Employers are obligated to reimburse employees for medical costs based on the average customary charges or the actual charge, whichever is lower, and out-of-state providers must adhere to workers’ compensation utilization review rules. Employers must also cover the cost to repair or replace prosthetic devices damaged in the workplace and reimburse employees for reasonable travel expenses incurred to obtain necessary services, at the state’s mileage reimbursement rate. Additionally, upon the first payment for medical care, payors must inform claimants about independent medical examination procedures for disputes. Payors cannot deny care without documented efforts to communicate this information, and failure to do so may result in fines. The application of these provisions extends to all claims for necessary medical treatment, including prescription medication. La.R.S. 23:1142 is applicable to claims made by health care providers against employers or insurers, classified as 'payors' responsible for medical expenses resulting from work-related injuries. Rebel Distributors/Physician Partner's arguments regarding the Workers' Compensation Judge (WCJ)’s application of this statute to their claims against LUBA lack merit. They contended that the WCJ erred in failing to award penalties and attorney fees due to LUBA's non-payment for medications related to Ms. Doucet's treatment. LUBA maintained that it had the right to designate the pharmacy for medication dispensation and claimed its denial of payment was justified, citing the novel legal issues presented and the reasonable notice given to Rebel Distributors/Physician Partner and Dr. Heard/Clinic. The WCJ denied the claims for penalties and attorney fees based on three reasons: the potential question of whether Rebel Distributors met the definition of a health care provider, the notification from LUBA regarding non-payment which was disregarded by the plaintiff, and the ambiguity surrounding the employer's right to select the pharmacy. The WCJ found no error in denying the claims for penalties and attorney fees, reiterating that under La.R.S. 23:1142, fees and expenses can only be claimed if the payor's withholding of consent was arbitrary and capricious. If a payor denies an employee’s injury as compensable, prior approval for diagnostic testing or treatment is not necessary. Medical benefits must be paid within sixty days of receiving written notice, and failure to do so, or to consent to a physician selection as required, can incur penalties. These penalties include either twelve percent of unpaid compensation or medical benefits, or fifty dollars per day for each day of nonpayment, capped at a total of two thousand dollars per claim. A maximum of eight thousand dollars in penalties can be imposed at a hearing. Penalties and fees awarded at a hearing are res judicata for all related claims prior to that hearing. Nonpayment is excused if the claim is reasonably controverted or due to circumstances beyond the employer’s or insurer’s control. If a healthcare provider wins a claim for payment, they may be awarded penalties and attorney fees directly. A claim is considered "reasonably controverted" if the employer or insurer has valid reasons to deny benefits. The decision to impose penalties and fees is fact-specific and subject to review standards. The court found that LUBA reasonably controverted the claims and upheld the WCJ's decision to deny penalties and attorney fees, rejecting LUBA’s arguments regarding errors in granting a new trial and its exception of res judicata. LUBA contends that the Workers' Compensation Judge (WCJ) erred by signing a second judgment rejecting its exceptions and summary judgment after previously denying a motion for a new trial by Rebel Distributors/Physician Partner. The procedural history surrounding the new trial request is noted as confusing, with insufficient detail on the issues considered by the WCJ during various hearings. The WCJ had initially granted an exception of no right of action to Acadiana/LUBA on July 16, 2010, despite an amendment to the original claim. The WCJ determined that the change in plaintiffs did not rectify the identified defect and permitted Rebel Distributors/Physician Partner a 45-day period to amend the claim, starting from the judgment date of August 12, 2010. Before this period expired, a motion for a new trial was filed, along with a second amendment to the original claim and a subsequent agreement. During a December 15, 2010 hearing, the WCJ addressed all pending matters simultaneously, concluding that the motion for a new trial was denied before considering other issues. The WCJ maintained that neither the distributor nor the packager of pharmaceuticals could pursue the action under Louisiana Workers’ Compensation law as they did not qualify as healthcare providers. Following this ruling, the WCJ allowed the second amendment, retroactively changing the nature of the agreement to one of agency, thereby permitting Rebel Distributors/Physician Partner to act on behalf of the principal, Dr. Heard/Clinic. Consequently, the WCJ rejected LUBA's exceptions and granted the amendment. On February 21, 2011, the WCJ executed a judgment denying the motion for a new trial and granting the motion to file the second amendment. The following day, the WCJ denied LUBA’s motions for summary judgment and exceptions. The court affirmed the WCJ's judgment in all respects, assessing appeal costs equally between the plaintiff and defendants. Chief Judge Thibodeaux dissented in part with written reasons.