18-003845 Lakeland Regional Health Systems, Inc. vs. Department Of Financial Services, Division Of Workers' Compensation Status: Closed Recommended Order on Monday, November 26, 2018.

Summary: Petitions for reimbursement dispute resolution were not timely filed. Equitable tolling defense not proven to excuse the late-filed petitions. Recommend dismissal.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

LAKELAND REGIONAL HEALTH

SYSTEMS, INC.,

Petitioner,

vs. Case No. 18 - 3845

DEPARTMENT OF FINANCIAL

SERVICES, DIVISION OF WORKERS'

COMPENSATION,

Respondent.

_______________________________/

LAKELAND REGIONAL MEDICAL

CENTER, INC.,

Petitioner,

vs. Case No. 18 - 3846

DEPARTMENT OF FINANCIAL

SERVICES, DIVISION OF WORKERS'

COMPENSATION,

Respondent.

_______________________________/

RECOMMENDED ORDER

On October 2, 2018, a disputed - fact evidentiary hearing was

held in these consolidated cases by video teleconference in

Tallahassee and Lakeland, Florida, before Elizabeth W. McArthur,

Administrative Law Judge of the Division of Administrative

Hearings.

APPEARANCES

For Petit ioner: Matthew James Vaughn, Esquire

Peterson & Myers, P.A.

Post Office Box 24628

Lakeland, Florida 33802

For Respondent: Thomas Nemecek, Esquire

Department of Financial Services

Division of WorkersÓ Compensation

200 East Gaines Street

Tallahassee, Florida 32399

Kyle Christopher, Esquire

Department of Financial Services

Hartman Build ing

2012 Capital Circle Southeast

Tallahassee, Florida 32399

STATEMENT OF THE ISSUE S

The issues in these cases are whether two Petitions for

Resolution of Reimbursement Dispute (Petitions) , filed pursuant

to section 440. 13(7), Florida Statutes (2018), 1/ were untimely ;

and, if so, whether the untimeliness should be excused under the

equitable tolling defense asserted by Petitioners.

PRELIMINARY STATEMENT

Petitioners, Lakeland Regional Health Systems, Inc. (LRHS),

and Lakel and Regional Medical Center, Inc. (LRMC) (collectively,

Petitioners), through counsel, filed separate Petitions with the

Department of Financial Services, Division of WorkersÓ

Compensation (Respondent or Department), on May 4, 2018. In

separate notices, t he Department informed Petitioners that it was

dismissing the Petitions because they were untimely. The notices

advised Petitioners of their right to request an administrative

hearing to contest the proposed dismissals. Timely hearing

requests were filed , by LRHS on May 29, 2018, and by LRMC on

June 15, 2018. For reasons not evident in the record, the cases

were not transferred to the Division of Administrative Hearings

until July 20, 2018. The cases were assigned to the undersigned,

consolidated on Re spondentÓs agreed motion, and set for hearing.

Prior to the hearing, the parties filed a Joint Pre - hearing

Stipulation in which they agreed to several facts that would not

require proof at hearing. The agreed facts are incorporated into

the findings below to the extent relevant.

At hearing, Petitioners presented the testimony of one

witness, Gina Cobb. PetitionersÓ Exhibits 1 through 4 were

admitted in evidence, with limitations on the use of Exhibit 1

because of imbedded hearsay within the business recor d, as

discussed at hearing. See § 120.57(1)(c), Fla. Stat.; Fla.

Admin. Code R. 28 - 106.213(3); and see, e.g. , Reichenberg v.

Davis , 846 So. 2d 1233, 1234 (Fla. 5th DCA 2003) (witness

statements contained within an agencyÓs business records do not

fall wit hin the business records exception because they were not

based upon the personal knowledge of an agent of the ÐbusinessÑ).

Respondent presented the testimony of Arlene Cotton.

RespondentÓs Exhibits 1 through 4 were admitted.

The exhibits offered at hearin g contained unredacted

confidential information. After the hearing, the exhibits were

given to counsel for Respondent, with instructions to determine

necessary redaction with counsel for Petitioners, redact the

exhibits as agreed, and return them. This t ask was accomplished.

On October 5, 2018, Respondent filed a Notice of Filing Redaction

Log, and submitted a redacted set of the exhibits along with the

unredacted exhibits. The unredacted exhibits are in a sealed

envelope labelled as confidential, with access restricted to

parties and tribunals for this proceeding and any appeal.

Since the redaction task did not include adding any exhibits

not admitted at hearing, the evidentiary record was closed at the

end of the hearing on October 2, 2018. See Tr. at 118. Despite

the closure of the record, the next day Petitioners filed a

ÐNotice of Proffer,Ñ proffering one fax and two letters, which

had been offered into evidence at hearing, but not admitted.

Petitioners should have proffered the exhibits at the ti me they

were not admitted, but did not. Petitioners only requested to

make a proffer of testimony at hearing, which was permitted, but

which did not include any proffer of documents. S ee Tr. at

55 - 57. Nonetheless, Respondent did not file an objection t o the

Notice of Proffer. PetitionersÓ late - proffered Exhibits A and B

are accepted as proffers in the record pursuant to section

120.57(1)(f) , Florida Statutes . They are not made part of the

evidentiary record for the reasons stated at hearing. 2/

The on e - volume Transcript of the final hearing (which

includes the proffer that is not part of the hearing testimony,

Tr. at 55 - 57), was filed October 26, 2018. The parties timely

filed Proposed Recommended Orders (PROs), which have been

considered in preparing this Recommended Order.

FINDING S OF FACT

1. LRMC is a large hospital in Lakeland that regularly

provides hospital care and services to injured workers covered by

workersÓ compensation insurance. In conformity with the workersÓ

compensation statutes and rules, LRMC bills workersÓ compensation

insurance carriers (carriers) for the hospital charges.

2. LRHS is a health system, presumably affiliated with LRMC

(though there is no record evidence of the relationship between

the two entities). Based on an uns pecified relationship with

physicians who provide services to injured workers at LRMC, LRHS

takes care of billing carriers for those physician charges.

3. The parties stipulated that Petitioners are considered

Ðhealth care providersÑ within the meaning o f the WorkersÓ

Compensation Law, chapter 440, Florida Statutes.

4. In these cases, Petitioners want the Department to

resolve their reimbursement disputes with a carrier. The

disputes arose from the carrierÓs disallowance or adjustment of

payment on bill s for hospital and physician services rendered to

an injured worker during a single ÐencounterÑ (patient stay at

LRMC) from October 31, 2017, to November 8, 2017.

5. The Department is the state agency responsible for

administering and enforcing the Worker sÓ Compensation Law. One

of its responsibilities is resolving reimbursement disputes

between providers and carriers, upon a providerÓs timely petition

after receiving notice from a carrier that payment of a bill has

been disallowed or adjusted. See § 440 .13(7), Fla. Stat.

Regulatory Context

6. The process by which health care providers bill carriers

and carriers review and make determinations on provider bills is

highly regulated, with requirements, deadlines , and procedures in

the WorkersÓ Compensatio n Law and implementing rules. 3/

7. Bill review by carriers under section 440.13(6) and

implementing rules culminates in a reimbursement decision by the

carrier to either pay the bill or to disallow, adjust, or deny

payment. An ÐExplanation of Bill Revi ewÑ (EOBR) is Ðthe document

used to provide notice of payment or notice of adjustment,

disallowance or denial by a claim administrator or any entity

acting on behalf of an insurer to a health care provider[.]Ñ

Fla. Admin. Code R. 69L - 7.710(1)(y).

8. Pu rsuant to rule 69L - 7.740(14), the carrier (or its

claim administrator) must use an EOBR detailing the adjudication

of the submitted bill by each line item ; it i s the only

authorized means for giving notice to the health care provider of

the reimbursement d ecision. The adjudication (reimbursement

decision) must be explained using EOBR reason codes and code

descriptors listed in rule 69L - 7.740(13)(b) (listing 9 8 EOBR

codes with code descriptors). The carrier must select at least

one EOBR code reason, and no more than three EOBR code reasons,

for each line item. When more than one EOBR code reason is used

for one line item, the codes must be shown in descending order of

importance. Fla. Admin. Code R. 69L - 7.740(13)(a). EOBR codes

must be used, but the carr ier may al so add internal code reasons

for additional explanation. Fla. Admin. Code R. 69L - 7.740(14).

9. The EOBR notice is what triggers a health care

providerÓs option to petition the Department to resolve a

reimbursement dispute with the carrier pursu ant to section

440.13(7). The EOBR itself must make that clear by including the

following statements required by rule 69L - 7.740(14):

An EOBR shall specifically state that the

EOBR constitutes notice of disallowance or

adjustment of payment within the mean ing of

subsection 440.13(7), F.S . An EOBR shall

specifically identify the name and mailing

address of the entity the carrier designates

to receive service on behalf of the Ðcarrier

and all affected partiesÑ for the purpose of

receiving the petitionerÓs se rvice of a copy

of a petition for reimbursement dispute

resolution by certified mail, pursuant to

paragraph 440.13(7)(a), F.S.

10. By statute, a provider ha s a limited 45 - day window after

receiving a carrierÓs notice of disallowance or adjustment of a

bi ll to petition the Department to resolve a reimbursement dispute

with the carrier. £ 440.13(7)(a), Fla. Stat. (ÐAny health care

provide r who elects to contest the disallowance or adjustment of

payment by a carrier under subsection (6) must, within 45 days

after receipt of notice of disallowance or adjustment of payment,

petition the department to resolve the dispute. Ñ). Since th e

notice can only be given by means of an EOBR, the 45 - day window

starts upon receipt of the EOBR.

Three EOBRs Ad judicating Two L RHS Bills (C ase N o. 18 - 3845)

11. The parties stipulated that in C ase N o. 18 - 3845, LRHS

received notice of disallowance or adjustment of payment from the

carrier on December 5, 2017, and December 11, 2017. As required

by rule, notice was given by EOBRs: two EOBRs were received on

the first date; a third EOBR was received on the second date. 4/

12. One EOBR received on December 5, 2017, addressed a

Ðtreating physicianÑ bill with three line items for physician

services rendered on or about November 6 and 8, 2017 (as best the

dates can be discerned). The EOBR authorized partial payment of

$407.25 for two of the three line items, and identified a check

issued in that amount on December 1, 2017. The second EOBR

received on December 5, 2017, addressed a dif ferent treating

physician bill, with line items for three hospital visits, on

November 3, 4, and either 5 or 6, 2017 (the date is stated on the

EOBR, but is not clear on the reduced copy in evidence). The

EOBR authorized partial payment in the amount of $ 180.00, and

identified a check issued in that amount on December 1, 2017.

13. The EOBR received on December 11, 2017, appears to be a

reconsideration of the first EOBR described in the preceding

paragraph, because it addressed the same three line items. The

EOBR authorized additional reimbursement of $2,172.00, and

identified a check issued in that amount on December 7, 2017.

14. E OBR codes were assigned in all three EOBRs to explain

the reasons for adjusting or disallowing payment for each line

item. A dditional internal codes were also provided with

additional explanation. According to the codes, payment was

reduced from the amounts billed based on reimbursement manual

provisions and/or a contractual arrangement , and p ayment on one

line item on each bi ll was disallowed as a billing error.

15. As required by Department rule, each EOBR stated:

ÐThis EOBR constitutes notice of disallowance or adjustment of

payment within the meaning of Section 440.13(7), Florida Statutes

(F.S.). This carrier designate s Optum, 2500 Monroe Blvd.,

Suite 100, Norristown, PA 19430 to receive service of a copy of a

petition for reimbursement dispute resolution by certified mail,

pursuant to Section 440.13(7)(a), F.S. on behalf of the carrier

and all affected parties.Ñ

1 6. Arlene Cotton, testifying for the Department, said that

carriers occasionally issue multiple EOBRs . Usually that is done

to address different components of a bill or series of bills.

If a carrier issues multiple EOBRs for the same bill, the 45 - day

dead line to file a reimbursement dispute resolution petition

would run from the last EOBR receipt date only if the last EOBR

is substantively different from a prior EOBR adjudicating the

same line items, i.e., if the last EOBR makes changes to the

line - by - line adjudication of the bill.

17. For LRHS, a single EOBR was issued to adjudicate the

bill for three physician hospital visits, received on December 5,

2017. The 45 - day deadline to file a petition disputing the

reimbursement decisions in that EOBR was Ja nuary 19, 2018.

18. The other LRMC bill, with three line items charging for

three types of physician services, was the subject of two EOBRs.

The second EOBR, received December 11, 2017, changed the line - by -

line adjudication of the submitted bill, changin g both the amount

of payment authorized and some of the coded reasons assigned to

the three line items. The deadline to file a petition to dispute

the revised adjudication of that bill was January 25, 2018.

19. On May 4, 2018, counsel for LRHS filed a si ngle

Petition to dispute the EOBRs received on December 5 and 11,

2017. The LRHS Petition was, without question, very untimely.

One EOBR Ad judicating One LRMC B ill (Case No. 18 - 3846)

20. The parties stipulated that in C ase N o. 18 - 3846, LRMC

received no tices of disallowance or adjustment of payment on

January 12, 2018, and February 16, 2018. As provided by rule,

notice was by means of an EOBR. A sing l e EOBR , issued to

adjudicate a single LRMC bill with 27 line items , was sent twice ,

with different fax transmittal pages, first on January 12, 2018,

and again on February 16, 2018 .

21. The twice - transmitted EOBR, as required by Department

rule, stated: ÐThis EOBR constitutes notice of disallowance or

adjustment of payment within the meaning of Section 44 0.13(7),

Florida Statutes (F.S.). This carrier designates Optum,

2500 Monroe Blvd., Suite 100, Norristown, PA 19430 to receive

service of a copy of a petition for reimbursement dispute

resolution by certified mail, pursuant to Section 440.13(7)(a),

F .S. on behalf of the carrier and all affected parties.Ñ

22. The Department takes the position that when the same

EOBR is transmitted on two different days, transmittal of a

second identical EOBR does not start a second 45 - day window to

file a petition for reimbursement dispute resolution. Under that

view, which is found to be the more reasonable position under the

circumstances here (where nothing was changed in the EOBR, not

even a date, much less an authorized payment or reason code),

LRMC was required to file a petition by February 26, 2018.

No evidence was offered t hat would suggest LRMC was operating

under a different assumption; Ms. Cobb did not testify that she

believed LRMC would have the right to file a petition within 45

days of receiving the s ame EOBR a second time. It is noted that

even if the later receipt date were used to restart the 45 - day

clock, the petition would have been due April 2, 2018.

23. Counsel for LRMC filed the Petition on May 4, 2018,

more than two months late according to the more reasonable

position, and more than one month late under the most generous

(and unreasonable) interpretation. Under any interpretation, the

Petition was untimely; there is no legitimate dispute about that.

Equitable Tolling Defense

24. Petitioner s raise equitable tolling as a defense,

contending the untimeliness of their Petitions should be excused.

25. Gina Cobb was PetitionersÓ only witness. She works for

LRMC in the denials and appeals department. During the time

pertinent to this case, she worked exclusively on workersÓ

compensation claims for four years at LRMC, billing carriers for

LRMCÓs hospital charges and following up when payment was denied,

disallowed, or adjusted. Before that, she did the same kind of

work in the workersÓ compensat ion claims arena at Winter Haven

Hospital for an additional four years.

26. Ms. Cobb does not handle billing for LRHS. LRHS takes

care of billing carriers for separate physician charges for

services to injured workers while at LRMC. When both hospital

services and physician services are provided to the same injured

worker during a single ÐencounterÑ (i.e., a patient stay at

LRMC), Ms. CobbÓs only involvement in the LRHC billing process is

to provide LRHS with the claim number issued by the carrier or

c laim administrator, as well as the address to use for billing

purposes. Ms. Cobb did not work on the LRHS bill submissions at

issue in this case, other than to provide the claim number and

address for LRHS to use to submit its bills.

27. Ms. Cobb is not a lawyer. Instead, in keeping with her

job duties, she is certified in medical billing and coding. With

eight yearsÓ experience handling workersÓ compensation billing

for two different Florida hospitals, she would have to be very

familiar with the regula tory requirements for the billing and

payment process under the WorkersÓ Compensation Law. Indeed, she

is quite proud of her track record, saying more than once that

she is Ðusually successfulÑ in getting bills paid.

28. Whether a badge of accomplishment or not, in her eight

years of experience, Ms. Cobb has never filed a petition for

reimbursement dispute resolution or been involved in a Department

proceeding to resolve a reimbursement dispute. Indeed, she did

not file a petition this time, either. Ins tead, at some unknown

point, Petitioners retained an attorney who prepared and filed

the untimely Petitions; his name, not Ms. CobbÓs, appears on

LRMCÓs Petition as the LRMC representative.

29. Ms. CobbÓs initial involvement in the October 31

through Nove mber 8, 2017, injured worker ÐencounterÑ at issue was

on November 2, 2017. That is when Ms. Cobb was informed by a

hospital social worker that a patient was being reclassified from

self - pay to workersÓ compensation. The next day, Ms. Cobb called

the pati entÓs employer and learned that the carrier was Lion

Insurance Company (Lion or carrier), and that the claim

administrator was Packard Claims Administration (Packard or

administrator). She called Packard and received a claim number

and address to use in s ubmitting bills for the encounter.

30. Ms. Cobb worked on preparing and submitting the LRMC

bill to Packard for the hospital charges. She also gave the

Packard claim number and address to LRHS so that LRHS could file

bills with Packard for physician cha rges for the encounter.

31. Ms. CobbÓs testimony was limited to addressing the LRMC

billing process before and after receiving the EOBR. She was

unable to address the LRHS bills because she did not submit them,

nor could she address the EOBRs on those bills, because she did

not receive them. Ms. Cobb had no communications with Packard or

the carrier regarding the LRHS bills or the EOBRs on those bills.

32. With regard to the LRMC bill, Ms. Cobb testified that

she prepared the claim (bill with support ing records), which was

printed out and mailed to Packard on or about November 29, 2017.

She called Packard to check on the claim status and spoke with a

representative on January 12, 2018. The EOBR was transmitted to

her later that same day. It appears from the EOBR, corroborated

by what Ms. Cobb said she was told by the Packard representative,

that as of January 12, 2018, the bill had already been reviewed

and payment disallowed (on or about December 21, 2017). The EOBR

giving notice of that reimburse ment decision was not received by

LRMC until Ms. CobbÓs inquiry prompted the fax transmittal.

33. Ms. Cobb testified that she reviewed the EOBR, and

believed from her review that the reason payment of the entire

hospital bill was disallowed was that no me dical records were

received. That belief is contradicted by the EOBR itself, which

is the only non - hearsay record evidence. 5/ The impression given

from Ms. CobbÓs testimony is that she did not carefully study the

EOBR she received on January 12, 2018.

34. The EOBR addressed 27 separate line items on the LRMC

bill. All 27 billed line items were disallowed, with

code 34 given as the first EOBR code reason for each line item.

The reason descriptor for code 34 set forth in the EOBR

( consistent with the EOBR coding rule ) was : ÐPayment disallowed:

no modification to the information provided on the medical

bill. [6/] No payment made pursuant to contractual arrangement.Ñ

(all caps in original converted to lower case).

35. A second EOBR code reason related to insufficient

documentation was given for only one of the 27 line items, which

was a line item charging for an implant. For this single line

item, after code 34, EOBR code 47 was added as the second reason

for disallowing payment. The reason descripto r for code 47 set

forth in the EOBR ( consistent with the EOBR coding rule ) , wa s:

ÐPayment disallowed: insufficient documentation; invoice or

certification not submitted for implant.Ñ (all caps in original

converted to lower case). For the same implant l ine item, two

internal code reasons (M127 and MA27) were added: ÐMissing

patient medical record for this serviceÑ and ÐMissing/incomplete/

invalid entitlement number or name shown on this claim.Ñ

36. Following her review of the EOBR received January 12,

2018, Ms. Cobb said that she immediately printed all of the

medical records and submitted them to Packard with a request for

reconsideration. A reasonably prudent employee with

responsibility over a hospitalÓs workersÓ compensation claim

denials and appea ls department would have, instead, addressed the

actual EOBR code reasons given for disallowing payment. 7/

37. Petitioners did not point to any statute or rule that

regulates a providerÓs request for Ðreconsideration,Ñ or a

carrierÓs obligations with resp ect to such a request, after the

carrier disallows or adjusts payment of a bill for reasons set

forth in an EOBR sent to the provider. The only official avenue

in statute and rule available to a provider who wants to contest

a carrierÓs disallowance or ad justment of payment, as set forth

in an EOBR, is to file a petition with the Department to resolve

the reimbursement dispute.

38. It appears that the process of requesting a carrier

reconsider its adjudication of a bill as set forth in an EOBR is

an infor mal, unofficial process, akin to other settlement efforts

to resolve disputes. As evident by the LRHS December 11, 2017,

EOBR, sometimes a carrier will reconsider its adjudication of a

bill, revise an EOBR, and authorize additional payment. But

within th e official statutory and rule framework, there is only

the 45 - day period for carriers to review and adjudicate a bill by

means of an EOBR, followed by a 45 - day period after a providerÓs

receipt of an EOBR for the provider to file a petition with the

Depart ment for reimbursement dispute resolution.

39. Ms. Cobb offered testimony about the steps she took

beginning on January 12, 2018, to try to get the carrier to

reconsider its reimbursement decision that was set forth in the

EOBR. Because the total hospi tal charge on the bill was over

$135,000, and the expected reimbursement was just over $100,000,

Ms. Cobb said that the claim was considered Ðhigh dollar,Ñ and

she was expected to ÐtouchÑ the account more often, which she

described as checking on the statu s. She called Packard

periodically and spoke with different persons about the status of

the reconsideration request.

40. Ms. Cobb said that when she spoke with someone on

February 13, 2018, that person said that no claim was found for

that amount. Thi s was a red flag to Ms. Cobb. As she put it :

ItÓs usually a stalling tactic that we deal

with -- with carriers, so I felt like it was ,

but to cover myself I sent everything all

over again. Tr. at 42 ( emphasis added).

41. As of February 13, 2018, 32 day s had elapsed since the

EOBR was received on January 12, 2018. Ms. Cobb was experienced

enough to understand the possibility that her reconsideration

request was not getting attention, but rather, that the carrier

was employing stalling tactics while the days counted down.

Having Ðfelt like it wasÑ a stalling tactic, Ms. Cobb should

have, at that time (instead of months later , well after the 45 -

day deadline had passed), enlisted the help of the LRMC attorney

to prepare and file the Petition. Since that i s the only formal

avenue in statute and rule available to a provider wanting to

contest a carrierÓs EOBR adjudication of a bill, it is

inconceivable that Ms. Cobb would not have done so.

42. Instead, despite her belief that the carrier was using

stallin g tactics, Ms. CobbÓs only action was to reprint the bill

and supporting documentation, and send the reconsideration

request a second time.

43. Although Ms. Cobb testified about several conversations

with Packard, she never said that she was misled or lu lled into

believing that she did not have to file a petition for

reimbursement dispute resolution within 45 days after receiving

the EOBR on January 12, 2018. She repeatedly acknowledged that

nothing prevented her from filing a petition for reimbursement

dispute resolution. Instead, it was her choice to pursue

informal resolution of the dispute by filing (and refiling)

reconsideration requests. That choice was not mutually exclusive

with protecting LRMCÓs rights by means of a timely filed

petition. Give n Ms. CobbÓs belief as of February 12, 2018, that

the carrier was employing stalling tactics with regard to her

reconsideration requests, it was unreasonable for her to pursue

only this avenue for this high dollar unpaid bill. In light of

her concerns, sh e failed to act with reasonably prudent regard

for LRMCÓs rights, when she did not file a petition then (with

13 days remaining) or enlist counsel (as was later done) to file

a petition for reimbursement dispute resolution.

44. Three days later, on Febr uary 16, 2018, Ms. Cobb

received a fax transmittal from Packard, transmitting the same

EOBR that had previously been transmitted on January 12, 2018.

Ms. CobbÓs concerns should have been heightened by this second

red flag. The failure to act with reasona bly prudent regard for

LRMCÓs rights was compounded by letting this second red flag go.

Although there were still ten days left to file a petition for

reimbursement dispute resolution based on the first EOBR

transmittal, Ms. Cobb still took no action to c ontact the LRMC

attorney or seek authorization to retain an attorney to prepare a

petition (as was done much later, after any conceivable 45 - day

window had long passed). A reasonably prudent employee in her

position would have been spurred to action by fi ling a petition

or enlisting counsel then, with 10 days remaini ng to timely

dispute the EOBR.

45. Instead, Ms. Cobb said that she did two things when she

received the identical EOBR a second time. She said at that

point, she gave the EOBR to the Ðcash a pps departmentÑ to post

zero as the money received on the bill. In addition, she said

that upon receiving the EOBR a second time (five weeks after she

first received the EOBR notifying LRMC that payment on the entire

bill was disallowed), she Ðdid a more thorough check,Ñ for the

purpose of Ðlooking for the denial reasons to -- I was looking

for the denial reasons that I couldÓve rectified.Ñ Tr. at 47.

She admitted that when she looked more closely at the EOBR, ÐI

did see that I missed [the] implant invoi ces.Ñ Id. Reasonable

regard for her employerÓs rights would have compelled this

careful attention immediately upon first receipt of the EOBR.

That was her job.

46. Ms. Cobb said she assumed that since payment was

disallowed for the whole bill, the EO BRÓs reference to missing

implant invoices on one line item must have meant that the

carrier was missing everything. This explanation does not square

with the actual EOBR code reasons given for disallowing payment

on the other 26 line items. But Ms. Cobb said that Ðjust to be

thorough this time,Ñ she sent everything one more time. In

addition, this time she included the implant invoices that she

had never previously submitted.

47. On March 27, 2018, Ms. Cobb called Packard to check on

the status of th e reconsideration request. Following the

conversation, she received a fax from Packard. With regard to

that communication, the parties stipulated that on March 27,

2018, Ms. Cobb Ðreceived correspondence from Packard stating that

the bill was being audit ed by an attorney, and that Òit is still

processing.ÓÑ Ms. Cobb acknowledged that the March 27, 2018, fax

was not an EOBR. 8/

48. Ms. Cobb testified that it was her expectation that

another EOBR would be sent after the carrier or administrator

completed r eview of the reconsideration request. Her expectation

was based on hearsay, and was not proven to be a reasonable

expectation. Petitioners did not offer any statutory or rule

authority that would have required the carrier to proceed in a

certain fashion on the reconsideration request, or to give notice

in any particular form of the culmination of that process.

Moreover, having already been sent the same EOBR twice, Ms. Cobb

had no basis for assuming or expecting that any subsequent EOBR

transmittal would not have been of the same EOBR, a third time,

to signify denial of the request for reconsideration.

49. Ms. Cobb testified that she followed up on April 13,

2018, by calling the attorney who had been auditing the

reconsideration request. There was no non - hearsay evidence as to

what she was told. She indicated that she perceived what she was

told to be a red flag. This was not the first red flag, though,

as Ms. Cobb believed two months earlier that the carrier was

employing stalling tactics.

50. Pe titioners apparently contend that as of March 27,

2018, it was reasonable for Ms. Cobb to believe not only that the

carrier would review the multiple reconsideration requests she

had sent by then, but also, that the carrier would revise the

EOBR to change its prior adjudication of the bill. Petitioners

essentially concede that that expectation was rendered

unreasonable as of April 13, 2018, when it became clear to

Ms. Cobb that the carrier was not going to reconsider its

decision to disallow payment of th e LRMC bill.

51. Ms. Cobb did not say that she ever informed the carrier

or administrator that LRMC was planning to file a petition with

the Department t o resolve the dispute over the carrierÓs

disallowance of payment. Ms. Cobb did not testify that she was

ever led to believe by the carrier or administrator that the time

for LRMC to file a petition for reimbursement dispute resolution

would be extended by her reconsideration request. Ms. Cobb did

not say that the subject of a dispute resolution petition was

ever raised in any of her communications with the carrier and

administrator.

52. Petitioners admit that they had no communications with

the Department regarding whether or when to file a petition for

resolution of the reimbursement dispute. There is no evidence

that a Department employee said or did anything to mislead or

lull Petitioners into inaction that prevented the timely filing

of the Petitions.

53. At the point that even Petitioners acknowledge it was

no longer reasonable to expect reconsi deration by the carrier of

its reimbursement decision, the Petitions were not immediately

filed. No explanation was given for waiting three more weeks

before filing the Petitions on May 4, 2018.

CONCLUSIONS OF LAW

54 . The Division of Administrative Hear ings has

jurisdiction over the parties and subject matter, pursuant to

sections 120.569 and 120.57(1), Florida Statutes.

55. At issue in both consolidated cases is whether the

Petitions filed pursuant to section 440.13(7) were untimely, as

initially deter mined by the Department. If untimely filed,

Petitioners raise the defense of equitable tolling to excuse the

untimeliness.

56. As the parties asserting the affirmative of the issue,

Petitioners have the burden of proving by a preponderance of the

evidenc e that they are entitled to the relief they seek. See

generally Balino v. De pÓt of Health & Rehab. Servs. , 348 So. 2d

349, 350 (Fla. 1st DCA 1977); § 120.57(1)(j), Fla. Stat.

57. The parties stipulated to the dates on which

Petitioners received notices, by means of EOBRs, of the carrierÓs

disallowance or adjustment of payment on their bills, within the

meaning of section 440.13(7)(a).

58. As found above, the Petitions were not timely filed by

counsel for Petitioners within 45 days of PetitionersÓ receip t of

the EOBRs. The Petitions were untimely -- and not by just a little

bit -- under any counting scenario.

59. As recognized in the cases cited by Petitioners, a

partyÓs failure to meet an administrative deadline, such as the

45 - day requirement for filing p etitions for resolution of

reimbursement disputes pursuant to section 440.13(7)(a), can

sometimes be excused, by application of the equitable tolling

doctrine as a defense. See Aleong v. DepÓt of Bus. & ProfÓl

Reg. , 963 So. 2d 799, 801 (Fla. 4th DCA 2007) (considering the

defense, but finding it inapplicable); Florists Mut. Ins. Co. v.

DepÓt of Fin. Servs., Div. of WorkersÓ Comp. , Case No. 13 - 2940 ,

2013 WL 550890 (Fla. DOAH Sept. 30, 2013) ( rejecting equitable

tolling based on petitionerÓs lack of due d ili gence ). 9/

60. The doctrine of equitable tolling was first applied in

administrative proceedings by the Florida Supreme Court in

Machules v. DepÓt of Admin. , 523 So. 2d 1132, 1134 (Fla. 1988),

in which the doctrine was described as follows:

The tolling doc trine is used in the interests

of justice to accommodate both a defendantÓs

right not to be called upon to defend a stale

claim and a plaintiffÓs right to assert a

meritorious claim when equitable

circumstances have prevented a timely filing .

Equitable to lling is a type of equitable

modification which focuses on the plaintiffÓs

excusable ignorance of the limitations period

and the lack of prejudice to the defendant.

(emphasis added; cites and quotes omitted).

61. The Court described the type of equitabl e circumstances

that might justify equitable tolling when they prevent a timely

filing in the proper forum:

Generally, the tolling doctrine has been

applied when the plaintiff has been misled or

lulled into inaction, has in some

extraordinary way been prev ented from

asserting his rights, or has timely asserted

his rights mistakenly in the wrong forum.

Id.

62. Petitioners here seek to invoke the first type

identified in Machules , contending that they were misled or

lulled into inaction, not by the Depart ment, but by the carrier

or its administrator.

63. As a threshold matter, although the equitable tolling

defense is claimed for both Petitioners, the record is devoid of

evidence to support an equitable tolling defense to excuse LRHSÓs

late filing of its Petition in C ase N o. 18 - 3845. No evidence was

presented to show that LRHS was misled or lulled into inaction by

anyone associated with the carrier, the administrator, or the

Department, that in any way prevented the timely filing of a

petition by the due dates of January 19 and 25, 2018. Instead,

the only evidence offered to support equitable tolling was the

testimony of Ms. Cobb regarding her pursuit of reconsideration of

the disallowance of payment on the LRMC bill. Therefore,

consideration of the equi table tolling defense must be limited to

LRMC only.

64. As noted by the Court in Machules , although it is not

necessary to prove that LRMC was misled or lulled into inaction

by active deception or misconduct, the focal point for equitable

tolling is whe ther LRMC acted Ðwith a reasonably prudent regard

forÑ its rights. Application of the doctrine to allow a party to

proceed on an untimely petition is dependent, in part, upon a

showing that the litigant has not Ðslept on his rights.Ñ

Machules , 523 So. 2d at 135; accord Jancyn Mfg. Corp. v. DepÓt of

Health , 742 So. 2d 473, 476 (Fla. 1st DCA 1999).

65. While there is much to distinguish Machules factually,

consi deration of this focal point is particularly compelling

u nder the facts of this case. As found above, LRMC did not prove

that it acted with a reasonably prudent regard for its rights.

Instead, the evidence shows that LRMC slept on its rights.

66. In addition, unlike in Machules , there is no claim that

the statutes or rules are confusing or uncle ar regarding whether

or when to petition the Department for reimbursement dispute

resolution. Cf. Madison Highlands, LLC v. Fla. Hous. Fin. Corp. ,

220 SO. 3d 457 (Fla. 5th DCA 2017) (applying equitable tolling

where agencyÓs rule contradicted the applicab le uniform rules,

and the party relied on the agencyÓs rule to file a seconded

amended petition slightly late).

67. Also unlike in Machules , Ms. Cobb was not acting as a

layperson seeking to protect her own personal interests. It was

her job to protect the interests of her employer in having its

bills paid for hospital services rendered to injured workers. It

was her job to understand and follow the regulatory requirements

governing workersÓ compensation claims. Indeed, during the time

that she worked on the claim at issue in this case, workersÓ

compensation claims were her exclusive focus and only

responsibility for her big hospital employer.

68. What the evidence does show is that after receiving

notice by means of the EOBR faxed to Ms. Cobb on Ja nuary 12,

2018, LRMC, by its employee Ms. Cobb, was attempting to get the

carrier/administrator to reconsider the decision to disallow

payment. No authority was presented to show that reconsideration

is a regulatory option that must be addressed in a cert ain

fashion by the carrier or that a reconsideration request acts to

extend or toll the deadline in section 440.13(7). Instead, as

found above, the only evidence in this record is th at

reconsideration is a permissive informal process akin to other

types o f settlement efforts.

69. While there is nothing wrong with providers and

carriers attempting to resolve disputes informally, that effort

does not constitute an equitable circumstance that prevented the

timely filing of a formal petition for reimburseme nt dispute

resolution. There is no reason why LRMC could not go down

parallel tracks, by enlisting counsel to timely file a petition

with the Department, while also having Ms. Cobb pursue

reconsideration with the carrier. And under the facts found

above, there were many reasons why LRMC should have taken those

parallel tracks, in order to act with reasonably prudent regard

for its rights.

70. Indeed, this dual path is recognized by one of the

DepartmentÓs reimbursement dispute resolution rules, Florida

Administrative Code Rule 69L - 31.012, authorizing the following

after a timely petition is filed and a carrier response is filed:

Within fourteen (14) calendar days subsequent

to service upon the Department of the carrier

response, the petitioner and carri er may

serve upon the Department a joint stipulation

of the parties, mutually stipulating in

writing that the reimbursement dispute be

held in abeyance for a specified time period,

not to exceed sixty (60) calendar days, for

the parties to seek a resolutio n of the

reimbursement dispute without the need for a

determination by the Department.

71. Application of the equitable tolling doctrine is not

warranted to excuse the untimely filing of the Petitions.

RECOMMENDATION

Based on the foregoing Findings of Fa ct and Conclusions of

Law, it is RECOMMENDED that the Department of Financial Services,

Division of WorkersÓ Compensation , issue a final order dismissing

the untimely Petitions filed by Petitioners LRHS and LRMC.

DONE AND ENTERED this 26th day of November , 2018, in

Tallahassee, Leon County, Florida.

S

ELIZABETH W. MCARTHUR

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 26th day of November , 2018.

ENDNOTE S

1/ For ease of reference, citations to Florida Statutes are to

the 2018 version, and citations to r ules are to the current

versions. It is noted that the relevant statutory and rule

provisions discussed herein have not changed during the time

period involved in these cases (i.e., since October 31, 2017).

2 / PetitionersÓ Notice of Proffer reiterates t he argument made

and rejected at hearing that the fax and letters from persons who

did not testify at hearing were admissible, not for the truth of

the matters asserted, but Ðto show Ms. CobbÓs reaction and

thought process following her receipt of the comm unications.Ñ

Notice of Proffer at 3. For the reasons given at hearing, this

re - argument is rejected. See, e.g. , Tr. at 49 - 53, 59 - 61. The

Notice of Proffer also belatedly raises a new argument that the

documents should be admitted for the truth of the m atters

asserted, notwithstanding their hearsay nature, because

objections to hearsay were waived when not raised in the Joint

Pre - hearing Stipulation. However, as the parties were reminded

at the outset of this hearing (Tr. at 12 - 13), under the statutes

a nd rules governing this proceeding, the limitations on using

hearsay evidence cannot be waived by the absence of an objection.

See § 120.57(1)(c), Fla. Stat.; Fla. Admin. Code R. 28 - 106.213(3)

(hearsay evidence, whether objected to or not, cannot be the s ole

basis for a finding of fact unless it would be admissible in a

civil action over objection).

3 / S ection 440.13(6) requires carrier s to review health care

providersÓ bills for services rendered to injured workers .

Section 440.20(2)(b) provides the fo llowing deadline : ÐThe

carrier must pay, disallow, or deny all medical, dental,

pharmacy, and hospital bills submitted to the carrier in

accordance with department rule no later than 45 calendar days

after the carrierÓs receipt of the bill.Ñ A providerÓs

requirement to submit bills Ðin accordance with department ruleÑ

means that the provider must use medical billing forms and

corresponding instructions adopted by the Department and

in corporated by reference in Florida Administrative Code Rule

69L - 7.720. Provider bills must also comply with Department rules

69L - 7.020, 69L - 7.100, and 69L - 7.501 , which adopt and incorporate

by reference three voluminous reimbursement manuals. In

addition, rule 69L - 7.730 details provider billing and reporting

responsibilities . For carriers, ru le 69L - 7.740 details medical

bill review responsibilities , including requirements for carriers

to document and keep records of the ÐDate Insurer Received Bill,Ñ

which starts the 45 - day period in section 440.20(2)(b).

4 / Copies of the three LRHS EOBRs in evidence (Pet. Ex. 4) are

very difficult to read, as they are reduced images to make room

on the page for additional information documenting the date and

manner in which the EOBRs were received by LRHS. The redacted

copies are even mor e difficult to read; the unredacted sealed

copies are a little clearer.

5 / Ms. Cobb testified that her belief that payment of the entire

bill was disallowed because there were no medical records was

based not only on her review of the EOBR, but also, on what she

was told by a Packard employee to whom she spoke by telephone.

No Packard witness testified, and no Packard records were offered

at hearing to show what was received and when , although s uch

records , required to be maintained by Department rule, w ere

presumably available and could have been sought. The Packard

employee statement is hearsay that does not explain or supplement

non - hearsay evidence; it contradicts the non - hearsay evidence.

6 / Ms. Cotton explained that the phrase Ðno modification to the

information provided on the medical billÑ simply means that the

carrier did not change a code on the medical bill, as might be

done if the carrier believes an item is improperly billed.

7 / A careful review of the EOBR, disallowing payment of an enti re

hospital bill that charged over $100,000, m ight have found that

the code reasons were erroneous, or that there was some other

problem with the claim or adjudication of the claim. It is

unclear what the EOBR means by disallowing payment due to a

contrac tual arrangement, but that is the first (and thus, the

most important) code reason given for all 27 line items, and is

the only code reason given for most of the line items. As such,

it certainly deserved scrutiny by Ms. Cobb or by someone at LRMC

who cou ld address the legitimacy of payment disallowance based on

a contractual arrangement. Consideration of the actual EOBR code

reasons might have led to authorization to have an attorney look

at the matter then (as ultimately was done much later).

8 / In th e Petition, counsel for LRMC mischaracterized the

March 27, 2018, fax as an EOBR, by listing the dates on which the

provider received the EOBR at issue from the carrier as

January 12, 2018; February 16, 2018; and March 27, 2018. That

caused the Departme nt to issue an omissions notice, since the

Petition failed to attach an EOBR received March 27, 2018.

Counsel for LRMC repeated that mistake in PetitionersÓ PRO,

erroneously referring to the March 27, 2018, fax as an EOBR.

See Pet. PRO at 6, ¶ 26.

9/ As pointed out by Administrative Law Judge F. Scott Boyd ,

while refusing to apply equitable tolling may seem contrary to

the important goal of ameliorating harsh results, there is an

equally important competing value: routinely enforcing filing

deadlines so they do not become blurred and unreliable. Florists

Mutual , Case No. 13 - 2940, FO at 13.

COPIES FURNISHED:

Kyle Christopher, Esquire

Department of Financial Services

Hartman Building

2012 Capital Circle Southeast

Tallahassee, Florida 32399

(eServed)

Matthew James Vaughn, Esquire

Peterson & Myers, P.A.

Post Office Box 24628

Lakeland, Florida 33802

(eServed)

Thomas Nemecek, Esquire

Department of Financial Services

Division of Workers' Compensation

200 East Gaines Street

Tallahassee, Florida 32399

(eS erved)

Julie Jones, CP, FRP, Agency Clerk

Division of Legal Services

Department of Financial Services

200 East Gaines Street

Tallahassee, Florida 32399 - 0390

(eServed)

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written e xceptions within

15 days from the date of this Recommended Order. Any exceptions

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.