RECENT DEVELOPMENTS IN PPO LITIGATION
The Louisiana Third Circuit Court of Appeals has affirmed Judge Bradock’s decision to not allow the use of a PPO contractual discount in workers’ compensation matters by a 2-1 majority opinion. The majority opinion found no error in the trial court’s ruling. The Third Circuit found that 23:1203(B) does not allow the employer to pay less than the scheduled amount if the provider charges the amount or more. They further held that 23:1033 provides that no contract . . . shall operate to relieve the employer, in whole or in part, from any liability created by the Act. The majority cited to Judge Peters’ concurrence in a prior case that “to the extent that PPO contracts purport to further limit the employer’s liability for medical care, it runs afoul of 23:1033 and may not serve as the basis to reduce the amount owed to [the provider].” They upheld the trial court’s decision awarding penalties and attorney’s fees finding that the claim was not reasonably controverted nor was it a close factual situation.” The trial court had awarded a $2000 penalty and $4000 in attorney’s fees.
Judge Amy authored a dissent to the majority’s opinion. He found that reversal of the trial court’s ruling was required. He wrote that the medical provider confuses the employer’s liability to the employee with that of the employer’s liability to the provider. He states that 23:1033 governs the employer’s liability and in his opinion the employer had satisfied its liability to the employee for the pertinent medical treatment as service was rendered and paid for under a contractually agreed upon fee. There was no shifting of liability to the employee under the contracts. Additionally, 23:1033 prohibits limitation on liability except as provided under the Act and 23:1034.2 provides that a health care provider can charge a fee that is less than the fee schedule. The PPO contract is the type of arrangement specified by 23:1034.2. The health care provider was aware of the contract’s provisions indicating that workers’ compensation services would be paid at a reduced rate but contested it when the insurer abided by its terms.
While this decision is disappointing, Judge Amy’s dissent is a strong statement for our position. He essentially validates everything that the defendants have been arguing and it is an affirmation of Judge Dick’s decision on some of the prior cases. At this point, the defendant has may move the Third Circuit for rehearing move the Louisiana Supreme Court for a writ of certiorari. We will let you know as soon as we hear of the defendant’s decisions.
We continue to hope that the Louisiana Supreme Court will weigh into the matter and find that PPO discounts are allowed. We hope that at a minimum they would recognize that the Third Circuit’s decision is a pronouncement of new law and one that has been the source of disagreement among many of the judges including one of the panel members. We hope that they would take that into account and hold that no penalties or attorney’s fees are due in these matters.
