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FOR IMMEDIATE NEWS RELEASE

NEWS RELEASE # 15

FROM: CLERK OF SUPREME COURT OF LOUISIANA

The Opinions handed down on the 25th day of February, 2003 , are as follows:

BY WEIMER, J.:

2002-C - 1631

RONALD JOSEPH AUTHEMENT v. SHAPPERT ENGINEERING AND ST. PAUL FIRE & MARINE INSURANCE COMPANY (Office Of Workers' Compensation District 9) For the foregoing reasons, we find the workers' compensation hearing officer did not abuse his discretion in awarding penalties and attorney fees. We reverse the judgment of the court of appeal and reinstate the judgment of the workers' compensation hearing officer. Defendants are cast with all costs of this proceedings. REVERSED; WORKERS' COMPENSATION JUDGMENT REINSTATED. VICTORY, J., dissents and assigns reasons. TRAYLOR, J., dissents in part and assigns reasons.

SUPREME COURT OF LOUISIANA
02-C-1631 RONALD JOSEPH AUTHEMENT versus SHAPPERT ENGINEERING AND ST. PAUL FIRE & MARINE INSURANCE COMPANY
ON WRIT OF CERTIORARI TO THE COURT OF APPEAL, FIRST CIRCUIT

WEIMER, Justice This matter comes before the court on the issue of whether the failure of a workers' compensation carrier to authorize prepayment requested by a doctor prior to examination of a workers' compensation claimant is a failure to provide payment of medical benefits such that penalties are triggered. See LSA-R.S. 23:1201(E) & (F) and 23:1203(A). Additionally we are called upon to resolve a split in the circuits regarding whether a failure to authorize a medical procedure for an employee otherwise eligible to receive workers' compensation benefits is deemed to be a failure to provide compensation benefits such that penalties can be imposed. Based on the facts and circumstances of this case, we reverse the court of appeal and reinstate the decision of the worker's compensation hearing officer in favor of the employee imposing penalties and attorney fees. FACTS AND PROCEDURAL BACKGROUND In May of 1997, the claimant sustained a work related injury to his right ankle following which he was treated by multiple health care providers. He underwent two

surgical procedures and participated in physical therapy. During December 1999, the claimant filed a disputed claim for compensation alleging that St. Paul Fire & Marine Insurance Co. (St. Paul), the employer's workers' compensation carrier, refused to authorize certain testing and treatment as recommended by the treating physician. In the petition, he sought penalties, attorney fees and litigation expenses. defendants answered denying that any benefits were due. The record reflects that during November 1999, Dr. James Laskey, a podiatrist, recommended treatment by an orthopedist. The claimant chose Dr. Christopher Cenac as his treating orthopedist1 and was seen by him for the first time on January 5, 2000. On that date, Dr. Cenac recommended that a functional capacity evaluation be completed and following that evaluation, recommended that Mr. Authement see a foot and ankle specialist such as Dr. Robert Dehne2 at the LSU Medical School. As early as January 25, 2000, plaintiff's counsel communicated with St. Paul asserting a formal demand to make appropriate financial arrangements for Mr. Authement to be examined by Dr. Dehne as soon as possible. By letter dated February 11, 2000, St. Paul authorized the functional capacity evaluation recommended by Dr. Cenac on January 5. By letter dated February 15, 2000, Dr. Cenac informed St. Paul that the functional capacity evaluation was scheduled for March 1, 2000. In that letter Dr. Cenac wrote, "Please communicate with my office relative to the recommendation for the patient to be seen by Dr. Robert Dehne at LSU Medical School." On March 27, 2000, plaintiff amended his disputed claim for compensation seeking evaluation by Dr. Dehne as recommended by Dr. Cenac.
1

The

Prior to that time, claimant had treated with Dr. Gary Guidry, an orthopedist he claims was chosen by the employer.
2

In the letter from Dr. Cenac to St Paul dated January 5, 2000, Dr. Dehne is referred to as Dr. Robert Dana, a specialist in foot and ankle injuries. All subsequent references are to Dr. Dehne, who is apparently the same person. 2

On May 4, 2000, defense counsel wrote to plaintiff's counsel stating that there was no objection to Mr. Authement seeing Dr. Dehne. Mr. Authement was advised to make an appointment and have Dr. Dehne call defense counsel's office for approval. The next day, on May 5, 2000, counsel for Mr. Authement wrote to counsel for St. Paul advising that Dr. Dehne required a $750 prepayment. The letter requested that payment be made as soon as possible so that Mr. Authement could be seen by Dr. Dehne. Then again, on June 22, 2000, by letter to counsel for St. Paul, plaintiff's counsel indicated that pursuant to a discussion on June 21, it was his understanding that St. Paul agreed to authorize treatment by Dr. Dehne at LSU. The letter again requested that St. Paul forward advance payment of $750 directly to the doctor. On July 21, 2000, the day the matter was initially set for trial,3 counsel for defendant provided plaintiff's counsel with a report from Dr. Cenac dated March 20, 2000. The report recommended that Mr. Authement see a surgical podiatrist such as Dr. Robert Dehne or alternatively, Dr. Waybrun Hebert. This report indicates that as early as March 20, 2000, the insurer was given the choice of two specialists recommended by Dr. Cenac. However, the claimant had not been previously provided with the name of the alternate specialist. Meanwhile, he was unable to see Dr. Dehne, because Dr. Dehne required a $750 prepaid deposit prior to the examination and the employer/insurer would not provide the prepayment. On July 24, 2000, defense counsel finally wrote to claimant's counsel that the surgical podiatrist chosen by claimant, Dr. Dehne, refused to treat the patient within the payment structure set in the workers' compensation reimbursement schedule. A suggestion was made that claimant could choose Dr. Hebert, an alternate surgical podiatrist, as his treating physician.
3

The trial was continued to a later date. 3

Immediately, Mr. Authement made an appointment with Dr. Hebert who first treated him on July 26, 2000, and continued to treat him through November 2000. The parties proceeded to a trial on the merits on February 12, 2001. The issue before the court was whether the insurer was arbitrary and capricious and thus liable for attorney fees and penalties for its failure to comply with Dr. Cenac's recommendation of January 5, 2000, that Mr. Authement be seen by a specialist such as Dr. Robert Dehne. The morning of the trial, the parties agreed to submit the matter on briefs. They also agreed that the letters exchanged between counsel and the doctors' reports would be attached to the briefs and submitted as evidence. On February 23, 2001, the court rendered judgment in favor of Mr. Authement and against Shappert Engineering finding the employer's actions were "arbitrary, capricious and without probable cause in failing to authorize medical treatment in this matter." The court awarded penalties in the amount of $2,000 and attorney fees in the amount of $7,000. Defendants perfected a suspensive appeal. The court of appeal, relying on a prior holding of the First Circuit,4 determined that failure to authorize treatment does not equate to failure to provide payment. The court held that the workers' compensation hearing officer erred in finding that the employer's action resulted in liability for penalties and attorney fees. The court of appeal disagreed with claimant's argument that penalties and attorney fees applied at least from the time the employer authorized treatment, but refused to prepay Dr. Dehne's fee. The court held the employer is statutorily obligated to reimburse the

4

See Howard v. Our Lady of the Lake Regional Medical Center, 99-1826 (La.App. 1 Cir. 9/22/00), 768 So.2d 293, 297-298. The court of appeal acknowledged contrary holdings in other circuits, citing Sims v. Sun Chemical Corporation 34,947 (La.App. 2 Cir. 8/22/01), 795 So.2d 439, 441; George v. Guillory, 00-00591 (La.App. 3 Cir. 11/2/00), 776 So.2d 1200, 1208-1209; and Gross v. Maison Blanche, Inc., 98-2341 (La.App. 4 Cir. 4/21/99), 732 So.2d 147, 151. These cases will be discussed infra. 4

claimant for necessary medical treatment, but is not required to prepay medical expenses. Additionally, the court examined the provisions of LSA-R.S. 23:1142 which provides for attorney fees if the employer arbitrarily and capriciously denies consent to incur more than $750 for any non-emergency diagnostic testing or treatment and found that the statute does not provide for the imposition of a penalty. Since there was no proof that treatment would exceed $750, the court found this statute did not apply.5 Authement v. Shappert Engineering, 2001-0934 (La.App. 1 Cir. 5/10/02), 818 So.2d 928. We granted a writ to consider the split in the circuits.6 DISCUSSION In this matter, the appellate court reasoned that "a `failure to authorize medical treatment' does not equate to a `failure to provide payment' as set forth in La. R.S. 23:1201(F)" and, thus, does not result in liability for penalties and attorney fees. Authement, 2001-0934 at 4-5, 818 So.2d at 931. The court concluded that the workers' compensation hearing officer erred in reasoning that the failure to authorize medical treatment in this matter resulted in liability for penalties and attorney fees and reversed the judgment of the workers' compensation hearing officer. Additionally, relying on Howard v. Our Lady of the Lake Regional Medical Center, 99-1826 (La.App. 1 Cir. 9/22/00), 768 So.2d 293, 297-298, the court found the obligation of the employer or insurer is that of reimbursement. Pursuant to Howard, the court found that the employer was not required to prepay a medical expense.

5

Based on our resolution of this matter, we are not called upon to address the provisions of LSAR.S. 23:1142, which were discussed by the court of appeal. We express no opinion regarding the evaluation of this provision by the court of appeal.
6

Authement v. Shappert Engineering and St. Paul Fire & Marine Ins. Co., 02-1631 (La. 10/25/02), 827 So.2d 1175. 5

Review of the jurisprudence indicates all other circuits recognize that the failure to authorize a medical procedure for an employee eligible to receive workers' compensation is deemed to be the failure to furnish compensation benefits warranting penalties and attorney fees under LSA-R.S. 23:1201. In Sims v. Sun Chemical Corporation, 34,947 (La.App. 2 Cir 8/22/01), 795 So.2d 439, 441, the Second Circuit found that defendants' refusal to authorize the initial surgical procedure was a violation of its duty to provide medical care pursuant to LSA-R.S. 23:1203(A). Relying on Howard, supra, appellants argued that the obligation to furnish medical treatment was limited to reimbursement, therefore, only the failure to provide payment would subject the employer to penalties and attorney fees. However, the Second Circuit, citing previous opinions of that court,7 held that absent a finding that the claim was reasonably controverted, an employer's failure to authorize a medical procedure for an employee eligible to receive workers' compensation is deemed to be the failure to furnish compensation warranting penalties and attorney fees. In Savoy v. Double Diamond Casino, 2002-25 (La.App. 3 Cir. 5/8/02), 816 So.2d 973, the Third Circuit affirmed the award for penalties for failure to authorize an MRI recommended by plaintiff's treating physician. The MRI had been requested in May 2000 and remained denied at the time of the appeal. The appellate court, citing the provisions of LSA-R.S. 23:1201(F), increased the award for penalties from $1,000 to $2,000 and increased the award for attorney fees from $2,000 to $4,000 to cover the appeal.

7

See Gay v. Georgia Pacific Corporation, 32,653 (La.App. 2 Cir. 12/22/99), 754 So.2d 1101; Roach v. Eagle Water, Inc., 31, 912 (La.App. 2 Cir. 5/5/99), 737 So.2d 182; Fisher v. Lincoln Timber Co., 31, 430 (La.App. 2 Cir. 1/24/99), 730 So.2d 973; and Ward v. Phoenix Operating Co., 31,656 (La.App. 2 Cir. 2/24/99), 729 So.2d 109. 6

Similarly, in Gross v. Maison Blanche, Inc., 98-2341 (La.App. 4 Cir. 4/21/99), 732 So.2d 147, the Fourth Circuit upheld an award for penalties and attorney fees for the refusal to authorize medical treatment which was reasonable and necessary. In Adams v. Bayou Steel Corporation, 01-1392 (La.App. 5 Cir. 4/10/02), 813 So.2d 1285, the Fifth Circuit held that the employer's failure to authorize a medical procedure for a claimant otherwise eligible to receive workers' compensation is deemed to be the failure to furnish compensation benefits triggering the penalty provisions. In this matter, the carrier eventually authorized Mr. Authement to see Dr. Dehne. However, the authorization was not made until May 4, 2000, despite the initial recommendation by Dr. Cenac on January 5, 2000, and requests in the interim that Mr. Authement see Dr. Dehne. Thus, four months lapsed between the initial recommendation of Dr. Cenac and the eventual authorization.8 Nothing in the record establishes a justification for this delay in authorization. Further, there was an alternative recommendation by Dr. Cenac that Dr. Hebert was available to treat Mr. Authement. This alternative recommendation was not shared with Mr. Authement until July 24, 2000. Meanwhile, Mr. Authement went without treatment by a recommended specialist for over seven months. While the workers' compensation statute does not address a failure to authorize medical treatment as such, we find the position taken by the Second, Third, Fourth, and Fifth circuits more reflective of the benevolent goals of the workers' compensation law to ensure prompt medical attention to injured workers.

8

The record also reflects a delay of forty days between the original recommendation by Dr. Cenac for a functional capacity evaluation of Mr. Authement and the insurer's authorization for that examination. 7

Additionally, we note that the title of a statute may be instructive in determining legislative intent. Green v. Louisiana Underwriters Insurance

Company, 571 So.2d 610 (La. 1990). The title to LSA-R.S. 23:1201 now states: "Time and place of payment; failure to pay timely; failure to authorize; penalties and attorney fees." (Emphasis added.) The legislature amended LSA-R.S. 23:1201 by 1995 La. Acts No. 1137,

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