Can an employer use “no liability” C&R Agreement to challenge jurisdiction in fee review matter?

The parties presented a C&R Agreement to the workers’ compensation judge, which stated that the employer was not admitting liability. It also specified there were pending fee reviews that were not being resolved by the C&R and that the claimant would not be responsible for any payments to the pharmacy pursuant to the fee review litigation. Upon questioning by the employer’s counsel, the claimant indicated that he understood he would not be responsible for payment of the pharmacy bills that were subject to the pending fee review litigation.

After the C&R Agreement was approved, the Hearing Office vacated the three determinations of the Medical Fee Review Section, holding that, because the employer had not been adjudicated liable for the work injury, the Hearing Office lacked jurisdiction over the fee review contest. The pharmacy appealed to the Commonwealth Court. The court vacated the decision of the Hearing Office, finding that the employer accepted full liability for the debt to the pharmacy, even though they did not admit liability in the C&R Agreement. The court noted that the employer, in both the Agreement and in questioning the claimant at the C&R hearing, promised the claimant that he would not be liable for the pharmacy’s bills, regardless of the outcome of the fee review litigation. In other words, the employer accepted responsibility for the debt to the pharmacy when it released the claimant from any obligation to pay the pharmacy in the C&R Agreement.

Case Law Alerts, 1st Quarter, January 2020 is prepared by Marshall Dennehey Warner Coleman & Goggin to provide information on recent developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. Copyright © 2020 Marshall Dennehey Warner Coleman & Goggin, all rights reserved. This article may not be reprinted without the express written permission of our firm.