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Smith v. Union Insurance Co.

United States District Court, N.D. Mississippi, Oxford Division

June 6, 2017




         Presently before the Court is defendant Union Insurance Company's (“Union”) First Motion for Summary Judgment [138]. Plaintiff Anthony Smith filed a response in opposition to the motion, to which Union filed a reply.[1] The Court has reviewed the parties' submissions, in addition to relevant evidence and authorities, and is now prepared to rule.

         Factual and Procedural Background [2]

         Anthony Smith was employed as a teacher with the Desoto County School District in Desoto County, Mississippi. On August 10, 2009, Smith attempted to replace a light bulb in his classroom. However, the light bulb unexpectedly exploded, causing Smith to lose his balance and fall from a ten-foot ladder. As a result of the fall, Smith sustained serious injuries to his “head, neck, back, shoulder and other upper extremities.” It is undisputed that, at the time the accident occurred, Union was Desoto County School District's workers' compensation insurance carrier.

         Due to the severity of his injuries, Smith needed extensive medical treatment. In fact, in his brief, he himself admitted that he “required a lot of medical care.” He alleges, however, that he failed to receive the medical care he needed in a timely fashion due to Union's unnecessary delay in providing authorization for many requested services, despite his numerous attempts to obtain Union's cooperation.

         As a result, Smith filed suit in this Court on September 24, 2015, alleging that Union's bad faith delay in authorizing necessary medical care and failure to promptly and properly conduct investigations into his requests caused him emotional distress. He also avers that Union's conduct was so egregious as to warrant punitive damages. Specifically, he alleges that Union “delayed or constructively denied medical care in defiance of the medical evidence provided to it by the treating physician, and repeatedly left [him] without medical care. The delays, and the refusal to investigate [his] need for medical care is systemic behavior of a willful nature representing a repetitious, and intentional wrong against [him]. . .” He has also described Union's handling of his claim as a “disgrace.” Smith's allegations are essentially based on four specific instances of Union's bad faith delay in providing authorization for necessary medical care. However, prior to providing a description of those specific instances, the Court will set forth a brief explanation of the administrative process for workers' compensation claims to the extent it is relevant to the present action, in order to provide context for Smith's allegations.

         Pursuant to the Workers' Compensation Act (“the Act”), the Workers' Compensation Commission (“the Commission”) must “establish an appropriate medical provider fee schedule, medical cost containment system and utilization review which incorporates one or more medical review panels to determine the reasonableness of charges and the necessity for the services . . .” Miss. Code Ann. § 71-3-15(3). In compliance with this statutory mandate, the Commission has enacted a fee schedule.[3] The fee schedule defines “utilization review” as the “evaluation of the necessity, appropriateness, and efficiency for the use of heath care services.” It permits the insurance carrier to submit any recommended medical service through utilization review prior to authorization and even requires that certain medical services be submitted through utilization review. Once a recommended service is submitted to utilization review, an outside entity, organization, or representative conducts an investigation and ultimately makes a determination on behalf of the carrier as to whether the requested service is medically necessary.

         In the case at hand, Forté was the name of the company that performed the utilization reviews that Union submitted in this case.

         With this brief background in mind, the Court turns to Smith's four specific alleged instances of Union's delay in this cause. As stated by Smith in his response, the four instances of bad faith delay concern “(1) failure to authorize physical therapy and ESI injection; (2) delay in requests to authorize carpal tunnel surgery; (3) delay in refusing to authorize cubital tunnel surgery; and (4) the refusal to authorize a neurological evaluation, and the follow[-]up requests of that doctor for diagnostic testing.” Perhaps unsurprisingly, the parties dispute many of the underlying facts surrounding each of those four instances. The Court will set forth the relevant facts as to each of them in turn.

         First Alleged Instance of Delay:

         The first alleged instance of delay occurred between August 10, 2009-the date of the accident-and December 28, 2009. Smith alleges that sometime during October 2009, “Union began to refuse physical therapy and [epidural steroid injections] recommended by Calandruccio.” Dr. Calandruccio was Smith's treating physician. As to this refusal, Union states that, at the time this non-authorization occurred, Smith had already completed approximately twenty-five physical therapy sessions, all of which had been approved and paid by Union. However, Forté-again, the company performing the utilization reviews for Union in this matter-determined that the request for additional therapy should be denied because “Smith had previously undergone physical therapy and a nerve block, and that additional physical therapy was not in accordance with applicable guidelines or properly documented by the treating physician.”

         During this same time period, Smith received an epidural steroid injection. On December 2, 2009, Dr. Dockery-another treating physician-recommended that Smith receive a second injection. This request was sent through utilization review, and Forté ultimately found that the request should not be authorized. On this point, Union states that “[t]he treatment was non-authorized, in part, because the first injection only provided short-term relief, and the physician did not provide documentation to support that an additional injection would provide any long-lasting relief.”

         At the time these denials occurred, Smith was not represented by counsel. The denials were not appealed. At some point thereafter, Smith obtained counsel-Shane Tompkins. On or about December 28, 2009, Tompkins filed a motion to compel before the Commission on Smith's behalf, requesting an order compelling Union to authorize the additional physical therapy sessions and a second epidural steroid injection. According to the parties, although no other documentation has been submitted on the point, a hearing was held before an administrative law judge as to the motion to compel; however, an order was not entered after the hearing. Nevertheless, Union eventually agreed to authorize the second injection and additional physical therapy.

         Smith received the second injection on February 3, 2010, and began additional physical therapy on February 15, 2010. He now argues that the fact that Union ultimately agreed to authorize the additional therapy sessions and the injection tends to show that the initial denial was nothing more than a delay tactic.

         Second Alleged Instance of Delay:

         Second, Smith alleges delay related to the authorization of his carpal tunnel release surgery, which was recommended by Dr. Calandruccio on June 30, 2010. Smith avers that Union unnecessarily delayed in providing authorization for the surgery. Contesting this allegation, Union emphasizes that Smith had been diagnosed with pre-existing carpal tunnel syndrome prior to the accident and that there was a reasonable dispute as to whether the requested procedure was related to the accident or Smith's pre-existing condition. On July 7, 2010, Union submitted the request to utilization review, and Forté issued a notice declining the request two days later.

         Thereafter, on July 26, 2010, Tompkins filed another motion to compel on Smith's behalf, requesting “that the Commission compel [Union] to approve and pay for the scalene blocks and carpal tunnel release recommended by his treating physician, Dr. James Calandruccio, pursuant to the Mississippi Workers Compensation Act.”[4] A hearing on the motion was set for August 20, 2010.

         Prior to the hearing, Union exercised its statutory right to have Smith evaluated by a physician of its choosing to assess the extent of the injury and the need for medical treatment, which is referred to as an employer medical exam (“EME”).[5] Union arranged for Smith to be evaluated by Dr. Feredion Parsioon. After his first appointment was postponed, Smith was seen and evaluated by Dr. Parsioon on September 16, 2010. Dr. Parsioon recommended an MRI and an EMG nerve conduction study, presumably in order to aid in his determination as to whether the surgery was medically necessary. After Union initially declined to provide payment for these tests, arguing that there was a lack of medical evidence supporting the need for them, it eventually agreed to authorize them sometime during November 2010. Union claims, however, that it was unable to get in touch with Dr. Parsioon's office for several weeks in order to schedule the tests. Smith filed an additional motion to compel the authorization of the tests in the interim-on December 20, 2010. At some point during this time period, Union got in touch with Dr. Parsioon's office to schedule the tests. The MRI exam was performed on December 22, 2010, and the nerve testing was performed on January 4, 2011. The administrative law judge entered an order granting Smith's motion that Union authorize these tests on January 6, 2011- despite the fact that they had already been performed by this point.

         After receiving the test results, Dr. Parsioon agreed that the carpal tunnel release surgery was medically necessary. He also recommended that Smith undergo surgery for his cervical spine.

         Smith alleges that Union was aware of Dr. Parsioon's opinions-and Smith's desire to undergo the procedure- on January 11, 2011; however, Union still had not authorized the surgeries as of February 9, 2011. Eventually, Smith underwent the cervical fusion surgery on March 2, 2011, and the carpal tunnel release surgery on March 28, 2011. While Union ultimately authorized these procedures, Smith emphasizes that it took nearly eight months for him to receive authorization. On this point, Smith states that “[a] jury could reasonably conclude the initial utilization review was improper; requiring its own medical examiner submit diagnostic test [sic] he needed for utilization review was improper; or, the failure of Union to appeal the denial by Forté and the delay in acquiring his opinion were all unjustified legally and factually.” Further, Smith argues that a jury could find that “after Dr. Parsioon indicated the carpel [sic] tunnel surgery was reasonable and proper, the refusal of Union to authorize the surgery was outrageous and knowingly appreciated by Union[.]”

         Third Alleged Instance of Delay:

         Smith next alleges delay concerning his cubital tunnel surgery request. After undergoing the carpal tunnel release surgery and the cervical spine surgery, Smith continued to receive various forms of medical aid, including physical therapy and multiple medications. During this time period, Dr. Calandruccio recommended that Smith undergo a cubital tunnel release surgery. Accepting his advice, Smith eventually informed Dr. Calandruccio that he wished to undergo the procedure. On October 24, 2011, Dr. Calandruccio informed Union that Smith had agreed to undergo the surgery. Union submitted the request to utilization review, and Forté issued a non-authorization on November 11, 2011, which was not appealed.

         Instead, after unsuccessfully attempting to discuss the denial with Union and reach a compromise, Tompkins-on Smith's behalf-filed a motion to compel authorization of the surgery on November 23, 2011. At some point after the motion was filed, Union-through its counsel, Jeff Skelton-indicated that it again intended to exercise its statutory right to have Smith evaluated by a physician of its choosing. Therefore, the administrative law judge held the motion in abeyance.

         The parties dispute exactly what occurred at this point. Smith provides a copy of a letter from Tompkins to Skelton, wherein he “ask[ed] that the evaluation be scheduled immediately” and further stated “[p]lease note . . . [that] the employer waited almost six (6) weeks to request an EME.” Smith states that he did not hear anything in response and was therefore forced to file an additional motion to compel the surgery, alleging that Union “has not ...

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