             IN THE COMMONWEALTH COURT OF PENNSYLVANIA


Peter Schatzberg, DC and                     :
Philadelphia Pain Management,                : No. 1914 C.D. 2015
                                             : Submitted: February 12, 2016
                            Petitioners      :
                                             :
                     v.                      :
                                             :
Workers’ Compensation Appeal                 :
Board (Bemis Company, Inc.),                 :
                                             :
                            Respondent       :


BEFORE:       HONORABLE MARY HANNAH LEAVITT, President Judge
              HONORABLE ANNE E. COVEY, Judge
              HONORABLE ROCHELLE S. FRIEDMAN, Senior Judge


OPINION
BY SENIOR JUDGE FRIEDMAN                                        FILED: March 30, 2016

              Peter Schatzberg, DC and Philadelphia Pain Management (together,
Provider) petition for review of the September 18, 2015, order of the Workers’
Compensation Appeal Board (WCAB) affirming the amended decision of the
workers’ compensation judge (WCJ) to deny and dismiss Provider’s penalty petition.
We affirm.


              On November 13, 2009, Eric Green (Claimant) allegedly suffered a
work-related injury while employed with Bemis Company, Inc. (Employer). 1 (WCJ’s
Op., 5/13/14, Findings of Fact, No. 1.) Claimant notified Employer of the injury and

       1
       Claimant was first injured on July 9, 2008, and alleged that he aggravated that injury on
November 13, 2009. (N.T., 3/14/11, at 8.)
on November 25, 2009, Employer filed a timely notice of workers’ compensation
(WC) denial. On December 16, 2009, Claimant began treating with Provider. (Ex.
C-5; R.R. at 40-97.) On July 1, 2010, Claimant filed a claim petition due to the
alleged work injury of November 13, 2009. (WCJ’s Op., 3/17/11, at 1.) Employer
filed an answer denying that Claimant suffered a work injury.


              On March 14, 2011, at a hearing before the WCJ, Claimant amended his
claim petition to seek approval of a compromise and release (C&R) agreement
reached between Claimant and Employer. (Id.) The C&R agreement described
Claimant’s alleged injury as an “injury to the neck, thoracic spine and lumbar spine.”
(C&R Agmt., 3/14/11, at 1.) The C&R agreement stated that it was a resolution of
wage loss and medical benefits. (Id. at 2.) It further stated that “[i]n exchange for a
[C&R] of all liability, [Employer] shall agree to pay [C]laimant $86,944 subject to a
20% attorney fee chargeable to Claimant’s share. The instant agreement covers all
injury dates.” (Id.) The purpose of the C&R agreement was “to resolve this case on
a full and final basis.” (Id. at 3.)


              Claimant certified that he understood that Employer “will never have to
pay any other [WC] benefits for the injury” and that “this agreement is a [C&R] of a
[WC] claim, and is not considered an admission of liability by [E]mployer.” (Id. at
4.) The WCJ concluded that “Claimant understands the full legal significance of the
[C&R] [a]greement and has knowingly and voluntarily entered into the agreement.”
(WCJ’s Op., 3/17/11, Conclusions of Law, No. 3.) The WCJ granted the petition




                                          2
seeking approval of the C&R agreement. (WCJ’s Op., 3/17/11, at 2.) This decision
was not appealed.2


                On February 6, 2013, Provider filed a penalty petition3 alleging that
Employer violated the Workers’ Compensation Act (Act)4 by resolving the WC case
through a C&R agreement with Claimant without giving Provider notice and an
opportunity to intervene.5 (Penalty Pet., 2/6/13, at 1.) Provider alleged that Employer
violated the Act when it failed to pay Claimant’s medical bills pursuant to the C&R
agreement. (WCJ’s Op., 5/13/14, Findings of Fact, No. 1.) Employer denied the
allegations. (Id., No. 2.)


                After a hearing, the WCJ found that:

                Employer did not agree to pay medical bills incurred as a
                result of the [alleged] work injury, and this is consistent
                with the [C&R] [a]greement. There is nothing set forth in
                the [C&R] [a]greement itself addressing payment of
                medical bills. Paragraph 5 indicates that no medical bills
                were paid pursuant to Claimant’s [alleged] work-related
                injuries and settlement.



       2
        Following the C&R agreement, Claimant filed a review and reinstatement petition for
nonpayment of medical bills that were incurred before the C&R agreement. However, Claimant
withdrew this petition in March 2012.

       3
          The penalty petition states that “[t]his Petition is filed by Provider, who is/was NOT a
party to [the] C&R [agreement].” (Penalty Pet., 2/6/13, at 2.)

       4
           Act of June 2, 1915, P.L. 736, as amended, 77 P.S. §§1-1041.4, 2501-2708.

       5
          Provider also alleged that it relied, to its detriment, on Claimant’s counsel to protect its
interest in the pending litigation. (Penalty Pet., 2/6/13, at 1.)


                                                  3
(Id., No. 7.) The WCJ further found that:

                Provider has no recourse against Employer in this matter.
                Provider lost its cause of action when the [C&R]
                [a]greement was finalized by the parties. A [C&R]
                [a]greement that is silent on the payment of medical bills
                does not obligate Employer to pay. . . . The attorneys who
                were involved at the time and knew that Claimant had
                treated with Provider by reason of his [alleged] work injury
                could have made sure the doctor’s bill was satisfied at the
                time the [C&R] agreement was reached. They did not.
                Contrary to the imaginative argument forwarded by
                [Provider’s] counsel, nothing left unspecified by the [C&R]
                [a]greement can be deemed “only logical” or
                “conclusive.”[6] Claimant’s counsel is well aware that if
                medical bills are to be paid, it would be set forth in the
                terms of the [C&R] [a]greement and it was not. Provider
                has no legal recourse against Employer.

(Id., No. 8.)


                The WCJ concluded that Provider failed to establish that Employer was
required to pay Claimant’s medical bills because the C&R agreement does not
obligate Employer to pay them. (Id., Conclusions of Law, No. 1.) The WCJ denied
and dismissed Provider’s penalty petition. Provider appealed to the WCAB, which
affirmed. Provider now petitions this court for review.7



       6
         Provider stated that Claimant’s medical bills were logically due and payable as a matter of
course pursuant to the WCJ’s March 17, 2011, decision approving the C&R agreement.

       7
        Our scope of review is limited to determining whether constitutional rights were violated,
whether the adjudication is in accordance with the law, and whether the necessary factual findings
are supported by substantial evidence. Section 704 of the Administrative Agency Law, 2 Pa. C.S.
§704.


                                                 4
                Section 435(d) of the Act gives “[t]he department, the board, or any
court which may hear any proceedings brought under this act . . . the power to impose
penalties . . . for violations of . . . this act.” 77 P.S. §991(d).8 “‘However, the
imposition of a penalty is at the discretion of the WCJ and is not required, even if a
violation of the Act is apparent on the record.’” Lincow v. Workers’ Compensation
Appeal Board (Prudential Securities, Inc.), 832 A.2d 569, 571 (Pa. Cmwlth. 2003)
(citation omitted).


                Provider argues that Employer’s failure to pay Claimant’s medical bills
in accordance with the C&R agreement is a violation of the Act. We disagree.


                Section 449(b) of the Act provides that an employer or insurer may
submit a proposed C&R agreement stipulated to by both parties to the WCJ for
approval. 77 P.S. §1000.5(b).9 “The agreement must be explicit with regard to the
payment, if any, of reasonable, necessary and related medical expenses.” Id. Here,
Employer and Claimant entered into a C&R agreement that was approved by the
WCJ.        The C&R agreement stated that it was not an admission of liability by
Employer.10 Additionally, the C&R agreement did not require Employer to pay any




       8
           Added by Section 3 of the Act of February 8, 1972, P.L. 25.

       9
           Added by Section 22 of the Act of June 24, 1996, P.L. 350.

       10
         Employer never issued a notice of compensation payable (NCP) and there was never a
determination by agreement or adjudication of a work-related injury in this matter.



                                                  5
past or future medical expenses.11 Thus, contrary to Provider’s assertion, nothing in
the C&R agreement obligates Employer to pay Claimant’s medical expenses.


               In Lincow, the claimant sustained a work-related injury, the employer
issued a NCP, and the claimant received total disability benefits. 832 A.2d at 569-70.
Thus, the employer admitted that there was a work-related injury and liability. Id. at
570. The employer then filed a utilization review (UR) petition, challenging the
reasonableness of the claimant’s medical treatment. Id. The employer prevailed and,
subsequently, filed a termination petition. Id. The provider, Lincow, filed a petition
to review the UR determination, alleging that the claimant’s treatment was reasonable
and necessary. Id. The WCJ denied both petitions. Id. Lincow appealed the UR
petition, and the employer filed a second termination petition. Id. Thereafter, the
claimant and the employer entered into a C&R agreement that resolved the
termination petition and released employer from all liability for medical benefits
under the Act. Id. Ultimately, the WCJ denied the UR petition and determined that
the claimant’s treatment was neither reasonable nor necessary. Id.


               Lincow then filed the penalty petition at issue, seeking penalties against
the employer for failure to pay medical bills. Id. The WCJ denied the penalty
petition, determining that the C&R agreement had compromised the medical bills
and, therefore, Lincow did not have standing to seek penalties for failure to pay
medical bills that were determined to be for treatment that was deemed not

       11
          Paragraph 5 of the C&R agreement provides that “the amount of benefits paid or due and
unpaid to the [Claimant] up to the date of this agreement or death [is] . . . Medical: 0.” Paragraph 7
provides that the C&R agreement is “a resolution of medical benefits for the injury referenced.”
(C&R Agmt., 3/14/11, at 2.)


                                                  6
reasonable or necessary. Id. at 570-71. The WCAB affirmed the WCJ. Id. at 571.
Lincow petitioned this court for review, and we affirmed. Id. at 571-72.


                Here, unlike Lincow, Employer denied that Claimant suffered a work
injury and never admitted liability. Further, there was no finding or adjudication that
Claimant’s injury was work-related. Thus, Employer was not obligated at any time to
pay Claimant’s medical bills.12


                Accordingly, we affirm.



                                             ___________________________________
                                             ROCHELLE S. FRIEDMAN, Senior Judge




      12
           Due to this determination, we need not address Provider’s remaining issues.


                                                  7
          IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Peter Schatzberg, DC and              :
Philadelphia Pain Management,         : No. 1914 C.D. 2015
                                      :
                       Petitioners    :
                                      :
                 v.                   :
                                      :
Workers’ Compensation Appeal          :
Board (Bemis Company, Inc.),          :
                                      :
                       Respondent     :



                                     ORDER


           AND NOW, this 30th day of March, 2016, we hereby affirm the
September 18, 2015, order of the Workers’ Compensation Appeal Board.



                                      ___________________________________
                                      ROCHELLE S. FRIEDMAN, Senior Judge
