State of New Jersey

DEPARTMENT OF LABOR

December 7, 2000

re: Hartten v. Link Belt Const. Eqmt. et al. – 93-028693

Judge Gilroy and Counsel:

Under date of May 1, 2000, the Appellate Division issued a decision in the instant case dealing with an appeal taken by the Stilo Paving Co. and/or Great American Insurance Co. with respect to the application of N.J.S.A. 34:15-40 against a settlement which had been made in this third-party action. The Appellate Division opinion resolved all issues under appeal with the exception of the treatment to be given the fee ($ 30,365); charged by a rehabilitation administration firm for services rendered to/for the plaintiff. On this issue the Appellate Division, noting its then recent decision in Raso v. Ross Steel Erectors, Inc., A-3049-96T2 (App. Div. 1999), remanded the case to the trial court for a determination as to whether the services rendered by Mary Jo Hackett and her firm to the plaintiff during the period 1992-1995 met the "necessary and reasonable" standard set forth in N.J.S.A.34:15-15.

A summary of services allegedly performed by Ms. Hackett and her staff, doing business as Rehab Consulting Service (hereinafter collectively referred to as "RCS") and to which Ms. Hackett testified in the course of the recent hearing conducted in this matter, is summarized on page 11 of the Appellate Division's earlier opinion in this matter, viz. assisting in the purchase of a special wheelchair, arranging home nursing services, arranging for a physical therapist and prosthetic providers, scheduling appointments with and/or otherwise contacting medical providers and obtaining a psychologist familiar with amputee cases. As previously noted, the Appellate Division made it clear in its Raso opinion that recovery of funds by a carrier under Section 40 will only be allowed where the expense in question is both reasonable and necessary to cure and relieve the injured employee of the effects of his/her work related injury.

Webster II (New College Dict., 1995 ed.) defines "necessary" to mean "absolutely required or indispensable"; a secondary meaning is "that which is needed to bring about a certain effect or result". Houghton-Mifflin's American College Dictionary (2nd ed. 1985) offers the definition of something that is "absolutely essential". In addition, I note that the Supreme Court in reviewing the application of Section 15 to benefits sought by an injured employee found that:

" the services must be shown by competent medical testimony to be such as are

reasonable and necessary for the particular patient, taking into consideration

his individual condition and needs." Squeo v. Comfort Controls Corp., 99 N.J.

588, 599 (1985). emphasis added.

In considering what is required to meet the proof level of Section 15, I find that the "necessary" test

must be applied to each of the rehabilitation administrator's activities and not merely to the function

to which such activity applies. This is a critical point, since all of the administration activities listed by the Appellate Division in its earlier opinion in this case were necessary to take the petitioner from his condition following his injury, through his period of treatment and to the point where he was able to function with a prosthesis. The question then becomes, what was the role of RCS in each of these areas of activity and was such service necessary given the definition we have accepted for such term ? In considering this point I suggest that the resolution of this question is heavily fact sensitive and may differ widely from case to case. I would note at this point that I see wide differences in pertinent facts from those presented in the Raso case, supra.

Based upon the record before me, I make the following findings of fact in regards to the services provided by RCS to the petitioner during the period  for which RCS billed Great American Ins. Co.

(hereafter "Great American"):

a) RCS was retained by Great American with the clear understanding that the latter was responsible for any charges RCS would generate in handling Mr. Hartten's case. RCS's invoices for services rendered were sent to and paid by Great American. The petitioner's agreement as to the retention of RCS was neither sought, granted, nor refused.

b) Though RCS testified (Ms. Hackett) that their services were directed solely to the benefit of the petitioner, the fact remains that RCS made various suggestions and sought the carrying out of activities that were not in petitioner's best interests and appear to be cost containment motivated, which I find to be to the benefit of Great American , to wit:

(i) at the commencement of its relationship with the petitioner RCS suggested to Mr. Hartten that he consider an amputation above the knee rather than pursue a surgical course that sought to effect the amputation below the knee, notwithstanding the obvious advantage of retaining

one's knee joint for future use of the injured leg. In the instant case the fact that petitioner had retained only a small portion of his leg below the knee required additional surgery and in addition made it more difficult to properly fit a prosthesis. Without doubt, the decision to save petitioner' knee joint increased the cost of his medical care.

(ii) Mr. Roy, who made the petitioner's prosthesis, confirmed the petitioner's testimony that RCS sought to have him utilize used parts in manufacturing such item. In addition there was

uncontradicted testimony regarding the difficulties petitioner experienced in obtaining a "backup"

prosthesis for future use, notwithstanding the fact that Mr. Roy testified that supplying the same was a "normal" request and one that he was accustomed to meeting. I view the same as a cost containment issue and one in which RCS did not act solely for the benefit of petitioner. The issue of cost containment also appears as the driving force behind Mr. Roy's testimony that RCS's approval was required for every step in the selection and manufacture of a prosthesis for the petitioner. In testifying on this point (T-11/21/00, pp. 11-15) Mr. Roy stated that he was delayed on numerous occasions by the position RCS had taken regarding the necessity of obtaining their prior approval of all activity; he also provided examples of cost containment inquiries made by RCS, e.g. as to whether Mr. Hartten could make adjustment to his prosthesis without Mr. Roy's assistance, and as to refusing approval/fitting/use of a final prosthesis beyond the point that the initial prosthesis should have been discarded. Based on the testimony offered by Mr. Roy, I find that RCS was more of a problem than a problem-solver in those of its activities that involved ordering a prosthesis for the petitioner and that its services were not directed primarily to the interests of the petitioner as regards providing him with a suitable prosthesis. Further, on the subject of cost containment, I note the various references to cost containment that are set forth in Exhibit HR-2, which was presented by Great American for the purpose of establishing Ms. Hackett's credentials as a certified case manager.

c) RCS did not provide any "necessary" services in the selection of petitioner's surgical or

hospital care. This fact is clear from RCS records (see Exhibit HR-6, p. 007) which indicate that petitioner had undergone more than one surgical procedure before RCS met him and/or started to administer his case for Great American. Indeed, Mr. Hartten testified that Dr. Herbstman, his principal surgeon, called Ms. Hackett a "bean counter" for the insurance carrier. I note that Ms. Hackett's testimony as regards her contact with Dr. Herbstman support the conclusion that her role

was purely that of administrative review. See T-10/30/2000, p. 20.

d) RCS did provide "necessary" services to the petitioner in the selection of home nursing

services following the petitioner's discharge from the hospital after his initial surgery. Petitioner

has acknowledged this fact on the record and has admitted that he and his wife did not know where to obtain the nursing service(s) that RCS obtained for petitioner. It is also clear that RCS acted

for the petitioner, and against the wishes of Great American, as regards petitioner's "demand" that

the insurer purchase a wheelchair for his continued and sole use after he left the hospital. In so acting RCS provided a clear example of services "necessary" for the petitioner to receive the medical treatment he sought.

e) There is no evidence before me that RCS provided "necessary" services to the petitioner in the selection of a physical therapist. Such services were rendered by Matt Miller (T-10/31/2000,

p. 40). Ms. Hackett apparently attended one meeting with the petitioner and Mr. Miller in order to

learn what regimen Mr. Miller intended to follow.

f) After reviewing Exhibit HR-6 (RCS notes on petitioner's case) I am satisfied that RCS provided "necessary" services in locating a prosthetist, Mr. Roy, to provide a prosthesis for the petitioner, notwithstanding the fact that the petitioner may have known of Mr. Roy and/or his firm

by reason of past family experience. I further find, however, that after the initial meeting and acceptance of this provider RCS' later and continuing contact with Mr. Roy was principally for the benefit of Great American rather than the petitioner. I also note comments in Exhibit HR-6 regarding cost reduction(s) available to RCS, which were enjoyed by Great American. The subject of discounting bills was acknowledged by Mr. Roy when he testified.

g) The record before me does not support a finding that RCS provided "necessary" services to petitioner with respect to the retention of either (i) Dr. Motley, a psychiatrist with whom the petitioner treated after he had been released from hospital care, or (ii) Dr. Ustkl, a physiatrist who

had been placed in contact with the petitioner while the latter was a patient at Robert Wood Johnson Hospital. RCS did, however, recommend petitioner have counseling sessions with

Dr. Krass, a psychologist experienced in cases involving post-traumatic-stress disorder. For that reason I will consider RCS as providing "necessary" services in recruiting Dr. Krass.

h) Since the petitioner and his wife selected the initial pharmacy that they used to obtain the

petitioner's medicines and related medical supplies, it is obvious that RCS did not provide "necessary" services in such regard. RCS did help the petitioner's locate a second or replacement pharmacy when the initial pharmacy could not provide saline solution at a later point in time. Given what I know of the petitioner and his wife (based upon their several appearances in the litigation involving Mr. Hartten's work-related injury) I do not doubt that they could have located a local pharmacy that would have been able to supply liquid saline solution. The issue in this particular instance, as with the refusal of Great American to provide them with a supply of rubber gloves for use while dressing the petitioner's amputated stump, is that the petitioner felt he was entitled to a standard of treatment that was not accepted by Great American and/or RCS.

Having reviewed the transcripts of testimony in this matter, and taking into consideration the demeanor of the witnesses (petitioner, his wife and Ms. Hackett) I find the complaint(s) of petitioner and his wife to the effect that RCS interfered, rather than interceded, in their relationship

with physicians treating the petitioner to be entirely credible. Mr. and Mrs. Hartten testified that

they were unable to communicate directly with petitioner's treating physicians when Mrs. Hackett

attended the treating sessions. It is also clear to me that once RCS lost the petitioner's confidence,

which occurred when Ms. Hackett suggested to petitioner that he should consider an above-knee

amputation, the ability of RCS to effectively represent the interests of the petitioner, which RCS alleges was its primary duty in this case, became impossible. RCS recognized this problem and Ms. Hackett testified that she suggested to Great American that it consider assigning another rehabilitation service to this case; Great American advised RCS to continue as its representative. Ultimately, RCS stopped attending meetings between the petitioner and his treating physicians and the petitioner and his wife were able to communicate directly with his treating physicians and obtain answers to the various questions they wished to ask.

I further find, based on the record before me that cost containment was a function of RCS' role in

assisting in the administration of the petitioner's medical treatment. Though Ms. Hackett sought to

deny this fact, the very certification(s) which were presented in support of her background and knowledge in/of disability case management acknowledge cost containment as a one of the five

principal subjects on which a candidate is examined in order to qualify as a certified case manager.

By way of summary, I have no evidence before me which contradicts the statements of the petitioner and that of his wife that, aside from home nursing services, the retention of Dr. Krass and Mr. Roy, and the purchase of a wheel chair for his permanent use, the petitioner did not need RCS' services in either procuring or using medical treatment for his injury, and other than so stated, RCS' services were not necessary as regards his medical treatment.

In considering whether RCS performed "necessary" services for the petitioner I have reviewed the

extensive, and most helpful, summary of activities that respondent's counsel submitted as Exhibits

HR-4, -5 and -6. These documents detail both what RCS did and how they performed their function. I note in this regard that in the three (3) year period in which they dealt with the petitioner (7/92 through 8/95) RCS (i) attended a maximum of 8 meetings with petitioner and his physicians or other parties offering medical treatment to petitioner, and (ii) participated in 314 telephone calls concerning petitioner's case, of which 59 phone calls were with Great American. I also note that (x) RCS did not attend any meeting regarding petitioner's case or injury after October 1, 1993, though they continued to bill on this case through August 1995, and (y) as of the latter date the petitioner had completed all treatment relative to his injury save for additional stump and/or prosthesis revisions which were in all cases performed by medical providers who had previously worked on and were familiar with his case.

Recognizing that the Appellate Division may be considering the Raso case, supra, at this time I believe it necessary to bring to the court's attention certain significant differences between the facts

presented in that matter and the instant case. To begin with neither Mr. Hartten nor his wife sought,

were consulted concerning or agreed to use the services of RCS in the handling of his medical treatment. This is contrary to Raso where the petitioner and/or his family agreed in writing that the carrier would utilize a rehabilitation specialist in administering the injured party's care. In addition and of greater significance is the testimony offered in the Raso case by the principal treating physician, the carrier and an independent medical expert to the effect that not only were the services performed by the rehabilitation specialist necessary in themselves, but that the claimant's cognitive disability increased the need for such services. Mr. Hartten had no such cognitive problem. Further, the only comments made by other medical providers on the record before me regarding RCS's services were negative (see clauses (b)(ii) and (c) above), and there was no testimony offered in support of RCS' role aside from the self-serving testimony of Ms. Hackett. Lastly, as regards a comparison with Raso, is the fact that in the instant case RCS did not even meet, much less provide any service to or for, the petitioner until the fourth day following his accident. By that time his hospital had been selected, his surgeon had been retained and the initial surgeries had been performed. Since the petitioner thereafter made what must be considered, under the circumstances, as a good and progressive recovery the potential importance of a rehabilitation specialist were minimized.

In its concluding comment in the Raso decision, supra, as regards the application of Section 15 to the services of a rehabilitation specialist, the Appellate Division stated that where some but not all of the specialist's services were found to meet the necessary and reasonable standard required under Section 15, the supplier's charges may be apportioned accordingly. That is the case before me at this time. I note that (i) RCS billed in minimum units of 15 minutes; thus four separate telephone calls to parties who were not then available provided a minimum aggregate charge of one hour or $120 - 125 depending on the year of activity, and that the same charge applied regardless of which representative of RCS was performing the activity (Ms. Hackett stated that at that point in time her staff varied between 8 and 10 employees).

In reviewing RCS' notes for the petitioner's case (Exh. HR-6) I find that the great majority, if not all, of RCS' "necessary" services, as above defined, were rendered prior to October 1992. RCS' aggregate billing to that point was $13,400. Given the expertise that RCS claims by its billing rate

and recent testimony I find that it should have been able to provide the services I have found to meet the "necessary" standard of Section 15 in not more than 50 hours. At an hourly charge of $125 the total is $6,250. I would add $250 for telephone charges (per its billing practice). We then have a total of $6,500 which is subject to the Section 40 lien being exercised by Great American, which means that an additional $4,355.50 is due the latter from petitioner or from monies held for the latter's account.

Neale F. Hooley
Judge of Compensation