County Memorial Hospital v. ICAO

The summaries of the Colorado Court of Appeals published opinions
constitute no part of the opinion of the division but have been prepared by
the division for the convenience of the reader. The summaries may not be
cited or relied upon as they are not the official language of the division.
Any discrepancy between the language in the summary and in the opinion
should be resolved in favor of the language in the opinion.

SUMMARY
June 17, 2021

2021COA84

No. 20CA1523, Delta County Memorial Hospital v. ICAO —

Labor and Industry — Workers’ Compensation — Benefits — No

Recovery from Employee — Violations — Each Day a Separate

Offense

In a matter of first impression, a division of the court of

appeals considers whether medical billing sent to an injured worker

in violation of section 8-42-101(4), C.R.S. 2020 (prohibiting medical

providers from billing injured workers for medical care arising out of

admitted or determined compensable claims), can constitute a

“continuing violation” within the meaning of section 8-43-305,

C.R.S. 2020. The division concludes that penalties under section 8-

43-304(1), C.R.S. 2020, can only be imposed for the discrete days

on which bills were sent in violation of section 8-42-101(4). In
addition, the division concludes that where, as here, a non-party

entered a general appearance to contest a penalty claim, the non-

party consented to the personal jurisdiction of the Office of

Administrative Courts.
COLORADO COURT OF APPEALS 2021COA84

Court of Appeals No. 20CA1523
Industrial Claim Appeals Office of the State of Colorado
WC No. 5-065-586

Delta County Memorial Hospital,

Petitioner,

v.

Industrial Claim Appeals Office of the State of Colorado, Robert C. Adams
d/b/a Bob Adams Trucking, and Edith Keating,

Respondents.

ORDER AFFIRMED IN PART, SET ASIDE IN PART,
AND CASE REMANDED WITH DIRECTIONS

Division IV
Opinion by JUDGE HAWTHORNE*
Terry and Navarro, JJ., concur

June 17, 2021

Ritsema & Lyon, P.C., Douglas L. Stratton, Fort Collins, Colorado, for Petitioner
Delta County Memorial Hospital

No Appearance for Respondent Industrial Claim Appeals Office

No Appearance for Respondent Robert C. Adams d/b/a Bob Adams Trucking

Law Office of Donald Kaufman, Donald Kaufman, Glenwood Springs, Colorado;
The McCarthy Law Firm, P.C., John D. McCarthy, Arvada, Colorado for
Respondent Edith Keating

*Sitting by assignment of the Chief Justice under provisions of Colo. Const. art.
VI, § 5(3), and § 24-51-1105, C.R.S. 2020.
¶1 This workers’ compensation action raises two questions: (1)

whether a non-party to a case — here, a hospital — can be

penalized for violating a provision of the Workers’ Compensation Act

(Act): and (2) in a matter of first impression, whether discrete

hospital bills can give rise to a continuing violation. For the

reasons addressed below, we do not reach the first question and

answer the second question in the negative.

¶2 The hospital, Delta County Memorial Hospital (the hospital),

violated section 8-42-101(4), C.R.S. 2020, by billing its patient,

claimant Edith Keating, for medical procedures related to her work

injury. An administrative law judge (ALJ) imposed penalties against

the hospital even though the hospital had not been joined as a

party to the action under C.R.C.P. 19(a). The hospital challenges

the ALJ’s order, arguing that penalties cannot be imposed against a

non-party. But we need not answer this question. By entering a

general appearance in the proceedings, the hospital voluntarily

submitted itself to the jurisdiction of the Office of Administrative

Courts (OAC). The OAC thereby acquired personal jurisdiction over

the hospital, and we affirm the decision of the Industrial Claim

1
Appeals Office (Panel) upholding this portion of the ALJ’s order on

this basis.

¶3 Claimant cross-appeals the Panel’s decision, contending that

the penalty amount affirmed by the Panel should have been greater.

Penalties under the Act accrue daily. See § 8-43-304(1), C.R.S.

2020. The Panel limited the daily penalty to those specific dates on

which the hospital issued medical bills to claimant after learning

that her injuries were work-related. But claimant maintains that

the hospital’s violation should be regarded as a “continuing

violation” for which daily penalties can be imposed over a range of

dates. We agree with the Panel that each bill constitutes a distinct

violation that cannot be cured. Such violative billing practices

therefore do not fit within the definition of a continuing violation.

Penalties could be imposed, then, only for those dates on which the

hospital improperly billed claimant. We therefore conclude that the

Panel correctly limited the penalty and affirm the imposition of

penalties on discrete dates when the hospital billed claimant.

However, we set aside that portion of the Panel’s order excluding

two collection attempts by the hospital from claimant’s penalty

award.

2
I. Background

¶4 Claimant worked for Robert C. Adams, doing business as Bob

Adams Trucking. In 2017, she sustained serious injuries while

loading a pickup truck onto a tilt-bed tow truck. After initially

being treated at another hospital, claimant received ongoing

treatment for her injuries at the hospital.

¶5 Claimant sought workers’ compensation benefits from her

employer, Mr. Adams, who has not entered an appearance. In

October 2018, an ALJ found claimant’s claim compensable and

awarded her medical and disability benefits against Mr. Adams,

who lacked statutorily required workers’ compensation insurance.

The ALJ ordered Mr. Adams to deposit $130,000.00 with the

Division of Workers’ Compensation (division) “to secure the

payment of all unpaid compensation and benefits awarded” and file

a bond with the division in the same amount. Claimant testified

that Mr. Adams never paid any funds to her; never paid any of her

medical providers, including the hospital; and, to the best of her

knowledge, never paid any sum to the division as ordered.

¶6 Claimant provided the hospital a copy of the order. Having not

received payment for the services it rendered, the hospital still

3
attempted to collect the debt from claimant. It admittedly sent bills

directly to her. But, as her attorney explained to the hospital in a

letter dated April 10, 2019, once an ALJ has found the claim

compensable, section 8-42-101(4) makes it “unlawful . . . for a

medical provider to bill an injured worker” for medical services

treating the work-related injury. The hospital’s billing manager

testified that she became aware of the letter and order in May 2019,

and a note dated May 7, 2019, in the hospital’s file for claimant’s

account indicates it had received a copy of claimant’s “Work Comp

lawsuit.”

¶7 Despite being advised of the law and the order, on June 13,

2019, counsel for the hospital responded to claimant’s counsel,

writing that because Mr. Adams never paid into the division’s fund

“as ordered by the Court,” the hospital had no other available

avenue to recoup its expenses and its “only recourse in recovering

its costs/fees is through continued collection efforts against

[claimant].” The record shows that the hospital thereafter sent

claimant several billing statements between June 18 and September

12, 2019.

4
¶8 Soon after receiving the first hospital bill, claimant filed an

application for hearing with the division seeking penalties against

the hospital. She first filed a hearing application on June 18, 2019,

naming the hospital as the respondent in the caption. A copy was

sent to the hospital and its counsel the same day. The division

rejected that application because the hospital was not the

respondent-employer. Claimant filed and served on the hospital

and its counsel a second application for hearing on June 19, 2019,

listing both the hospital and Robert C. Adams as respondents, but

it, too, was rejected. Finally, the division accepted claimant’s third

application for hearing, filed June 20, 2019. The third application

identified Robert C. Adams as the respondent, and under its

endorsement of the issue of penalties stated,

8-42-101(4) DELTA MEMORIAL HOSPITAL[:]
No Recovery From Employee, Once there has
been an admission of liability or the entry of a
final order finding that an employer or
insurance carrier is liable for the payment of
an employee’s medical costs or fees, a medical
provider shall under no circumstances seek to
recover such costs or fees from the employee.

5
As with the two rejected applications for hearing, claimant’s counsel

served the third application on the hospital and its counsel that

day.

¶9 At the ensuing hearing, the hospital’s counsel argued that it

had not been properly joined and that penalties therefore could not

be imposed against it. Noting that the penalties statute, section 8-

43-304(1), may be asserted against an employee, employer, insurer

or “any other person,” the ALJ disagreed. The ALJ instead

concluded that the hospital violated the Act by sending claimant

medical bills despite being informed of the ALJ’s October 2018

order finding the claim compensable. Because the ALJ considered

the hospital’s actions a “continu[ing] statutory violation,” she

imposed penalties of $750 per day “for the period of June 13, 2019

through and including October 9, 2019” — i.e., from the date the

hospital’s counsel responded to claimant’s counsel’s letter advising

the hospital of the October 2018 order and the statutory prohibition

against billing claimant through the date of the hearing before the

ALJ — a period of 119 days, resulting in a total penalty award of

$89,250.

6
¶ 10 On review, the Panel affirmed that claimant had properly

asserted her penalty claim against the hospital, that the hospital

need not be joined as a party to have penalties imposed against it,

and that claimant had pleaded her penalty claim with sufficient

specificity. But the Panel concluded that because the hospital

could not cure its violation after sending the bills, the violation was

not “continuing” as the ALJ had found. And because the violations

were not continuing, penalties could only be imposed for those

dates on which the hospital improperly billed claimant. So the

Panel remanded the matter to the ALJ for additional findings

determining which specific bills violated section 8-42-101(4).

¶ 11 On remand, the ALJ found that the hospital improperly billed

claimant on eight separate occasions: June 18, July 2, July 8, July

18, July 31, August 7, August 13, and September 12, 2019. The

ALJ also found “two additional instances of the respondent hospital

attempting to collect from the claimant when two bills were

forwarded to collections on September 20, 2019.” Having found

these ten discrete instances of violative billing, the ALJ imposed

penalties of $750 per day for each of the ten instances, totaling

$7,500 in penalties.

7
¶ 12 The Panel affirmed the imposition of penalties on the eight

dates on which the hospital sent bills to claimant but set aside that

portion of the ALJ’s order awarding penalties for the two bills

forwarded to collections on September 20, 2019. The bills sent to

collections, the Panel determined, were beyond the scope of

claimant’s application for hearing. A penalty cannot be assessed

“for activity not properly noticed” in an application for hearing. The

Panel then amended the ALJ’s order “to apply a daily penalty to

eight instances of violations,” resulting in a total penalty award of

$6,000. The hospital and claimant both appeal the Panel’s order.

II. The Hospital’s Appeal

¶ 13 The hospital contends that (1) the ALJ and the Panel erred by

finding that the hospital, a non-party to the action, could be

assessed penalties without being joined as an indispensable party

under C.R.C.P. 19(a), and thus imposing the penalties violated its

right to due process; and (2) the ALJ lacked personal jurisdiction

over it to assess penalties against a non-party. We are not

persuaded by either contention.

¶ 14 The Act says,

8
Once there has been an admission of liability
or the entry of a final order finding that an
employer or insurance carrier is liable for the
payment of an employee’s medical costs or
fees, a medical provider shall under no
circumstances seek to recover such costs or fees
from the employee.

§ 8-42-101(4) (emphasis added). The hospital does not dispute that

it violated this provision. It challenges only its failure to be joined

as a party, asserting that because it was not a party it could not

adequately protect its rights.

¶ 15 The Act’s penalties statute expressly permits imposing

penalties against anyone who violates its provisions. The relevant

portion states,

Any employer or insurer, or any officer or
agent of either, or any employee, or any other
person who violates articles 40 to 47 of this title
8, or does any act prohibited thereby, or fails
or refuses to perform any duty lawfully
enjoined within the time prescribed by the
director or panel, for which no penalty has
been specifically provided, or fails, neglects, or
refuses to obey any lawful order made by the
director or panel or any judgment or decree
made by any court as provided by the articles
shall be subject to such order being reduced to
judgment by a court of competent jurisdiction
and shall also be punished by a fine of not more
than one thousand dollars per day for each
offense . . . .

9
§ 8-43-304(1) (emphasis added).

A. Personal Jurisdiction

¶ 16 We first address the personal jurisdiction issue. The hospital

argues that because the ALJ lacked personal jurisdiction over it,

she should not have proceeded with the penalties hearing against it.

Although the hospital concedes that it received notice of the hearing

and application, it argues that the notice “was inadequate in that

[the division] wrongfully changed the caption from the underlying

application for hearing that did not list the hospital as a party.” We

conclude that regardless of the language used in the caption, the

hospital submitted itself to personal jurisdiction by entering a

general appearance in the proceedings and defending itself on the

claim’s merits.

¶ 17 “[P]ersonal jurisdiction involves a court’s authority over a

particular individual.” Currier v. Sutherland, 218 P.3d 709, 714

(Colo. 2009). It “is the court’s power to subject a particular

defendant to the decisions of the court.” Rombough v. Mitchell, 140

P.3d 202, 204 (Colo. App. 2006). “[P]ersonal jurisdiction over a

defendant is required before a court may enter enforceable orders.”

Giduck v. Niblett, 2014 COA 86, ¶ 9.

10
¶ 18 “The exercise of personal jurisdiction over a defendant is

proper ‘if fair and adequate notice is provided to the defendant, and

if the defendant has sufficient minimum contacts with the state

seeking jurisdiction.’” Currier, 218 P.3d at 714-15 (quoting Stone’s

Farm Supply, Inc. v. Deacon, 805 P.2d 1109, 1113 (Colo. 1991),

overruled on other grounds by Chapman v. Harner, 2014 CO 78).

¶ 19 Importantly, where, as here, a party or person submits to the

court’s personal jurisdiction over it, no further inquiry is necessary.

See Stone’s Farm Supply, 805 P.2d at 1113 n.6 (“If the court lacks

personal jurisdiction over a defendant, the defendant may consent

to jurisdiction by a voluntary appearance, i.e., by contesting the

case without challenging personal jurisdiction.”). “[W]hen a

defendant who purposefully directed his activities at a forum seeks

to defeat jurisdiction, he must present a compelling case that the

presence of some other considerations would render jurisdiction

unreasonable.” Rome v. Reyes, 2017 COA 84, ¶ 15.

¶ 20 In a situation analogous to the hospital’s appearance before

the ALJ, the Rombough division concluded that the trial court had

personal jurisdiction over the defendant in that case because “(1)

she was properly served; (2) she was alleged to have committed

11
tortious acts within the state; and (3) she filed an answer and

asserted counterclaims.” 140 P.3d at 204.

A party enters a general appearance and
consents to the personal jurisdiction of a court
by seeking relief in a form that acknowledges
the personal jurisdiction of the court. Two
requirements must be met: 1) the party must
have knowledge of the pending proceeding;
and 2) the party must intend to appear.

In re Marriage of Jeffers, 992 P.2d 686, 689 (Colo. App. 1999).

¶ 21 The record establishes that the hospital consented to the ALJ’s

personal jurisdiction over it. First, the hospital was named in the

application for hearing in the penalty section as anticipated by the

provision in section 8-43-304(1) allowing penalties to be pursued

against “any other person.” Second, it admittedly received multiple

notices of the action. And third, it entered a general appearance in

the proceeding before the ALJ by responding to the application for

hearing, filing a “Case Information Sheet,” defending itself on the

merits in the hearing (including presenting evidence and

questioning witnesses on both sides), and filing a post-hearing

position statement with the ALJ.

¶ 22 True, a non-party may appear specially to contest a court’s

personal jurisdiction over it and such special appearance may not

12
result in the court’s acquiring personal jurisdiction over the non-

party.

A special appearance is one made for the
purpose of urging jurisdictional objections. If
a defendant separately or in conjunction with
a motion going only to the jurisdiction invokes
the power of the court on the merits, or moves
to dismiss the action, or asks relief which
presupposes that jurisdiction has attached,
this constitutes a general appearance.

Everett v. Wilson, 34 Colo. 476, 480, 83 P. 211, 212 (1905)

(citations omitted).

The usual method or procedure, common in
the district court when process issues to one
claiming non-jurisdiction, is for the one
summoned to appear specially in the court and
to move that process be quashed as to him.
The court in such cases is vested with power to
determine whether it has jurisdiction.

City of Thornton v. Pub. Utils. Comm’n, 154 Colo. 431, 435, 391 P.2d

374, 376 (1964). But the hospital did not enter a special

appearance at the hearing to solely contest personal jurisdiction.

Indeed, its counsel never mentioned the phrase “personal

jurisdiction” in its appearance, instead discussing at length whether

it had “standing” to contest the penalty claim. Counsel then

proceeded to mount a full defense on the merits of the penalty claim

13
by presenting witnesses, evidence, and argument challenging

claimant’s allegations. The hospital thus entered a general, not a

special, appearance, and it thereby consented to the OAC’s personal

jurisdiction over it.

¶ 23 Finally, we note that the case the hospital cites to support its

personal jurisdiction contention does not stand for the proposition

it advances. See Barker v. Dist. Ct., 199 Colo. 416, 420, 609 P.2d

628, 631 (1980). Instead, Barker was dismissed because “there

[was] no legal entity named as a party defendant. Absent a

controversy between legal entities, there [was] no subject matter to

be litigated and the court [was] without jurisdiction to proceed.” Id.

¶ 24 Because we conclude that the hospital consented to the OAC’s

personal jurisdiction over it, we necessarily reject its personal

jurisdiction contention. See Rombough, 140 P.3d at 204.

B. Joinder

¶ 25 Because the hospital appeared and defended itself — thus

consenting to the OAC’s personal jurisdiction over it — whether it

was properly joined in the action is inconsequential. But the

hospital argues that C.R.C.P. 19(a) mandates joinder of

indispensable parties — those whose rights could be injuriously

14
affected by any decision — and that it is necessarily an

indispensable party because penalties can be, and were, imposed

against it. The posture of this case convinces us that the hospital

suffered no harm, even if it was not properly joined under C.R.C.P.

19.

¶ 26 C.R.C.P. 19(a) states as follows:

A person who is properly subject to service of
process in the action shall be joined as a party
in the action if: (1) In his absence complete
relief cannot be accorded among those already
parties, or (2) he claims an interest relating to
the subject of the action and is so situated
that the disposition of the action in his
absence may: (A) As a practical matter impair
or impede his ability to protect that interest or
(B) leave any of the persons already parties
subject to a substantial risk of incurring
double, multiple, or otherwise inconsistent
obligations by reason of his claimed interest.
If he has not been so joined, the court shall
order that he be made a party. If he should
join as a plaintiff but refuses to do so, he may
be made a defendant, or, in a proper case, an
involuntary plaintiff. If the joined party objects
to venue and his joinder would render the
venue of the action improper, he shall be
dismissed from the action.

(Emphasis added.) Even if the hospital should have been joined as

a party because its rights could be negatively impacted in its

absence, it appeared generally, thus consenting to the OAC’s

15
personal jurisdiction over it, and defended itself on the claim’s

merits before any penalty was entered against it. In other words, its

rights were not negatively impacted in its absence because it was

not absent from the proceeding. So we need not determine whether

C.R.C.P. 19 applied under the Act.

C. Due Process

¶ 27 Due process and personal jurisdiction are inextricably linked.

“In fact, ‘the personal jurisdiction inquiry under Colorado law

collapses into the traditional due process inquiry.’” Rome, ¶ 22

(quoting Grynberg Petroleum Co. v. Evergreen Energy Partners, LLC,

485 F. Supp. 2d 1217, 1222-23 (D. Colo. 2007)). The hospital

contends that its right to due process was violated when the ALJ

permitted claimant’s request for penalties against it to proceed even

though it was not a party to the action. Again, we disagree.

¶ 28 “The fundamental requisites of due process are notice and the

opportunity to be heard.” Franz v. Indus. Claim Appeals Off., 250

P.3d 755, 758 (Colo. App. 2010) (quoting Hendricks v. Indus. Claim

Appeals Off., 809 P.2d 1076, 1077 (Colo. App. 1990)). Due process

requires “that the parties be apprised of all the evidence to be

submitted and considered, and that they be afforded a reasonable

16
opportunity in which to confront adverse witnesses and to present

evidence and argument in support of their position.” Hendricks,

809 P.2d at 1077. The due process clause protects against the

infringement of individual property and liberty interests — such as

the imposition of penalties against an entity — without notice and

an opportunity to be heard. See Whiteside v. Smith, 67 P.3d 1240,

1247 (Colo. 2003). But because it is a flexible standard, no specific

procedure is required “as long as the basic opportunity for a

hearing and judicial review is present.” Ortega v. Indus. Claim

Appeals Off., 207 P.3d 895, 899 (Colo. App. 2009); see also Kroupa

v. Indus. Claim Appeals Off., 53 P.3d 1192, 1195 (Colo. App. 2002);

Wecker v. TBL Excavating, Inc., 908 P.2d 1186, 1188 (Colo. App.

1995).

¶ 29 The hospital received claimant’s three applications for hearing

— two of which were rejected by the division — notifying the

hospital that claimant sought penalties against it and that a

hearing would be held on the matter. After the third application’s

acceptance, the division notified the hospital of the scheduled

hearing date. The hospital’s representative appeared at that

hearing with counsel, who offered documentary evidence,

17
questioned the hospital’s witnesses, cross-examined claimant’s

witnesses, and orally set out the hospital’s position for the ALJ.

Finally, after the hearing, the hospital submitted a position

statement detailing its arguments. Given that the due process

clause guarantees notice and the right to be heard, the hospital was

afforded all the requisite procedural protections. See Hendricks,

809 P.2d at 1077.

¶ 30 The two Panel decisions the hospital cites to support its

argument do not persuade us to reach a different conclusion. See

Caro v. Johnson Controls, Inc., W.C. No. 4-786-424, 2010 WL

2019859 (Colo. I.C.A.O. May 12, 2010); Weber v. Shiloh Homes,

W.C. No. 4-540-459, 2005 WL 3125896 (Colo. I.C.A.O. Nov. 14,

2005). The hospital argues that these Panel decisions establish

that ALJs cannot proceed against non-parties and that the Panel’s

decision in this case was contrary to its own precedent. We are not

persuaded.

¶ 31 First, we are not bound by the Panel’s decisions. See Olivas-

Soto v. Indus. Claim Appeals Off., 143 P.3d 1178, 1180 (Colo. App.

2006). And second, each of the Panel cases is distinguishable. In

Weber, the aggrieved non-party, a physician whose fees were

18
challenged as excessive by the claimant, was not included on the

certificate of mailing nor present at a pre-hearing conference

addressing the motion affecting him. 2005 WL 3125896, at *1. Nor

was he included on the ensuing orders’ certificates of service. Id.

Unlike the hospital here, the physician in Weber received neither

notice nor the opportunity to be heard, as required by the due

process clause.

¶ 32 Likewise, in Caro, the claimant attempted to seek penalties

directly against the division for allegedly refusing “to provide a

medical examiner with expertise in the requested medical field to

evaluate the claimant’s injury.” 2010 WL 2019859, at *2. But the

Panel did not hold that a penalty against the division was improper

because the division had not been joined as a party; instead, the

Panel ruled that it did not need to determine whether the ALJ had

jurisdiction over the division because the claimant’s claim and the

record before it were “insufficient as a matter of law to support any

order providing relief.” Id. at *3. Caro never answered the question

the hospital poses here and is inapposite to our analysis.

19
¶ 33 We conclude that the hospital was not deprived of due process

when the ALJ considered and ruled on claimant’s request for

penalties against it. See Hendricks, 809 P.2d at 1077.

III. Claimant’s Cross-Appeal

¶ 34 Claimant contends that the Panel improperly ruled that the

statutory violations the hospital committed could not be classified

as continuing violations. She argues that the hospital’s actions

“constituted a continuous and unrelenting violation of [section] 8-

42-101(4), subject to daily penalties from June 13, 2019 through

October 9, 2019.” As explained above, if the hospital is subject to

penalties for a continuing violation during the period identified,

claimant would receive $83,000 more in penalties than if penalties

are assessed only for the eight dates on which the hospital

improperly billed claimant. Claimant argues that ample evidence

supported the ALJ’s original order finding the violation to be

continuing and that the Panel exceeded its authority by engaging in

factfinding when it re-categorized the violations as discrete, not

continuing, acts. We are not persuaded.

¶ 35 But we agree with claimant’s alternative assertion that ample

evidence supported an award of penalties against the hospital for

20
the two instances in which the hospital sent claimant’s bills to a

collection agency.

A. Continuing Violation

¶ 36 Section 8-43-305, C.R.S. 2020, permits daily penalties to be

imposed against an individual or entity for failure to comply with an

order. It states as follows:

Every day during which any employer or
insurer, or officer or agent of either, or any
employee, or any other person fails to comply
with any lawful order of an administrative law
judge, the director, or the panel or fails to
perform any duty imposed by articles 40 to 47
of this title shall constitute a separate and
distinct violation thereof. In any action
brought to enforce the same or to enforce any
penalty provided for in said articles, such
violation shall be considered cumulative and
may be joined in such action.

§ 8-43-305. “The purpose of section 8-43-305 is to address

‘ongoing conduct.’” Crowell v. Indus. Claim Appeals Off., 2012 COA

30, ¶ 12 (quoting Spracklin v. Indus. Claim Appeals Off., 66 P.3d

176, 178 (Colo. App. 2002)). When violative “conduct is ongoing,

imposition of a daily penalty is required.” Id.

¶ 37 As Crowell explained, continuing violations typically include a

delay in acting and can therefore “be cured by simply taking the

21
required action.” Id. at ¶ 14. Crowell identified numerous

examples of failures to act that would result in daily penalties for

continuing violations, including the following:

 failure to pay medically necessary bills, Associated Bus.

Prods. v. Indus. Claim Appeals Off., 126 P.3d 323, 324,

326 (Colo. App. 2005), abrogated on other grounds by

Colo. Dep’t of Lab. & Emp. v. Dami Hosp., LLC, 2019 CO

47M;

 failure to provide medical treatment, Pena v. Indus. Claim

Appeals Off., 117 P.3d 84, 86 (Colo. App. 2004);

 failure to timely file a final admission of liability, Hum.

Res. Co. v. Indus. Claim Appeals Off., 984 P.2d 1194,

1196 (Colo. App. 1999); and

 failure to provide a medical report to claimant, Diversified

Veterans Corp. Ctr. v. Hewuse, 942 P.2d 1312, 1313

(Colo. App. 1997).

The common thread running through these examples is that, in

each case, the offense could be corrected by taking the required

action. Simply put, “the difference between a one-time violation

22
and a continuing violation hinges on whether the violation is

subject to being cured by subsequent action.” Crowell, ¶ 13.

¶ 38 Claimant describes the hospital’s patient billing practices as

an ongoing act requiring no “affirmative action . . . to generate

individual bills.” She paints a picture of the hospital’s billing

practices as being “on continuous autopilot,” and argues that the

billing cycle could be cured “by simply rescinding its invoices and

halting all other internal and external . . . collection processes.”

¶ 39 But claimant’s characterization omits two crucial distinctions

between this situation and the continuing violations discussed in

Crowell. First, the hospital did not issue claimant a bill every day.

In contrast, continuing failures to pay for or provide medical care,

like those described in Crowell, occur each and every day that a

medical bill goes unpaid or treatment is delayed. See id. at ¶ 14;

Associated Bus. Prods., 126 P.3d at 324, 326; Pena, 117 P.3d at 86.

Although the hospital’s billing process generated several bills and

did so until it intervened to stop the system, the hospital only sent

claimant violative bills on eight discrete occasions.

¶ 40 Second, once a bill has been generated and sent, the violative

deed has been committed and cannot be undone. In other words,

23
improperly sending a bill to a claimant for covered care cannot be

cured because the bill cannot be “unsent.” See Crowell, ¶¶ 13, 14.

In contrast, a failure to pay a medical bill can be corrected once the

bill is paid. Given these differences, we conclude that the hospital

violated section 8-42-101(4) on the dates it or its agent generated

and sent a medical bill to claimant, but that it did not commit a

continuing violation within the scope of section 8-43-305.

¶ 41 Claimant also maintains that the Panel overstepped its

authority by rejecting the ALJ’s initial finding that the hospital’s

violations were continuing in nature. True, the Panel is bound by

the ALJ’s factual determinations if those findings are supported by

substantial evidence in the record. § 8-43-301(8), C.R.S. 2020;

Pella Windows & Doors, Inc. v. Indus. Claim Appeals Off., 2020 COA

9, ¶ 44. But, when an ALJ misconstrues or misapplies the law,

neither the Panel nor we are so bound. See Paint Connection Plus v.

Indus. Claim Appeals Off., 240 P.3d 429, 431 (Colo. App. 2010)

(“[A]n agency’s decision that misconstrues or misapplies the law is

not binding.”).

¶ 42 The ALJ misconstrued the nature of the bills and consequently

misapplied section 8-43-305. Because the hospital could not take

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back the bills once they had been sent, it could not cure its

violation. Even though the ALJ found that the hospital committed a

continuing violation, that finding was based on a misapplication of

the law, so the Panel did not err by setting that finding aside. See

id.

B. Bills Sent to Collection Agency

¶ 43 Claimant alternatively contends that the Panel erred by

determining that the two instances in which a collection agency

attempted to collect payment from her could not serve as bases for

penalties. The Panel set aside the ALJ’s penalty award for the two

collection attempts on the grounds that (1) the hospital sent the

bills to the collection agency before it knew that claimant’s claim

had been ruled compensable; and (2) claimant failed to specifically

plead that her penalties claim was premised on the collection

attempts. It noted that the “assessment of a penalty for activity not

properly noticed is prohibited by statute, . . . the OAC rules, . . .

and standards of procedural due process.” We agree with claimant

that sufficient record evidence supported the ALJ’s finding that

these two collection attempts constituted incidents of improper

billing in violation of section 8-42-101(4).

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¶ 44 The Act mandates that “any application for hearing for any

penalty pursuant to subsection (1) of this section . . . shall state

with specificity the grounds on which the penalty is being asserted.”

§ 8-43-304(4). While claimant’s statement is broad, it put the

hospital on notice that its attempts to collect medical fees from

claimant after the ALJ had found the claim compensable violated

the Act. Claimant’s application for hearing cast a wide net by

paraphrasing section 8-42-101(4)’s prohibition against seeking “to

recover such costs or fees from the employee.” The September 2019

collection attempts fit under the umbrella of violative acts described

in the application for hearing. We conclude that the application

sufficiently notified the hospital that its billing of claimant,

including any collection attempts, subjected it to penalties.

¶ 45 Also, collection attempts fall within the scope of behavior the

Act prohibits. The Act forbids medical providers from “seek[ing] to

recover” medical costs and fees once liability for a claim attaches.

§ 8-42-101(4). The statute does not limit the prohibited acts to bills

mailed by a medical provider or affirmative actions taken by a

medical provider to collect on a bill. Instead, the Act broadly

incorporates any action that “seek[s] to recover” fees and costs.

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Collection attempts are certainly efforts to recover fees and costs

and thus fall under the rubric of prohibited acts. True, the hospital

submitted the bills to the collection agency before it knew of the

ALJ’s compensability finding, but no evidence in the record

indicates the hospital contacted the collection agency to stop those

activities on learning of the order. And it appears undisputed that a

collection attempt was “last reported” in September 2019.

¶ 46 This evidence supports the ALJ’s finding that there were “two

additional instances of [the hospital] attempting to collect from the

claimant when two bills were forwarded to collections on September

20, 2019.” Where substantial evidence supports an ALJ’s factual

finding, the Panel is bound by it and may not set it aside. See Paint

Connection Plus, 240 P.3d at 431. We conclude that the Panel erred

when it set aside this finding.

IV. Conclusion

¶ 47 We therefore affirm the Panel’s order holding that daily

penalties, but not a continuing violation, could be assessed against

the hospital; set aside that portion of the Panel’s order rejecting

penalties for the bills sent to a collection agency; and remand the

case to the Panel with instructions to reinstate the ALJ’s award of

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penalties for the two days collection attempts were instigated

against claimant.

JUDGE TERRY and JUDGE NAVARRO concur.

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