Stephen J. Leibovic, MD v San Juanito Melchor,etc

COURT OF APPEALS OF VIRGINIA
Present: 	Judges Humphreys, Clements and Senior Judge Coleman
Argued at Richmond, Virginia
STEPHEN J. LEIBOVIC, M.D.
OPINION BY
v. 	Record No. 0790-00-2 	JUDGE ROBERT J. HUMPHREYS
MARCH 6, 2001
SAN JUANITO MELCHOR, TRUSSWAY, LTD.
AND LIBERTY MUTUAL INSURANCE CORPORATION
FROM THE VIRGINIA WORKERS' COMPENSATION COMMISSION
S. Vernon Priddy, III (Daniel L. Rosenthal;
Law Office of Daniel L. Rosenthal, on brief),
for appellant.
Roger L. Williams (John T. Cornett, Jr.;
Williams & Lynch, on brief), for appellees
Trussway, Ltd. and Liberty Mutual Insurance
Corporation.
No brief for appellee San Juanito Melchor.
Dr. Stephen J. Leibovic appeals a decision of the Workers'
Compensation Commission, holding that he was not entitled to
additional compensation for medical services provided pursuant
to a contract between himself and First Health Group Corporation
("First Health"). 	Specifically, Dr. Leibovic argues that the
commission erred in finding that Code § 65.2-605 is not a "rule"
or "guideline" for the payment of workers' compensation
healthcare services.1
1 "All questions arising under [the Workers'
Compensation Act ('the Act')] . . . shall be
determined by the Commission . . . ." 	Code

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On August 6, 1996, San Juanito Melchor, an employee of
Trussway, Ltd., severed his left index finger and thumb in an
industrial accident. 	This claim was accepted as compensable by
Trussway. 	On April 28, 1996, pursuant to an agreement of the
parties, an award was entered for medical benefits and
compensation.
On October 28, 1998, Dr. Leibovic filed the claim at issue
seeking payment for services rendered to Melchor. 	Dr. Leibovic
had charged $22,993 for four surgeries performed on Melchor.
However, First Health paid Dr. Leibovic only $10,228.86 for
these services.
First Health is a national health benefits service company.
It operates a preferred provider organization that contracts
with private physicians and other healthcare providers.
Pursuant to these contracts, the physicians and medical
providers agree to accept certain rates for medical services
rendered to workers' compensation claimants when the insurer is
one of First Health's clients. 	In this case, Liberty Mutual
§ 65.2-700. 	This grant of subject matter
jurisdiction includes the authority of the
commission to enforce its orders and to
resolve coverage and payment disputes. 	Code
§ 65.2-714(A) provides the commission
exclusive jurisdiction over all disputes
concerning payment of the fees or charges of
physicians and hospitals.
Combustion Engineering, Inc. v. Lafon, 22 Va. App. 235, 237, 468
S.E.2d 698, 699 (1996) (citation omitted).

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Insurance Corporation ("Liberty Mutual"), the carrier for
Trussway, was one of First Health's clients. 	Liberty Mutual had
contracted with First Health to use its PPO network to treat
workers' compensation claimants. 	Based on this relationship,
Dr. Leibovic claims that Liberty Mutual is responsible for the
additional charges. 	Liberty Mutual contends that pursuant to
the contract between First Health and Dr. Liebovic, Dr. Liebovic
is entitled to no additional payment.
Appendix A, Section D of the contract between First Health
and Dr. Liebovic provides a method for determining payment for
medical services as follows:2
Reimbursement from Workers' Compensation
Payors for services rendered to
occupationally ill/injured employees shall
be as follows:
(1) 	If any state law or regulation
establishes rules or guidelines for the
payment of health care services,
reimbursement shall not exceed 80% of the
maximum amount payable under such rules or
guidelines. 	This rate of reimbursement
shall apply whether such rules or guidelines
are in existence at the time of execution of
this agreement or established at a later
time.
(2) 	In absence of any state law or
regulation set forth in Section D, Paragraph
(1), reimbursement shall be the method set
forth in section A, Paragraphs (1), (2) and
(3) of this appendix, but in no event shall
the reimbursement exceed the usual and
2 The contract at issue was actually executed between Dr.
Leibovic and Affordable Health Care Concepts. 	First Health is
the successor in interest to Affordable Health Care Concepts.

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customary charge for services, as determined
by AFFORDABLE or Payor.
Dr. Liebovic argues that Paragraph D(1) controls and that he is
entitled to 80% of the charges for the surgeries. 	Liberty
Mutual argues that Paragraph D(2) controls. 	The commission
agreed with Liberty Mutual, finding that Code § 65.2-605 is "not
[a rule or guideline] for payment of healthcare services within
the meaning of the contract." 	We agree with the commission.
Code § 65.2-605 provides as follows:
The pecuniary liability of the employer for
medical, surgical, and hospital service
herein required when ordered by the
Commission shall be limited to such charges
as prevail in the same community for similar
treatment when such treatment is paid for by
the injured person and the employer shall
not be liable in damages for malpractice by
a physician or surgeon furnished by him
pursuant to the provisions of § 65.2-603,
but the consequences of any such malpractice
shall be deemed part of the injury resulting
from the accident and shall be compensated
for as such.
Dr. Liebovic misunderstands the holding of the commission.
He asserts the commission held that Code § 65.2-605 was not a
rule or guideline. 	However, the commission merely determined
that this particular statute was not a "rule or guideline" as
contemplated by the contract section at issue. 	As the
commission noted, Code § 65.2-605 establishes a standard that is
often called the prevailing community rate. 	It provides a
mechanism for resolving disputes over medical charges. 	However,
the statute does not establish a minimum charge or schedule of

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fees, nor does it prohibit medical care providers from entering
into agreements for fee reimbursement in workers' compensation
cases. 	See Cousar v. Peoples Drug Store, 26 Va. App. 740, 743,
496 S.E.2d 670, 672 (1998) ("As a general rule, the construction
afforded a statute by the public officials charged with its
administration and enforcement is entitled to be given weight by
a court.")
We agree that the statute at issue does not fall within the
purview of the contract between Dr. Liebovic and First Health,
because it does not establish a rule or guideline for the
"payment" of healthcare services. 	Accordingly, we affirm the
commission's decision in this regard.
Affirmed.