SIGNIFICANT CASE SUMMARIES

Pennsylvania Significant Case Summaries

Scomed Supply v. Hartford Accident & Indemnity Co. and Sedgwick Claims Mgmt. Servs. (Bureau of Workers’ Compensation Fee Review Hearing Office)
Commonwealth Court of Pennsylvania
No. 79 C.D. 2025
Decided: March 16, 2026

Entities who only supply medical equipment, without providing licensed medical treatment, fall outside of Section 109’s definition of a “health care provider,” leaving them no access to the fee review process and no option to dispute insurer payments where the payments are proper and supported.

Background

Scomed, a retail seller of medical supplies, shipped goods to a claimant and sent an invoice to the Insurer. The Insurer rendered payment for less than the full amount billed and Scomed filed numerous Applications for Fee Review. The Fee Review Section found that no payment was due to Scomed beyond the amount already paid by the Insurer. Scomed requests for de novo hearings. The Insurer contended that Scomed lacked recourse to the Medical Fee Review Section because it was not a healthcare provider or “anything more than a middleman.” Scomed did not see patients, did not issue prescriptions, and had no “independent treating ability.” In support of its position, the Insurer cited Harburg Medical Sales Company v. PMA Management Corp. (Pa. Cmwlth., No. 635 C.D. 2020 filed August 30, 2021)(unreported) and argued Scomed and Harburg were similar as neither do more than dispense product. Scomed’s Hearing Requests were denied on the grounds that Scomed is not a healthcare provider as defined by Section 109. Scomed appealed.

Holding

The Commonwealth Court affirmed the Fee Review Hearing Officer’s decision, which found that Scomed is not a “health care provider” as defined by Section 109 of the Act. The Court declined to expand the definition of a “health care provider, noting that the Supreme Court has found Section 109 to be clear and unambiguous. Further, the Court noted, that while Section 109 and Section 107.3 of the Act’s Medical Cost Containment Regulations differ slightly, both require entities to be licensed to provide health care services, not simply just sell goods. The Court emphasized that providers perform services, not just simply distribute medical products. The Court further rejected Scomed’s attempt to distinguish the present matter from Harburg, noting that despite its accreditation, regulatory compliance, and involvement in supplying DME, Scomed still provides goods, as opposed to services, and does not qualify as a “health care provider” under Section 109 of the Act.

Takeaway

This Opinion confirmed that medical supply middlemen are not providers, cannot use fee review, and if insurance carriers can justify what was paid, medical supply middlemen cannot challenge reimbursement.

Questions about this case can be directed to Emily LaGreca at 267-861-7589 or elagreca@tthlaw.com.

Erie Ins. v. Heater (WCAB)
No. 103 MAP 2024
Supreme Court of Pennsylvania
Decided: March 26, 2026

Section 311 does not require a sole owner-employee to notify the insurer of a work-related injury within 120 days to be eligible for compensation.

Facts

The Claimant, the sole owner-employee of a general contracting business, sustained a work-related injury on September 28, 2015. After the incident, the Claimant notified an insurance agent, although the Insurer maintained that it was not notified until much later after the 120-day notice period had expired.

The workers’ compensation judge sided with the Insurer and held that the Claimant did not provide notice to the Insurer within 120 days of the injury, thus barring compensation under Section 311. The Workers’ Compensation Appeal Board (Board) reversed, holding that notice to an insurer is not required. Furthermore, the Board reasoned that because the Claimant was a sole owner-employee, notice to an employer occurred instantaneously. Erie appealed the decision to the Supreme Court of Pennsylvania.

Holding

The Supreme Court of Pennsylvania affirmed the Appeal Board’s decision. The Court ultimately accepted the Claimant’s proposed definition of “employer” as outlined in Section 103, as Section 401’s definition only applies to Article IV and not Section 311.

Takeaway

The Court’s decision is naturally a troubling development for Pennsylvania insurers. By excluding insurers under Section 311’s definition of “employers”, the Court’s decision essentially permits sole owner-employees to dictate the investigation timeline of their own claim. Sole owner-employee claimants could delay notice to their insurer for an exorbitant amount of time, potentially years. In turn, insurers would be deprived of the ability to conduct timely investigations and prepare all potential defenses. The potential for fraud is great. However, the Court highlighted one potential workaround that carriers had implemented in prior cases. Carriers writing policies for sole owner-employees can protect themselves by “conditioning coverage on compliance with mandatory prompt notification provisions written into the insurance contract.”

Questions about this case can be directed to Eli Weisman at 610.332.7023 or eweisman@tthlaw.com.

Save A Lot v. Morales
No. 1363 C.D. 2024
Commonwealth Court of Pennsylvania
Decided: March 12, 2026

A WCJ can award penalties for nonpayment of medical bills even where the provider failed to avail itself of the Fee Review process.

Facts

The Claimant sustained a work injury on August 1, 2021. The parties resolved her wage loss claims through a Compromise and Release Agreement approved June 1, 2022, which preserved Employer’s liability for reasonable and necessary medical expenses through May 30, 2022. Claimant thereafter filed a Penalty Petition alleging Employer violated the Act by failing to timely pay medical bills. The Employer’s remittance statements had coded those bills as “not eligible for medical payments,” which the Court treated as outright denials. The WCJ imposed a 50% penalty on the outstanding bills with interest and Section 440 fees. The Workers’ Compensation Appeal Board affirmed. The Employer on appeal argued that the dispute over the amount and timeliness of the bills fell within the Act’s fee review process under Section 306(f.1)(5), and that the WCJ therefore lacked jurisdiction to impose penalties where the provider never pursued fee review as a prerequisite to penalty relief.

Holding

The Commonwealth Court affirmed, in a nonprecedential opinion. Relying on Hough v. WCAB (AC&T Cos.), 928 A.2d 1173 (Pa. Cmwlth. 2007), and Day-Timers, Inc. v. Horton, 344 A.3d 482 (Pa. Cmwlth. 2025), the Court held that the fee review provisions of Section 306(f.1)(5) govern only the provider-insurer relationship and do not condition or displace a claimant’s independent right to pursue a penalty petition under Section 435 for an employer’s failure to pay medical bills. The Court reaffirmed that a claimant need not demonstrate economic harm to sustain a penalty award.

Takeaway

The opinion is nonprecedential and, as such, cannot be cited as binding authority. The same underlying issue is now pending before the Commonwealth Court in at least one other matter to unravel the Court’s confusion over the Hough and Day-Timers cases. The confusion surrounds the ability for the WCJ’s ability to render a penalty on an amount that has not yet been determined or finalized in the fee review courts. Until another case resolves whether fee review is a prerequisite to penalty exposure, employers and insurers should treat any unpaid or coded-off medical bill within a preserved treatment period as a live penalty risk regardless of whether the provider invoked fee review. Carriers should audit remittance coding carefully: blanket “not eligible” or “denied” designations without a specific basis under the fee review provisions of the Act are the fact pattern courts continue to use and sustain penalties.

Questions about this case can be directed to Christopher Scott at (717) 237-7111 or cscott@tthlaw.com.