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Self-Insured Employer May Not Require Injured Worker to Use In-House Treatment Facility 2005-1483. State ex rel. Navistar Internatl. Transp. Corp. v. Indus. Comm., 2006-Ohio-4089. (Aug. 23, 2006) The Supreme Court of Ohio held today that, when an injured worker qualifies to receive state workers' compensation benefits, a self-insured employer may not condition its authorization of physical therapy treatment on the employee's agreement to receive that treatment at an on-site facility established by the employer rather than at an outside facility recommended by the attending physician. In the course of his duties as an employee of Navistar International Transportation Corp., Thomas Clifford suffered a torn rotator cuff and other injuries to his right shoulder and arm that required surgery and follow-up physical therapy. Clifford's attending physician, Dr. Paul Nitz, recommended that he receive his post-surgical treatment at Springfield Physical Therapy. Navistar, which provides state workers' compensation coverage of its employees through self-insurance, approved payment for Clifford's medical expenses on the condition that he agree to receive the prescribed physical therapy at the company's own in-house treatment facility. When Clifford refused to accept that condition, the company refused to cover the cost of his therapy. Clifford appealed the denial of coverage to the Ohio Industrial Commission. The commission ruled that Navistar must cover Clifford's costs of outside treatment because his claim met all three requirements for coverage set forth in the Supreme Court's 1994 decision in State ex rel. Miller v. Industrial Commission. In Miller, the Court held that payment must be authorized for treatment of a qualifying medical condition if: (1) the services are reasonably related to the allowed condition; (2) the services are reasonably necessary for treatment of the allowed condition; and (3) the cost of the service is “medically reasonable.” Navistar sought a writ of mandamus from the 10th District Court of Appeals, arguing that the Industrial Commission had abused its discretion by requiring “double payment” when it ordered the company to pay for Clifford's treatment at Springfield Physical Therapy despite having already incurred the expense of creating and maintaining an in-house treatment facility. The court of appeals affirmed the Industrial Commission's ruling. Navistar then exercised its right to appeal the 10th District's decision to the Supreme Court. In today's per curiam decision, the Court unanimously affirmed the 10th District and rejected Navistar's argument that the Industrial Commission's ruling had granted claimants such as Clifford “an unfettered right to treatment anywhere and anytime” while imposing an unreasonable financial burden on self-insured employers who have already paid to establish on-site treatment facilities. The Court's opinion emphasized that the commission and court of appeals did not recognize any new or expanded theory of a claimant's entitlement to treatment, but merely applied the criteria set forth in the Miller decision to the facts of Clifford's claim. “The parties agree that Clifford's request satisfies the first two prongs delineated in Miller, and they focus solely on the third prong: whether, under the circumstances, the costs that Navistar has been ordered to assume are ‘medically reasonable,'” the Court held. “Navistar proposes … that the commission must balance the proposed costs (of Clifford's treatment at an outside facility) against the employer's own facility-related costs. … Miller does not contain the requirement advocated by Navistar. … Although it is admirable that Navistar has voluntarily created its own facility to provide physical treatment to injured employees, it may not condition treatment authorization on an employee's agreement to use its facility rather than any other.” The majority opinion was joined by Chief Justice Thomas J. Moyer and Justices Alice Robie Resnick, Paul E. Pfeifer, Maureen O'Connor, Terrence O'Donnell and Judith Ann Lanzinger. Justice Evelyn Lundberg Stratton entered a separate opinion in which she concurred that the majority's holding was correct under current Ohio law, but expressed support for the public policy argument advanced by Navistar. “It seems to be a sound policy to encourage companies to establish on-site physical therapy facilities for both the convenience of the employees and for cost savings to the employers and the worker's compensation system,” wrote Justice Stratton. “But this court does not set Bureau of Workers' Compensation policy. Navistar's issues are more appropriately directed to the legislature.” Contacts Dennis H. Behm, 614.466.6696, for the Industrial Commission of Ohio. Robert Bumgarner, 614.486.0297, for workers' compensation claimant Thomas Clifford. 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