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Medical provider’s fees limited by contract

Where a medical care provider and a city’s workers’ compensation claims administrator contracted to limit the provider’s fees, this limitation applied to all of the provider’s billed services.

The provider’s argument that the limitation does not apply in this case because the provider never completed the contract’s “Exhibit B” is not well-taken.

The contract’s plain language applies the fee limitation to all services the provider has rendered.


The claimant, Todd Recupero, suffered a compensable injury in October 2012 while working for Virginia Beach. In February 2013, CorVel took over as Virginia Beach’s workers’ compensation claims administrator. The commission entered a lifetime medical award.

APM provided medical services to Recupero. Before treatment began, APM and CorVel entered into a contract that limited APM’s payment for services to 80 percent of the billed amount.

After APM billed for its services to Recupero, CorVel applied the 20 percent contractual adjustment. APM filed a claim with the commission for the unpaid amount.

The commission ruled “that the contract applied to all medical services provided by APM. This appeal followed.”

Parties’ positions

“For medical treatment rendered prior to the start of statutory fee schedules in 2018, a medical provider’s bills to a workers’ compensation claimant are prima facie evidence that the billed charges are reasonable. … Once the bills have been submitted, the burden shifts to the defendants to prove under Code § 65.2-605(B) that the charges exceed the prevailing community rate or that the charges are controlled by ‘a contract providing otherwise.’ …

“APM contends that because it did not complete Exhibit B of the contract, any service rendered by APM or its physicians does not come within the scope of the contract and therefore the City of Virginia Beach is liable for the full amount of APM’s billed charges.

“The City of Virginia Beach contends that all services provided by APM were subject to the contractual limitation found in the agreement.

“The plain text of the contract unambiguously supports the City of Virginia Beach’s position.”

Plain text

Section 5.1 limits ‘the Provider’s bill(s) for Contracted Services’ to the amount found in Exhibit C (80% in this case). Accordingly, to determine if the services rendered are covered by the fee limitation, we must determine who is the ‘Provider’ contemplated by the provision and then determine whether the ‘Provider’ billed for ‘Contracted Services.’

“The first paragraph of the contract provides a definition of the term ‘Provider’: ‘APM Spine and Sports Physicians, an individual, corporation, partnership or other legal entity, on behalf of itself, the persons and entities referenced in Section 3.15 and Exhibit B and any other entity controlled by it that provides Covered Services to Covered Persons (collectively “Provider”).’

“Therefore, the term ‘Provider,’ at a minimum, refers to APM as an entity.

“We must next determine whether APM (the ‘Provider’) provided ‘Contracted Services’ subject to the fee limitation in Exhibit C. ‘Contracted Services’ are defined as ‘Covered Services which [APM] is licensed to provide and which [APM] will provide to Covered Persons in accordance with this agreement.’ Therefore, to define ‘Contracted Services’ we must turn to the definition for ‘Covered Services’ and’ Covered Persons.’

“A ‘Covered Person’ is an ‘individual who is eligible for Covered Services under a Medical Plan,’ and a ‘Medical Plan’ includes workers’ compensation under the terms of the contract. APM does not argue that Mr. Recupero is not a ‘Covered Person’ under a ‘Medical Plan.’

“‘Covered Services’ are defined as ‘health care services including, but not limited to, hospital, physician and other health care practitioner services, medications and supplies rendered to Covered Persons by a Participating Provider for which reimbursement is required by a Medical Plan.’

“Accordingly, a service is a ‘Covered Service’ if it meets four elements. First, it is a ‘health care service.’ Second, it is rendered to ‘a Covered Person.’ Third, it is rendered by a ‘Participating Provider.’ Fourth, reimbursement for the service is required by a ‘Medical Plan.’

“APM does not contend that the services rendered to Mr. Recupero were not ‘health care services’; thus, the first element is met. Also, as noted, it is not disputed that Mr. Recupero is a ‘Covered Person’ and that reimbursement for services rendered is required by the workers’ compensation award, so the second and fourth elements are met.

“To determine whether the third element (rendered by a ‘Participating Provider’) is met we must go deeper into the contract to define ‘Participating Provider.’

“A ‘Participating Provider’ is a ‘Health Care Provider that has contracted with CorVel either directly or indirectly through an affiliate network to provide Covered Services under a Medical Plan to eligible Covered Persons under an alternative method of fee reimbursement.’

“A ‘Health Care Provider is a … provider of Covered Services including but not limited to physicians … or other health care or health care services/supplies providers, in those states where such Health Care Provider provides health care services, and any of its principals, shareholders, agents or employees.’

“The definition of Participating Provider also has multiple elements: first, they must be a ‘Health Care Provider’; second, the provider has to have contracted with CorVel to provide ‘Covered Services’ under a ‘Medical Plan.’

“As to the first element, the contract defines ‘Health Care Provider’ broadly as any health care provider of ‘Covered Services’ (i.e. health care services rendered to Covered Persons under Medical Plans) and any shareholders, agents, or employees of that provider.

“APM plainly fits the definition of a ‘Health Care Provider.’ Turning to the second element, APM has directly contracted with CorVel to provide “Covered Services.” APM therefore matches the definition of a ‘Participating Provider.’”

‘Inescapable conclusion’

“Putting the jigsaw pieces together leads to one inescapable conclusion. The plain language of the contract means that any health care service APM provided to Mr. Recupero that was covered by the workers’ compensation award is a ‘Contracted Service’ subject to the fee limitation contained in Exhibit C.

“All the bills at issue in this case are derived from health care services provided to Mr. Recupero and accordingly fall within the scope of the fee limitation provision. As such, CorVel and the City of Virginia Beach were entitled to adjust the total amount paid for each bill in accordance with the contract.”


APM Spine and Sports Physicians v. City of Virginia Beach, Record No. 1235-21-1, May 24, 2022. CAV (Humphreys) From the Virginia Workers’ Compensation Comm’n. Philip J. Geib for appellant. Danielle A. Takacs for appellee. VLW 022-7-155, 9 pp. Unpublished opinion.