OnMarch 16, 2026, the Pennsylvania Commonwealth Court held in the matter of Scomed Supply v Hartford Accident & Indemnity Company and SedgwickClaims Management Services (Bureau of Workers’ Compensation Fee Review HearingOffice), 79 C.D. 2025, that Scomed is not a health care provider under thePennsylvania Workers’ Compensation Act. In the underlying case, Scomed dispensed various medical goods to the claimant and submitted their bills for the same to the carrier, Hartford. Hartford made less-than-full payment for said bills, prompting Scomed to file fee reviews. The Medical Fee ReviewSection found that no additional payment was due to Scomed beyond the amount already paid. Scomed appealed and the matter was assigned to Hearing OfficerPickens.
In the fee review litigation before HO Pickens, Hartford argued that Scomed lacked standing to appeal the Medical Fee Review Section’s determination because Scomed was not a health care provider as defined by the Act. Hartford submitted evidence to HO Pickens that Scomed was merely a medical supplier that dispensed medical products and equipment, was not licensed or authorized by theCommonwealth to provide health care services, and did not render medical treatment. Scomed did not present any evidence to rebut Hartford’s arguments, and HO Pickens ruled in Hartford’s favor dismissing Scomed’s petition on grounds that Scomed was not a health care provider and therefore lacked standing to file fee review applications and subsequent fee review hearing requests.
Scomed appealed HO Pickens Decision to the Commonwealth Court. Despite various arguments first presented by Scomed on appeal, the Commonwealth Court ultimately affirmed HO Pickens’ Decision. For context, under Section306(f.1)(5) of the Act, the fee review process is afforded to health care providers as a means of disputing the amount and/or timeliness of payments from carriers. The Court noted that Scomed does not qualify as a health care provider as defined under either Section 127.3 of the Act’s Medical CostContainment (MCC) Regulations or Section 109 of the Act – both definitions require the provider to be licensed by the Commonwealth to provide health care services, and the Court held that Scomed is merely licensed to sell and distribute medical goods and not to provide health care services.
Scomed argued that the Court’s affirmation of HO Pickens’ Decision would effectively leave Scomed and all similarly situated medical supply companies without recourse to challenge payment disputes by precluding their filing of fee review petitions. The Court acknowledged but was not swayed by this public policy argument. The Court simply noted that it would not construe Section 306(f.1)(5)of the Act in a manner inconsistent with its plain language in order to fit and further Scomed’s argument.
Although the Court’s opinion is favorable to employers and insurers within the PA workers’ compensation system, specifically in that it will (or at least, should) preclude further fee reviews by Scomed and will provide a basis for insurers’ motions to dismiss fee review hearing requests filed by Scomed and similar medical suppliers, such suppliers may still have recourse to challenge the amounts paid by insurers – a civil remedy outside of the workers’ compensation system. In the case of Elite Care RX v Premier CompSolutions, et al (PA Super. 2023), the PA Superior Court ruled that health care providers can pursue civil lawsuits against insurers for unpaid workers’ compensation benefits. The PA Supreme Court was evenly divided on the issue but nonetheless affirmed this decision. Therefore, when faced with fee reviews by medical suppliers, insurers have an important decision to make, and it all comes down to what makes most economical sense. Insurers can continue to litigate Scomed fee reviews as usual under the Act and bind the suppliers to the Act’s MCC regulations, or invoke the Scomed v. Hartford decision to have suppliers’ fee review dismissed. The latter can and likely will open upInsurers to civil litigation, which is far more costly to defend than a workers’ compensation fee review.
We encourage our clients and all insurers to take a pause when dealing with medical supplier fee reviews, think about the larger picture and make an informed decision that is in your company’s overall best interest. Our attorneys at Carpenter McCadden & Lane are always available to discuss and provide guidance your specific claims.