Workers' Compensation Defense

On March 16, 2026, the Pennsylvania Commonwealth Court provided much-needed clarification on who may seek recourse under Section 306(f.1)(5) of the Pennsylvania Workers’ Compensation Act—specifically through the Fee Review process. In Scomed Supply v. Hartford Accident & Indemnity Company and Sedgwick Claims Management Services, the court held that Scomed Supply, a retail seller of durable medical equipment and medical supplies, does not qualify as a “health care provider” under the Act, and therefore had no standing to dispute the amount of payment issued by the workers’ compensation insurance carrier through a fee review.

The case itself stems from a straightforward set of facts. Scomed provided medical supplies (electrodes, batteries, lead wires, moisturizer, and alcohol wipes) to the claimant. The supplies were all related to the claimant’s TENS unit that had been prescribed by the claimant’s physician for treatment of a work-related injury. Between July 2023 and April 2024, Scomed provided these supplies to the claimant on ten separate occasions, and billed the workers’ compensation carrier.

The carrier paid less than the full amount billed. Unsatisfied with the amount of the payment, Scomed filed five fee review applications with the Bureau of Workers’ Compensation Medical Fee Review Section. The section found that the carrier was not required to issue any additional payment. Still unsatisfied with the amount of payment issued, Scomed filed hearing requests, which were assigned to Hearing Officer Colleen Pickens.

In its defense, the carrier argued and Hearing Officer Pickens agreed that Scomed was not a health care provider as defined by Section 109 of the Act and thus, had no recourse under Section 306 (f.1)(5). Notably, a Fee Review Hearing Officer has the jurisdiction to conduct a hearing on whether a person invoking the remedy set forth in Section 306(f.1)(5) is a “provider" under the Act. See Armour Pharmacy v. Bureau of Workers 'Comp. Fee Rev. Hearing Off (Wegman's Food Markets, Inc.), 206 A.3d 660, 671 (Pa. Cmwlth. 2019) (en banc).

Section 109 of the Act defines a "health care provider" as

any person, corporation, facility or institution licensed or otherwise authorized by the Commonwealth to provide health care services, including, but not limited to, any physician, coordinated care organization, hospital, health care facility, dentist, nurse, optometrist, podiatrist, physical therapist, psychologist, chiropractor or pharmacist and an officer, employee or agent of such person acting in the course and scope of employment or agency related to health care services. (emphasis added).

Scomed argued that the Act defines health care providers broadly and should be construed to include durable medical equipment. The court rejected this argument, noting that both Section 109 and the Act's Medical Cost Containment (MCC) Regulations describe entities that are "licensed by the Commonwealth to provide health care services." The court emphasized that Scomed concerns itself primarily with the sale or distribution of medical goods, not services. They do nothing to treat a patient, but instead merely dispense a product and function as a middleman. The court emphasized that this is insufficient to extend the recourse offered by the Fee Review process.

The court then reviewed two related decisions issued by it and the Pennsylvania Supreme Court: Harburg Medical Sales Company v. PMA Management Corp., No. 635 C.D. (Pa. Cmwlth., August 30, 2021) (holding medical supplies distributor at issue was not a health care provider because it was neither licensed nor authorized by the Commonwealth to provide health care services); and Schmidt v. Schmidt, Kirifides, and Rassias, PC (WCAB), 333 A.3d 310 (Pa. 2025) (holding any item prescribed by a health care provider as a part of a treatment plan for a work-related injury qualifies as medicines and supplies under Section 306(f.1)(1)(i)).

Scomed attempted to argue that it was distinguishable from the company at issue in the Harburg case, emphasizing that its various accreditations and compliance with federal regulations made it a more qualified provider than the one at issue in Harburg. While the court acknowledged Scomed’s accreditations, it rejected the argument, again turning the focus to Scomed’s function as a provider of goods, not health care services.

Scomed also attempted to assert that the Pennsylvania Supreme Court’s decision in Schmidt should permit recourse for itself under the Act’s fee review process, as the decision broadly interprets the phrase “medicines and supplies” and broadly interprets what items should be covered by the insurance carrier. However, the court emphasized that whether an item qualifies as a covered supply, is an entirely separate issue from who qualifies as a provider, and the core of this litigation was whether Scomed was a provider. As such, the court also rejected this argument.

Finally, Scomed attempted to argue that as a matter of policy, the court should extend the recourse offered through the fee review process, as shutting medical supply companies out of the process undermines the Act and impacts injured workers’ access to necessary supplies. The court acknowledged Scomed’s concern but asserted that the plain language of the Act does not permit an extension of the fee review process, and if Scomed wants this to change, that change must come from the legislature.

Ultimately, this case provides workers’ compensation carriers and claims administrators a much needed line of defense against fee review challenges from entities that supply medical goods, not services, to injured workers. It also provides defense counsel a vehicle through which they can seek the dismissal of some of the ever increasing number of fee reviews. However, this case does leave an issue unresolved—what recourse, if any, do these medical supply companies have when they believe bills have been underpaid? Until that question is resolved by the legislature or further court order, practitioners and insurers alike should review all fee reviews to determine the applicability of this new defense.