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What's Hot in Workers' Comp

The Commonwealth Court of Pennsylvania Narrows Who May Seek Recourse Through The Workers’ Compensation Act’s Fee Review Process

Scomed Supply v. Hartford Accident & Indemnity Company and Sedgwick Claims Management Services (Bureau of Workers' Compensation Fee Review Hearing Office), No. 79 C.D. 2025 (Pa. Cmwlth. March 16, 2026)

March 19, 2026

by Alana M. Staniszewski

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.

Firm Highlights

Thought Leadership

U.S. Supreme Court Decides Key Issue Regarding Interstate Freight Broker Liability

Freight brokers are intermediaries.  They connect shippers of goods with trucking companies that transport those goods.  Freight brokers match a load of freight with a trucking company and oversee the logistics of the transportation. For a number of years there has been a division among the Federal Circuits regarding the potential liability of freight brokers when the trucking companies that they retain for interstate loads are involved in accidents.  At the center of this division was the Federal Aviation Administration Authorization Act of 1994 (FAAAA).  Some Federal Circuit Courts have held that state law negligent hiring claims against freight brokers were preempted by the FAAAA .  Other Federal Circuits Courts have held that even if preemption applied, the “safety exception” in the FAAAA saved state law negligent hiring claims from federal preemption.  On May 14, 2026, the U.S. Supreme Court addressed the conflict in Montgomery v. Caribe Transport II, LLC, et al, No24-1238. In that case freight broker C.H. Robinson selected Caribe Transport to haul an interstate load. The commercial truck driver employed by Caribe Transport allegedly caused an accident and the plaintiff, Montgomery, was seriously injured. Montgomery brought an action against the driver, Caribe Transport and C.H. Robinson. The allegation against C.H. Robinson was that it negligently retained Caribe Transport when it knew, or should have known, that it was an unsafe company. The Seventh Circuit Court of Appeals held that Montgomery’s claims against C.H. Robinson were preempted by the FAAAA. The plaintiff appealed to the U.S. Supreme Court.  The U.S. Supreme Court’s decision focused primarily on the safety exception in the FAAAA.  That provision provides that the FAAAA preemption “…shall not restrict the safety regulatory authority of a State with respect to motor vehicles.” C.H. Robinson argued, as freight brokers historically have, that their function was not “with respect to motor vehicles” because they do not own trucks or employ drivers. They are merely intermediaries, connecting entities who need freight moved with entities who can do that job. Therefore, C.H. Robinson argued that preemption applied, not the safety exception. The U.S. Supreme Court did not accept that argument. The Court focused on the meaning of the phrase “with respect to” in the safety exception. The Court held that it means “referring to”, “concerning” or “regarding”. Therefore, writing for a unanimous Court, Justice Barrett concluded that “[r]equiring C.H. Robinson to exercise ordinary care in selecting a carrier therefore “concerns” motor vehicles—most obviously, the trucks that will transport the goods. So, Montgomery’s negligent-hiring claim falls within the FAAAA’s safety exception, which saves it from preemption.” Justice Kavanaugh, in his concurring opinion, noted the effect this ruling may have on freight brokers and their insurers throughout the country: Importantly, the Court's decision today should not be read to mean that brokers will routinely be subject to state tort liability in the wake of truck accidents. As even plaintiff's counsel stressed, brokers should be able to successfully defend against state tort suits if the brokers have acted reasonably and arranged transportation with reputable trucking companies. Tr. of Oral Arg. 27-29. In plaintiff's counsel's words, the brokers "just have to hire carriers that actually have a reasonable policy," and "the broker is not going to have a problem if it's asking the hard questions of the carrier." Id., at 42, 45. In addition, the proximate-cause requirement in typical state tort law should help protect brokers from excessive liability. Id., at 25. That said, the brokers rightly caution against naivete. In the real world, as the brokers forcefully respond, state tort law can be unpredictable, and the costs to brokers of litigation and insurance may be significant even when brokers prevail in lawsuits. Moreover, the costs of litigation and insurance, as well as the costs of brokers' conducting more substantial inquiries into trucking companies, will cascade through the economy and be paid in part by American consumers in the form of higher prices. The concerns expressed by the brokers are legitimate and weighty. The key point here is that freight brokers can no longer claim they are protected from negligent retention claims by the FAAAA (in cases involving interstate transportation). The challenge will be to determine what is considered ”reasonable efforts” used by brokers when retaining transportation companies. 

Thought Leadership

PA Middle District Dismisses Claims Against School District and its Superintendent, Principal, Special Education Director, and Classroom Teacher

A five-year-old special education student was enrolled in the Wyoming Valley West School District and attended the State Street Elementary School during the 2024-2025 school year. The student refused to clean up classroom toys at dismissal. When his teacher allegedly grabbed him by the wrist to walk him back to his seat, the student dropped to the floor and began crying. The teacher then allegedly grabbed the student by the ankle and dragged him across the floor. Following an investigation, criminal charges were not advanced by the county DA, and the school permitted the teacher to return to the classroom. The student’s parents sued, lodging thirteen legal counts under both state and federal law, which sought monetary damages from the teacher, the school district, the superintendent, the principal, and the director of special education. The plaintiff’s 42 USC 1983 claims were dismissed as to the school district for failure to allege a policy or custom violation, and the failure to alleged deliberate indifference in the failure-to-train context. As to the superintendent, building principal, and special education director, the Section 1983 claims were also dismissed for failure to allege personal involvement on the part of the individuals. Regarding an equal protection claim asserted against all defendants, the motion to dismiss was also granted for a failure to advance a plausible equal protection claim, holding that “plaintiffs' single-act allegations do not include a factual basis to even infer that the act was motivated by discriminatory animus rather than some other non-discriminatory impulse.” The court further dismissed the plaintiff’s negligence-based claims including negligence against the teacher and district administrators, NIED, and vicarious liability under the Political Subdivision Tort Claims Act (PSTCA). The federal claims under the IDEA, Section 504, and the ADA were also dismissed in various respects. The IDEA claim was dismissed against all defendants with prejudice for failure to exhaust administrative remedies. The Section 504 claims against the individual defendants were also dismissed with prejudice, as districts, not individuals, are the recipients of federal funds under Section 504. However, the Section 504 and ADA claims were dismissed without prejudice as to defendant Wyoming Valley West, and the plaintiff was permitted leave to amend.

Result

No-Cause Jury Verdict Secured in Wrongful Death Trial

We successfully obtained a no-cause jury verdict in a 13-day wrongful death trial. The decedent, a 59-year-old man, was admitted to the emergency room on February 15, 2019, with complaints of abdominal pain, decreased appetite, and constipation, despite the use of laxatives. The patient did not complain of any nausea, vomiting, or diarrhea. He had a significant medical history including diabetes, hypertension, prior coronary artery stenting, morbid obesity (with past gastric bypass surgery), longstanding ventral hernia, and back pain. A CT scan revealed multiple hernias and a potential closed-loop bowel obstruction, leading to a surgery consultation. Our client, an emergency general surgeon, interpreted that the patient did not have a closed loop or any significant obstruction and recommended non-surgical management. The patient was approved to have clear liquids, and had a vomiting incident shortly after, but our client was not notified. The patient was returned to NPO status, and after improving overnight, he was returned to “clears” and additional medical and renal consults were ordered. Our client did not receive any communications from the residents/nurses of any changes in the patient’s condition. On February 18, 2019, two rapid responses were called due to increased heart rate and vomiting. It is believed that the vomiting resulted in aspiration, causing sepsis, ultimately leading to the patient’s death. During the trial, the plaintiff’s sole medical expert highlighted imaging on the wrong hernia, which called into question all of his opinions in the case. We made key objections related to the expert testimony, limiting what the allegations were, and preventing new allegations from being made. After approximately two and a half hours of deliberating, the jury returned a no-cause verdict.