Appeal from the Alaska Workers' Compensation Appeals Commission, Laurence Keyes, Commissioner Chair. Alaska Workers' Compensation Appeals Commission No. 09-027.
Mark Choate, Choate Law Firm LLC, Juneau, and J. John Franich, Franich Law Offices LLC, Fairbanks, for Appellant/Cross-Appellee.
Robert J. Bredesen, Russell, Wagg, Gabbert & Budzinski, Anchorage, for Appellees/Cross-Appellants.
Before: Fabe, Chief Justice, Winfree, Stowers, Maassen, and Bolger, Justices.
FABE, Chief Justice.
After a 1976 work-related motor vehicle accident, the worker was left a paraplegic. He suffered a number of medical complications related to his injuries. In 2007 his employer controverted some aspects of his medical care, and he filed a written workers' compensation claim. Shortly before the hearing on the claim, the employer withdrew most of its controversions. The Alaska Workers' Compensation Board decided that some of the controversions were frivolous, unfair, or in bad faith. It imposed a statutory penalty and reported its findings about frivolous or unfair controversions to the Alaska Division of Insurance. The employer appealed, and the Alaska Workers' Compensation Appeals Commission reversed the Board in part, deciding as a matter of law that the Board could not impose a penalty for some of the controversions. The Commission decided that other appeal points were moot. The worker appeals the Commission's decision reversing the penalties and some attorney's fees; the employer cross-appeals the Commission's decisions about preservation of the controversion issues and mootness. We affirm in part, reverse in part, and remand to the Commission with instructions to remand to the Board.
II. FACTS AND PROCEEDINGS
In October 1976 Willard Harris suffered a spinal cord injury in a work-related motor vehicle accident; he has used a wheelchair since the accident. Not long after the accident he developed heterotopic ossification in his hips, which caused them to be " fixed in 35 degrees of flexion."  His knees, ankles, and toes are also fixed. Harris is diabetic and suffers from hypertension, chronic bed sores, and sleep apnea. As a result of the spinal cord injury, Harris has difficulty maintaining a correct body temperature. He is subject to many infections, including osteomyelitis, a bone infection that is related to " chronic bacterial growth on his wounds." His care is
understandably complex. Harris lives in the San Francisco Bay area, where he has lived for more than 20 years.
Because of Harris's fused hips, he is unable to transfer as easily as most paraplegics and cannot spend much time in his wheelchair because he cannot be positioned in the same way that other paraplegics can. He has several medical beds. At the time of his deposition in 2008, he had two beds in his home, one for sleeping and one " for daily living skills," in addition to one in his van for use when traveling long distances. The type of bed Harris uses is important to his skin care: Some beds are better able to prevent formation of bed sores and promote their healing, but Harris indicated that no bed is perfect for him. The specialized beds Harris requires are expensive, costing over $50,000.
Harris and his employer, M-K Rivers, have entered into several partial settlements since the accident. In 1998, he and the employer entered into a stipulation in which the employer accepted the compensability of his diabetes. In the stipulation, the employer agreed to pay for 24-hour-a-day attendant care and a personal trainer " if deemed reasonable and necessary pursuant to the Alaska Workers' Compensation Act." The stipulation also said that the employer had " authorized the services of a non-medical fitness facility" and " stipulated and agreed that such care is appropriate, reasonable and necessary pursuant to the Alaska Workers' Compensation Act." The parties agreed that alternative medical treatment, " including Chinese herbs and acupuncture, [was] not in issue" at the time; it was " left open pursuant to the Alaska Workers' Compensation Act."
At some point in the early 2000s, the insurance carrier suggested to Harris that he consider a global settlement of his claim. Harris told the adjuster he would want too much money, but they agreed to have a care planner write a life plan outlining Harris's future medical care needs. Beginning in 2005 a series of disagreements arose, and the employer set up an employer's independent medical evaluation (EIME) with Dr. Nichole Chitnis in 2006. Dr. Chitnis noted that Harris " has maintained a very positive outlook, in spite of numerous difficult situations in the last 30 years and has taken extremely good care of himself" and " has surrounded himself with good caretakers." She stated that Harris's routine medical care was " appropriately managed" by his various doctors and listed prescription medications Harris was taking, including Vasotec. Dr. Chitnis suggested a few changes to Harris's care: She recommended decreasing the frequency of his acupuncture treatments (for neck pain) and massage therapy (for muscle spasticity); she also thought that Harris did not need to see a nutritionist monthly and that some of the supplements he was taking were not essential to his care. Dr. Chitnis did not give an opinion about any prescription medication or the compensability of Harris's ancillary conditions, such as hypertension, and she said she did " not have enough experience to recommend one bed over the other."
After Dr. Chitnis's report, M-K Rivers controverted the following as not reasonably necessary: nutritional consultant services, many supplements, and a physical therapist assistant for in-home exercises (except for " short periods of time for acute flare ups only" ). It also reduced the frequency of covered acupuncture treatments, massage therapy, and personal trainer services. Finally, it controverted payments related to " a temperature controlled environment," asserting that this issue was part of an earlier partial compromise and release agreement.
About a week after this controversion, one of Harris's physicians prescribed a Clinitron bed for wound care for a three-month trial; the prescription noted that Harris might purchase the bed if it was effective. M-K Rivers controverted the Clinitron bed; the controversion notice said that according to Dr. Chitnis's EIME report Harris's " current bed was strongly recommended by his physicians" and that the employer would " agree to the rental/purchase of the Beriatric bed frame, welding of the trapeze bar, silk long johns as necessary and cushion covers as
needed." The controversion notice gave no other reason for denying a Clinitron bed.
A prehearing conference was held in April 2007 regarding the benefits that had been denied in the controversions. According to the employer, it did not have adequate information from Harris's physicians about his needs. Harris's attorney agreed to provide medical information to the employer and file a workers' compensation claim for any benefits the employer still denied.
Harris submitted a letter dated May 17, 2007, and signed by Andrew J. Ross, M.D., one of his treating physicians, setting out " the list of medical prescriptions Willard Harris Jr. will require for the rest of his life." The letter said that the Clinitron bed had " the unanimous approval of at least five doctors that it is medically necessary." It also asked that Harris's diabetes and hypertension medication coverage be reinstated.
On June 1, 2007, Harris filed a workers' compensation claim for " [u]nfair or frivolous controvert" as well as for a number of benefits that had been controverted. M-K Rivers answered and filed another controversion. The controversion and answer both disputed the compensability of Harris's diabetes, hypertension, and sleep apnea. Harris amended his claim at a September 2007 prehearing conference to include the Clinitron bed and the " [n]ature & extent of attendant care." The request for a Clinitron bed was later withdrawn, and a request for an Ortho Hillrom bed was added at a March 2009 prehearing conference.
At some point Harris's condition deteriorated; after his deposition in January 2008, the parties informed the Board they planned to " set up a team of physicians" to evaluate Harris's condition and make recommendations about needed treatment. The parties did not reach an agreement at that time, but after deposing Dr. Yenjean Hwang, Harris's infectious disease doctor, in June 2009, the employer " determined that it would be appropriate to withdraw the controversions" that were based on Dr. Chitnis's report. Several issues remained in dispute, including administrative costs, dentistry related to sleep apnea, transportation, heating and cooling needs, unfair and frivolous controversions, a petition to compel, and attorney's fees.
The Board held a hearing on July 2, 2009. At the beginning of the hearing the chair asked the parties what was still in dispute because he had stepped in at the last minute to preside at the hearing and was not familiar with the record. Harris's attorney said the carrier had withdrawn its controversions of many of the items listed as contested in the prehearing conference memo, but said that " the controversion process has caused injury to Mr. Harris." Harris's attorney later said they would " talk today about how his physical condition has deteriorated . . . since the controversions." When M-K Rivers's attorney listed the remaining issues, he said, " Unfair and frivolous controversion is still at issue."
Harris presented his own testimony and testimony from five witnesses. M-K Rivers presented the testimony of Patricia Mackay, the insurance adjuster. Most of the testimony was related to Harris's medical needs, not the controversions that are the subject of this appeal. M-K Rivers asked the ...