A Pennsylvania court has ruled that a medical supply company cannot use the state's workers' compensation Fee Review process to challenge insurer underpayments.
On March 16, 2026, the Commonwealth Court of Pennsylvania affirmed a hearing officer's finding that Scomed Supply does not qualify as a "health care provider" under the state's Workers' Compensation Act – and therefore has no standing to dispute what it was paid.
The case traces back to a fairly straightforward set of facts. Scomed, a retail seller of medical supplies, provided items like electrodes, batteries, lead wires, moisturizer, and alcohol wipes to an injured worker named Pedro Velez III. The supplies were all tied to a TENS unit that had been prescribed by the worker's physician to treat a work-related injury. Between July 2023 and April 2024, Scomed dispensed the goods on ten occasions and billed Hartford, the workers' compensation insurer for the worker's employer.
Hartford paid less than the full amount billed. Scomed, unsatisfied, filed five fee review applications with the Bureau of Workers' Compensation's Medical Fee Review Section. The section sided with Hartford, finding no additional payment was due.
Scomed then escalated the matter by filing hearing requests, which landed before Hearing Officer Colleen Pickens. Hartford's defense was blunt: Scomed was not a health care provider but rather a middleman. It did not see patients, did not write prescriptions, and had no independent ability to treat anyone.
Scomed was given multiple opportunities to respond over three hearings but largely declined to present its own arguments or evidence. Hartford, meanwhile, introduced exhibits – all of which came from Scomed's own counsel – showing that Scomed's business model revolved around stocking and selling commonly prescribed products. These included pages from Scomed's website and Facebook page, a state Department of Health certification, and a Medicare accreditation as a supplier of Durable Medical Equipment, Prosthetics, Orthotics, and Supplies, or DMEPOS. Hartford argued that these documents only reinforced the distinction between a health care provider and a medical supplier.
Hearing Officer Pickens agreed. In her January 2, 2025 decision, she found that Scomed did not employ anyone licensed or authorized to render health care services. She acknowledged that Scomed, unlike a similar company in an earlier case called Harburg Medical Sales Company v. PMA Management Corporation, kept its own inventory and operated out of a physical location – but found those differences immaterial. Both companies, she concluded, were middlemen selling goods that could just as easily be purchased from Amazon or Walmart.
On appeal, the Commonwealth Court took up four arguments from Scomed and rejected each one.
Scomed first argued that the Act's definition of health care provider was broad enough to include durable medical equipment suppliers, pointing to a slightly different version of the definition in the Act's Medical Cost Containment Regulations. The court was not persuaded, noting that both definitions hinge on being licensed by the Commonwealth to provide health care services – and that every entity listed in either definition performs services, not the sale or distribution of goods.
Scomed next tried to distinguish itself from the company in the Harburg case, emphasizing its DMEPOS accreditation and compliance with federal regulations. The court held that no matter how solid those credentials might be, they do not change the fundamental nature of what Scomed does: sell goods, not provide services.
Scomed also leaned on a recent Pennsylvania Supreme Court decision, Schmidt v. Schmidt, Kirifides and Rassias, PC, which broadly interpreted the phrase "medicines and supplies" under the Act. But the Commonwealth Court noted that the Schmidt decision dealt with what qualifies as a covered supply – not who qualifies as a provider. The two questions, the court emphasized, are distinct.
Finally, Scomed argued on policy grounds that shutting medical supply companies out of the Fee Review process undermines the workers' compensation system and puts injured workers' access to necessary supplies at risk. The court acknowledged the concern but said its hands were tied. When statutory language is clear, a court cannot rewrite it based on what it thinks the law should accomplish. That kind of change, the court said, belongs with the legislature.
For workers' compensation insurers and claims administrators, the decision reinforces a useful line of defense against fee review challenges from entities that supply medical goods but do not provide medical services. It also raises an unresolved question: if medical supply companies cannot access the Fee Review process, what recourse, if any, do they have when they believe they have been underpaid? That question, for now, remains unanswered – and squarely in the legislature's court.
