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Figueroa v. Rockbestos Company

CASE NO. 4633 CRB-1-03-2

COMPENSATION REVIEW BOARD

WORKERS’ COMPENSATION COMMISSION

JULY 20, 2004

SAMUEL FIGUEROA

CLAIMANT-APPELLEE

v.

ROCKBESTOS COMPANY

EMPLOYER

and

CONSTITUTION STATE SERVICE CO.

ADMINISTRATOR

RESPONDENTS-APPELLANTS

APPEARANCES:

The claimant was represented by Mark Blakeman, Esq., Michelson, Kane, Royster & Barger, 93 Oak Street, Hartford, CT 06106-1552.

The respondents were represented by Neil J. Ambrose, Esq., Letizia, Ambrose & Falls, P.C., One Church Street, New Haven, CT 06510.

This Petition for Review from the January 23, 2003 Finding and Award of the Commissioner acting for the First District was heard October 31, 2003 before a Compensation Review Board panel consisting of the Commission Chairman John A. Mastropietro and Commissioners James J. Metro and Howard H. Belkin.

OPINION

JOHN A. MASTROPIETRO, CHAIRMAN. The respondents have petitioned for review from the January 23, 2003 Finding and Award of the Commissioner acting for the First District. They contend on appeal that the trier erred by reversing a decision that had been made by the chief executive officer of the respondent Rockbestos’ medical care plan pursuant to the utilization review procedures codified in Admin. Reg. § 31-279-10. We remand the decision of the trial commissioner for further findings.

I

The trial commissioner found that the claimant suffered a compensable back injury on October 9, 2000. An MRI showed degenerative changes at L5-S1 and spondylosis. Dr. Becker, an orthopedic surgeon, initially recommended treating the claimant conservatively. In April 2001, Dr. Becker observed that conservative measures such as therapy and medication had failed, and he stated that the claimant was a reasonable candidate for decompression and fusion surgery. An operation was scheduled for June 5, 2001, but had to be cancelled because the claimant failed to abstain from eating on the morning of surgery.

The claimant instead continued to undergo conservative treatment. An MRI in October 2001 showed a bulge at L4-L5 and spondylolisthesis at L5-S1. Dr. Becker indicated that the claimant was not an optimal surgical candidate in light of multiple-level disease. He recommended that the claimant lose weight and exercise, and then return in two months for evaluation. On December 28, 2001, Dr. Becker again indicated that conservative treatment measures had failed, and recommended surgical decompression and fusion. Travelers Medical Management Services, the utilization reviewer for Rockbestos’ medical care plan, denied Dr. Becker’s request for surgery.

The claimant appealed that decision in accordance with Admin. Reg. § 31-279-10(e), which enumerates the dispute resolution procedures applicable to approved medical care plans. In response to the claimant’s appeal, Travelers sent the physician-advisor’s decision to Dr. Somogyi, an orthopedic surgeon, who reviewed the case and determined that the claimant should be certified for surgery if he were to reduce his weight to 200 lbs. and stop smoking. Dr. Somogyi’s February 21, 2002 opinion was forwarded to Dr. Seidner, the National Medical Director for Travelers, who overturned Dr. Somogyi’s certification for surgery, and denied the request. The claimant again appealed, this time to the Chief Executive Officer of the Rockbestos Company Medical Care Plan, who issued a decision denying Dr. Becker’s request for surgery on July 12, 2002. As the plan’s internal review process had been exhausted, the claimant appealed the denial of his surgery request to this Commission pursuant to § 31-279-10(f).

The trial commissioner found that it was unreasonable for the CEO of the medical care plan to deny the claimant’s request for surgery. He overruled that decision, finding instead that Dr. Becker’s opinions were more credible. The trier then authorized the decompression and fusion surgery as long as the claimant could reduce his weight to less than 200 lbs., and stop smoking for at least six months. The respondents have appealed the trial commissioner’s ruling to this board on the ground that he failed to apply the correct level of deference to the chief executive officer’s denial of the surgery request.

II

Section 31-279(c) allows an employer or workers’ compensation insurer to establish a plan for the provision of medical care to injured workers, subject to the approval of the chairman of this Commission. In order to be approved, a plan must contain an adequate list of qualified service providers and pharmacies that will provide services under the plan in a timely, effective and convenient manner for employees. Section 31-279(d) also requires that a plan meet specified standards, including “the inclusion in the plan of fee screening, peer review, service utilization review and dispute resolution procedures designed to prevent inappropriate or excessive treatment.”

To that end, § 31-279-10(e) states that each medical care plan must include a service utilization review process to allow evaluation of the necessity and appropriateness of recommended medical and health care services, as well as a dispute resolution process in the event payment is denied. The regulation then sets forth the minimum standards for review and appeal procedures. Under § 31-279-10(e)(1), review may be initiated by the employee, the medical provider, the employer, or the medical care plan itself, either directly or through a utilization review contractor.1 Once all proffered and requested information has been received by the plan, it must review the recommended treatment using written clinical criteria established by the plan, and issue a written decision on treatment within two business days. Admin. Reg. 31-279-10(e)(2), (3). If the recommended treatment is denied, the provider or employee may appeal that decision within 15 days as per § 31-279-10(e)(4). The plan must then provide “a practitioner in a specialty relating to the employee’s condition for the purpose of reviewing the plan’s initial decision.” Admin. Reg. 31-279-10(e)(5). The doctor’s opinion is then submitted to the medical director of the medical care plan within 15 days, who in turn must issue a written decision within 15 additional days. Admin. Reg. § 31-279-10(e)(6).

Either the employee, the employer or the provider may request further review of the medical director’s written decision, again within 15 days of the issuance of that ruling. Admin. Reg. § 31-279-10(e)(7). Such review is provided by the chief executive officer of the medical care plan, and may involve a hearing if either party requests it in writing. The CEO is instructed to issue a final written decision on the request for review no later than 30 days after the submission of the written review request or the conclusion of the hearing, if one is held. The right to further appeal is governed by § 31-279-10(f), which allows a Workers’ Compensation Commissioner to review the necessity and appropriateness of medical and health care services recommended by providers in a plan only after the plan’s utilization review and dispute resolution procedures have been exhausted. The regulation further provides, “The decision of the chief executive officer of the plan relating to payment for such medical and health care services shall be subject to modification only upon showing that it was unreasonable, arbitrary or capricious.”

III

In the context of appellate review, the words “unreasonable,” “arbitrary” and “capricious” connote that which has been done by whim, impulse or irrational basis in derogation of fact or law, and commonly appear where a factfinder has been granted a great deal of latitude. See, e.g., Wing v. Zoning Board of Appeals, 61 Conn. App. 639, 643 (2001)(as factfinder, zoning board of appeals was endowed with liberal discretion); see also, Black’s Law Dictionary, 5th Ed. For example, the Uniform Administrative Procedure Act allows an aggrieved party to appeal an agency’s administrative ruling to the superior court, which must affirm unless the appellant’s substantial rights have been prejudiced “because the administrative findings, inferences, conclusions, or decisions are . . . (6) arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion.” Section 4-183(j) C.G.S. In construing this statute, our Appellate Court has explained, “Such findings of fact or inferences reasonably drawn therefrom must be upheld unless the court finds them to be clearly erroneous in view of the whole record or arbitrary or capricious and, therefore, an abuse of the hearing officer’s discretion. . . . [T]he existence of contradictory evidence and the possibility of drawing two inconsistent conclusions from the evidence does not preclude an administrative agency’s finding from being supported by substantial evidence.” Wolf v. Commissioner of Motor Vehicles, 70 Conn. App. 76, 82-83 (2002); see also, Wasfi v. Dept. of Public Health, 60 Conn. App. 775, 792 (2000)(“arbitrary” and “capricious” are vague terms that reflect the considerable authority vested in administrative agencies by the legislature).

By allowing modification of a CEO’s decision regarding payment for recommended treatment only upon a showing that the decision was unreasonable, arbitrary or capricious, the drafters of Admin. Reg. § 31-279-10 presumably intended to grant substantial deference to the decisionmaker. The claimant nonetheless contends that the language of § 31-279-10(f) may not abridge a trial commissioner’s power to exercise his traditional factfinding authority over the credibility of the medical evidence in a workers’ compensation case. Although the regulation seems to allocate that factfinding authority to the medical plan’s CEO as part of the dispute resolution process, the claimant argues that allowing such an individual to act as the ultimate factfinder concerning medical treatment would defeat the humanitarian purpose of the Workers’ Compensation Act by substituting an interested party for an impartial judge. Brief, p. 6.

We remind the claimant that, as an administrative review body, this board lacks the authority to hold that § 31-279-10(f) is invalid based on constitutional principles of due process. Insofar as the regulation sets forth a standard of review, we must apply it as written. However, our inability to adjudicate the constitutionality of laws does not obscure our awareness of due process issues in our efforts to apply those laws. See Melendez v. Valley Metallurgical, 4178 CRB-2-00-1 (May 1, 2001). An injured worker has a substantial interest in obtaining medical treatment for a work-related injury, and our Workers’ Compensation Act is designed to protect that right. Giaimo v. New Haven, 257 Conn. 481, 512 (2001), citing Mathews v. Eldridge, 424 U.S. 319, 335 (1976). Due process concepts therefore remain relevant, especially when one considers that the terms “unreasonable,” “arbitrary” and “capricious” are by definition vague terms that refer to decisions made in the absence of due process. See Wasfi, supra. It follows that a commissioner must be able to review the decision of a medical care plan in order to ensure that clearly erroneous factual findings are corrected, and the correct legal standards have been applied. See Giaimo, supra (due process required commissioner to be able to review medical panel decision to correct clear factual errors and mistakes of law).

Unlike a hearing before an impartial government body whose procedures are designed by law to protect the rights of both parties; see, e.g., Rosado v. Bridgeport Roman Catholic Diocesan Corp., 77 Conn. App. 690, 713 (2003)(procedural due process guarantees fundamental fairness); the dispute resolution process set forth in Admin. Reg. § 31-279-10(e) involves decisionmaking by both agents of the medical care plan and private, for-profit utilization review companies. The presumption of impartiality that accompanies a governmental decision is therefore absent under the regulatory process. Accordingly, it falls on the trial commissioner and this agency to scrutinize the dispute resolution review process that the medical care plan has followed in determining whether a medical care plan’s decision is unreasonable, arbitrary or capricious.

With regard to general state-licensed utilization review, efforts have been made to ensure that qualified medical professionals will apply objective standards during the review process. This lessens the impact of any favoritism that might exist as a byproduct of the contractual relationship between the utilization reviewer and the employer or insurer.2 To that end, § 38a-226c(2)(B) requires that an appellate-level decision not to certify a procedure must be made by a “licensed practitioner of the medical arts.” Moreover, where an appeal to reverse such a denial is unsuccessful, the utilization review company must “assure that a practitioner in a specialty related to the condition is reasonably available to review the case.” Section 38a-226c(7).

In contrast, the dispute resolution procedure created by Admin. Reg. § 31-279-10(e) does not require appellate-level rulings to be made by medical practitioners only. Instead, the chief executive officer of the medical care plan is placed in the role of ultimate factfinder. There is no requirement that such a CEO be a licensed medical practitioner. The regulation also contains no proscription that prevents the CEO from being affiliated with the employer in the event that the medical care plan is operated by the employer rather than an outside organization. The absence of these safeguards is a flaw inherent in the regulatory dispute resolution process. It creates the potential for a person with both no medical background and a vested interest in the employer or insurer to make the ultimate determination over whether a procedure should be authorized, rather than a qualified practitioner in the appropriate medical field of specialty. In that respect, this arrangement is materially different from the standard agency appeal process before a presumptively neutral decisionmaker such as a workers’ compensation commissioner, and may be taken into account by a commissioner when reviewing the decision of a medical care plan’s CEO for arbitrariness, capriciousness or unreasonableness.

While it may be that the drafters of the regulation did not contemplate a situation in which the CEO of the medical care plan worked for the employer and lacked medical training, that is the situation that confronts us today. We find it troubling that the review process set forth in § 31-279-10(e) so favors a party who already enjoys a superior bargaining position in the employment relation and the administration of compensation claims. As a result, this commission must take extra pains to ensure that a claimant whose case has been through the dispute resolution process does not have necessary medical care denied on unreasonable grounds. This includes granting the trial commissioner the authority to take into account the relationship of a medical care plan CEO to the employer and/or insurer as part of his inquiry into whether such a CEO’s dispute resolution decision was arbitrary, capricious or unreasonable. Such an inquiry could reasonably include taking testimony by the CEO as to the nature of said relationship, as well as surveying his or her track record in reviewing medical care plan decisions in the event said CEO appears to be predisposed to particular outcomes.

IV

Here, the initial denial of certification for the claimant’s spinal fusion surgery came through the utilization review process from a physician-advisor who identified “a lack of clinical findings to justify the requested services/procedures.” Claimant’s Exhibit M. The advisor wrote, “The patient is a poor candidate for surgery (overweight, smoker, litigious[s], did not respond to orthosis, perhaps psychologically unstable). Dr. Becker agrees to wait 6 months, then declare him permanently partial[ly] impaired. He is a candidate for retraining.” Id. When the claimant appealed, his case was referred to an orthopedic surgeon, Dr. Somogyi. Dr. Somogyi spoke to Dr. Becker, who explained that he was aware of certain “red flags,” but would consider the surgery as long as the claimant reduced his weight to less than 200 lbs. Noting that “conservative care has not eliminated chronic complaints of persistent low back pain,” Dr. Somogyi opted to partially certify the surgery based on the information provided to him by Dr. Becker. Id.

However, Dr. Somogyi’s opinion was not implemented by Dr. Seidner, a licensed physician who acts as Travelers’ national medical director. After reviewing the medical records, Dr. Seidner explained that the claimant had been diagnosed with spondylolisthesis, congenitally shortened pedicles, a small protrusion at L4-L5 and a mild anterior subluxation at L5-S1. He wrote, “while individuals can be treated surgically, Samuel Figueroa’s positive Waddell findings, and Dr. Becker’s notes stating that he is not a surgical candidate suggest that this should not be the treatment option. The fact that he is obese and a smoker are not absolute contraindications to surgery.” Claimant’s Exhibit M. Dr. Seidner advised further evaluation with a physiatrist or neurologist.

At that point, the claimant took an appeal to the CEO of Rockbestos’ medical care plan, Philip Borgia. As noted by the trial commissioner, Borgia is a human resources director with no formal medical training. There is also evidence in the record showing that Borgia, in his capacity as Rockbestos’ Director of Human Resources, was previously involved in this case as an advocate for his employer. He apparently wrote a letter dated October 12, 2000 in which he expressed concern that the claimant had not returned to light duty work, and sought to terminate his workers’ compensation. See Claimant’s Exhibit K (report of Dr. Kruger). Though § 31-279-10 does not discuss this issue, the concerns we enumerated above regarding the decisionmaking role of the medical care plan CEO are amplified by Borgia’s previous involvement in this case, especially because the claimant had no ready opportunity to object to Borgia’s serving as factfinder on the ground of potential bias. Giaimo, supra, 516. A reasonable person might question whether such a factfinder could remain reasonably impartial.

This duality of roles played by Borgia thus adds to our caution in reviewing whether the evidence and the trier’s factual findings support his ruling that the CEO’s decision was unreasonable. Pursuant to the claimant’s appeal, Borgia held a hearing on June 13, 2002, as directed by § 31-279-10(e)(7). The claimant and his attorney were present, along with a representative from Rockbestos and its counsel. The claimant testified at the hearing regarding the progression of his lower back pain, describing his pain as a maximum “10” on a one-to-ten scale. He also submitted medical records and a transcript of Dr. Becker’s deposition from the previous day. See Claimant’s Exhibit N.

In his summary of the medical records, Borgia began with the claimant’s visits to Johnson Occupational Medicine Center shortly after his injury. He cited an October 11, 2000 report by a physician’s assistant that portrayed the claimant as being angry over his job conditions, and over the lack of attention that others seemed to be giving to his pain. Claimant’s Exhibit C. The claimant was lying flat on an exam table when the physician’s assistant informed him that physical therapy was contraindicated for such an acute condition and chiropractic referrals weren’t normally provided. The claimant reportedly sat up quickly and retorted, “How about if I see a lawyer? Is that going to help me?” Id. On October 19, 2000, Dr. Artzerounian saw the claimant, and identified two out of four positive Waddell’s signs, along with some abnormal pain behavior. He also noted that the claimant had complained of employer harassment, and had retained a lawyer. Id.

In considering Dr. Becker’s medical reports, Borgia made note of his December 29, 2000 opinion that recommended conservative treatment and a return to light work, while describing the claimant as a surgical non-candidate. He also made note of reports dated March 16, 2001 and April 13, 2001 that favored surgery, the October 29, 2001 report stating that the claimant was “not an optimal surgical candidate in light of multiple level disease” despite some positive MRI findings, and the December 29, 2001 report in which a fusion was again suggested.

As for Dr. Becker’s testimony, Borgia focused primarily on the elements that did not favor surgery. For example, he cited Dr. Becker’s statement that he had concerns about the claimant’s mindset and Waddell factors that had been identified by Dr. Kruger, the staff at Johnson Occupational, and a functional capacity evaluation (FCE). Deposition, p. 20, 23; see also Claimant’s Exhibits C, K, L. He also wrote, “Dr. Becker admitted that he has seen Mr. Figueroa ‘hypersensitive’ during examination, and that he has seen him ‘maybe overreacting.’ He denied, however, seeing more than three positive Waddell signs at once.” Exhibit M, supra, citing Deposition, p. 27. Borgia also referred to Dr. Becker’s statement that, if a physician were to find at least three positive Waddell’s findings, he might “force the issue of further weight loss and participation on [the claimant’s] part.” Exhibit M, supra, citing Deposition, p. 30. Borgia had earlier cited a May 31, 2001 report by Dr. Kruger that recommended an FCE and a bone/spec scan because the claimant had evinced multiple Waddell’s findings while objectively displaying only minor symptoms. Claimant’s Exhibit K.

Borgia’s written conclusions listed several reasons for denying the surgery proposed by Dr. Becker. Claimant’s Exhibit M. With regard to the FCE and spect/bone scan that Dr. Kruger had recommended, Borgia relied on the manifestation of three Waddell’s signs (tenderness, regional disturbances, overreaction) during the FCE, as well as the normal results produced by the spect/bone scan. See Claimant’s Exhibit L; see also, Claimant’s Exhibit J (Dr. Becker’s October 29, 2001 report). Borgia cited the positive Waddell’s signs that had been detected by various treaters. He also noted that the claimant’s testimony at the June 13, 2002 hearing was inconsistent with regard to his alleged progress in breaking his smoking habit, and was not convinced that the claimant had actually stopped smoking. Borgia further wrote that the claimant “admitted that his weight . . . was 210 pounds,” though Dr. Becker thought an optimal surgery weight to be 190 lbs., and Dr. Somogyi had indicated that the claimant should weight 200 lbs. or less. Borgia described the claimant as having no straightforward physical problem, stating that x-rays had shown no evidence of spondylolisthesis and an MRI had shown only a “minimal anterior sublaxation[sic]” at L5-S1. He also mentioned Dr. Becker 2’s October 29, 2001 report, which described the claimant as not being an optimal surgical candidate due to multiple-level disc disease.

Our review of Dr. Becker’s deposition shows that the thrust of his opinion was in favor of the claimant having surgery as long as he wanted to follow through on it, and was not smoking. Deposition, pp. 29-30. However, his recommendation was couched in somewhat tentative language. He explained that the claimant’s main problem was L5-S1 spondylolisthesis, a dormant condition that was activated by the October 9, 2000 compensable injury. Deposition, p. 8. This condition involved mechanical instability, with no slippage or ruptured disks that would show up on an MRI. Id., pp. 17, 20. Dr. Becker also cited data correlating smoking with a 40% surgical failure rate, compared to 8% in nonsmokers. Id., pp. 18-19. He acknowledged that the claimant’s weight loss could be furthered, as an ideal surgery weight for him would be 190 lbs. Id., pp. 21, 28. Though Dr. Becker stated that he had never seen the claimant display simultaneous multiple Waddell’s signs, i.e., pain with no apparent organic cause, he did note occasional findings. Id., pp. 19-20, 27. He also acknowledged that a patient with Waddell’s signs would need to approach surgery cautiously. Id., p. 20.

As the reports of four separate medical providers noted positive signs of non-organic pain, with three of them noting multiple Waddell’s indicators, we cannot readily infer that it was unreasonable for Borgia to find that the claimant indeed manifested such signs. Dr. Becker indeed acknowledged that the presence of three or more factors would contraindicate surgery without additional weight loss and active participation by the claimant. Deposition, p. 30. Furthermore, Dr. Seidner also declined the surgery request after reviewing the claimant’s records, and Dr. Somogyi’s opinion was both hesitant and expressly dependent on the information provided to him by Dr. Becker.

Given the medical evidence that was before the CEO, we cannot say that Borgia’s decision contained clearly erroneous findings in and of themselves, or that his decision was visibly unreasonable, arbitrary or capricious. Also, the commissioner’s decision was rendered with the benefit of two opinions by Dr. Becker that postdated Borgia’s dispute resolution appeal hearing. See Claimant’s Exhibit J. One of those opinions was clearly material to the surgery recommendation of Dr. Becker, as it indicated that the claimant had decreased his weight from 210 to 198 pounds as of September 20, 2002.

Admittedly, the Workers’ Compensation Act places upon the employer the duty to furnish “any medical and surgical aid . . . as the [treating] physician deems reasonable or necessary;” § 31-294d(a)(1); and grants workers’ compensation commissioners the power to hear all claims and questions arising under the Act, and to carry out its provisions and intent. Sections 31-278, 31-298. Though we agree in principle that this Commission must retain the ultimate authority to decide whether a compensable injury has caused a claimant to require surgery or other medical treatment, we do not believe that this authority allows a commissioner to make initial findings of credibility regarding evidence that, under § 31-279-10(e), should have been submitted to the CEO pursuant to the regulatory dispute resolution process. Any exercise by the commissioner of initial fact-finding authority in conjunction with a review under § 31-279-10(f) is inappropriate under the regulations, as § 31-279-10(f) explicitly states that dispute resolution procedures must be exhausted before a workers’ compensation commissioner may consider the necessity and appropriateness of such services.

The trial commissioner’s conclusion that the claimant’s surgery was unreasonably denied by Borgia is ostensibly premised on his finding that Borgia was a human resources executive without any medical training. As discussed above, we share the trier’s concern regarding that fact, and observe that the integrity of this system is jeopardized by the apparent conflict of interests that the claimant must perceive when an employer’s representative also acts as CEO of the medical care plan and the ultimate arbiter of his entitlement to surgery. The trier is permitted to consider such factors in determining whether a CEO’s decision is arbitrary, capricious or unreasonable. Nevertheless, given that § 31-279-10(f) specifically provides for review by the medical care plan CEO and does not require said CEO to have medical training, we do not believe that the stated basis for the trier’s finding of unreasonableness reached a legally sufficient level to justify reversal. More specific evidence would have to be taken regarding the CEO’s potential bias or prejudgment of issues, and additional findings would be necessary.

We also cannot tell how much weight, if any, the trier placed on the additional evidence that was not before the CEO at the time of his decision. Therefore, we believe that this matter should be remanded to the trial commissioner for a reconsideration of his conclusion that the CEO’s denial of surgery was unreasonable. We note that, on remand, the trier must limit his consideration of medical evidence to the reports and data that were previously submitted to Borgia in determining whether his denial of surgery was reasonable. However, in the event additional proceedings on other evidentiary matters prove to be necessary in light of our discussion above, such hearings may be scheduled.

Having found that the trial commissioner erroneously considered evidence that had not yet been submitted to the utilization review process as required by § 31-279-10, and in light of his incorrect reliance on the factfinder’s lack of medical training as a basis for finding the medical plan CEO’s decision to be unreasonable, we hereby reverse and remand the trial commissioner’s decision for further consideration.

Commissioners James J. Metro and Howard H. Belkin concur in this opinion.

1 Admin. Reg. § 31-279-10(h)(7) requires any entity engaging in utilization review, whether it be a medical care plan or a utilization review contractor, to be licensed by the Commissioner of Insurance as a utilization review company. See § 38a-226 through § 38a-226d C.G.S. span class="back">BACK TO TEXT

2 For instance, under § 38a-226c(a)(11), utilization review companies may not give their employees financial incentive to increase denials of certification. They are required to apply written clinical criteria and review procedures that are “established and periodically evaluated and updated with appropriate involvement from practitioners.” Section 38a-226c(5). Also, an initial determination to deny services must be made by a licensed health professional, and any notice of a decision not to certify a procedure must inform the provider or enrollee of the principal reasons for the denial, as well as relevant appeal procedures. Section 38a-226c(1)(E), (13). span class="back">BACK TO TEXT

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