"court apparently didn't care much about the word 'shall'" being used in the Labor Code, and he thought "it would really help the system if Southard and Saunders were the law." That way, "if there has to be challenges, at least we'd know things would move" Alan Gurvey
Published on October 30, 2015 by WorkCompCentral, authored by Sherri Okamoto
The California 1st District Court of Appeal has declared that the state's independent medical review process passes constitutional muster, but attorneys are saying the ruling still leaves them plenty to fight over.
In Stevens v. WCAB, a unanimous panel determined that California’s scheme for evaluating workers’ treatment requests through independent medical review "is fundamentally fair and affords workers sufficient opportunities to present evidence and be heard."
The Labor Code allows a worker to appeal an IMR decision to the Workers' Compensation Appeals Board only in limited circumstances. Section 4610.6 says the WCAB can overturn the Maximus decision only if the DWC director acted without authority, the decision was procured by fraud, the physician reviewer had a material conflict of interest, the decision was the result of bias or the decision was based on a plainly erroneous fact that is not a matter subject to expert opinion.
"These grounds are considerable and include reviews of both factual and legal questions," the court said Wednesday.
The court reasoned that this standard allows the WCAB to determine whether the IMR decision was made in accordance with accepted standards of medical necessity – including the Medical Treatment Utilization Schedule.
Thus, the court said, "the denial of a particular treatment request on the basis that the treatment is not permitted by the MTUS would be reviewable on the ground that the treatment actually is permitted by the MTUS."
Since the WCAB "failed to appreciate this latter point" when Frances Stevens appealed the IMR denial of her request for a home health aide, the court said the case had to be remanded for the WCAB to determine whether the Maximus reviewer had wrongly interpreted the MTUS to conclude Stevens didn't need in-home help.
Stevens, a former magazine editor, is now wheelchair-bound because of complex-regional-pain syndrome involving both feet.
The State Compensation Fund, which provided coverage for Stevens' employer, has covered the cost of the extensive medical care Stevens has required over the years. In July 2013, Stevens' doctor requested authorization to administer her Ativan, Flexeril, diolofenac cream and hydrocodone. He also sought approval for an in-home health aide.
State Fund submitted the requests to UR, and the reviewing doctor recommended that authorization be denied. Stevens then pursued IMR. She appealed to the WCAB when the decision was upheld.
Stevens argued that IMR violated the state constitution’s separation of powers clause and the state constitution’s requirements that workers’ compensation decisions be subject to review and the system “accomplish substantial justice.” Stevens also claimed IMR denied her due process rights under the U.S. Constitution.
Workers' Compensation Judge Frances Lehmer found she could not review the IMR decision because of the limitations of Section 4610.6. After the WCAB denied reconsideration of the judge's ruling last August, Stevens took her case to the 1st DCA.
The 1st DCA said the state constitution's grant of plenary power to the Legislature to establish a system of workers' compensation was fatal to Stevens' separation of powers claim. The court said there was no authority permitting it to invalidate a statute when the Legislature has made a finding of necessity in enacting it, as lawmakers had done in passing SB 863.
"It is not our place under the state constitution to 'second guess the wisdom of the Legislature' in making these determinations," the court said.
The court also found no due process violation since "IMR is only one aspect of the process afforded to workers who request treatment," and the multiple layers of review available for treatment denials provide "ample process" to protect against the risk of an erroneous deprivation of necessary care.
Michael McClain, general counsel for the California Workers' Compensation Institute, said he thought the court produced "a very strong opinion people can their hang hats on," even though he said he believed the decision is likely to be appealed to the California Supreme Court.
McClain said he thought the "comprehensiveness" of the 1st DCA's discussion of the constitutional arguments makes it less likely that the Supreme Court would see any need to chime in, and so he was hopeful that the Stevens ruling has "closed the door on a whole lot of arguments" against the IMR process.
Theodore Penny of Haight, Brown & Bonesteel, who filed an amicus brief on behalf of the California Chamber of Commerce, was less optimistic. He said he thought "applicants' attorneys are going to try to drive a truck through that sentence that said the board has the right to interpret the MTUS."
But Penny said that portion of the decision can't be read independently from the rest of it. When considered as a whole, he said he thought the court was saying that "there may have been a factual mistake in the application of the MTUS in Stevens' case," and the case has to be remanded to the board to determine if that is so.
"All that paragraph authorized the board to do was review the IMR decision for a factual mistake," Penny opined, and it has to be "the kind of factual mistake that does not require medical expertise to recognize."
If the board finds such a mistake, Penny said, the question is whether the board will "replace the IMR decision with its own or refer it for a new IMR."
Penny said he believed the appropriate course would be for the board to correct the mistake and send the case back to Maximus.
But applicants' attorney Alan Gurvey of Rowen, Gurvey & Win – a longtime vocal critic of IMR – said he thought such an approach would be "absolutely ludicrous."
When a worker's treatment is on the line, Gurvey insisted that it's not fair to make the worker "have to wait for a judge to review the IMR and then go back through IMR." If the worker's been able to get the IMR declared invalid, Gurvey said, "you've got to do something to expedite the treatment," otherwise the worker is going to go outside the comp system and rely on Medicare or Medi-Cal to get care.
Gurvey said he also thought the Stevens decision has "opened the door to a lot of potential litigation on the determinations by IMR and whether there are mistakes of fact."
In light of the Stevens ruling, he said he thought "workers may now get a more tangible shot at the denied treatment through the IMR appeal process." But while "it is a good thing that Maximus doesn't have complete free reign," Gurvey said, "it really doesn't help the injured worker in the long run if it's going to take months and months to go through this convoluted system and get treatment."
What would help with that, he opined, would be if the 3rd DCA upholds the board decision in Hallmark Marketing v. WCAB (Southard).
The Labor Code provides that Maximus "shall" get decisions out within 30 days of the receipt of the request for review and supporting documentation. However, the average wait time for parties was as long as 130 days at one point last year. The DWC says the turn-around time is now down to 10 days.
In the Hallmark case and a second case called Saunders v. Loma Linda University, a WCAB panel ruled that an IMR that is not completed within 30 days is invalid.
But a different panel of commissioners ruled in Arredondo v. Tri-Modal Distribution Services that IMR was designed to be a "governmental action" that occurs under the auspices and control of the administrative director of the DWC. As such, Maximus serves a "state function," and the statutory provisions guiding its conduct therefore had to be "discretionary," the panel said.
The 1st DCA touched on this issue on Wednesday, rejecting Stevens’ argument that her due process rights were violated by the fact it took Maximus over seven months to issue its ruling in her case.
Gurvey reflected that the "court apparently didn't care much about the word 'shall'" being used in the Labor Code, and he thought "it would really help the system if Southard and Saunders were the law."
That way, "if there has to be challenges, at least we'd know things would move," he said.
Defense attorney Gregory Grinberg said the discussion on the IMR deadlines also caught his eye when he was reading the case. He said he saw the 1st DCA as "essentially approving the Arrendondo holding," so the question for practitioners at the board in the coming months will be "whether the Court of Appeal's opinion that a blown deadline doesn’t render IMR unconstitutional means that a blown deadline is not authority for the WCAB to take matters into its own hands."
Ronald M. Metzinger of Metzinger & Associates, counsel for the applicant in the Southard case, said Thursday that the Stevens decision "may or may not have put the kibbosh on the constitutional arguments" he had made, but he didn't think the 3rd DCA was likely to rule on anything other than the question of whether the 30-day deadline for IMR decisions is mandatory or not anyway.
He said he was still evaluating how the outcome of Stevens may affect that issue in his case as of Thursday.
Gregory G. Gomez of Mastagni, Holstedt, Amick, Miller & Johnsen also has a challenge to IMR pending at the 3rd DCA. The court granted review to his case, Ramirez v. WCAB (SCIF), in February, but it has still not set a date for oral argument.
Gomez on Thursday lamented that the Stevens decision "will subject the thousands of injured workers throughout California to the faulty IMR process of a final medical review by unknown medical providers."
If it stands, he predicted, "IMR will continue to drive up costs for both workers' compensation carriers and non-workers’ compensation carriers to whom injured workers’ medical bills are shunted, as well as present a roadblock towards injured workers’ access to reasonable medical care."
Jesse Ceniceros, president of Voters Injured at Work, also expressed disappointment with the outcome of the Stevens case. VIAW had supported Stevens as an amicus, he said, because "IMR has not delivered on the promised 'quick resolution of medical disputes'" and "seems just to rubber stamp the UR denials."
Bert Arnold, president of the California Applicants' Attorneys Association, on Thursday issued a statement saying that "injured workers are not getting treatment they need to return to work, and are having to turn to private health care and Medicare to get their treatment covered.”
CAAA, which had backed Stevens as an amici, "believes it is time for the Legislature to second guess the wisdom of the state bureaucrats who have created a system which rewards a multibillion dollar for-profit corporation for denying medical treatment ordered for injured employees by treating doctors which are selected by their own employers," Arnold said.