1st DCA Denies Review of Constitutional Challenge to IMR Optio

Published 06/19/14 by WorkCompCentral, authored by Sherri Okamoto

The 1st District Court of Appeal on Tuesday summarily denied review of a lawsuit that challenges the constitutionality of the independent medical review process, but applicant attorneys say this doesn't mean the controversial system with limited judicial oversight for treatment decisions actually comports with principles of due process. 

Joseph Waxman, the San Francisco applicant attorney who filed the appeal in Stevens v. WCAB, on Wednesday said he was "disappointed that the Court of Appeal panel decided not to grant the petition for writ of mandate to hear the constitutional issues posed by the IMR statutory scheme set out in Labor Code Sections 4610.5 and 4610.6, given that medical care issues – and denials of care – are of crucial importance to every injured worker in this state."

He said his belief was that a petition for writ of mandate is the appropriate remedy when constitutional issues are to be considered and there is no adequate remedy available through the Workers' Compensation Appeals Board. 

Waxman explained that he had pursued the writ in the Stevens case since he thought no administrative resolution would be forthcoming. This was because the administrative law judge who presided over the trial had indicated she felt she did not have jurisdiction to decide the medical necessity of the care which IMR had denied, and the WCAB had indicated that it couldn't pass judgment on his constitutional arguments, he said. 

The attorney said he was "considering all appropriate legal options" for how to proceed in the best interests of his client, Frances Stevens. But no matter how her case comes out, Waxman said he didn't think this will be the end of constitutional challenges to IMR.

"I do not believe that these issues can be fully resolved within the workers' compensation community until addressed by the higher courts of this state," he said. 

Frances Stevens had worked as a magazine editor before suffering an admitted industrial injury to her feet three days before Halloween in 1997. She underwent a series of surgeries, but her condition did not improve. Stevens wound up dependent on a wheelchair for mobility, which caused her to become severely depressed.

Workers' Compensation Judge Francie Lehmer found Stevens to be permanently and totally disabled last August. 

Following this decision, Stevens' treating doctor issued her prescriptions for home health care services and a variety of pain medications. However the insurance carrier for Stevens' employer, the State Compensation Insurance Fund, refused to pay for such treatment. 

Maximus Federal Services, the contractor which provides IMR services in California, upheld the SCIF's decision in February. 

Waxman in April filed his petition asking the 1st DCA to issue a writ of mandate finding IMR denies injured workers their due process rights by prohibiting meaningful judicial review of decisions.

A final IMR decision can be appealed only for an obvious mistake of fact or allegations of bias, fraud or conflict of interest, and Waxman, in his petition, alleged that the anonymity of the reviewing physician renders it impossible to substantiate any such allegations. Additionally, if an IMR decision is set aside, the worker is not automatically entitled to the recommended treatment but has to go through the process again. 

The California Division of Workers’ Compensation countered that Stevens lacked standing to pursue writ relief since she had not exhausted her administrative remedies. The DWC noted that Stevens could still appeal the IMR decision and, if unsatisfied with the outcome of the appeal, petition the WCAB for reconsideration. Until the WCAB rules on the petition for recon, there is no final order subject to a writ of review, the DWC said.

SCIF asserted a similar argument, and moved for dismissal of the writ petition. 

The California Workers' Compensation Institute and Property Casualty Insurers Association of America earlier this month filed a joint amicus brief in support of the DWC and SCIF, and the California Chamber of Commerce sought to throw its support behind the DWC and SCIF as well, but the 1st DCA issued an order Tuesday to deny review in the matter and not accept the additional amicus brief.

Jennifer Vargen, the senior vice president for public affairs for SCIF, on Wednesday said "we are gratified by the action taken by the Court of Appeal and hope that this is the final action on this issue."

That's unlikely to be the case, according to applicant attorney William Herreras.

Applicants' attorneys have long been critical of the IMR process and many have been questioning whether it would pass constitutional muster since its inception last year. While the Stevens case appears to be the first to take the issue up to an appellate court, Herreras on Wednesday promised that "there will be others."

He said he was "aware of a number of cases" involving similar challenges to those raised by Waxman, but "none have been perfected by writ yet." 

Herreras emphasized that the 1st DCA's decision to deny review was not a judgment on the merits of whether IMR was constitutional, and he said he thought "the mechanism of the review" was what had prompted the court's decision.

It's not clear what the justices were thinking though, because there was no written decision from the 1st DCA.

Since there was no actual decision from the WCAB denying review of the IMR decision, Herreras said the Stevens case may have to be formally rejected by the WCAB and then brought back up to the 1st DCA for the court to review its merits. In the alternative, Herreras said, Waxman also has the option of petitioning the Supreme Court for review of the 1st DCA's decision not to take up the case as it stands. 

Herreras said the California Applicants' Attorneys Association had been thinking about filing an amicus brief in support of Waxman with the 1st DCA, but since the court denied review, "we're going to have to save it for another day." He said he plans to speak with Waxman in the coming days to see how Waxman will proceed and how CAAA may be able to assist him. 

CAAA President Jim Butler said Wednesday that the group thinks the IMR process "should be workable," but "in its current incarnation there are more questions than answers."

He said CAAA remains concerned about the fact that the number of IMR requests in workers' compensation are 30 times higher than in a group health setting, and that the organization feels IMR is "adding delay, increasing costs and not providing a complete, fair review of medical records."

By contrast, defense attorney Lois Owensby of Laughlin, Falbo, Levy & Moresi said she found it "heartening" that the 1st DCA declined review of the Stevens case.

Establishing the IMR process was "a significant part" of the reforms enacted by the passage of SB 863, she opined. 

"Considering the setbacks in Angelotti, Dubon and Navarro, this is a notable victory for the cost-saving provisions of SB 863," Owensby said. 

Ownesby is talking about several pending cases that threaten to eliminate much of the cost savings intended through passage of the reform legislation.

Angelotti Chiropractic v. Baker is before the 9th Circuit Court of Appeals right now, and it involves a constitutional challenge to the $100 lien activation fee that has to be paid under SB 863. A federal judge in Los Angeles last year issued a temporary injunction prohibiting the DWC from collecting these fees, or dismissing any liens for which this fee has not been paid, pending the outcome of the litigation.

Dubon v. World Restoration involves the WCAB's recognition of an exception to the statutory requirement that cases go through IMR. In February, the en banc WCAB ruled that determinations of medical necessity are not subject to IMR when the underlying utilization review was defective. 

The board has since granted reconsideration of its ruling.

In Navarro v. City of Montebello, the en banc WCAB invalidated an administrative rule from the Department of Industrial Relations which limited the ability of an injured worker to see a new qualified medical evaluator for a successive injury.

The board ruled that the Labor Code does not require an employee to return to the same panel QME for an evaluation of a subsequent claim of injury, even if the second claim involves the same parties and same body parts. 

This decision has been appealed to the 2nd DCA.

Meanwhile, applicant attorneys are exploring when and how they can challenge adverse IMR rulings.

Alan Gurvey of Rowen, Gurvey & Win on Wednesday pointed out that the Labor Code allows an applicant to get judicial review of an IMR decision if there is a mistake of fact or law. 

Last month he was able to secure a findings and award allowing his client to get the medication that a doctor had prescribed, but an IMR reviewer had found to be unnecessary. Gurvey said he thought this decision in Nilsen v. Vista Ford was among the first of its kind in the state. 

Gregory Nilsen had worked as an automobile service advisor until a February 2007 accident left him permanently and totally disabled. His doctor issued him a prescription for Lidoderm patches to manage his pain, but his employer's comp carrier disputed the medical necessity for this medication.

 An IMR reviewer found the Lidoderm patches were not medically necessary because Nilsen's doctor had not first tried using serotonin-norepinephrine re-uptake inhibitors to manage Nilsen's pain. 

 However Administrative Law Judge William Carero noted that Nilsen's medical records indicated he had a long history of taking "first line medications," such as SNRIs, before his doctor started prescribing Lidoderm patches. In light of this, Carero said the IMR decision was based on a mistake of fact, which allowed him to review the finding of medical necessity and set aside the IMR reviewer's determination.

 Gurvey said that Nilsen's case may still need to make its way through the appeals court, but if it stands, "then there is still hope to litigate some instances where applicants have been railroaded." 

DWC Spokesman Peter Melton said Wednesday that the agency was analyzing the effect of the 1st DCA's decision not to review the Stevens case. He said that the division "is committed to making IMR the expedient resolution process envisioned by the Legislature in SB 863 for medical treatment disputes and appreciates the cooperation and consideration of all stakeholders."