Published on May 18, 2015 by WorkCompCentral, by Sherri Okamoto
The California 3rd District Court of Appeals has agreed to hear a constitutional challenge to the independent medical-review process mandated by Senate Bill 863.
Ramirez v. WCAB (SCIF), No. C078440, joins a case already pending at the 1st DCA called Stevens v. WCAB (Outspoken Entertainment), No. A143043, which also seeks to have the controversial procedure for determining issues of medical necessity declared invalid.
The stakes are high, as the Workers' Compensation Appeals Board has said IMR is the sole avenue for review of timely-issued utilization-review decisions. Last week, a board panel saiduntimeliness isn't a basis to overturn an IMR finding.
Labor Code Section 4610.6(d) provides that the state's IMR contractor – Maximus Federal Services – is supposed to get decisions out within 30 days of the receipt of the request for review and supporting documentation, but Maximus struggled to put out decisions within this timeframe after IMR became applicable for all dates of injury in July 2013.
The average wait time for parties was as long as 130 days at one point last year, although it's now dropped to about 24 days, according to the Division of Workers' Compensation.
On Tuesday, a split WCAB panel ruled in Arredondo v. Tri-Modal Distribution Services that no matter how long the IMR decision takes, the state's administrative law judges have no jurisdiction to decide whether the worker should get the disputed treatment, because the Legislature intended for IMR alone to make such decisions.
Zachary Sacks, a defense attorney with Sacks & Zolonz, said he was thrilled to finally have a statement from the WCAB expressly recognizing that the Legislature meant for IMR to be the only way for issues of medical necessity to be decided – but the anonymity of the doctor doing the review, and the limited ability of an aggrieved party to appeal the decision reached, have been worrisome to applicants' attorneys from the get-go.
Applicants' attorney Joseph Waxman is arguing that these aspects of IMR violate principles of due process in the Stevens case. Voters Injured at Work and the California Applicants' Attorneys Association are backing his position.
However the State Compensation Insurance Fund, which had provided coverage for Stevens' former employer, counters that placing the decision for medical necessity "in the hands of unbiased medical experts permits the workers' compensation administrative law judges to administer justice expeditiously to more injured employees and without the encumbrance of time-consuming and costly procedures leading to non-scientifically-based medical decisions."
The California Workers' Compensation Institute, the Property and Casualty Insurers Association of America and the California Chamber of Commerce are supporting State Fund.
Briefing in the Stevens case wrapped up in March, and Waxman has requested that the court hear oral argument. The 1st DCA has not yet set a date for that to happen.
Attorneys with Mastagni, Holstedt, Amick, Miller & Johnsen are advancing the Ramirez case at the 3rd DCA.
In his writ petition, Ramirez argues that an improperly conducted UR is, by definition, an untimely UR since the review process was "never completed." He claims the UR provider for the State Compensation Insurance Fund never conducted an appropriate UR in his case because the reviewer failed to apply the Medical Treatment Utilization Schedule before denying the care his doctor had requested.
Ramirez also contends that the WCAB's en banc decision in Dubon v. World Restoration, saying issues of medical necessity can be decided by an administrative law judge only in cases where the UR decision was untimely, was wrongly decided.
He says this rule from Dubon conflicts with California Code of Regulations Section 10451.2(c)(1), which states that disputes over whether UR was untimely "or otherwise procedurally deficient" will not go through IMR.
What's more, Ramirez says the entire IMR scheme is an unconstitutional impairment upon the WCAB's authority since it removes the board's jurisdiction over medical treatment disputes. He insists that the lack of any substantive appeals process for an IMR decision also violates his due process rights.
The State Compensation Insurance Fund counters that Ramirez can't challenge the Dubon ruling because this line or argument exceeds the scope of the issues he raised in his petition for reconsideration at the WCAB.
Should the court wish to address Dubon though, SCIF says the WCAB erred in retaining jurisdiction over medical treatment disputes for untimely UR decisions since the Labor Code says all such disputes are to go through IMR.
SCIF also argues that the Legislature's plenary power to establish a workers' compensation system "to decide who decides issues, what evidence may be used, and how such decisions may be reviewed."
It insists that the creation of IMR fell within the broad authority of the Legislature, and that the IMR system provides for meaningful appellate review of decisions.
The court granted writ to the Ramirez case on May 7, and it has requested that a record of the administrative proceedings be filed by next Wednesday.
Applicants' attorney Alan Gurvey of Rowen, Gurvey & Win – a vocal opponent to IMR – last week heralded the 3rd DCA's decision to hear the Ramirez matter. He said he felt all cases involving IMR decisions ought to be appealed "until there is transparency" in the decision-making process.
When "there is an uproar, as there is with IMR," Gurvey said he thought the judiciary needs to get involved and determine, once and for all, "if it's in accordance with the constitution or if individual rights have been violated."
Right now, he contended, "we have a system, where there's no legal recourse, where the ultimate arbiter is unknown, and the information and time spent in making the determinations that can affect whether someone lives or dies is unknown." If the courts say that passes constitutional muster, Gurvey said, "then I guess we need to live with it," but he emphasized that "many, many people believe individual rights are not being protected" by the IMR scheme.
But defense attorney Richard Jacobsmeyer of Shaw, Jacobsmeyer, Crain & Claffey said that he doubted any of the cases going up to the Courts of Appeal were likely "to get IMR thrown out altogether."
The Labor Code contains a "savings clause," so that even if one aspect of the IMR system is found to violate due process, the system as a whole will still remain in place, he explained.
"IMR doesn't necessarily go away if a piece is unconstitutional," Jacobsmeyer said, "that part will just need to be changed."
So the most IMR's opponents can do is "challenge bits and pieces" and perhaps tweak the way IMR works, he opined.