State Fund Seeks Reconsideration of WCAB's Dubon Decision

"....(he) was even less impressed with the State Fund's arguments. Upon reviewing the petition Tuesday, he derided its contents as 'unadulterated nonsense.' ....(he) posited that "basically what (the State Fund) is saying is that if people break the rules, regardless of what they do, the Appeals Board has no authority to deal with it."   Alan  Gurvey

The California State Compensation Insurance Fund on Monday filed a petition seeking reconsideration of the en banc Workers' Compensation Appeals Board decision last month in Dubon v. World Restoration.

In the Dubon case, the WCAB ruled that medical necessity is not subject to the independent medical-review process created by Senate Bill 863 when an employer's utilization review is invalid. Instead, the WCAB will resolve such disputes itself.

Jennifer Vargen, senior vice president of public affairs for State Fund, said Tuesday the carrier filed the reconsideration petition because it "continues to strongly believe" that the WCAB's en banc decision in Dubon was contrary to the intent of the reforms of SB 863.

SB 863 established an IMR process for UR decisions communicated to the requesting physician on or after July 1, 2013. Applications for IMR surged from 350 in June, to 4,410 in July, to 15,731 in August, before leveling off in the range of 13,000 to 15,000 per month for the rest of the year. The Workers' Compensation Insurance Rating Bureau has warned that far more IMR requests are being filed than anticipated, undermining the potential savings from the reform.

State Fund attorney Darren P. Wong argues that the WCAB exceeded its authority in finding that UR decisions are not eligible for UR if they are not done in compliance with applicable statutes and regulations. He said the plain meaning of Labor Code 4610.5  − which was added by SB 863 − is that "any dispute" about a UR decision must be resolved through the independent medical-review process laid out by this statute. 

"It is highly unlikely that a Court of Appeal would somehow find issues of timeliness and/or compliance with statutes and regulations regarding utilization review decisions do not fall within the definition of 'any dispute' under Section 4610.5," Wong writes. Had the Legislature intended for the WCAB to have jurisdiction of such issues, he adds, the lawmakers would have said so.

Wong also contends that the WCAB does not have authority to decide issues of medical necessity if the UR were invalid. He posited that the WCAB's conclusion that it had such authority was "directly contrary to the expressed intent of the Legislature to make IMR the exclusive method for resolving disputes over medical necessity."

What's more, he argues, the Legislature's intent to replace the WCAB with the IMR procedure as the arbiter of medical necessity is expressly stated in a September 2012 Senate Labor and Industrial Relations Committee report on SB 863. 

Even if the WCAB does have jurisdiction to decide the validity of a UR decision, and the WCAB determines that the UR in fact, suffered from "material procedural defects" that undermine the integrity of the decision, Wong insists this shouldn't keep the dispute from IMR. The IMR doctor just can't consider the UR decision, he says.

Wong goes on to argue that the responsibility for providing adequate medical records to the UR reviewer, such that the reviewer can return a valid decision, should be on an applicant's treating doctor. 

He also says that the administrative rules and regulations that purport to grant the WCAB authority to review the validity of UR decisions are invalid because the WCAB, as he argued earlier, lacks jurisdiction over these kinds of matters. 

Wong's arguments are similar to those raised by defense attorney Michael Sullivan, founder of Sullivan & Associates, in his recent analysis of Dubon. 

Sullivan noted that applicants' attorneys are "big fans" of the Dubon ruling, as it "seems to keep cases out of IMR if a procedural deficiency can be found in the UR procces." He said applicant attorneys appear to "generally believe that their claims for medical care will fare better before the WCAB than IMR."

That view may be correct. According to data released by the California Division of Workers' Compensation in January, IMR upholds a UR decision about 79% of the time, so if the UR decision was unfavorable, the odds are that the IMR decision will be as well.

Sullivan's analysis points out that the legislative history of SB 863 indicates that the IMR process was established as part of the 2012 reform of the comp system in hopes of creating "a faster and better medical-dispute resolution." The IMR system was also designed "to ensure that medical expertise is used to resolve medical disagreements," Sullivan says.

Allowing the WCAB to assume jurisdiction over a medical treatment dispute solely because of an allegation that the defendant's UR decision was procedurally deficient "would not speed up the resolution process and would leave medical treatment disputes in the hands of judges, rather than doctors," Sullivan contends. 

Sullivan, like Wong, also suggests that Section 4610.5 deprives the WCAB of authority to review the validity of UR decisions.

Dubon's attorney, Maurice Abarr of Santa Ana, said Tuesday he is not surprised that State Fund had sought reconsideration.

"From the State Fund's perspective, it all comes down to what is the legislative intent," Abarr said. 

Abarr said he agrees that medical treatment necessity decisions do belong within the purview of IMR, but only if there has been a valid UR decision. If the UR was invalid, Abarr said he thought the en banc WCAB was correct to find that the dispute should not go to IMR. 

Abarr added that he's heard some workers' compensation judges were unhappy with the Dubon decision when it came out, because the judges thought it would mean an increased workload for them. 

"Sorry about that, but I see it as increasing justice for the injured worker," he said.

Abarr also opined that the State Fund's petition was "hardly a refined response," and that it was clear to him, from the way it was written, that if the WCAB doesn't grant reconsideration, State Fund is just going to switch out the first page of the petition and submit it to the 4th District Court of Appeal as a petition for writ review. 

Fellow applicant attorney Alan Gurvey of Rowen, Gurvey & Win was even less impressed with the State Fund's arguments. Upon reviewing the petition Tuesday, he derided its contents as "unadulterated nonsense."

Gurvey posited that "basically what (the State Fund) is saying is that if people break the rules, regardless of what they do, the Appeals Board has no authority to deal with it." 

If the WCAB cannot ensure that litigants are following the rules to secure valid UR decisions for IMR, Gurvey warned, "chaos will ensue." 

What Gurvey said bothered him the most about the State Fund argument was that it was making IMR "the be all and end all of all disputes in workers' comp for medical treatment," when IMR is far from perfect.

For example, he said, he had a case where his client had been receiving cognitive behavior therapy for years, but a UR reviewer addressing some of the client's other treatment requests mistakenly included the cognitive behavior therapy as being a treatment for which the defendant had denied coverage. 

The dispute then went to IMR and the IMR reviewer determined that Gurvey's client wasn't entitled to the cognitive behavior therapy because it was not an accepted part of the client's claim, and because it "wasn't going to cure" the worker.

However, Gurvey said, the standard for compensability laid out in the Labor Code is treatment that will cure or relieve a condition, and the IMR reviewer in his case was apparently completely oblivious that relief was part of the standard. 

Oakland attorney Jim Butler, president of the California Applicants' Attorneys Association, on Tuesday remarked that the relief sought by State Fund "would eviscerate the entire UR/IMR process."

He said he saw the carrier as asking "to be granted permission to completely ignore their obligation under the law and withhold essential medical records to the detriment of the injured worker."

Butler suggested that the Dubon ruling was "an excellent example of the widespread failure of claims administrators to provide adequate medical records to the UR reviewer."

Butler also emphasized that this petition from State Fund does not stay or invalidate the WCAB's ruling in Dubon, and that the Dubon decision remains binding on judges throughout the state.

He added that he thought the WCAB "essentially reaffirmed existing law in the Dubon decision," and that he did not expect the board to change its position now. 

 Published on 03/26/2014 by WorkCompCentral, authored by Sherri Okamoto