Valdez Decision Reopened Debate over Non-Network Doctor Reports

"...it remains to be seen how the WCAB and courts will interpret the 'sole basis,' language, as it could arguably mean that the non-MPN report cannot be the sole basis for establishing the compensability of one condition among many, or if it just cannot be the sole basis for establishing the compensability of the worker's overall condition.....he is inclined to think it is the latter."   Alan Gurvey

In the past year, the California Supreme Court has handed down only one decision dealing directly with workers' compensation, and naturally the panelists at the California Applicant Attorneys Association winter convention last weekend discussed that ruling as part of a session on the most important cases of 2013.

However, the panelists disagreed about what Valdez v. WCAB (Warehouse Demo) means for injured workers and their attorneys.

The case arose from Elayne Valdez's 2009 workplace fall. She initially received treatment from within her employer's medical provider network, and then began seeing a chiropractor recommended by her attorney. An administrative judge relied on reports from her self-selected, non-network doctor to award her temporary disability benefits.

The Workers' Compensation Appeals Board then issued two en banc decisions overturning the award, finding Labor Code Section 4616.6 precluded the admission of reports from doctors outside of a valid medical provider network. 

Section 4616 sets forth a multi-level process for an injured worker to change physicians within an employer's network and obtain an independent medical review – governed by Section 4616.4 – to dispute a treatment of diagnosis. Section 4616.6 provides that "(n)o additional examinations shall be ordered by the Appeals Board and no other reports shall be admissible to resolve any controversy arising out of this article."

The 2nd District Court of Appeal annulled the WCAB decisions in 2012, based on its conclusion that Section 4616 comes into play only if there has been an independent medical review under Section 4616.4. 

Justice Laurie Zelon, in writing for the court, posited that this conclusion was buttressed by the language of Section 4605, which provided that a worker had the right to consult with any doctor of her choice, at her own expense. 

Valdez's employer, Warehouse Demo Services, petitioned the Supreme Court for review, and while the case was pending before the high court, the Legislature passed Senate Bill 863.

SB 863 amended Section 4605 to prohibit the use of reports by non-network doctors as the sole basis of an award for compensation.

The Supreme Court reasoned that the change to Section 4605, coupled with the fact that lawmakers did not amend Section 4616, indicated that the Legislature intended for non-MPN reports to be admissible and to provide "some basis for an award, but not standing alone."

Construing Section 4616.6 as barring the admission of reports from privately retained and compensated physicians in disability proceedings would be inconsistent with the terms of Section 4605, the court said. 

"Section 4605 has long permitted employees to consult privately retained doctors at their own expense," the court observed, "and the amendments enacted by Senate Bill 863 maintain that right." 

At the California Applicant Attorneys Association winter convention last weekend, panelist William Herreras said he saw the decision as establishing that "injured workers are entitled to obtain their own private (qualified medical evaluator) in determining permanent disability."

He said the Valdez case shows that lawmakers have created two separate statutory schemes for workers' compensation – one which deals with the diagnosis and treatment of a work injury, and another that deals with the evaluation of a worker's disability.

The Supreme Court, in Valdez, said that when there is a dispute about the diagnosis and treatment within a network, Section 4616.6 will restrict the admission of medical reports in hearings on that dispute. But, the court expressly said that reports by non-network doctors are admissible and can be considered in resolving disputes about the compensability of workplace injuries.

Herreras said this means the injured worker in the Valdez case could have the report from her non-network doctor admitted in proceedings to evaluate her disability. 

On Tuesday, Herreras elaborated that he thinks Section 4605 is clear that the applicant, or the applicant's attorney, has to pay for the report from the non-network doctor. He said he also does not believe that this cost can be recovered from the employer.

Fellow panelist Ronald Feenberg of Rose, Klein & Marias agreed that Section 4605 requires the applicant or applicant attorney to pay for the cost of the report, but he posited that this cost might be recoverable. 

For him, he said, the real issue with a non-MPN provider report is "What do you do with it after you've obtained it?" 

Feenberg said it seemed "foolish" for an applicant to pay for such a report unless the reports by the applicant's MPN doctor and/or the panel qualified medical evaluator are unfavorable to the applicant. "If you're not dissatisfied with that you have," Feenberg said, then there's no need to pay to obtain another report. 

So if the applicant is going to get the outside report, Feenberg said, "you're going to obtain it to rebut something." 

He advised against getting a report in every single case, saying he would only do so in a permanent total disability case, and that in such a case, he wouldn't care if he had to absorb the cost of paying for the report. 

Panelist Joseph Capurro wrapped up the discussion on Valdez by remarking that he sees the case, not as "the end" of a long court battle, but "the beginning" of a fight over whether the statutory limitations on developing medical evidence in a comp claim passes constitutional muster.

His comment was greeted with applause from the 1,000-plus member audience that had gathered at the Westin Mission Hills in Rancho Mirage for the four-day CAAA conference. 

Long Beach attorney John Mendoza of Perona, Langer, Beck, Serbin & Mendoza – counsel for Elayne Valdez – said he thought Capurro's comments were "the most spot-on of all." 

He said he believed the Valdez decision "drew a very clear line for the employer lobbyists and their beholden legislators," and warned them that "the pendulum has swung as far – favoring insurance carriers – as it possibly can."  

Following the Supreme Court's ruling, Mendoza said he believes there is "now no question about the ability to obtain an admissible report from a 'consulting' or 'attending' physician," as that was "the entire point behind Valdez."

Further, he said, "the Supreme Court made it perfectly clear that the reports of non MPN-physicians are admissible – even given SB 863’s amendment to Labor Code Section 4605," as long as they are not the sole basis of an award.

Mendoza added that medical reports "have never provided the sole basis of an award," as they "must nearly always be corroborated by other evidence, such as testimony, diagnostic studies and other matters established within the board’s evidentiary record."

He further opined that the Labor Code, administrative regulations and case law "provide ample avenues to obtain non-MPN reports in what is probably a majority of cases that end up being litigated."

Alan Gurvey of Rowen Gurvey & Win, said it remains to be seen how the WCAB and courts will interpret the "sole basis," language, as it could arguably mean that the non-MPN report cannot be the sole basis for establishing the compensability of one condition among many, or if it just cannot be the sole basis for establishing the compensability of the worker's overall condition. He said he is inclined to think it is the latter.

Defense attorney Tim Kinsey of Grancell Stander Reubens Thomas & Kinsey – counsel for Valdez's employer – said that prior to the Valdez decision, applicants' attorneys would use Section 4605 to procure reports from non-MPN doctors and use those reports to get an award for benefits, which is what initially happened in the Valdez case. 

This allowed an applicant to "bypass the MPN physician's opinions, obtain medical control and secure an award of compensation based on an applicant-selected non-MPN physician," he said. 

The legislative amendments to Section 4605 put a stop to such a strategy, and he contended that the statutory change was "clearly inspired by the attempt to circumvent the MPN in Valdez."

Kinsey said as he understands the state of the law now, a report from a non-MPN doctor cannot be used as the sole basis of an award but rather must now be sent to the QME or authorized treater – which would be the MPN primary care physician in cases of a properly noticed MPN – for review and comment. 

"Given its now limited and questionable value and the fact that applicant must pay for the report, I would expect to see 4605 reports under very limited circumstances," he said.

Published January 29, 2014 on WorkCompCentral, authored by Sherri Okamoto