California: The AME/PQME Quagmire on Determining Medical Necessity Post SB 863

  By Robert G. Rassp, Esq.
© Copyright 2013 LexisNexis. All rights reserved. Excerpts of this article will appear in a future edition of Rassp & Herlick, California Workers' Compensation Law.
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SB 863 has brought to us new laws and regulations that govern whether or not portions of medical opinion can be admissible before the WCAB at trial. A revolutionary part of SB 863 mandates that the opinions of treating and evaluating physicians are NOT admissible on the issue of medical necessity. Specifically, Labor Code section 4062(b) [4062(b)] states as follows:
4062(b): If the employee objects to a decision made pursuant to Section 4610 to modify, delay, or deny a request for authorization of a medical treatment recommendation made by a treating physician, the objection shall be resolved only in accordance with the independent medical review process established in Section 4610.5.
Issues involving medical necessity have been resolved for decades through the AME/QME process and this process is ingrained in each long-term workers’ compensation practitioner’s DNA. Independent medical review supersedes the AME/QME dispute resolution process and takes practitioners out of their comfort zone.
You do not have to look too far to see the changes embedded in the Labor Code and emergency regulations that prohibit evaluating physicians to discuss medical necessity for the purpose of admissible evidence at trial on the question of medical necessity. See, for example, Labor Code Sections 4061 and 4064(a) [4061, 4064(a)]:
4061: This section shall not apply to the employee’s dispute of a utilization review decision under Section 4610, nor to the employee’s dispute of the medical provider network treating physician’s diagnosis or treatment recommendations under Sections 4616.3 and 4616.4.….
4064(a): The employer shall be liable for the cost of each reasonable and necessary comprehensive medical-legal evaluation obtained by the employee pursuant to Sections 4060, 4061, and 4062. Each comprehensive medical-legal evaluation shall address all contested medical issues arising from all injuries reported on one or more claim forms, except medical treatment recommendations, which are subject to utilization review as provided by Section 4610, and objections to utilization review determinations, which are subject to independent medical review as provided by Section 4610.5.
For AME and QME physicians, also see pertinent parts of tit. 8 California Code of Regulations Sections 35.5(g)(1) and (g)(2) [35.5]:
(g)(1): Where the evaluation is performed on or before June 30, 2013, for injuries that occurred before January 1, 2013, whenever an [AME or QME] provides an opinion in a comprehensive medical/legal report on a disputed medical treatment issue, the evaluator's opinion shall be consistent with and apply the standards of evidence-based medicine set out in [the MTUS].
(g)(2): For any evaluation performed on or after July 1, 2013, and regardless of the date of injury, an [AME or QME] shall not provide an opinion on any disputed medical treatment issue, but shall provide an opinion about whether the injured worker will need future medical care to cure or relieve the effects of an industrial injury.
For treating physicians, see tit. 8 Cal. Code Regulations section 9785(b)(3) [9785(b)(3)], which in pertinent part says:
If the employee disputes a medical determination made by the primary treating physician, including a determination that the employee should be released from care, the dispute shall be resolved under the applicable procedures set forth at Labor Code Sections 4060, 40621, 4062, 4600.5, 4616.4. If the employee objects to a decision made pursuant to Labor Code Section 4610 to modify, delay, or deny a treatment recommendation, the dispute shall be resolved pursuant to Labor Code Section 4610.5, if applicable, or otherwise pursuant to Labor Code Section 4062. No other primary treating physician shall be designated by the employee unless and until the dispute is resolved.
Does this mean that treating physicians, AMEs, and PQMEs should never be asked about medical necessity since their opinions about that are not admissible because every utilization review denial, modification, or delay has to be resolved through the IMR process? So does this also mean defense counsel will object to questions asked during an AME or PQME deposition by applicant’s attorneys about medical necessity? What do attorneys ask evaluating physicians to cover in joint or advocacy letters about medical necessity? Nothing, because expert opinion on medical necessity is “irrelevant”?
Not so fast! Prohibiting admissibility at a WCAB trial of a doctor’s opinion on medical necessity is one thing. There are other compelling reasons why all treating and evaluating physicians, AME and PQME physicians included, should comment on medical necessity in medical reports and in deposition testimony:
  • When setting reserves for future costs of a claim
  • For establishing C&R value and adequacy
  • For development of a workers’ compensation Medicare set-aside proposal
  • When an injured worker appeals a UR denial, modification, or delay and requests IMR, the IMR reviewer can consider “expert opinion” as the fourth standard of review, and expert opinion can include that of a treating or evaluating physician
Remember, the only time a treating physician, AME, or QME opinion on medical necessity is not admissible applies in the narrow instance when a request for authorization for treatment is denied, modified or delayed based on medical necessity. So a treating physician sends a Request for Authorization (RFA) to a claims administrator who decides to put the RFA through the utilization review process. That UR process results in a denial, modification or delay notice for the requested treatment. Then the burden shifts to the injured worker to appeal a written UR denial, modification, or delay notice exclusively through the IMR process.
The parties through counsel are free to ask treating and evaluating physicians questions about medical necessity outside the UR denial, modification or delay and IMR process.
In some ways, asking a treating or evaluating physician to comment on medical necessity concurrently with that need or in projecting future needs, provides essential information, which a claims administrator needs to set reserves. Everything from a joint replacement to a spinal fusion to an implanted spinal stimulator would significantly affect future reserves in a case, even though medical necessity may be in issue based on a current, retroactive, or future utilization review denial, modification or delay.
Medical treatment by definition is “outcomes based”, which means that a standard treatment protocol should take a specific period of time for an injured worker to recover from an injury with a predicted benefit in function or reduction in pain. Failing those outcomes, claims payers have to set aside reserves to cover unanticipated losses. Those could include long-term care, home health care assistance, a joint replacement, a repeat joint replacement, or an amputation of a limb.
Often, the parties wish to buy their peace and allow the injured worker to take control over his or her future medical treatment. In those cases, a C&R is often the best route to go. When a C&R involves unencumbered funds without the need for a WCMSA, the adequacy of that C&R hinges in part on a determination of the present value of future medical treatment. Those expenses can be projected based on reasonable medical probability established by the opinions of treating and evaluating physicians outside the small litigation circle of a trial, or utilization review, or IMR process.
Prohibiting an evaluating or treating physician to comment on concurrent or prospective medical necessity may run afoul of the judicial mandate to determine adequacy of a compromise and release agreement. The take away is that counsel should not object to deposition questions of an AME or QME about medical necessity. A WCJ may always question the adequacy of a C&R on the basis that the provision for future medical treatment is not sufficient.
The only authority to determine current and projected medical necessity and therefore medical treatment and prescription medication needs is to have the treating and evaluating physicians in a case include medical necessity considerations in medical reports or testimony to establish those values.
The federal government gives great weight to the opinions of agreed medical examiners about current and future medical treatment needs. In order for a proposed WCMSA to pass muster with CMS, it is essential that medical necessity for treatment and medications be determined by these physicians without the encumbrance of utilization review and IMR.
Medicare Part A coverage is for hospitalization and hospice care; Medicare Part B coverage is the nuts and bolts of medical care – doctor visits, diagnostic studies, surgical procedures; Medicare Part D is prescription medication coverage. All of these components of Medicare set-aside proposals require speculation on everyone’s part on current and future medical necessity.
In fact, there are conflicts in the law under SB 863 that are inconsistent with the mandate that the opinions of treating and evaluating physicians are not admissible on the issue of medical necessity. Despite being inadmissible, these opinions are still relevant to the IMR process. How?
Take a look at Labor Code Section 4610.5(c) [4610.5(c)]:
4610.5(c): For purposes of this section and Section 4610.6, the following definitions apply:
(1) “Disputed medical treatment” means medical treatment that has been modified, delayed, or denied by a utilization review decision.
(2) “Medically necessary” and “medical necessity” mean medical treatment that is reasonably required to cure or relieve the injured employee of the effects of his or her injury and based on the following standards, which shall be applied in the order listed, allowing reliance on a lower ranked standard only if every higher ranked standard is inapplicable to the employee’s medical condition:
(A) The guidelines adopted by the administrative director pursuant to Section 5307.27.
(B) Peer-reviewed scientific and medical evidence regarding the effectiveness of the disputed service.
(C) Nationally recognized professional standards.
(D) Expert opinion.
(E) Generally accepted standards of medical practice.
(F) Treatments that are likely to provide a benefit to a patient for conditions for which other treatments are not clinically efficacious.
(3) “Utilization review decision” means a decision pursuant to Section 4610 to modify, delay, or deny, based in whole or in part on medical necessity to cure or relieve, a treatment recommendation or recommendations by a physician prior to, retrospectively, or concurrent with the provision of medical treatment services pursuant to Section 4600 or subdivision (c) of Section 5402. [Author’s note: Subsection 4610.5(c)(4) is omitted]
Notice that the fourth “standard,” Section 4610.5(c)(2)(D) [4610.5], for an IMR reviewer to use is “Expert Opinion.” Aren’t the opinions of the treating and evaluating physicians “expert” and are worth at least the fourth standard level of review by an IMR reviewer?
You bet that applicants’ attorneys should request treating and evaluating physicians to jump into the fray of a UR denial, modification, or delay letter within the IMR process and ask these physicians for help. Not doing so may constitute legal malpractice since the system has changed so drastically. Injured workers are powerless to realize how important it is for them to appeal UR denial, modification, or delay notices. This is a sea change from our relying on AMEs and QMEs to resolve these issues.
Applicant counsel should always enlist the assistance of the treating and evaluating physicians concerning medical necessity so that an IMR physician considers those expert opinions. The applicant has only 15 days from the date the IMR process is determined to be proper to send in relevant materials for consideration by the IMR organization (Maximus Federal Services). See Labor Code Section 4610.5(f) [4610.5] and proposed regulation tit. 8 Cal. Code Regulations section 9792.10.5(b)(1) [9792.10.5]. The same applies to the defendant who also has 10 days to send in one year’s worth of medical treatment records and anything else it wants to send to the IMR review organization in support of the UR denial, modification, or delay. See Labor Code Sections 4610.5(l) and (m) [4610.5].
Community standards of medical care vary by region, by state, and by community. A series of epidural steroid injections for a lumbar spinal injury is the standard of care in some places while in others it is not. There is no national standard of medical care in this country.
Counsel should be mindful that local standards of care may be to offer such treatment as acupuncture, chiropractic manipulation, epidural injections, medications, and extensive physical therapy since those modalities are routinely provided for the same medical condition through group or individual health insurance in a given area or region. See, specifically, Labor Code Section 4610.5(c)(2)(C) [4610.5] above.
Bear in mind that the IMR reviewer is being contracted by the IMR organization Maximus Federal Services, Inc., which is located in Reston, Virginia. This does not mean the IMR reviewer is from California, licensed in California, or even familiar with our regional or community standards of medical care, some of which may be embedded in the MTUS while others are not.
One of the most important sections in the Labor Code is Section 5703 [5703], which indicates what is admissible at the WCAB trial level. Sub-section (h) is not new and was not repealed in SB 863:
5703(h): Relevant portions of medical treatment protocols published by medical specialty societies. To be admissible, the party offering such a protocol or portion of a protocol shall concurrently enter into evidence information regarding how the protocol was developed, and to what extent the protocol is evidence-based, peer-reviewed, and nationally recognized. If a party offers into evidence a portion of a treatment protocol, any other party may offer into evidence additional portions of the protocol. The party offering a protocol, or portion thereof, into evidence shall either make a printed copy of the full protocol available for review and copying, or shall provide an Internet address at which the entire protocol may be accessed without charge.
Counsel should utilize this section and send an IMR reviewer medical treatment guidelines that are routinely used locally for the same medical condition that is at issue in a UR denial, modification, or delay and is pending an IMR evaluation. Counsel should also ask the treating physician, an AME, or QME, his or her expert opinion on what standard of care exists in this locality where the injured worker is obtaining treatment.
Nationally accepted workers’ compensation medical treatment protocols, such as described in the ODG [], or McKesson Guidelines for treatment, and other peer reviewed standards of care, should be referred to and attached to any request for IMR.
Treating or evaluating physicians are permitted under current law to comment on future medical treatment. They are prohibited by law under SB 863 to comment on “medical treatment disputes” under Labor Code Sections 4616.3 [4616.3], 4614.4 [4614.4] [both for disputes over diagnosis or treatment by MPN physician], 4610 [4610] and 4610.5 [4610.5] [for utilization review medical necessity determination]. In all other circumstances, counsel should always ask treating and evaluating physicians to comment on the Applicant need for treatment – from tomorrow through the foreseeable future.
The time to become familiar with this process is now since we are beginning to see 2013 dates of injury and July 1, 2013 is fast approaching. The independent medical review process will begin in earnest for all dates of injury on July 1, 2013, and we all should be ready now to learn and apply the process.
© Copyright 2013 LexisNexis. All rights reserved. 


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