California: Finding a Forum to Decide the MTUS Presumption

What if invalidity of the UR decision is not the issue? As part of the workers’ compensation litigation process, what if the injured worker wants to rebut the legal issue of the MTUS’ presumption of correctness? Is an expedited hearing the correct legal forum to present that argument? The two noteworthy panel decisions set forth below attempt to answer that question.

In the olden days, there was a strict division of labor between doctors and lawyers. Physicians were tasked with focusing on medical treatment, while lawyers handled the legal issues. Never the twain did meet… that is, not until workers’ compensation litigation came along and blurred the lines between the two professions. Nowadays, in the workers’ comp world, lawyers need to be familiar with medical issues to adequately represent their clients. And doctors are required to know the law, in order to write medical-legal reports that constitute substantial evidence.

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I. SB 863 Creates Major Paradigm Shift for Medical Treatment (MT) Disputes

Nowhere is this intertwining of fields more intertwined than in the area of medical treatment disputes. Attempts were made through enactment of SB 863 to bifurcate the professions and to limit lawyer involvement in medical treatment disputes. However, the results may not be what were intended.

Essentially, after passage of SB 863, resolution of medical treatment disputes were taken out of the hands of the medical-legal evaluators (i.e., the AMEs and QMEs) and placed into the hands of the Utilization Review (UR) and Independent Medical Review (IMR) physicians. In addition, medical treatment disputes would no longer be decided at expedited hearings by judges. Instead, these issues would be decided solely by UR and IMR physicians. That way, doctors, proficient in the field of medicine, would be deciding medical issues and lawyers could stick with what they knew best, practicing law.

A. Medical Evaluators Taken Out of the Loop re MT Disputes

The Legislature’s goal in this matter was set forth in the un-codified section 1(e) of SB 863 as follows, “(H)aving medical professionals ultimately determine the necessity of requested treatment furthers the social policy of this state. . .” (Stats. 2012, ch. 363, § 1(e).)

This Legislative purpose was codified, in part, by Labor Code § 4062.2(f) [LC 4062.2], which provides that parties may agree to an Agreed Medical Evaluator (AME) at any time “except as to issues subject to the IMR” per Labor Code § 4610.5 [LC 4610.5]. This means that parties could secure AMEs to resolve all issues, except Labor Code § 4610.5 medical treatment (MT) disputes. It was intended that only UR or IMR physician should determine MT disputes.

This legislative intent is further supported by 8 Cal. Code Reg. § 35.5(g)(2) [R 35.5], which provides in part, “For any evaluation performed on or after July 1, 2013…an Agreed Medical Evaluator or Qualified Medical Evaluator shall NOT provide an opinion on any disputed medical treatment issue…” (Emphasis added.)

B. Unintended Conundrums?

This paradigm shift appeared sound on paper, but real life glitches have popped up when put into practice. One of these issues has to do with the MTUS presumption of correctness found in Labor Code § 4604.5(a) [LC 4604.5]:

The recommended guidelines set forth in the medical treatment utilization schedule adopted by the administrative director pursuant to Section 5307.27 shall be presumptively correct on the issue of extent and scope of medical treatment. The presumption is rebuttable and may be controverted by a preponderance of the scientific medical evidence establishing that a variance from the guidelines reasonably is required to cure or relieve the injured worker from the effects of his or her injury. The presumption created is one affecting the burden of proof. (Emphasis added.) (See also 8 Cal. Code Reg. § 9792.20(d)(2) [R 9792.20].)

C. Regulatory Process for Rebuttal of MTUS Standard

In the recently revised MTUS regulations, which became effective on 4/20/2015, the AD addressed how this MTUS presumption might be rebutted under the new medical paradigm. Essentially, under 8 Cal. Code Reg. § 9792.21.1(b)(1)(B) [R 9792.21.1], the primary treating physician (PTP) should attach to the Request For Authorization (RFA) “a clear and concise statement that the MTUS presumption of correctness is being challenged.”

This “statement of challenge to the MTUS” would put the UR and IMR physician on notice that the PTP is attempting to rebut the MTUS standard that would normally apply. Then, in that attachment to the RFA, the PTP would make his or her pitch as to why another guideline or study is more appropriately applied and supports the medical treatment requested by the injured worker.

Presumably, either the UR physician or the IMR physician would review the PTP’s legal argument as to how and why the MTUS presumption of correctness has been rebutted and issue a determination as to whether or not the PTP successfully rebutted the MTUS presumption.

But wait! Doesn’t that mean the UR or IMR physician would be required to step outside their area of medical expertise and into the world of making a legal determination? And what about the injured worker’s right to due process? Labor Code § 4604.5 [LC 4604.5] gives the injured worker a right to rebut the MTUS. Doesn’t that mean the injured worker has a right to notice and an opportunity to be heard on this rebuttal issue? Doesn’t the injured worker have a right to present evidence and express their argument on this issue in some sort of legal tribunal?

II. MTUS Rebuttal Forum Addressed in NPDs

Two recent WCAB Noteworthy Panel Decision (NPD) have addressed this issue with mixed results. (NOTE: While WCAB panel decisions are citable, they are not binding legal precedent. The WCAB, along with the WCJs, are permitted to consider these decisions to the extent that they find their reasoning persuasive. (See Guitron v. Santa Fe Extruders (2011) 76 Cal. Comp. Cases 228, footnote 7 [76 CCC 228].)

Essentially, the issue in question boils down to this:  “Is there any circumstance under which a Workers’ Compensation Judge (WCJ) might have jurisdiction to hold an expedited hearing on a medical treatment issue when the parties stipulate that the UR decision was timely?”

The short answer is a resounding “maybe,” at least as far as two WCAB commissioners are concerned.

There is definitely consensus among the Commissioners that Dubon II requires any appeal from a timely UR be made through the IMR process. (See Dubon v. World Restoration, Inc. (2014) 79 Cal. Comp. Cases 1298 [79 CCC 1298] (Dubon II).)

But what if invalidity of the UR decision is not the issue? As part of the workers’ compensation litigation process, what if the injured worker wants to rebut the legal issue of the MTUS’ presumption of correctness? Is an expedited hearing the correct legal forum to present that argument? The two NPDs set forth below attempt to answer that question.

A. Case of McFarland v. The Permanente Medical Group

The NPD of McFarland v. The Permanente Medical Group, 2015 Cal. Wrk. Comp. P.D. LEXIS 23 [2015 Cal. Wrk. Comp. P.D. LEXIS 23], concerned Loretta McFarland, who was working as a nurse when she suffered a severe industrial injury to her back and other body parts. She settled her case with a Compromise and Release for $300,000, with a provision for open medical treatment.

Her PTP determined she needed an epidural steroid injection, which was denied by a timely UR decision. Applicant argued that the UR decision, although timely, was invalid due to a lack of adequate medical review and that the medical treatment dispute should be resolved at an expedited hearing in front of a Judge.  

The WCAB explained they had no jurisdiction to decide the medical treatment dispute since the UR decision was timely, pursuant to the WCAB en banc decision of Dubon v. World Restoration, Inc. (2014) 79 Cal. Comp. Cases 1298 [79 CCC 1298] (Dubon II). In Dubon II, the WCAB held the only situation in which they had jurisdiction to decide medical treatment issues, was when the UR decision was untimely. If the UR decision was allegedly invalid for reason, other than untimeliness, the WCAB lacked jurisdiction to decide the medical treatment dispute. Resolution of that issue rested solely with the IMR process.

In McFarland, the WCAB extrapolated the Dubon II holding of lack of jurisdiction to include hearings on the rebuttal of the MTUS. Although the WCAB majority recognized the legitimate concept of the MTUS rebuttal, they explained:

“The procedure for making this determination is found in Labor Code sections 4610.5 and 4610.6. This is consistent with the Legislature's statement of purpose in uncodified section 1(e) of SB 863 that ‘having medical professionals ultimately determine the necessity of requested treatment furthers the social policy of this state…’ (Stats. 2012, ch. 363, § 1(e).)”

Commissioner Marguerite Sweeney dissented from the majority in this case. She felt that Ms. McFarland should be allowed to rebut the MTUS presumption of correctness in a court of law. She relied on the guaranteed right of rebuttal set forth in Labor Code § 4604.5 [LC 4604.5] and discussed her position as follows:

“Whether a party has rebutted a presumption affecting the burden of proof is a legal question and the determination of a legal question must be made by a court…

…While the IMR process allows the applicant to submit additional medical information, it is not a legal forum and therefore cannot provide a party with a place to adjudicate legal issues such as whether a presumption has been rebutted…”

It remains to be seen whether a different WCAB panel might resolve this issue in a different manner.

B. Case of Ly v. Loral Space Systems

The recent NPD of Ly v. Loral Space Systems, 2015 Cal. Wrk. Comp. P.D. LEXIS 138 [2015 Cal. Wrk. Comp. P.D. LEXIS 138], dealt with similar facts. In this case, Minh Ly was an electronic technician who suffered an industrial injury to his head, neck and psyche. He was ultimately rendered 100% permanently and totally disabled, with an award for further medical treatment. His PTP’s requested MT in the form of a prescription for Lyrica. This request was modified by the UR physician. The matter was brought to an expedited hearing, at which time the WCJ ordered the matter off calendar since she had “no jurisdiction to proceed with an Expedited Hearing.”

Contrary to the McFarland case (where the parties were granted a hearing and allowed to establish a proper evidentiary record), the parties in Ly were denied an opportunity to be heard on this issue. “An opportunity to be heard” is required in these matters in order to allow all parties their right to due process. It is also required in order to allow a record to be established for review in the event a decision is appealed to a higher court.  (Labor Code § 5313 [LC 5313]; Hamilton v. Lockheed Corp. (2001) 66 Cal.Comp.Cases 473 [66 CCC 473] (Appeals Board en banc).)

Since an evidentiary hearing was not granted to the parties in the Ly case, the WCAB returned the matter to the trial level to conduct such a hearing. Violation of due process (“notice and an opportunity to be heard”) concerned the WCAB and tugged at the very core of this decision.

Specifically, in dicta, the WCAB commented that several issues may arise under these types of circumstances that need to be addressed at an expedited hearing. The WCAB noted that a party may attempt to raise rebuttal of the MTUS at an expedited hearing. They were quick to point out in footnote 9, that they expressed no opinion on that question. It might well be a viable issue, the WCAB explained, but they could not render an opinion on that the issue, because it was not before them at that time. Definitely a hint to the community: They may well consider the issue of a MTUS rebuttal a viable one for a future expedited hearing.

III. Conclusion

The kinks are still in the process of being ironed out of this new medical treatment dispute paradigm implemented by Labor Code § 4610.5 [LC 4610.5] and Labor Code § 4610.6 [LC 4610.6] post-SB 863. Litigants should study, in great depth, all new regulations that have issued recently, especially the new MTUS regulations made effective as of 4/20/2015. These can be found at the following link:

http://www.dir.ca.gov/dwc/DWCPropRegs/MTUS/MTUS_Regulations.htm

After doing so, they must adjust their litigation checklists to make sure they correctly interpret all issues and when relevant, bring legal issues such as the MTUS rebuttal to the attention of the WCAB in some form or manner to ensure rights of due process are not violated.

[Editor’s Note: For further discussion of due process, see the article “Due Process – A Constitutional Right”.]

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