California: How to File an Appeal of a Final Determination of an Independent Medical Review

A great deal of mystery surrounds who, what, where, when, and how the Applicant or Defendant can appeal an adverse Final Determination of an independent medical review. This article will discuss the process that leads from a utilization review denial through the IMR process and onto the final step of appealing an adverse final decision by Maximus that a request for authorization for medical treatment is not reasonably medically necessary. Remember, the burden of appealing adverse UR determinations in the first place is on the Applicant. What role, if any, does a defense attorney have in the process?

Part of the frustration everyone has concerning the process of appealing an IMR Final Determination is where to find the current regulation that implements Labor Code Section 4610.6(h). You can find the current regulation, Title 8 Cal. Code Regulations section 10957.1, in the current “Blue Book” (Workers’ Compensation Laws of California). You can also find it online under WCAB Rules of Practice and Procedure at the DWC web site link to the WCAB. See www.dir.ca.gov/dwc. The full text of 8 CCR § 10957.1 is included below for your reference.

CHECK FOR ANY FLAWS WITH UR PROCESS

We start with the initial utilization review process and check that it complies with all of the statutory requirements of Labor Code Section 4610 and the regulations that implement the UR process at Title 8, Cal. Code Regulations Section 9792.9.1 et seq. If there is a flaw in the UR process, the Applicant has the option of going to the WCAB to challenge the UR process and ask a judge to order the requested medical treatment if the Applicant can meet his or her burden of proving that the requested treatment is consistent with Labor Code Section 4600(b). That section requires that medical treatment to cure or relieve the effects of an industrial injury must be within the MTUS or evidence based and consistent with nationally accepted medical treatment standards. Best practices dictate that if the Applicant attacks the UR process at the WCAB though an expedited hearing, he or she should concurrently file a Request for Independent Medical Review of the denied treatment.

On February 27, 2014, the WCAB issued its en banc decision in Dubon vs. World Restoration, Inc. 79 Cal. Comp. Cases ____, 2014 Cal. Wrk. Comp. LEXIS 21, wherein the WCAB held as follows:

1. IMR solely resolves disputes over the medical necessity of treatment requests. Issues of timeliness and compliance with statutes and regulations governing UR are legal disputes within the jurisdiction of the WCAB.

2. A UR decision is invalid if it is untimely or suffers from material procedural defects that undermine the integrity of the UR decision. Minor technical or immaterial defects are insufficient to invalidate a defendant's UR determination.

3. If a defendant's UR is found invalid, the issue of medical necessity is not subject to IMR but is to be determined by the WCAB based upon substantial medical evidence, with the employee having the burden of proving the treatment is reasonably required.

4. If there is a timely and valid UR, the issue of medical necessity shall be resolved through the IMR process if requested by the employee.

For the purpose of this article, it is assumed that the UR process was pristine and not subject to a challenge under Dubon, or the Applicant’s challenge of the UR process was unsuccessful and the Applicant timely filed a Request for IMR with Maximus within 30 days of service of the UR denial notice.

NOTICE OF ASSIGNMENT AND FINAL DETERMINATION

Once the IMR process has begun, Maximus issues its Notice of Assignment to the requesting physician, the claims administrator, and the Applicant. That Notice of Assignment triggers two deadlines – 15 days for the claims administrator (even though Labor Code Section 4610.5 says 10 days) and 15 days for the Applicant and the requesting physician, respectively, from the date of the Notice of Assignment to send information to Maximus to assist the IMR reviewing physician in analyzing the request for authorization resulting in the IMR upholding or overturning the UR denial. See 8 CCR § 9792.10.5(a) and (b). The decision to uphold or overturn the UR denial is called the IMR Final Determination. That Final Determination becomes the decision of the Administrative Director of the DWC. See Labor Code Section 4610.6(g).

FINAL DETERMINATION OVERTURNS UR DENIAL AND QUESTIONABLE GROUNDS FOR APPEAL BY DEFENSE

If the Final Determination of the IMR reviewer overturns the UR denial, the claims administrator must authorize the disputed treatment within 5 working days of receipt of the IMR Final Determination [8 CCR § 9792.10.7(a)(2)]. Note here that the claims administrator has no legal grounds to appeal a Final Determination of the IMR reviewer that overturns a UR denial – the claims administrator MUST authorize the requested treatment. However, the regulations allow “parties” to appeal an IMR Final Decision so it is unclear if, when, and how a claims administrator can successfully appeal an IMR determination that overturns a UR denial. See 8 CCR § 9792.10.7(c). It is conceivable that Labor Code Section 4610.6(h)(5) may apply on the defense side if there is a material mistake of fact relied on by the IMR reviewer that resulted in overturning a UR denial of treatment.

FINAL DETERMINATION UPHOLDS UR DENIAL AND APPLICANT’S STATUTORY GROUNDS FOR APPEAL

The Five Grounds for Appeal

On the other hand, if the IMR reviewer upholds the UR denial, the burden of appealing the IMR Final Determination falls on the Applicant and one of the grounds for appeal in Labor Code Section 4610.6(h) must apply. Labor Code Section 4610.6(h) provides five grounds to appeal an IMR reviewer’s Final Determination as follows:

(1) The administrative director acted without or in excess of the administrative director’s powers.

(2) The determination of the administrative director was procured by fraud.

(3) The independent medical reviewer was subject to a material conflict of interest that is in violation of Section 139.5.

(4) The determination was the result of bias on the basis of race, national origin, ethnic group identification, religion, age, sex, sexual orientation, color, or disability.

(5) The determination was the result of a plainly erroneous express or implied finding of fact, provided that the mistake of fact is a matter of ordinary knowledge based on the information submitted for review pursuant to Section 4610.5 and not a matter that is subject to expert opinion.

It remains to be seen whether anyone can prevail on the grounds listed in 4610.6(h)(1) through (4). What does it mean if the “administrative director acted without or in excess of the administrative director’s powers”? Since the IMR reviewer’s decision becomes that of the administrative director, then the party asserting the appeal must somehow prove the IMR reviewer acted outside his or her statutory authority? That, along with the other three grounds, are impossible to prove, especially on the grounds of fraud, conflict of interest, or bias since no one knows the identity of the IMR reviewer except Maximus. That constitutional challenge is left for another day.

We will focus more specifically on the fifth grounds for appeal under Labor Code Section 4610.6(h)(5) – a “plainly erroneous express or implied finding of fact, provided that the mistake of fact is a matter of ordinary knowledge based on the information submitted for review pursuant to Section 4610.5 and not a matter that is subject to expert opinion.”

The Process for Appeal

What do the current WCAB Rules of Practice and Procedure say about the process of appealing a Final Determination by Maximus that upholds or overturns a UR denial of requested treatment? A thorough review of 8 CCR Section 10957.1 reveals that counsel must closely follow each requirement for a successful Petition to Appeal Final Determination of Independent Medical Review.

Section 10957.1 is reproduced in its entirety as follows:

§ 10957.1. Petition Appealing Independent Medical Review Determination of the Administrative Director.

(a) This section shall apply only to petitions appealing an independent medical review (IMR) determination of the Administrative Director (AD) regarding treatment for: (1) an injury occurring on or after January 1, 2013; and (2) an injury occurring on or before December 31, 2012, if the decision is communicated to the requesting physician on or after July 1, 2013. This section shall not apply where the injured employee asserts that a defendant’s utilization review is untimely or otherwise invalid unless, as an alternative challenge, the employee is also appealing the IMR determination.

(b) An aggrieved party may file a petition appealing the AD’s independent medical review (IMR) determination. For purposes of this section, a “determination” includes a decision regarding medical necessity and a decision that a dispute is not subject to independent medical review.

(c) The petition shall be filed with the Workers’ Compensation Appeals Board no later than 20 days after service of the IBR determination. An untimely petition may be summarily dismissed.

(d) The caption of the petition shall identify it as a “Petition Appealing Administrative Director’s Independent Medical Review Determination.”

(e) The caption of the petition shall include: (1) the injured employee’s first and last names; (2) the name(s) of the defendant(s) involved in the IMR dispute; (3) the case number assigned by the AD to the IMR determination; and (4) the adjudication case number, if any, assigned by the Workers’ Compensation Appeals Board to any related application for adjudication of claim(s) previously filed.

(f) The petition shall include a copy of the IMR determination and proof of service to that determination.

(g) The petition shall comply with each of the following provisions:

(1) The petition shall be limited to raising one or more of the five grounds specified in Labor Code section 4610.6(h).

(2) The petition shall set forth specifically and in full detail the factual and/or legal grounds upon which the petitioner considers the IMR determination to be unjust or unlawful, and every issue to be considered by the Workers’ Compensation Appeals Board. The petitioner shall be deemed to have finally waived all objections, irregularities, and illegalities concerning the IMR determination other than those set forth in the petition.

(3) The petition shall comply with the requirements of sections 10842(a) & (c), 10846, and 10852. It shall also comply with the provisions of section 10845, including but not limited to the 25-page restriction.

(4) Any failure to comply with the provisions of this subdivision shall constitute valid ground for summarily dismissing or denying the petition.

(h) A copy of the petition shall be concurrently served on: (1) the adverse party(ies) or provider(s) or, if represented, their attorney or non-attorney representatives; (2) the injured employee or, if represented, the employee’s attorney; and (3) the Division of Workers’ Compensation, Independent Medical Review Unit (IMR Unit).

(i) Upon receiving notice of the petition, the IMR Unit may download the record of the independent bill review organization into EAMS, in whole or in part. The Workers’ Compensation Appeals Board, in its discretion, may: (1) admit all or any part of the downloaded IMR record into evidence; and/or (2) permit the parties to offer in evidence documents that are duplicates of ones already existing in the downloaded IMR record.

(j)(1) The petition shall not be placed on calendar unless a declaration of readiness is filed. The declaration of readiness may be either concurrently filed with the petition or subsequently filed. Any declaration of readiness shall be concurrently served on the adverse party(ies) or provider(s) and on the IMR Unit.

(2) Notwithstanding the filing of a declaration of readiness, a petition appealing an IMR determination shall be deferred if at the time of the determination the defendant is also disputing liability for the treatment for any reason besides medical necessity.

(k) The petition shall be adjudicated by a workers’ compensation judge at the trial level of the Workers’ Compensation Appeals Board utilizing the same procedures applicable to claims for ordinary benefits, including but not limited to the setting of a mandatory settlement conference unless an expedited hearing is being conducted in accordance with Labor Code section 5502(b). However, the IMR determination shall be presumed correct and shall be set aside only upon proof by clear and convincing evidence of one or more of the Labor Code section 4610.6(h) statutory grounds for appeal.

(l) Any party aggrieved by a final decision, order, or award of the workers’ compensation judge may file a petition for reconsideration with the Appeals Board within the same time and in the same manner specified for petitions for reconsideration. The workers’ compensation judge shall prepare a report on the petition for reconsideration in accordance with section 10860, unless the judge acts on a timely filed petition for reconsideration in accordance with section 10859.

(m) If the IMR determination is reversed by the workers’ compensation judge or the Appeals Board, the dispute shall be remanded to the AD in accordance with Labor Code section 4610.6(i).

Authority: Sections 133, 5307, 5309 and 5708, Labor Code.

Reference: Sections 4610.6, 5500, 5501, 5502, 5700 et seq., 5800 et seq., 5900 et seq., Labor Code; Sections 10250, 10409, 10507, 10508, 10842, 10845, 10846, 10852, 10856, 10859, 10860, California Code of Regulations, title 8.

Even though section 10957.1 was vetted with public comments (including during the holiday season in the fall of 2013), there are significant flaws in the section that baffle and confuse anyone who reads it. While the section is exclusively intended to refer to procedures to appeal decisions involving Independent Medical Review, Section 10957.1 unfortunately erroneously refers in two places to “IBR” or “independent bill review” appeals, which is exclusively in 8 CCR § 10957. See, for example, subsections (c) and (i), which erroneously refer to “IBR” and “independent bill review”, respectively, and should mean “independent medical review” instead.

Also, 10957.1(c) states:

(c) The petition shall be filed with the Workers’ Compensation Appeals Board no later than 20 days after service of the IBR determination. An untimely petition may be summarily dismissed.

Confusion is further created here because Labor Code Section 4610.6(h) allows the Applicant or “aggrieved party” 30 days to file a petition with the WCAB to review a final determination of an IMR reviewer:

4610.6(h): A determination of the administrative director pursuant to this section may be reviewed only by a verified appeal from the medical review determination of the administrative director, filed with the appeals board for hearing pursuant to Chapter 3 (commencing with Section 5500) of Part 4 and served on all interested parties within 30 days of the date of mailing of the determination to the aggrieved employee or the aggrieved employer.

As you know, the Labor Code pre-empts any inconsistencies with a regulation.

As you can see, a successful appeal of a Final Determination of an IMR reviewer can only result in the WCAB trial judge or the WCAB itself on reconsideration ordering a new IMRO to review the matter for medical necessity or for a different IMR reviewer from Maximus to review the UR denial again. See Labor Code Section 4610.6(i). Remember, Labor Code Section 4610.6(h) creates a presumption that the IMR determination by Maximus is correct and can only be rebutted by “clear and convincing evidence” that one of the five grounds for setting aside the IMR determination exists. 8 CCR § 10957.1(k) essentially repeats the language from the statute: “However, the IMR determination shall be presumed correct and shall be set aside only upon proof by clear and convincing evidence of one or more of the Labor Code section 4610.6(h) statutory grounds for appeal.”

Sample Appeal of a Final Determination of an IMR

We include an example of an appeal of a Final Determination of an IMR that upheld a utilization review denial for a redo surgery of an unsuccessful Achilles tendon rupture repair. In compliance with 8 CCR 10957.1, the Petition for Appeal of a Final Determination of IMR is set forth below with identifying information redacted:

BEFORE THE WORKERS’ COMPENSATION

APPEALS BOARD STATE OF CALIFORNIA

JANE DOE,                               )                    CASE NO. VNO-ADJ
                                                 )
                                                 )                    IMR CASE NO: CM13-
Applicant,                                )                    APPLICANT’S PETITION APPEALING
vs.                                            )                    ADMINISTRATIVE DIRECTOR’S IMR
                                                 )                    FINAL DETERMINATION – TITLE 8 CCR
EMPLOYER,                              )                    10957.1; LABOR CODE § 4610.6(h)(5)
INSURANCE COMPANY OF      )
LAST RESORT, NOT SCIF,         )
                                                  )
Defendants.                              )
_________________________)

Applicant alleges as follows:

1. This Petition is filed pursuant to Labor Code Section 4620.6(h)(5) and alleges that the IMR determination dated January 29, 2014 was the result of a plainly erroneous express or implied finding(s) of fact and that the mistake(s) of fact are a matter of ordinary knowledge based on the determination submitted for review pursuant to Labor Code Section 4610.5 and not a matter that is subject to expert opinion.

2. The Applicant has an accepted injury to her right ankle that required a torn tendon repair of the Achilles tendon by a physician who was not an ankle/foot specialist. That surgery failed and the Applicant has significant residual problems with ambulation.

3. Applicant retained legal counsel who referred her to Dr. Foot and Ankle who is a Board Certified ankle and foot orthopedic surgeon. Applicant specifically alleges that her primary treating physician filed an RFA requesting authorization for a tendon transfer to reconstruct the right Achilles tendon to correct the poor first surgical result.

4. Said request was denied by utilization review which was timely appealed by the Applicant to IMR.

5. The IMR reviewer upheld the utilization review denial of the surgery by way of its Final Determination Letter dated January 29, 2014. A true and correct copy of the IMR Final Determination Letter is attached hereto as Exhibit A.

6. The IMR reviewer stated in his or her Final Determination Letter that “The clinical documentation submitted for review did not provide an independent review of an imaging study that provided a significant lesion that required surgical intervention.”

7. This statement is based on an expressed mistake of fact since there is in fact “an independent review of an imaging study that provided a significant lesion that requires surgical intervention.” That review is in the form of the deposition testimony of Dr. Richard Itoldyouso MD the agreed medical examiner in this case who upon reviewing the same record as the IMR reviewer pointed out the existence in his diagnostic imaging of x-rays and MRI scan of an os trigonum defect in the Applicant’s right ankle that is probably impinging on the peroneal nerve and posterior tibial nerve and in addition, significant swelling of the Achilles tendon. This is a significant lesion that the IMR reviewer failed to see in his or her review of the imaging records submitted for review.

8. In addition, the IMR reviewer failed to discuss the treating physician’s specific plan to perform a transfer of the flexor hallucis longus tendon to repair the dysfunction of the Achilles tendon – that fact is also missing from the IMR reviewer’s Final Determination.

Wherefore, Applicant requests that pursuant to Labor Code Section 4610.6(g) this matter be remanded to the AD to submit the dispute to independent medical review by a different IMRO.

DATED: February 28, 2014     _________________________________________
                                                YOU BETTER DO IT RIGHT, ESQ, Attorney for Applicant

Best Practices for Appeals

Notice in the Petition, you must state the grounds for appeal of the Final Determination of the IMR reviewer with specificity: “The petition shall set forth specifically and in full detail the factual and/or legal grounds upon which the petitioner considers the IMR determination to be unjust or unlawful, and every issue to be considered by the Workers’ Compensation Appeals Board.” See 8 CCR § 10957.1(g)(2).

Notice the regulation refers to an IMR determination to be “unjust” or “unlawful.” What if the IMR determination is simply dead wrong from a practical medical standpoint? The discussion below is a good example where conventional medicine would authorize the redo of a failed surgery of an Achilles tendon rupture but the IMR Final Determination denied the redo surgery, despite opinions outside the workers’ compensation system from ankle-foot orthopedic surgeons who would perform the surgery under the Applicant’s private insurance with no questions asked.

The petitioning counsel must attach a copy of the IMR Final Determination marked as an exhibit. Since this is a Petition filed with the WCAB, under the new WCAB Rules of Practice and Procedure, the Petition must be verified. See WCAB Rules of Practice and Procedure, 8 CCR § 10450(e). In addition, counsel must include on the proof of service the Administrative Director’s IMR Unit. See 8 CCR § 10957.1(h)

The regulation also spells out that no action is to be taken by a WCAB trial judge until the filing of a declaration of readiness to proceed on the Petition. It seems that best practices would have counsel file a Declaration of Readiness to an Expedited Hearing concurrently with the Petition Appealing AD’s IMR Final Determination. 8 CCR § 10957.1(k) allows an expedited hearing pursuant to Labor Code Section 5502(b), and counsel must also serve the declaration of readiness, along with the Petition and IMR Final Determination, on the AD IMR Unit. See 8 CCR § 10957.1(h).

The original version of 8 CCR § 10957.1 had a provision that provided the opposing counsel or a party ten days from the date of service of a Petition to file an Answer to the Petition. No provision exists in the October 23, 2013 final rule that opposing counsel is required to file an Answer.

THE BOTTOM LINE

The bottom line is that if counsel intends to file a petition appealing an IMR final determination, counsel must follow 8 CCR § 10957.1 to the letter in order to comply with its procedural and content requirements. Failure to do so will result in dismissal of the petition with no judicial action being taken other than dismissal of the petition itself.

What is the defense attorney to do in these cases? Since defense counsel is not required to be served with UR denial notices under the regulations, good communication between the defense attorney and the claims administrator is essential. Best claims practices would dictate that all claims examiners should send UR denial notices to defense counsel in the first place. This process may cause a dialogue to occur among the claims examiner, UR vendor, the requesting physician, and the Applicant’s counsel and may result in authorization being issued for the requested treatment. This dialogue may avoid the costs, expenses, and delays of the UR, IMR, and IMR appeals processes.

If the Applicant files a Petition Appealing AD’s IMR Final Determination, then defense counsel should file an answer first averring that the Petition fails to state proper grounds for appeal under Labor Code Section 4610.6(h). Defense counsel should then contend in his or her Answer to the Petition that the UR denial and IMR final determination upholding the UR denial was based on the MTUS, evidence based medicine and national peer reviewed medical standards and should be upheld.

So what kinds of cases should counsel seriously consider filing an appeal of an IMR Final Determination that upholds a denial of treatment under a utilization review denial? Remember, once a UR denial becomes final after an IMR Final Determination upholding that denial, the requesting physician may not submit a new Request for Authorization (RFA) for one year unless there is a material change in circumstances of the injured worker’s medical condition or a new treating physician requests and justifies the same treatment. See Labor Code Section 4610(g)(6).

The bottom line is for everyone to take a step back, assess the treating physician’s RFA, and see if the claims administrator will voluntarily authorize the treatment despite UR and IMR denials. Remember, in most cases the physician who issued the RFA in the first place is the employer’s or claims administrator’s own MPN physician! If that fails, the only course of action the injured worker has is to (1) file an appeal of the IMR Final Determination that upholds the UR denial under Labor Code Section 4610.6(h) and by following the procedures listed in Section 10957.1, (2) self procure the treatment outside the workers’ compensation system, or (3) wait a year and try again.

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