California: W.C.A.B. Issues En Banc Decision on “Defective UR”

California: W.C.A.B. Issues En Banc Decision on “Defective UR”

The W.C.A.B. issued two en banc decisions today, one involving Utilization Review and the other addressing the issue of the application of ADR 35.5(e) which requires the same QME to evaluate an employee for multiple injury claims.  The second decision will be the subject of a further EBlast message as the UR decision is one which is so significant it deserves its own message.

In Jose Dubon v World Restoration Inc and SCIF the W.C.A.B. has ruled that a (purportedly – more on that later) defective UR decision was invalid and the W.C.A.B. therefore had jurisdiction to determine the appropriateness of medical treatment.  At the trial level, the WCJ had ruled that the UR decision denying spinal surgery was defective, but that the proper procedure for review was through IMR and the WCJ lacked jurisdiction to rule on entitlement to the medical treatment. 

On appeal, the W.C.A.B. issued its ruling, holding 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.

In this case there was no issue as to the timeliness of the UR decision.  The defect determined by the WCJ and W.C.A.B. to exist was twofold.  First, the UR physician who reviewed the RFA, in his discussion of the records he reviewed, identified 18 pages of records which were not otherwise identified nor discussed.  The failure to identify those records was deemed a violation of Labor Code § 4610(g)(4) and ADR 9792.9.1(e)(5)(D), which requires “A list of all medical records reviewed”.  The second defect was the failure to review the records of multiple other physicians in the file which included reports of the prior treating physician and an AME.  The WCJ noted

“…failure to review all of the relevant medical records “was a critical error” because “the determination [of medical necessity] is made in part based upon the severity of pain, duration of pain, radiculopathy as well as a review as to whether conservative care had been undertaken.”

In spite of the perceived defects in the UR determination, the WCJ held the W.C.A.B. must defer the issue of medical necessity to IMR (which had been requested by the applicant but not yet ruled upon).

The W.C.A.B. started its analysis with a review of the history of Labor Code § 4610 and the dispute resolution process.  The W.C.A.B. noted disputes over compliance with UR criterion was covered in W.C.A.B. Rule 1045102(c)(1):

“Where applicable, independent medical review (IMR) applies solely to disputes over the necessity of medical treatment where a defendant has conducted a timely and otherwise procedurally proper utilization review (UR). … All other medical treatment disputes are non-IMR[] disputes. Such non-IMR[] disputes shall include, but are not limited to: … (C) a dispute over whether UR was timely undertaken or was otherwise procedurally deficient; however, if the employee prevails in this assertion, the employee … still has the burden of showing entitlement to the recommended treatment …”

(Cal. Code Regs., tit. 8, § 10451.2(e)

This rule provides the W.C.A.B. with jurisdiction to determine if a UR decision is timely and/or procedurally deficient and that such determinations are outside the purview of IMR, which is limited to resolving disputes over medical necessity.

The W.C.A.B. then turned its attention to interpreting its regulation:

Harmonizing the language of sections 4610 and 4610.5, and taking into consideration the expressly declared legislative intent set forth in uncodified section 1 of SB 863, we conclude that a UR decision is invalid if it suffers from material procedural defects that undermine the integrity of the UR decision. If, however, there are only minor technical or immaterial defects, a defendant’s UR determination remains fully subject to the IMR process.”

The key issue for the W.C.A.B. appears to be the “integrity of the UR decision” and in this case the failure to identify in specificity those 18 pages or records or to review the prior medical reports resulted in a corruption of the integrity of the UR process:

The need for a UR physician to be provided with and review sufficient medical records to determine the medical necessity of a treatment request and to disclose what those records are goes to the very core of a UR decision. To allow these statutory and regulatory requirements to be inadvertently neglected or deliberately disregarded would render UR decisions unreliable, possibly flawed and ultimately would defeat the purpose of having UR at all, while at the same time adding an extra layer of delay to the medical treatment resolution process.

Having determined the UR decision making process was deficient, the W.C.A.B. then proceeded to hold where UR was not validly issued either on a timeliness issue or due to procedural defect, the W.C.A.B. could rule directly on medical treatment issues with the applicant having the burden to provide substantial evidence to support the request under Rule 10451.2(c)(1)(C).  The Board further held in the final portion of its decision that if UR is procedurally adequate and timely, IMR is the only remedy by the injured worker and failure to pursue both remedies could result in a waiver of the right to challenge the treatment if the W.C.A.B. determines it lacks jurisdiction.  In this case, the W.C.A.B. determined the failure of the UR physicians to review the multiple medical reports resulted in a procedurally deficient UR determination, and the matter was remanded to the WCJ for further proceedings.


This decision, undoubtedly well intentioned by the Commissioners, is predictably going to wreak havoc with the medical treatment system in the workers’ compensation system, encourage and create substantial additional litigation and foment uncertainty in every challenged UR decision at the W.C.A.B.   It also evidences a complete lack of understanding of both the actual workings of Utilization Review and a failure to consider the practical impact of the decision.  In my opinion, the W.C.A.B.’s holding is cribbed together in a mish mash of misstated statutory and regulatory language taken both out context as well as misquoted.  I really do not have much difficulty with the general concept that the W.C.A.B. has jurisdiction where there is a significant defect in a UR decision.  It is the specific holding in this case that will effectively make virtually every UR decision subject to judicial review at the W.C.A.B. that is disturbing.  It is also the W.C.A.B.’s creation of a statutory obligation for the claims administrator—that simply is not in the statute and is impractical based on the remainder of the statutory scheme—that is problematic.

The W.C.A.B. notes the requirements in Labor Code § 4610 for establishment of a mandatory UR process which “shall” hew to specific criterion.  The Board then imposes a criterion that is found nowhere in the statute or in the regulations—that the failure of a  claims administrator to provide a UR physician the entire medical file for review constitutes a fatal defect in the UR process.  The W.C.A.B. cites the language in Labor Code § 4610(g)(5) as requiring a UR vendor to ask for complete review of the record, but that section deals with an issue where the UR vendor determines additional information or testing is necessary and makes no reference to a requirement for full blown review of the record. 

In many UR programs the claims administrator is not even aware when a request for UR is made as it goes directly to the UR vendor to process for review and issue a determination. And why is this?


It is completely impractical to expect with every UR request that the claims administrator will be able to provide a complete medical file to the UR vendor within sufficient time to be reviewed and a decision issued within 5 days.  Given these time frames, it is no wonder that nowhere in either the statutory scheme or the regulations is there a requirement for the entire medical file to be reviewed.  In order to make timely decisions, the only record that is required to be reviewed is the RFA (Request for Authorization) and the supporting documents.  In the RFA and its supporting documents, the requesting physician has the ability to provide the necessary information to document that the elements necessary to obtain approval for a specific course of treatment has been met.  In effect, the W.C.A.B. has just put the burden on the employer to prove the RFA does not meet the criterion for compliance with the MTUS.

In the IMR process, the employer has a much longer time to get the complete record to the IMR vendor and that does not even include the time for review and decision making.  The W.C.A.B. expects that within 5 days from receipt of a RFA that the claims administrator, who may not even have the RFA, is going to be made aware of the request, decide which medical reports are relevant, and copy and transmit those reports to the UR vendor in time for a decision to issue within 5 business days…  Are they NUTS?  It is difficult enough for the UR vendors to provide the information to a physician reviewer and get a decision out within 5 days without  the extra steps the W.C.A.B. has imposed—with no statutory or regulatory support.

While it is certainly a desirable result that UR decisions should be made based on a fully reviewed and complete record, the statutory time frames for UR simply do not allow the opportunity to transmit complete copies of medical files with every UR review.  The arbitrarily short time frames actually suggest that UR is not intended to involve such a complete review, which is why there is no statutory requirement for provision of such records.  Instead, what is intended is that the requesting physician has properly documented the requested treatment with adequate information that an informed decision can be made.  That is possible within the 5 day time frame because the information is provided prior to the time frame beginning.  One of the questions the W.C.A.B. never asked is why the requesting physician did not include as supporting documentation the remainder of the history to support his request for surgery?  The criteria for obtaining approval are not a mystery.  However, this decision in effect encourages a requesting physician to provide as little information as possible and when the claims administrator (as will inevitably happen given the 5 day time limit) fails to provide the remainder of the medical file—a new game of “gotcha” will be created. 

The W.C.A.B.’s determination that a failure of the claims administrator to meet the statutorily non-existent obligation to provide a medical file to UR is going to result in a dramatic increase in litigation, create unnecessary confusion over what constitutes a “defective” UR review and, in my opinion, effectively remove any cost saving benefits that might have been achieved with the IMR process (which was probably cost neutral at best, at least in the short run) and will clearly now be cost negative with the dramatic increase in litigation this decision is going to create.

Presumably SCIF will file a Petition for Reconsideration from the W.C.A.B. decision and point out the fallacy of the W.C.A.B.’s rationale and analysis as well as the practical implications of its decision and if the W.C.A.B. does not recognize what a mess it has created, seek appellate relief for the W.C.A.B.’s overreaching in this decision.

This is one of those “be careful what you ask for, you may get it” kind of dilemmas.  The W.C.A.B. appears to want to get back into the medical decision making business and it probably will in a big way with this decision.

From a claims administrator or UR vendor’s perspective, if this decision holds up, it may be necessary to issue delays in every case to 14 days to allow additional time to obtain the medical report file and if not received and reviewed in that time frame, issue a denial until the records can be received and reviewed.  Since the W.C.A.B. has determined that review of such information is statutorily required, such an approach would appear to be consistent with the W.C.A.B.’s directives—probably not its intent, but certainly the result that is indicated. Otherwise, UR will almost certainly be defective for failure to review the entire record.

© Copyright 2014 Shaw, Jacobsmeyer, Crain & Claffey PC. All rights reserved. Reprinted with permission.

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