The Dreaded Rule 30

The Dreaded Rule 30

Most California workers compensation attorneys and judges are not aware of it yet. Of those who are aware, applicant attorneys love it and defense attorneys dread it. What is “it?” “It” is Title 8 California Code of Regulations, section 30. Specifically, sub-section 30(d) which is in four parts.

Can you imagine being a defendant and discovering that the applicant can obtain a default judgment against you on injury AOE/COE because you failed to obtain a panel QME or AME on medical compensability within 90 days from the date a claim form is filed pursuant to Labor Code Sections 4060 and 5402(b)? That’s exactly what Rule 30(d) does!

In 2008, the Administrative Director promulgated new rules that govern all aspects of the panel QME process. Rule 30 was born as part of that rule making that resulted in the approval and adoption of new medical legal evaluator regulations which can be found at Title 8 California Code of Regulations sections 1 through 159. These regulations have been effective as of February 17, 2009 and include the new mandatory Request for Panel QME Form 105 for unrepresented Applicants (Rule 30(a)) and Form 106 for represented Applicants (Rule 30(b)).

The problem is that the new QME regulations were accessible to the workers’ compensation community only through the DWC website (www.dir.ca.gov/dwc) in an itsy-bitsy, teeny weenie sub-address and link to proposed laws and regulations. Now you can find them at the same website under Title 8 of the California Code of Regulations. It was not until July 2009 when LexisNexis Matthew Bender published a supplement to its blue book, “Workers’ Compensation Laws of California” that includes all of the new regulations for medical legal evaluations, Court Administrator regulations and the new WCAB Rules (Title 8, California Code Regulations, sections 10210-10297 and sections 10300-10999, respectively, which were adopted and effective on November 17, 2008).

Revisiting the Labor Code

In order to understand Rule 30 and its impact on the workers’ compensation community, you have to revisit Labor Code sections 4060, 4062.1 and 4062.2. In addition, you have to be familiar with Labor Code Section 5402(b). As you know, Labor Code Section 4060 mandates that in order to evaluate the medical compensability of an alleged industrial injury, the parties have to go through the medical-legal process of Labor Code Sections 4062.1 for unrepresented applicants or 4062.2 for represented applicants. Medical compensability must be established under the mandate of Labor Code Section 4060:

4060.(a) This section shall apply to disputes over the compensability of any injury. This section shall not apply where injury to any part or parts of the body is accepted as compensable by the employer.

(b) Neither the employer nor the employee shall be liable for any comprehensive medical-legal evaluation performed by other than the treating physician, except as provided in this section. However, reports of treating physicians shall be admissible.

(c) If a medical evaluation is required to determine compensability at any time after the filing of the claim form, and the employee is represented by an attorney, a medical evaluation to determine compensability shall be obtained only by the procedure provided in Section 4062.2.

(d) If a medical evaluation is required to determine compensability at any time after the claim form is filed, and the employee is not represented by an attorney, the employer shall provide the employee with notice either that the employer requests a comprehensive medical evaluation to determine compensability or that the employer has not accepted liability and the employee may request a comprehensive medical evaluation to determine compensability. Either party may request a comprehensive medical evaluation to determine compensability. The evaluation shall be obtained only by the procedure provided in Section 4062.1.

Relevant parts of Labor Code Sections 4062.1 and 4062.2 must be read in conjunction with Labor Code Section 4060:

4062.1.(a) If an employee is not represented by an attorney, the employer shall not seek agreement with the employee on an agreed medical evaluator, nor shall an agreed medical evaluator prepare the formal medical evaluation on any issues in dispute.

(b) If either party requests a medical evaluation pursuant to Section 4060, 4061, or 4062, either party may submit the form prescribed by the administrative director requesting the medical director to assign a panel of three qualified medical evaluators in accordance with Section 139.2.

4062.2.(a) Whenever a comprehensive medical evaluation is required to resolve any dispute arising out of an injury or a claimed injury occurring on or after January 1, 2005, and the employee is represented by an attorney, the evaluation shall be obtained only as provided in this section.

(b) If either party requests a medical evaluation pursuant to Section 4060, 4061, or 4062, either party may commence the selection process for an agreed medical evaluator by making a written request naming at least one proposed physician to be the evaluator. The parties shall seek agreement with the other party on the physician, who need not be a qualified medical evaluator, to prepare a report resolving the disputed issue. If no agreement is reached…

Remember, sections 4062.1(e) and 4062.2(e) each prohibit an Applicant from obtaining an additional medical-legal evaluation once he or she has been examined by a panel QME prior to obtaining legal counsel, or after substituting out an attorney and having been previously examined by an AME or Panel QME.

Finally, Labor Code sections 5402(a) and (b) state:

5402.(a) Knowledge of an injury, obtained from any source, on the part of an employer, his or her managing agent, superintendent, foreman, or other person in authority, or knowledge of the assertion of a claim of injury sufficient to afford opportunity to the employer to make an investigation into the facts, is equivalent to service under Section 5400.

(b) If liability is not rejected within 90 days after the date the claim form is filed under Section 5401, the injury shall be presumed compensable under this division. The presumption of this subdivision is rebuttable only by evidence discovered subsequent to the 90-day period.

See Honeywell vs. WCAB (Wagner) 2005, 70 Cal. Comp. Cases 97 which says that the 90 day period under section 5402(b) presumption of compensability begins on the date a claim form is filed by the injured employee with the employer.

The Significance of Rule 30

In order to fully understand the significance of Rule 30, you must read these sections in detail as set forth above. The relevant parts of Rule 30(d) are as follows:

30(d)(1) After a claim form has been filed, the claims administrator, or if none the employer, may request a panel of Qualified Medical Evaluators only as provided in Labor Code section 4060, to determine whether to accept or reject a claim within the ninety (90) day period for rejecting liability in Labor Code section 5402(b), and only after providing evidence of compliance with Labor Code Section 4062.1 or 4062.2.

(d)(2) Once the claims administrator, or if none the employer, has accepted as compensable injury to any body part in the claim, a request for a panel QME may only be filed based on a dispute arising under Labor Code section 4061 or 4062.

(d)(3) Whenever an injury or illness claim of an employee has been denied entirely by the claims administrator, or if none by the employer, only the employee may request a panel of Qualified Medical Evaluators, as provided in Labor Code sections 4060(d) and 4062.1 if unrepresented, or as provided in Labor Code sections 4060(c) and 4062.2 if represented.

(d)(4) After the ninety (90) day period specified in Labor Code section 5402(b) for denying liability has expired, a request from the claims administrator, or if none from the employer, for a QME panel to determine compensability shall only be issued upon presentation of a finding and decision issued by a Workers' Compensation Administrative Law Judge that the presumption in section 5402(b) has been rebutted and an order that a QME panel should be issued to determine compensability. The order shall also specify the residential or, if applicable, the employment-based zip code from which to select evaluators and either the medical specialty of the panel or which party may select the medical specialty.

Rule 30(d) was developed as an interpretation of Labor Code sections 4060 and 5402(d) which establish the time limits for employers to accept liability for a claimed industrial injury. It appears that the DWC takes the position that Rule 30(d) was necessary to implement and enforce those time limitations and restrictions against obtaining compensability medical evidence after the 90 days from the filing of a claim form when the employer should have done so during the 90 day period but failed to do so.

Rule 30(d) is probably a response by the DWC to complaints that employers are denying injuries AOE/COE on flimsy grounds that “there is no medical evidence to support your claim of industrial injuries” that has been common practice by insurance companies and claims administrators since even before the enactment of SB 899. They are essentially placing the burden on the applicant to initiate the process of obtaining a Labor Code section 4060 report and if none is requested then the employer denies the claim for lack of medical evidence to support it.

Also, sub-section 30(d) is a bail-out section that allows a judge to order a Labor Code section 4060 medical-legal evaluation after the 90 days has passed if the employer was able to rebut the presumption of compensability under Labor Code section 5402(b) by non-medical evidence it acquired during the 90 day investigation period or after the time expired with evidence discovered after the 90 days.

Food for Thought

Does this mean in every case that there has to be a medical-legal report if the employer is denying injury AOE/COE? What if the employer is denying liability asserting an affirmative defense or for non-medical reasons? There may be various legal defenses to a claim without the apparent need for medical evidence such as a factual dispute over whether or not an alleged injury occurred, a post-termination defense under Labor Code Section 3600(a)(10), where employment is denied, where it is alleged the Applicant was not working on the alleged date of injury, a statute of limitations defense, a jurisdiction challenge, an initial aggressor defense, a going and coming rule defense, an independent contractor defense, or less than six months of employment for a psych injury under Labor Code Section 3208.3(d) to name a few. None of these defenses empirically require any medical legal reporting; they are all legal defenses to a claim and are not medically driven.

Now that Rule 30 exists, should employers always invoke Labor Code Section 4060 and initiate the medical-legal process under sections 4062.1 or 4062.2? Rule 30 suggests that if a defendant does not obtain a medical-legal compensability report under Labor Code section 4060 it is doing so at its own peril.

As a result of Rule 30(d), the DWC Medical Unit will refuse to issue a Panel QME list at the request of the employer for a compensability determination under Labor Code Section 4060 if that request is made after expiration of the 90 day claim investigation period allowed under Labor Code Section 5402(b).

Remember, the Request for Panel QME list forms (Forms 105 and 106) require a party to indicate the Labor Code Section that is being relied on that constitutes a medical dispute – compensability under section 4060, permanent disability under section 4061 or medical treatment issues under section 4062. The DWC Medical Unit will only issue a panel QME list for a determination of compensability under section 4060 after the 90 days if the request is made by the Applicant or if a judge orders one. So the conundrum is that the employer is up a creek without a paddle.

A Hobson’s Choice

So here is the dreadful part of Rule 30. We have seen many cases where an Applicant files a continuous trauma or specific injury claim form and during the first 90 days, the employer does not initiate the AME and/or QME process to determine medical compensability of the claim under Labor Code section 4060. Instead, the employer sends a timely notice of denial of the claim to the Applicant with the standard language “We are denying liability for your workers’ compensation claim because you have failed to provide medical evidence that your alleged injuries are work related.” Sometimes, the notice of denial will state only that the denial is based on non-medical grounds. Meanwhile, floating out there in the evidentiary record are reports and records of treating physicians who state that the medical condition is work related.

Remember, Labor Code section 4060(b) says the reports of treating physicians are admissible. So at an AOE/COE trial, the Applicant has the reports of the treating physician to prove medical compensability and industrial causation of the medical condition of a denied claim while the employer has no admissible medical evidence to refute the conclusions of the treating physician. Rule 30(a) basically allows an Applicant to obtain a default judgment of industrial injury and compensability if an employer fails to timely initiate a Labor Code section 4060 medical-legal evaluation within 90 days of the filing of a claim form!

Perhaps the reason some employers do not obtain a compensability medical-legal report under Labor Code section 4060 during the first 90 days is because of fear that a panel QME may find a denied injury compensable. Perhaps the 90 day window is too short a time period to comply. Perhaps an employer holds a claim form for a period of time before it turns it over to its claims administrator which creates a delay in an employer level investigation and initiation of a Labor Code section 4060 medical-legal process. Remember, the WCAB was recently upheld by the District Court of Appeal for strictly enforcing the 20 day time limit deadline to object to a treating physician report under Labor Code Section 4062. See J.C. Penney vs. WCAB (Edwards) (2009) 74 Cal. Comp. Cases 826. We have seen a strict application of the 90 day time limitation to deny an injury AOE/COE in pre-SB899 case law. See, for example, State Compensation Insurance Fund vs. WCAB (Welcher) 1995 37 Cal.App.4th 675, 43 Cal. Rptr.2d 660, 60 Cal. Comp. Cases 717.

So if an employer intends to deny liability in a claim because of non-medical reasons, should the employer obtain a Labor Code section 4060 medical-legal evaluation anyway during the 90 day discovery window for compensability? Or should the employer hang its hat only on the non-medical defense? Sometimes, this is a Hobson’s choice.

The Best Practice?

It seems that in most cases, it would be best practices to obtain a compensability medical-legal report under Labor Code section 4060 even with an otherwise iron clad non-medical defense to the claim. Counsel never knows the outcome of a trial or what a party’s own witnesses will testify to while on the witness stand. Counsel can always take the deposition of an AME or panel QME and share with the physician the non-medical basis for a denial of liability. However, reasonable minds may differ.

In an unrepresented case, perhaps a clever claims administrator could request a QME who is asked to evaluate a case for permanent disability or medical treatment after the 90 days has run to discuss compensability of the claim even though it is too late after the 90 days. The applicant would know nothing about Rule 30(d). The same can be true in a represented case. How many applicant attorneys actually read joint AME letters or letters to panel QME physicians where the defendant asks the evaluator whether a claim is compensable even though asking that is too late based on a Labor Code section 4060 compensability evaluation?

This is why many defense attorneys are contending that Rule 30(d) denies their clients due process of law – employers should be able to obtain medical evidence through an AME or panel QME that a claim is not medically compensable at any time, even after expiration of the 90 days from the filing of a claim form, like we used to be allowed to do prior to the adoption of Rule 30(d). Until the recent action by the DWC Medical Unit denying employers access to a Labor Code section 4060 medical-legal evaluation after the 90 days, employers were free to contest medical compensability under current Labor Code sections 4060, 4061 and 4062 pretty much unabated and unencumbered.

Challenges to Rule 30

There are several challenges pending to have Rule 30(d) repealed as overbroad, unconstitutional or beyond the statutory scope to implement Labor Code sections 4060 and 5402(b). In each of these cases, there has been a timely denial of liability and a Labor Code section 4060 compensability request has been made with the DWC Medical Unit after expiration of the 90 days from the date of filing a claim form.

In each case, the Medical Unit sent its notice informing the parties that it was too late to issue a panel QME list under Labor Code section 4060 and refused to do so. Thereafter, each defendant had to file a motion at the proper venue WCAB District Office to have a judge compel the DWC Medical Unit to issue a panel QME list for compensability. The WCJ refused to order one if he or she is familiar with Rule 30(d) and then defendants would have to file a Petition for Removal. If the WCAB concludes that no irreparable harm has occurred and no final order of a judge exists on substantive rights of the parties then the Petition for Removal would be denied. Thereafter, counsel for defendants would have to file a writ of prohibition in the District Court of Appeal in order to have an appellate court declare Rule 30(d) unconstitutional, overbroad or beyond the scope of implementing Labor Code sections 4060 and 5402(b). Does it sound like a lot of trouble is brewing because of the dreaded Rule 30?

More Food for Thought

It will be interesting to see how case law develops on Rule 30(d) issues. Can an applicant strike a panel QME report or an opinion on compensability that is obtained after expiration of the 90 days that concludes an alleged injury is not medically compensable contending that the defendant failed to comply with Rule 30(d) and did not obtain a Labor Code section 4060 evaluation prior to the expiration of the 90 days? What if in a represented case, defendant fails to obtain a Labor Code section 4060 evaluation within 90 days of the filing of a claim form, denies injury AOE/COE for non-medical reasons and later on an AME opines that the medical condition was non-industrial? Can the applicant move to strike the AME’s conclusions on medical compensability as a violation of Rule 30(d)?

Does defendant’s non-compliance with Rule 30(d) preclude use of the AME’s conclusion about medical compensability if the defendant loses on its non-medical defense? Is the AME report admissible on medical compensability since it could not have been obtained prior to expiration of the 90 days? Defendants would argue that an AME report that has on opinion on compensability is “evidence discovered after expiration of the 90 days” in Labor Code section 5402(b).

What if a Labor Code section 4060 compensability issue is disguised during a Labor Code section 4061 or 4062 panel QME or AME evaluation in the absence of a timely prior Labor Code section 4060 evaluation? Can applicant move to strike the evaluator’s conclusion about medical compensability because it is too late citing defendant’s violation of Rule 30(d)?

What about a situation where defendant denies injury AOE/COE in a psyche case contending that any psychiatric condition was caused by good faith personnel actions? Should the defendant obtain a timely Labor Code section 4060 medical evaluation when the applicant is the one who has the burden of proving injury in the first place? How does Rule 30(d) apply in such cases?

Hypothetically, an applicant could rely on reports of a treating psychiatrist, defendant presents rebuttal witnesses to show good faith personnel actions but what is missing is the medical-legal analysis required in psychiatric cases on causation. If the defendant fails to obtain a timely Labor Code section 4060 evaluation, it may fail to succeed in a good faith personnel action defense if the applicant’s treating physician covers all elements required to prove a psychiatric case in the first place. See Rolda vs. Pitney Bowes, Inc. (2001) 66 Cal. Comp. Cases 241 (WCAB en banc decision). Applicant goes into trial with medical reports and defendant has nothing but good intentions and no medical evidence.

Conclusion

Rule 30(d) is proving to be a viable source of disagreement between applicant and defense attorneys, judges and claims administrators over the authority of the DWC Medical Unit to impose a rule that affects substantive rights of parties to develop the record in these cases. We look forward to some guidance from the WCAB and from the appellate courts on this very interesting development brought to us by the DWC Medical Unit.

ARGUMENT FOR RULE 30(d) CHALLENGE:

See Brasher vs. Nationwide Studio Fund (WCAB Significant Panel Decision) 2006 71 Cal. Comp. Cases 1282; Brasher vs. WCAB (2007) 72 Cal. Comp. Cases 229 (W/D).  The DWC Medical Unit forced Defendant to appeal a UR denial for spinal surgery under L.C. section 4610 procedures before Medical Unit was willing to issue Form 223 and allow L.C. Section 4062(b) spinal surgery second opinion procedure.  WCAB held Defendant has four choices:  authorize the spinal surgery, initiate UR procedures, initiate L.C. 4062(b) procedure, or initiate both UR and L.C. 4062(b) procedures simultaneously.

The Medical Unit was overruled by creating its own “underground regulation” which violated Government Code section 11342.600 that defines “regulation.”  The Medical Unit violated Government Code sections 11340 et seq. (Administrative Procedures Act).

L.C. section 4060 says that “at any time after a claim form has been filed” any party can request an AME or QME panel list to determine compensability of an injury.  Rule 30(d) seems to overrule the Defendant’s right to obtain a QME or AME on compensability “at any time after a claim form is filed” in contravention of the statute.  Does this sound like the Medical Unit is again running amok and creating not an underground regulation but an outright illegal one?

ARGUMENT AGAINST RULE 30(d) CHALLENGE

There were public hearings on Title 8 Cal. Code Regulations sections 1-159 that were initiated during the summer 2008 and extended into the fall of 2008.  The Office of Administrative Law approved the regulations, including Rule 30(d) in February 2009 at which time they were officially adopted by the Administrative Director.

The Brasher case does not apply with Rule 30(d) because it is not an “underground regulation.”  Rule 30(d) was vetted through the administrative process mandated by the Government Code for establishing regulations that implement the intent of Labor Code Sections 4060 and 5402(b) for timely action by employers in determining accepting or denying liability for new claims.  There have been too many denials of liability that place the burden of obtaining a compensable medical-legal report on the Applicant when in fact it is the duty of the employer to conduct timely discovery within 90 days of the filing of a claim form to determine compensability of a claim.

 © Copyright 2009 by Robert G. Rassp. All rights reserved.

Comments

Robert G. Rassp, Esq.
  • 08-27-2009

Here's a comment we received from the DWC Medical Unit: "Bob, Just read your LexisNexis Blog on Reg 30(b). I thought it was excellent. You hit all the issues right on the head. I hope lots of people read it, get the message and follow your argument against challenging it. Our position is that once a claims administrator actually denies the claim, compensability is no longer at issue. They've already made up their minds, for whatever reason. If they think they have enough evidence to support the denial without a QME eval, then their decision was appropriate. If they think they need medical evidence to support their denial, they should get it before denying and stop trying to get it after the time has run. We only require that they get the process started prior to denying the claim. We will give a panel as long as the claim hasn't already been denied. If they deny it right after the panel is received before by the injured worker sees the doctor, we are not aware of it. That would be an issue that would have to be brought up before a judge. - Suzanne Honor-Vangerov, Workers' Compensation Manager, DWC Medical Unit"