California: IME Report Based Upon Unilateral Ex-Parte Communication Struck By Court Of Appeal—New IME Required

California: IME Report Based Upon Unilateral Ex-Parte Communication Struck By Court Of Appeal—New IME Required

   By David Bryan Leonard, Esq.

Physician’s vulnerability to ex parte manipulation by a party is highlighted in the recent Court of Appeal Case of State Farm Insurance v. W.C.A.B. (“Pearson”) [192 Cal. App. 4th 51; 2011 Cal. App. LEXIS 86]. This is the second appellate decision to address the impact of ex-parte communication with the evaluating physician.  Like Alvarez v. W.C.A.B. (2010) 187 Cal.App.4th 575, 114 Cal.Rptr.3d 429, 75 Cal. Comp. Cases 817, the court in Pearson has shown its lack of tolerance for ex-parte communication.

The case of Alvarez involved oral communication.  Pearson goes one step further and specifically addresses administrative and procedural communications. The administrative communication involved unilaterally scheduling the IME evaluation without the other side’s awareness. The procedural communication involved the selective presentation of medical reports to the IME by one party. The Court in Pearson held that neither form of ex-parte communication could be cured with subsequent record review or deposition. Automatic physician disqualification was required and a new evaluator had to be selected.

In Pearson, the physician did not recognize that ex-parte communication was occurring.

The WCJ tried to cure the defects and the Court of Appeal held that ex-parte communication could not be cured. The details of the case provide insight and will be summarized below.

Applicant sustained an industrial injury and developed fibromyalgia.  Her husband (“Husband”) provided home health care services. Her case was settled by Stipulated Award of 100% permanently disability with future medical care that included a life care plan.  Jurisdiction was reserved over unpaid home health care services.

Post settlement, the Court appointed an Independent Medical Examiner (IME) to address the reasonableness and necessity of the home health care services provided by Husband. After the Court issued the order, without giving notice to Defendant, Applicant’s attorney unilaterally scheduled the IME appointment. Then both counsel and Applicant’s Husband unilaterally sent several medical reports to the IME.  After examination, and based in part upon the information provided, the IME concluded that Applicant’s medical condition required the home health care services service provided by Husband. Comparing the level of services to that of licensed vocational nursing (LVN), the IME concluded that the value of home health care services amounted to $35 per hour.

Defendant moved to strike the IME’s report. It complained that the appointment had been set up without notice of time, date or location to Defendant. In addition, it alleged that Husband provided the IME with selected self serving records. Additionally, Defendant alleged that the IME did not adequately explain the nature of the home health care services.

Defendant filed a motion to strike the IME report. The WCJ concluded that the parties did not advise the IME of the Court’s intent. Furthermore, the WCJ found that Husband unilaterally submitted documents to the IME.  Rather than strike the IME’s report, the WCJ ordered the parties to jointly provide the IME with all documents and that the IME prepare a supplemental report. The Court requested the IME to estimate the reasonable number of hours per day that home health care was required and whether a Certified Nurse’s Assistant or LVN was required to provide these services.

The IME issued a supplemental report. The case was returned to the WCJ and submitted for decision. The WCJ issued a Findings and Award concluding among other things that Husband had provided home health care services to Applicant 24 hours per day from July 24, 2003. Based on the recommendations of the IME, the WCJ found that the value of Husband’s services was $30 per hour, for which he was entitled to $720 per day.

Defendant petitioned for reconsideration arguing, in relevant part, that the IME’s report was based upon prohibited ex-parte communication.  In addition, it contended that the majority of time spent on Applicant’s home health care were non-compensable matrimonial duties such as cooking, cleaning, paying bills, and non-medical errands.

The WCAB denied reconsideration. It concluded that the IME was qualified to provide expert opinion regarding the level of attendant care required and the value of services. The WCAB found that the IME findings were not tainted by the unilateral contacts and that Defendant had a full opportunity to provide the IME with all relevant information and in fact deposed the IME.

Defendant sought review contending that the IME reports should be stricken because it was based on ex-parte communication. It also argued that the amount awarded was excessive and unreasonable. Applicant contended that the communications had no adverse effect.

The Court of Appeal granted review. It observed that it was uncontested that Defendant did not have notice of the appointment. Furthermore, on the day of examination, Applicant’s Husband gave the IME medical records for review.

The Court found that Husband’s communications with the IME were on the merits of the case upon which the IME relied. As a result, the Husband’s communications were ex-parte and required that the IME report be stricken and the IME disqualified. The Court found that the records provided by Applicant’s Husband were partial and incomplete and did not include the medical records that Defendant would have provided if it had the opportunity.

The Court explained that ex-parte communications on the merits of a case with an appointed medical examiner are prohibited.  When IMEs are used, California Code of Regulations, Title 8, Section 10718 requires that “all correspondence concerning the examination and reports … shall be made through the Workers’ Compensation Appeals Board, and no party, attorney or representative shall communicate with that physician with respect to the merits of the case unless ordered to do so by the Workers’ Compensation Appeals Board.”

It observed that the goal of prohibiting ex-parte communication is to prevent medical decisions being issued based on information not known to one or both parties.  Fairness of information is so important the Court noted that ex-parte communication amounts to a “denial of a hearing” because it deprives the excluded party of the opportunity of controvert the undisclosed information. Specifically, “fundamental fairness in decision making demands that factual inputs and arguments to the decision maker on law and policy be made openly and be subject to argument by all parties.”  (citation omitted.)

Like the prohibitions against communicating with an IME, the Court observed that other statutory provisions and regulations within the Workers’ Compensation Act prohibit ex-parte communication with Agreed or Qualified Medical Examiners.  Citing the recent case of Alvarez v. Workers’ Comp. Appeals Bd. (2010) 187 Cal.App.4th 575 the Court observed that there are no exceptions for ex-parte communication. The prohibition against ex-parte communications is a strict rule.  No showing of prejudice is required to invoke the remedy.  (Id. at p. 589.) Since the prohibition against ex-parte communication was violated, the IME report was stricken, and a new medical examiner appointed.

Addressing Defendant’s argument that home health care services 24 hours a day, 7 days a week was unreasonable and that $30 an hour was excessive, the Court observed that Applicant’s list of services did not add up to 24 hours a day. On its face, the Court found that the evidence relied upon was not substantial due to the discrepancy between time awarded and time alleged.   Additionally, the Court noted that many of the services alleged as “home health care” did not constitute treatment services under Labor Code Section 4600. Specifically, the Court observed that while an employer is required to provide treatment that is reasonably required to cure or relieve the worker from the effects of the injury, the home health care services provided by a family member must qualify as medical care under section 4600. For instance, the Court observed that a wife providing practical nursing services was eligible for reimbursement. In addition, physician recommended housekeeping services may be considered as medical treatment.

In the present case, based on the evidence presented, the Court found that some of the services provided were not of the type that would be considered medical treatment under section 4600.  Additionally, some services provided by Husband did not require a LVN license.  As a result, payment of $30 per hour, seven days a week, 24 hours a day was not justified.  Other services provided by Husband were not medically necessary, and were not expenses for which the employer was liable. It also observed that Husband was being reimbursed for services that did not require an LVN license.

Authors Comment:  Most significantly, this case highlights the Court’s strict, no-nonsense interpretation of the prohibition against ex-parte communication. In addition, the failure of the home health care timesheets to add up clearly caught the Court’s attention. Going from bad to worse, a number of the home services did not require licensure.

The physician did not recognize that ex-parte communication was occurring. Pearson clearly shows that physicians can be presented with a partial record and/or unilateral appointment scheduling. The misconduct was caused by a participant in the case. About the only way for a physician to deter this type of conduct is confirmation of all conduct with the other party prior to action. [i.e.” I have received these records which I am going to review.”] This may not be a feasible alternative. Because the Legislature contemplated that the party causing the ex-parte violation should be responsible for the increased cost, evaluators may simply have to trust that this deters future ex-parte communications.

© Copyright 2011 David Bryan Leonard. All rights reserved. Reprinted with permission.

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