Employers must conduct utilization reviews when deciding whether to approve or deny an injured employee’s request for workers’ compensation medical treatment, the Supreme Court of California has ruled.
In State Compensation Insurance Fund v. Workers’ Compensation Appeals Board and Brice Sandhagen, the court concluded that pursuant to California Labor Code section 4062, the Legislature intended to require employers to conduct utilization reviews and not permit employers to use section 4062 to dispute employee’s treatment requests.
The case indicates that in 2003, a car struck Brice Sandhagen while he was working as a foreman on a road construction project. He injured his neck, back, left elbow, left wrist and received medical treatment continuously since the accident. His physician recommended a magnetic resonance imaging test of his spine to determine whether a disc herniation or disc degeneration was causing his pain. The physician submitted a report to his insurer, State Compensation Insurance Fund, with a request to authorize the utilization review. SCIF did not communicate its decision within the 14-day statutory deadline, so Sandhagen requested an expedited hearing to review his case. Ten days later, before the expedited hearing but 28 days after the MRI authorization request was submitted, his medical treatment request was denied, citing new medical treatment guidelines.
At the hearing, the workers’ compensation judge found that SCIF’s failure to comply with the statutory deadlines precluded it from relying on the utilization review process to deny Sandhagen’s treatment. And the judge ordered SCIF to authorize the MRI.
SCIF appealed to the Workers’ Compensation Appeals Board, arguing that that the consequences for failing to comply with utilization review guidelines are set forth in California Labor Code, which “provides for administrative penalties and allows possible penalties for delay,” and that “nothing in the statutory scheme allows for the exclusion of a utilization review report.”
Sandhagen disagreed, contending that the Code “requires an employer to meet specific deadlines,” and that SCIF’s “failure to comply with the deadlines meant that it could not rely on the utilization review process to justify denial of treatment.”
WCAB ruled that the deadlines were mandatory, and because SCIF failed to meet the deadline, it was precluded from using the utilization review process to deny treatment. However, WCAB noted SCIF could dispute the treating physician’s treatment recommendation using the dispute resolution procedure set forth in section 4062.
SCIF and Sandhagen filed a petition for a write of review, and the Court of Appeal affirmed both of WCAB’s holdings. It said “an employer is not required to use the utilization review process when considering employees’ requests for medical treatment.”
The state Supreme Court disagreed, concluding that section 4062 of the Labor Code is “not available to employers as an alternative avenue for disputing employees’ requests for treatment.” “We conclude the Legislature intended to require employers to conduct utilization review when considering employee’s requests for medical treatment,” the high court said.
The case was remanded for a hearing consistent with the Supreme Court decision.
To read the decision in its entirety, visit http://www.courtinfo.ca.gov/opinions/documents/S149257.DOC.
Topics California Workers' Compensation
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