California Independent Medical Review (IMR) Constitutional Update

| | Utilization Review

At the 2016 WCRI Conference in Boston, the state of California Independent Medical Review (IMR) was a key topic. As many of you know, IMR has just passed constitutional muster by way of the decision in Stevens v. WCAB. In this case, the Court of Appeal ruled that IMR violated neither the U.S. not California Constitutions.

In an interesting twist, however, the Court of Appeal did say that an IMR decision could be overturned by the WCAB if it was “adopted without authority.” This means that if the IMR decision, for example, incorrectly applied guidelines such as MTUS, the decision could be overturned. While many in the insurance industry believed the “adopted without authority” doctrine was an unwanted curve ball, the bottom line is that most people, including the California legislature, were glad to see that IMR passed constitutional muster.

But what about Zuniga v. WCAB? This new case is generating much conversation. Saul Zuniga was employed with Interactive Trucking, Inc. as a truck driver. In October 2007, Zuniga sustained an injury to his left shoulder and other body parts. Zuniga’s workers’ comp claim was handled by State Compensation Insurance Fund (SCIF).

Mr. Zuniga underwent multiple surgeries to treat his shoulder. Unfortunately, this resulted in multiple infections. For many years, Zuniga treated with pain management specialist Douglas Grant, M.D., who prescribed five pain medications. These medications included Percocet, Lidoderm patches, Nortriptyline HC1, Celebrex and Prilosec.

In mid-2013, Zuniga’s case was sent for Utilization Review (UR). The UR physician certified the use of Percocet but denied the other four drugs as not medically necessary. In accordance with SB 863, Mr. Zuniga would need to appeal the UR decision to IMR.

SCIF provided Zuniga’s medical records to Maximus Federal Services for review. The reviewing physician overruled the UR physician with respect to Nortriptyline HC1 but upheld the denial of Lidoderm patches, Celebrex and Prilosec, as not medically necessary.

Zuniga disagreed with the IMR physician and decided to appeal his case to Administrative Law Judge Christopher Miller. Judge Miller determined that the IMR physician did not review all of the medical records and committed plain error. Therefore, Judge Miller ordered another IMR.

In March 2014, Maximus issued a second IMR report. This one, referenced as a “correction,” affirmed the use of Nortriptyline HC1 as before and also affirmed the use of Celebrex. The new report denied the use of Lidoderm patches and Prilosec.

As before, Zuniga asserted that there were erroneous findings of fact in the report, and that these plain errors led to the denial of the Lidoderm patches and Priolsec. As a result, Zuniga made a motion before Judge Miller to disclose the identities of the persons involved in the review. In other words, Zuniga wanted the names of the IMR reviewers.

Judge Miller ruled that the secrecy provision of LC 4610.6(f) did not allow him to order the identity of the IMR reviewers. This was despite the fact that Judge Miller made assertions that the secrecy provision may violate Zuniga’s due process rights under the constitution. Judge Miller denied Zuniga’s petition and motion for reconsideration, and Zuniga appealed to the California Court of Appeal.

The Court of Appeal has recently indicated that they will be issuing a written opinion sometime this year. This case is interesting because Zuniga, unlike in the Stevens case, is not asking that the entire IMR process be declared unconstitutional. Rather, Stevens is asserting that the secrecy portion of the process should be struck as unconstitutional. Presumably, the IMR process, if Zuniga gets his wish, will still go forward, but the IMR reviewing physician will no longer be anonymous.

SCIF has some interesting arguments as well. In addition to claiming Zuniga did not exhaust all of his administrative remedies, SCIF claims Zuniga failed to name the Division of Workers’ Compensation as a defendant. In other words, SCIF claims that IMR is not SCIF’s program and is instead the DWC’s program and that DWC must be named as a defendant. The fact that they were not is a fatal flaw. SCIF further contends that Judge Miller followed LC 4610.6(f) accurately and that the secrecy provision is just as the legislature intended it to work, and as previously stated in the Stevens case, passes constitutional muster.

This case will be an interesting to follow to conclusion as a very important aspect of IMR hangs in the balance.

Tom Swiatek

Tom Swiatek

As Assistant Vice President of Regulatory Services, General Counsel, and Editor in Chief of UR Nation, Tom Swiatek draws on his experience as an insurance attorney on both the general liability side, as well as on workers’ compensation matters. As a California Workers’ Compensation Section Member, Tom is leading the discussion with respect to the regulatory challenges and opportunities facing the workers’ compensation system.