Happy New Year! But First a Look Back at 2015

| | Utilization Review


UR Nation wishes everyone in the workers’ comp industry a safe and happy new year. And of course we hope 2016 will be the best yet for all our readers. But before we dive into the issues shaping 2016, let’s look back at 2015 and take inventory of what happened in the year that’s past. To this end, I created a top 10 list of significant California workers’ comp legislation and case law that from 2015. Granted, these are things that in my opinion were particularly significant. Here’s my Top 10:

#10 Lien Activation Fees Must Be Paid

In Angelotti v. Baker, the 9th Circuit Court of Appeals allowed enforcement of the lien activation fee as mandated by SB 863. You may recall that as part of SB 863, in order to file a lien you had to pay a lien filing fee. But what about liens already filed before 1/1/2013? You had to pay a lien activation fee. This lien activation fee was vigorously challenged. Pursuant to the court’s order, all liens filed prior to 1/1/13 for which no lien activation fee has been paid by 1/1/16 will be dismissed by operation of law per LC 4903.06.

#9 Bill Review Only Applicable to Disputes After 1/1/2013

As part of SB 863, a program was put in place for the resolution of bill disputes. So along with Independent Medical Review (IMR), the legislature created Independent Bill Review (IBR). One of the hotly contested issues that arose in 2013 was whether or not billing disputes that arose prior to the day SB 863 went into effect were subject to IBR. In CIGA v WCAB the Court of Appeal ruled that with respect to disputes that arose over payment for services prior to 1/1/2013, the new IBR process did not apply.

#8 IMR Appeal Time Extended 5 Days

In Matute v. Los Angeles Unified School District, the injured worker’s request for treatment was denied via IMR. The worker, Matute, filed an appeal with the WCAB, but the appeal was not filed within 30 days after the notice of mailing. Therefore, the WCAB denied the appeal as untimely. However, after Matute requested reconsideration, the Board issued an en banc opinion. In the opinion, they held that where LC Sec. 4610.6 provides that an appeal from an IMR determination must be made within 30 days, an extra 5 days is added for mailing. The net effect is that you must file your appeal from an IMR determination 35 days from the date stamped on the notice of mailing.

#7 On Demand Employee Status Litigated

In O’Connor v. Uber, three Uber drivers asserted that they were employees and not independent contractors and that they were entitled to benefits including workers’ comp. Uber has taken the position that they are independent contractors. Uber points out, for example, that the drivers are basically their own boss, free to decide how many hours a week they work. They are also allowed, and even expected to have, other employment. Uber filed a motion for summary judgment at the trial level, but that was overturned by the Court of Appeal. The Court of Appeal has remanded, holding that employee versus independent contractor status is one of mixed fact and law and requires further evidence at the trial level. This is an interesting case to follow given the “employee on demand” app-based business model we are now seeing as part of the mobile computing revolution.

#6 The Firefighter Cancer Presumption Challenged

SB 1271 went into effect on Jan. 1, 2009. The law extended the cancer presumption to firefighters (so they could more easily receive work comp benefits). In Lozano v. Workers’ Comp, the widow and children of William Lozano, a firefighter who died of cancer in 2007, filed for benefits in 2009. The WCAB denied their claim. The Court of Appeal ruled that the WCAB erred in holding that allowing the use of the cancer presumption was a retroactive application of the law. The Court of Appeal said that SB 1271 made procedural changes for claims filed after Jan. 1, 2009. Since the case was filed after SB 1271 went into effect, even though the death occurred prior in 2007, Lozano would receive the cancer presumption.

#5 Medical Provider Networks Must Post a Physician Roster and Contact Information for Medical Access Assistants

SB 542 requires every Medical Provider Network (MPN) to post, and update quarterly, a roster of treating physicians in the network and provide contact information for the Medical Access Assistants. This is in an effort to get injured workers the care they need within the network. In addition, for MPNs seeking to comply with the new laws, a modification that updates an MPN plan will be deemed approved for four years from the modification approval date.

#4 Utilization Review – Untimeliness Can Render a UR Determination Invalid

In Bodam v San Bernardino County, the WCAB decided what to do when a utilization review (UR) is untimely. In the case, Timothy Bodam suffered a back injury while on the job. His orthopedic surgeon recommended surgery. The matter was sent to UR. The UR determination was made but not timely communicated. The WCAB ruled that because the UR was untimely it was fatally defective. This allowed the WCAB to decide, based upon the substantial medical evidence, whether or not Bodam got the surgery. This is an important case because it shows us exactly what will happen if a UR is not timely – it will be viewed as fatally defective and the WCAB will then get to decide, just like prior to SB 863, if the injured worker gets the surgery or treatment.

#3 ICD-10 Finally Implemented

Implementation of ICD-10 took a very long and winding road. As our own Lisa Robinson pointed out back in September, ICD-10 was endorsed by the World Health Organization 25 years ago. It was adopted by Australia in 1999. By 2009, when Dept. of Health and Human Services was pushing hard for ICD-10, the United States was the only G7 nation that was still using ICD-9. Finally, on Oct. 1, 2015, ICD-10 took effect. The good news is that there is a 1-year grace period that runs until Oct. 1 2016. As long as providers use codes from within the correct ICD-10 families, bills will be accepted and processed. When the grace period ends, however, claims may be rejected, and/or penalties may be levied.

#2 California Created A Prescription Drug Formulary

The legislature pass AB 1124 which amended LC Sec. 4600.1 et seq. requiring the Administrative Director to establish a drug formulary by July 1, 2017. This will be part of the Medical Treatment Utilization Schedule (MTUS) and will cover medications prescribed for injured workers. Interestingly, it looked like this bill was dying in the legislature, but then Gov. Brown issued a decree that the Department Industrial Relations would create its own formulary without the need for legislative action. This statement by Gov. Brown no doubt motivated the stakeholders to work out their differences and pass AB 1124.

#1 IMR Ruled Constitutional

In Stevens v. WCAB, the Court of Appeal issued an opinion on Oct. 28, 2015 that basically ruled that the Independent Medical Review (IMR) program did not violate the U.S. and California constitutions. In the opinion, the court said that IMR did not violate the separation of powers doctrine or the due process clause. However, in an interesting twist, the Court of Appeal remanded to the WCAB to determine if the IMR reviewing physician improperly interpreted MTUS with respect to home health care. The court said that if the reviewing physician misinterpreted MTUS then the IMR determination would fail as it was adopted without authority. The attorney for Stevens, Joseph Waxman, filed a writ petition to the Supreme Court of California, so stay tuned on this case. It may be that the Supreme Court of California overrules the Court of Appeal.

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.