Independent Medical Review – Constitutional In California?

| | Utilization Review


Last week, in Stevens v. Workers’ Compensation Appeals Board (WCAB), Joseph Waxman, attorney for Frances Stevens, filed a Petition for Review to the California Supreme Court. This follows the Court of Appeal’s October 28, 2015 ruling that the Independent Medical Review (IMR) process does not violate the U.S. and California Constitutions. This article provides an update on this important case.

Frances Stevens fractured her foot in 1997 while working for a magazine publisher. Between 1999 and 2002 she underwent three surgeries on the foot. Further complications ensued, including complex regional pain syndrome and severe depression. In a trial in May 2013, a workers’ comp judge ruled that she was permanently totally disabled.

In July 2013, Stevens’ physician, Dr. Jamasbi, sought approval for Ativan, Flexeril, diclofenec cream and hydrocodone. In addition, Dr. Jamasbi sought home health aide for 8 hours a day 5 days a week. The request for authorization (RFA) was given to the State Compensation Insurance Fund (SCIF) utilization review (UR) agent Bunch CareSoutions. Bunch CareSolutions retained Dr. Andrew Seltzer to perform the physician review. After review, Dr. Seltzer denied the request in its entirety. After an internal voluntary appeal by SCIF, the matter proceeded to IMR.

IMR is currently performed by Maximus Federal Services. The IMR physician affirmed Dr. Seltzer’s report that none of the prescribed medications were medically necessary and that home healthcare, as prescribed, was not appropriate. With respect to home healthcare, the IMR physician wrote that medical treatment does not include homemaker services like shopping, cleaning and laundry services.

Stevens appealed the IMR decision to the WCAB. The WCAB stated that the IMR could only be set aside for fraud, conflict of interest, bias, adoption without authority, or if it resulted from a plainly erroneous finding of fact not subject to expert opinion. The Board ruled they had no jurisdiction and denied the appeal. Stevens field a writ petition with the California Court of Appeal.

The Court of Appeal ruled that the IMR program did not violate the U.S. and California Constitutions with respect to separation of powers or due process. The Court of Appeal also ruled that while there was no jurisdiction over medical determinations, the WCAB did have jurisdiction over matters that were adopted without authority, including whether or not home healthcare was properly interpreted per MTUS. The Court of Appeal remanded the decision back to the WCAB to determine, for example, if the WCAB should set aside the IMR decision because the IMR reviewing physician did not properly interpret MTUS with respect to home healthcare.

However, now that a writ petition has been filed by Mr. Waxman, the case may be heard by the Supreme Court of California. The Supreme Court of California can refuse to hear the matter and let the Court of Appeal decision stand, or it can hear it and issue its own new ruling. No doubt Mr. Waxman was pleased the Court of Appeal remanded on the issue of the IMR reviewing physician adopting his medical determination without authority (incorrectly interpreting MTUS regarding home health care). However, looking at his pleadings, Waxman still wants to see the entire IMR program scrapped as unconstitutional.

This case is so important because it is a direct challenge to the IMR program as created by SB 863. This program, which mirrors what we see in group health, requires an injured worker, if their request for treatment is denied in UR, to petition the Administrative Director to have the case heard by an IMR physician. The IMR process is much different than prior to SB 863, when a workers’ comp judge, reading various physician reports, would decide if an injured worker got the requested treatment. The knock against this system is that it was expensive, involved depositions and court hearings, and was time consuming. It usually took six months to a year and simply didn’t make sense; why would a judge make a medical determination?

Workers’ comp stakeholders are following, as they should, Stevens v. WCAB. While the goals of IMR are worthy goals, including speed and cost efficiency, the program must pass constitutional muster in order to be a viable system. Up next, the Supreme Court of California.
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.