CAAA Taking Second Swing at Constitutional Challenge to IMR

Monday, January 4, 2016 | 6

Just as 2015 drew to a close, the California Applicants' Attorneys Association threw its weight behind a second effort to get the state's independent medical review process to be declared unconstitutional.

Two months ago, the 1st District Court of Appeal in San Francisco said the controversial method for resolving issues of medical necessity passed constitutional muster in its decision for Stevens v. WCAB (Outspoken Entertainment). The 3rd DCA in Sacramento is getting its chance to address the same question in Ramirez v. WCAB (SCIF).

The 3rd DCA granted review to the Ramirez case in February, but it has yet to set an oral argument date. So far it has collected amicus input from the Division of Workers' Compensation, the California Workers' Compensation Institute, the California Chamber of Commerce, and the California Society of Industrial Medicine and Surgery.

CAAA jumped into the fray last Tuesday. The organization is arguing that Stevens was "wrongly decided," and that the limitations contained in Labor Code Sections 4610.5 and 4610.6 are unconstitutional.

In the alternative, CAAA suggests that the way in which the Workers' Compensation Appeals Board has interpreted the statutes as limiting the availability of judicial review for IMR decisions is unconstitutional.

Section 4610.5 provides that an unfavorable utilization review decision may be appealed only through the IMR process. Section 4610.6 says that a worker can appeal an IMR decision to the WCAB only if the decision was procured by fraud or by a doctor with a conflict of interest or bias.

Daniel Ramirez followed the IMR process when he was unable to get authorization from the State Compensation Insurance Fund for 12 sessions of acupuncture in July 2014.

After the state's IMR contractor – Maximus Federal Services – upheld the UR decision, Ramirez requested a hearing with the WCAB.

At the time, the WCAB's first of two en banc decisions in Dubon v. World Restoration was still good law.

The board's holding in what has now become known as "Dubon I" said UR decisions suffering from "material procedural defects" wouldn't have to go through IMR – a workers' compensation judge resolves treatment disputes instead.

Ramirez claimed that the question of medical necessity for his acupuncture treatments should have gone to a judge to decide, pursuant to Dubon I, insisting the UR in his case was improperly conducted because the reviewer hadn't taken the Medical Treatment Utilization Schedule into account before declaring Ramirez didn't need acupuncture treatment.

Five days after Ramirez raised his claim with the board, the WCAB rescinded Dubon I and issued a second en banc decision saying a UR decision becomes ineligible for IMR only if it is untimely.

In light of the rule established by Dubon II, Workers' Compensation Judge Gregory Cleveland found the WCAB lacked jurisdiction over Ramirez's claim, and he ordered the case taken off the calendar.

Ramirez appealed, but the WCAB said his claim was properly dismissed. Ramirez then petitioned the 3rd DCA for relief.

In his writ petition, Ramirez argues that an improperly conducted UR is, by definition, an untimely UR since the review process was "never completed." He claims the UR provider for the State Compensation Insurance Fund never conducted an appropriate UR in his case because the reviewer failed to apply the Medical Treatment Utilization Schedule before denying the care his doctor had requested.

Ramirez also contends that the WCAB's en banc decision in Dubon II was wrongly decided.

He says this rule conflicts with California Code of Regulations Section 10451.2(c)(1), which states that disputes over whether UR was untimely "or otherwise procedurally deficient" will not go through IMR. 

What's more, Ramirez says the entire IMR scheme is an unconstitutional impairment upon the WCAB's authority since it removes the board's jurisdiction over medical treatment disputes. He insists that the lack of any substantive appeals process for an IMR decision also violates his due process rights.

The State Compensation Insurance Fund counters that Ramirez can't challenge the Dubon II ruling because this line or argument exceeds the scope of the issues he raised in his petition for reconsideration at the WCAB.

Should the court wish to address the Dubon issue, SCIF says the WCAB erred in retaining jurisdiction over medical treatment disputes for untimely UR decisions since the Labor Code says all such disputes are to go through IMR.

SCIF also argues that it is the Legislature's plenary power to establish a workers' compensation system "to decide who decides issues, what evidence may be used, and how such decisions may be reviewed."

The carrier said that the creation of IMR fell within the broad authority of the Legislature, and the IMR system provides for meaningful appellate review of decisions.

The 1st DCA found this to be true in the Stevens case, declaring IMR "is fundamentally fair and affords workers sufficient opportunities to present evidence and be heard."

Joseph Waxman, the attorney for Frances Stevens, filed a petition for review with the California Supreme Court earlier this month. He has also filed a request for the court to "unpublish" the 1st DCA's decision.

In California, only cases designated for publication become binding precedent. The appellate courts get to decide which opinions to publish, but the Supreme Court can effectively undo the precedent set by the appellate courts without reviewing a case by ordering the decision to be unpublished.

CAAA, in its amicus brief for the Ramirez case, heavily emphasizes that idea that the California Constitution guarantees that "all decisions of any (workers' compensation) tribunal shall be subject to review by the appellate courts of this state."

CAAA contends that the IMR process confers "judicial or quasi-judicial powers" upon Maximus, which itself is unconstitutional. The IMR statutes then fail to provides "adequate standards and safeguards to prevent arbitrary and capricious decision-making" by Maximus, by affording the IMR decision a presumption of correctness and limiting the ability of the board to review the decision.

CAAA also argues that the WCAB wrongly limited its authority to review IMR decisions in Dubon II, since the plain language of Sections 4610.5 and 4610.6 limit the scope of IMR review to issues of medical necessity.

There is nothing in these statutes that says the procedural validity of the UR process cannot be addressed by the board, CAAA says, and so there was no reason for the board to deny itself such authority in Dubon II.

CAAA further submits that the WCAB's "unexplained and inexplicable abandonment" of its position in Dubon I was also an indication that its ruling in Dubon II was "arbitrary and capricious and lacks any rational basis."

Maurice Abarr, the attorney for Jose Dubon, had sought judicial review of the WCAB's second en banc ruing last year, but the 4th DCA turned him down. The Supreme Court then denied review in April of this year.

The 3rd DCA has ordered SCIF to respond to the CAAA brief by Jan. 4, but SCIF on Wednesday requested an extension until Jan. 29.

To read CAAA's brief, click here.