The Bodam Decision – Timely Utilization Review

Wednesday, April 1, 2015 | 0

Since its inception, utilization review (UR) has become an essential tool in curbing runaway and unnecessary medical treatment. The Legislature strengthened the power of UR with the passing of SB 863 by taking disputes regarding UR decisions out of the hands of workers' compensation judges and putting them into those of other medical professionals with the implementation of independent medical review.

Inarguably the most important California Workers' Compensation Appeals Board decision of 2014, the en banc decision of Dubon v. World Restoration Inc. clarified the judicial role in the UR process. In Dubon, the WCAB found that it had the power to overturn a UR decision only if the decision was untimely. After Dubon, it became exceedingly important to make sure that all UR decisions were made within the statutory timeframe.

In the significant panel decision Bodam v. San Bernardino County/Department of Social Services (2014), the WCAB took the logical next step of providing clarity as to what constitutes timeliness. In Bodam, the primary treating physician faxed a request for authorization for prospective treatment to the defendant’s adjuster on Oct. 28, 2013, which was referred to the defendant’s UR vendor the same day. The UR vendor in turn denied the requested treatment, making its decision on Oct. 31, 2013. Defendant’s adjuster issued written denial letters to the referring PTP, and to the applicant with copies to applicant’s attorney on Nov. 5, 2013. There was no evidence of any other communication of the UR denial.

As a threshold matter, the WCAB found that the time limits of Labor Code Section 4610 were mandatory. Per Section 4610(g)(1), a decision for prospective treatment “shall be made in a timely fashion that is appropriate for the nature of the employee’s condition, not to exceed five working days from the receipt of the information reasonably necessary to make the determination, but in no event more than 14 days from the date of the medical treatment recommendation by the physician.

In Bodam, defendant’s UR vendor made its decision well within the five-day time period. However, the WCAB found that not only did the decision need to be timely, but that decision also needed to be communicated timely in order to meet the legislative purpose of the UR process.

The WCAB found that the communication requirements were clarified by California Code of Regulations Section 9792.9(e)(3), which states that the UR decision “shall be communicated to the requesting physician within 24 hours of the decision, and shall be communicated to the requesting physician initially by telephone, facsimile, or electronic mail. The communication by telephone shall be followed by written notice to the requesting physician...within two business days of the prospective review..."

In addition to the obvious necessity of making and communicating a UR decision in a timely fashion, an important takeaway from the Bodam case is that these time limits cannot be viewed in the cumulative. In other words, there is not a six-day safe harbor in which to make and communicate a UR decision. Rather, the 24-hour period in which to initially communicate the decision begins to run the moment the decision is made.

Although it took a hard line as to timeliness in Bodam, the WCAB has also recently shown that the time limits are not necessarily absolute. For example, in the decision of Chamberlain v. Humphry and Giacopuzzi Veterinary Hospital (2014), the WCAB found that where a PTP failed to respond to the UR vendor’s requests for additional information, the five-day time period did not begin to run until the date of the last request made to the PTP, as long as the 14-day time limit was not breached.

Most workers’ compensation professionals strive to meet every time limit, but the ability to do so may not be a reality. Even the best of us are going to miss one periodically. If it happens, remember that the applicant is not automatically entitled to the treatment at issue. The Bodam panel reinforced that even though the decision shifts to the purview of the WCJ, medical necessity of the treatment request still must be supported by substantial evidence in light of the entire record.

In the end, claims professionals must be vigilant in communicating UR decisions immediately upon receipt. It is also exceedingly important that the initial communication by telephone, fax or email be documented, because failure to do so can make the UR decision untimely even if every other time limit is met.

David Chun is managing shareholder in Grancell, Stander, Reugens, Thomas and Kinsey's Fresno office. This column was reprinted with permission from the law firm's Quarterly Review newsletter.