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Jacobsmeyer: 3rd District Upholds Validity of IMR Process

By Jake Jacobsmeyer

Thursday, March 30, 2017 | 681 | 0 | min read

The 3rd District Court of Appeals has issue its decision in Ramirez v. WCAB, again upholding the constitutionality of the IMR process for review of UR determinations and providing, perhaps, some additional nuggets for potential challenges on the WCAB decision in Dubon II concerning the authority of the board to review medical decisions.

Jake Jacobsmeyer

Jake Jacobsmeyer

Ramirez is the third in a series of cases where applicant attorneys have attempted to challenge the constitutionality of the independent medical review process on various grounds.  In two prior decisions (Stevens v. WCAB and Margaris v. WCAB), different districts of the Courts of Appeal had rejected constitutional challenges to the IMR process based on similar arguments presented by the applicant in this case.

While the applicant’s arguments in this appeal were somewhat broader than either of the prior appeals, the court’s rejection was just as emphatic. Ramirez’s challenge to IMR was based on multiple arguments:

  • He argued that the underlying utilization review was based on an incorrect standard, in effect appealing the UR determination itself to the court. This argument was rejected by the court on the grounds that the attack was at the heart of the determination of medical necessity, a determination that Labor Code  4610.6(c) prohibits the court from making. The court noted that the applicant's attorney did not argue that the IMR reviewer used an improper standard and that even if he did, the court could review only nonsubstantive reasons as set out in Labor Code  4610.6(h).
  • Ramirez also challenged the constitutionality of the IMR process, arguing that it violates the separation of powers clause as well as state and federal principles of due process. Both of these arguments were rejected in much the same manner as the court in Stevens had rejected similar argument.
  • Ramirez argued that the Workers' Compensation Appeals Board's decision in Dubon II, which limited its authority to review UR determinations to the timeliness of the decisions, was incorrectly decided and that other flaws in the UR process should allow the board to assume jurisdiction over medical treatment issues. The court specifically rejected the argument that the WCAB had jurisdiction to review an IMR determination, on the ground that the UR determination did not use the medical treatment utilization schedule (MTUS).

It is on this last point that the court’s language becomes interesting. The court reviewed the history of the Dubon decisions and the progression, from an expansive view of the WCAB’s authority to the much narrower result in Dubon II limiting the WCAB’s authority to review only timeliness. The court does note that in Dubon II, where a UR determination is late, the WCAB could determine the medical necessity for the proposed treatment. 

After reviewing the WCAB decision and Cal Code Regs Tit. 8 §10451.2, the court goes on to state:

“To the extent the board has any jurisdiction to review a utilization review as provided by this regulation, it has jurisdiction only over nonmedical issues such as timeliness of the utilization review as stated in the Final Statement of Reasons and Dubon II. We are not presented with a nonmedical issue. Any question that has the effect of assessing medical necessity is a medical question to be conducted by a qualified medical professional by way of independent medical review. (§ 4610.6, subd. (i) ['In no event shall a workers’ compensation administrative law judge, the appeals board or any higher court make a determination of medical necessity contrary to the determination of the independent medical review organization.'].) Whether the utilization reviewer correctly followed the medical treatment utilization schedule is a question directly related to medical necessity, and is reviewable only by independent medical review.”

While the court does not specifically indicate that the WCAB was incorrect in Dubon II in its ruling that an untimely UR determination vests jurisdiction on medical issues, the above language certainly at least implies that any medical determination is beyond the WCAB’s authority.  

In the instant case, the court held there was not a basis to challenge the UR decision, as it was timely and the other issues were not subject to WCAB review. The bolded language in the above quote certainly gives food for thought, and perhaps some additional basis to challenge the WCAB’s holding in Dubon II, which has not been given a serious challenge at the appellate level.

Comments and conclusions

That this court essentially followed the logic and reasoning of the prior appellate cases on this issue certainly suggests that the options for challenging the IMR process are rapidly closing.  

While there are still a couple of additional challenges pending in the appellate courts (Zuniga in the 1st District, challenging on one of the issues raised here that the limitation on disclosure of the IMR doctor prohibited the applicant’s ability to challenge the doctor on bias, conflict of interest, etc.; and the Southard and Baker cases, addressing the issue of validity of late IMR, as previously addressed in the negative in Margaris), so far the appellate courts have shown little interest in challenging the Legislature’s authority to create and mold the workers’ compensation system. 

As one who has consistently believed that the WCAB exceeded its jurisdiction in deciding it could address medical issues in Dubon II — in spite of the strongly stated legislative purpose prohibiting exactly that conduct — I am cautiously optimistic that if someone challenges that decision, even the WCAB might have second thoughts about maintaining this ability.

Richard M. "Jake" Jacobsmeyer is a founding partner of the Shaw, Jacobsmeyer, Crain and Claffey workers' compensation defense law firm, based in Oakland.

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