Immediate Medical Care - SB 899 Two Years Later - Part 2

Saturday, July 1, 2006 | 0

The following is an excerpt from the recently published treatise on the two-year anniversary of SB 899 by attorney Michael Sullivan. The full document can be downloaded here.

Section 5402 of the Labor Code is well known by all parties in the system. That section provides that a claim must be accepted or denied in ninety days.

This section has been amended to indicate that an employer must provide medical treatment to the applicant in the period before any denial issues. Specifically, the new Labor Code Section 5402(c) specifies that within one working day after the employee files a claim form, the employer must authorize the provision of all treatment consistent with the utilization guidelines. This treatment is to continue until the date that liability for the claim is accepted or rejected. This takes effect for those cases where the claim form is received from the employee on or after April 19, 2004.

The incredibly important case of Honeywell v. WCAB (Wagner) (2005) 70 CCC 97 was handed down by the Supreme Court after SB 899. It spoke to the issue of timely denial under Section 5402(b). The ninety days to deny a case according to Honeywell begins to run, absent egregious behavior on the part of the employer, only when the completed claim form is received back from the employee, and not upon notice of industrial injury alone. At that point it is considered "filed". As discussed in the section on medical treatment herein, treatment is due from the filing of a claim form, with some qualifications.

There is a $10,000 limit on the expense of this medical treatment up until the time of denial or acceptance of the claim. Furthermore, it is specified in Labor Code Section 5402(d) that this treatment provided does not give rise to a presumption of liability.

This rule has caused some level of consternation. From the defense perspective, the applicant is now entitled to benefits even before it is established that a work related injury exists. It is not inconceivable that a person explicitly manufacturing a false claim could receive extensive medical benefits under this new rule. In fact this has probably already happened more than once. It has been pointed out that Labor Code Section 3602(c) states explicitly that if industrial injury did not occur, "the liability of the employer shall be the same as if this Division had not been enacted." There is a contradiction here.

There is no reason to think that this requires the provision of unwarranted care, nor does it require care in excess of mandated standards, (i.e., the ACOEM guidelines). Nevertheless, it has been held by at least one local Judge (in the case of Heike Ruvalcaba v. Scott Roberg,WCAB No. (OXN 0129714)), that a lien claim for treatment done before a denial issues is compensable, even if the lien claim is filed after the denial date. The lien claimant would be wise to submit the bill quickly in cases where there is a prospective denial and it looks as though the $10,000 will be used up rather quickly. The adjuster should keep track of payouts before the denial.

The defense is well advised these days to deny a case quickly if possible. Accordingly, we are seeing many adjusters become circumspect about how much evidence is required to sustain a denial that will hold up under the scrutiny of an audit. Gone are the days of full-blown discovery, complete with a deposition, one or more QMEs, subpoenaed records, etc., performed on every case before a denial issues. Only a "factual, legal, or medical basis" per Regulation Section 10111 and Section 10111.1 is required. Accordingly, an indication from the insured that a case has no merit should be followed up quickly with an investigation sufficient to support a denial. The only question should be if there is a sufficient basis for denial. If further discovery warrants, the case can always be picked up later.

If medical evidence is required, the med-legal process should be delayed, if feasible, in favor of an opinion by the treating physician. With networks in place, the initial opinion of the treating physician in this situation can perhaps be obtained quickly, and without bias against the defense. Also, there is no statutory bar against communications with this physician. The medical legal process in its new form requires a panel QME or an AME, and often these evaluations cannot be obtained within the ninety days; even if they can, the defense can run through a lot of medical costs in a suspect case before the report comes in. The Labor Code reiterates in several places that the treating doctor's opinion is admissible as evidence.

Some have suggested obtaining a speedy evaluation under Labor Code Section 4050. As further discussed in the section on medical-legal evaluations, there may be some question as to the defense's entitlement to obtain these evaluations, as Labor Code Section 4060 prohibits any medical-legal evaluation to determine the question of compensability other than the procedures outlined in Sub-Section 4062.1 and 4062.2. Almost certainly, these reports will not be admissible. If an applicant objects, the defense may not be allowed to force attendance.

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