The Practical Effects of Sandhagen and Willette - Part 2

Tuesday, December 28, 2004 | 0

This if the second part of a two part series by York McGavin examining the effects of the recent Workers' Compensation Appeals Board En Banc decisions in Brice Sandhagen vs. Cox & Cox Construction, Inc. (69 CCC (2004); En Banc, WCC 30652004 CA) and Michael A. Willette vs. AU Electric Corporation; and State Compensation Insurance Fund (68 CCC 1298 (2004); En Banc, WCC 30322004 CA) on lien claimant rights, and the practical effect on provider billing issues.

by York McGavin

Willette teaches us that when a proposed course of treatment is denied by a utilization review (UR), the injured worker (IW) is to timely initiate the panel qualified medical examiner (PQME or QME) process outlined in LC 4062. In Willette, Mr. Willette was given a "one-time free-pass" by the en banc panel and allowed to initiate the PQME process despite the fact that the request would be untimely.

Sandhagen teaches us that when the UR denial is untimely, the PQME will be forbidden from even seeing it. In addition, the WCJ is prohibited from allowing the untimely UR denial to be introduced into evidence. Here the State Compensation Insurance Fund (SCIF) was also given a one-time free-pass by the en banc panel and allowed to untimely initiate an Agreed Medical Evaluator (AME) or PQME evaluation, albeit without the AME or PQME reviewing the untimely UR denial.

The Sandhagen and Willette en banc decisions both concentrate heavily on the definition of the word "shall" as being mandatory, leaving no doubt that the interpretation of the word "shall" is not permissive or optional. Simply put, the word "shall" means "must" and it connotes a mandatory duty. (See Sandhagen, at pages 5-6.)

The time frame to issue a UR denial is delineated as a 'bright-line' rule that must be observed. (See Sandhagen) Similarly, the time frames to request an AME or a PQME are delineated as 'bright-line' rules that must be observed. (See Willette)

A review of CCR 10608(a) reveals:
"After the filing of an Application for Adjudication, if a party is requested by another party or lien claimant to serve copies of physicians' reports relating to the claim, the party receiving the request shall serve copies of the reports on the requesting party or lien claimant within six (6) days of the request; the party receiving the request shall serve a copy of any subsequently-received physician's report within six (6) days of receipt of the report."

Similarly, a review of CCR 10561 reveals:
"Failure to timely serve evidentiary documents, including but not limited to medical reports pursuant to rule 10608, shall be deemed a bad faith action or tactic that is frivolous or solely intended to cause unnecessary delay unless that failure resulted from mistake, inadvertence, or excusable neglect."

I have found that CCR 10608(a) demands by a lien claimant are routinely ignored by the payors. Sometimes, the DA for the payor will serve the medical records/reports on the demanding lien claimant prior to a lien conference, but most of the time it takes an Order from the WCJ to get the medical records/reports and the lien conference is continued.

It will be interesting to see if the WCAB continues this trend of a strict application of the word "shall" in Willette and Sandhagen to a CCR 10608(a) demand that is ignored by the payor. Will the WCAB find that failure to comply with the 'bright-line' rule for service of medical records/reports, within six (6) days from receipt of the demand result in automatic exclusion per CCR 10622? We will just have to wait and see.

I will be testing the waters on this issue.

It will also be interesting to see if the WCAB follows this line of reasoning in regards to a petition for costs/sanctions, pursuant to CCR 10561, when a lien conference is continued due to the failure of the payor, or the DA, to timely serve all medical records/reports.

After all, the language in CCR 10561 states on its face that "failure to timely serve... medical reports pursuant to rule 10608, shall be considered a bad-faith action or tactic that is frivolous or solely intended to cause unnecessary delay..."

When a lien conference is continued, due to the failure to timely serve medical records/reports upon receipt of numerous earlier CCR 10608(a) demands, the offending party is entitled to a hearing to determine if the failure "resulted from mistake, inadvertence, or excusable neglect." If the WCJ finds that no "mistake, inadvertence, or excusable neglect" exempted the payors failure to timely serve the medical records/reports, will costs/sanctions be automatic for the waste of the hearing representative's time at the first aborted lien conference? Again, we will just have to wait and see.

I will be testing the waters on this issue as well.

I can already envision a DA whining to the WCJ that the payor's failure to timely serve medical records/reports within six (6) days from receipt of a CCR 10608(a) demand, "resulted from mistake, inadvertence, or excusable neglect" even though the payor received ten (10) separate CCR 10608(a) demands over a two-year period. Will this be a practical effect of Willette and Sandhagen? We will just have to wait and see.

by York McGavin. York can be contacted at ymcgavin@socal.rr.com.

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