The Demise of Dreaded Rule 30?

Wednesday, July 14, 2010 | 0

By Ted Richards
Grancell, Lebovitz, Stander, Reubens and Thomas
 
It has been dubbed the Dreaded Rule 30.  It is a trap for the unwary and despised by defendants and their attorneys.  It has its own six page article in the December 2009 update to the Workers’ Compensation Laws of California, 2010 Edition (the Blue Book).
 
However, its reign of terror appears to have ended.  On June 3, the WCAB ruled, en banc, that Administrative Director (AD) Rule 30(d)(3) is invalid, and suggested that a similar fate awaits AD Rule 30(d)(4).
 
Rule 30(d)(3) provides that: “Whenever an injury or illness claim of an employee has been denied entirely by the claims
administrator, or if none by the employer, only the employee may request a panel of Qualified Medical Evaluators.…”   The rule clearly created a quandary for defendants during the 90-day presumption period of Labor Code section 5402, particularly in light of liability under section 5402 for up to $10,000 in medical care prior to denial of a claim.  
 
For example, when a defendant has a legitimate factual or legal basis to deny a case, there is an incentive to deny the case as early as possible to cut off section 5402 medical liability.  However, under Rule 30(d)(3), if such a denial occurs too early and the factual defense fails, the defendant faces a situation where it has no medical-legal recourse available to rebut a PTP’s opinion on causation.
 
Prior to the demise of Rule 30(d)(3), the safest course when a reasonable basis for denial existed was to request a panel as soon as possible during the section 5402 presumption period and promptly follow the panel request with a denial.  Such a course no longer appears necessary.
 
In its decision in Amelia Mendoza v. Huntington Hospital (en banc) (June 2010), the WCAB held that AD Rule 30(d)(3) is invalid because it is inconsistent with Labor Code sections 4060(c), 4062.2, and 5402(b).  The WCAB ruled that sections 4062 and 4062.2, when read together, provide that either party may make a QME panel request at any time after the filing of the claim form. The WCAB also noted that forcing a defendant to obtain an order from the WCAB compelling the Medical Director to issue a QME panel on compensability, which was defendant’s recourse under Rule 30, could significantly delay resolution of claims.
 
In effect, the ruling allows the defendant to deny a claim as soon as it has reasonable grounds to do so, and still obtain a panel QME at a later time when the case so warrants. This result is consistent with due process and provides the defendant with the necessary tools to investigate compensability and act upon that investigation within the time frame of section 5402, without risking a presumption of compensability or losing the ability to complete medical discovery.
 
The sequel to the Mendoza case will no doubt involve the validity of AD Rule 30(d)(4). If the 90-day period under section 5402 has expired without a denial, Rule 30(d)(4) requires a finding and decision from a workers’ compensation judge (1) that the section 5402 presumption has been rebutted and (2) that a QME panel should issue on compensability.  Only then will the Medical Director issue a panel.  In footnote 11 of Mendoza, the WCAB acknowledged that AD Rule 30(d)(4) was not at issue in that case, but noted that the rule appears to place a defendant in a Catch-22 situation where the defendant cannot obtain a panel QME on industrial causation unless it rebuts the 5402 presumption but cannot rebut the presumption unless it obtains a panel QME on industrial causation. It appears that the WCAB is inviting a challenge of Rule 30(d)(4).

Ted Richards is a managing shareholder in the Sacramento office of the Grancell law firm, which operates 10 offices in California. This column was reprinted with the firm's permission from its quarterly newsletter.