Clearing the Confusion About <i>Sandhagen</i> and UR

Tuesday, February 13, 2007 | 0

By Marguerite Sweeney

I read a WorkCompCentral article that said "...State Fund will have an opportunity to argue before the California Supreme Court why missed deadlines shouldn't lock out an employer or carrier from the utilization-review process.

"State Fund failed to comply with the mandatory deadlines of Labor Code Section 4610(g)(1), in giving timely utilization review of treatment for Brice Sandhagen. A workers' compensation judge ruled that, as a result, the carrier could not introduce its doctor's report as evidence."

As you now know, State Fund did not appeal the decision of the appellate court, which held that the timelines in 4610 are mandatory, and failure of the insurer to meet the deadlines makes their UR doctor's report inadmissible and voids the UR process. State Fund did not petition the Supreme Court for review.

Rather, the Supreme Court granted review of Brice Sandhagen's petition (my client), which objects to the lower court's additional holdings that UR under 4610 is optional, not mandatory, and that the insurer can instead object to treatment directly under 4062. I believe that UR under 4610 is mandatory for all treatment requests, and that the 4062 dispute resolution process is unavailable to the insurer, except derivatively after they have followed 4610 and the employee has then objected under 4062.

There is considerable confusion in the work comp community about Sandhagen and UR. One reason is that the colloquial definition of UR usually refers to treatment requests that are reviewed by a UR doctor. But by definition under 4610, UR also includes approval of a treatment request by an adjuster, without UR medical review. That, too, is "UR." The 3rd DCA didn't grasp that point, which is clear from their opinion. (They made an example of simple approval of a treatment request, to show that UR under 4610 would be unnecessarily costly and burdensome. But in fact, their example constitutes proper UR under 4610, without cost or burden.)

Another area of confusion is the mistaken idea by some that an employee will receive the requested treatment "by default," when UR is untimely.

Again, the appellate court incorrectly suggested this result in their published opinion, but they were mistaken. I.e., the treating doctor presumption is gone, replaced with new presumptively correct treatment guidelines. The applicant must prove that the treatment meets those guidelines or, if not, rebut the presumption with evidence-based guidelines or another compelling basis. At the original expedited hearing in Sandhagen, both parties submitted pertinent ACOEM guidelines to support their position. The trial judge found that the requested MRI was consistent with ACOEM guidelines.

It is critical that the work comp community understand that untimely UR:

1) does not mean that the injured employee gets the requested treatment by default. The treatment must still comply with new treatment guidelines, and the defendant may still dispute the request. (e.g. insurer may still point out ACOEM guidelines disapproving the treatment, and/or challenge the treating doctor's report, etc.);

2) the inability of the insurer to use UR/4610 only affects the specific request that was not acted upon within the statutory guidelines. The insurer continues to handle future treatment requests, under 4610, regarding the particular employee.

It's my belief that the appeals board, and then the 3rd DCA, misread, misunderstood, and misinterpreted the statutes that govern medical treatment issues and failed to understand how 4610 fits within the overall new statutory scheme.

Section 4610 and revised 4062 must be viewed as part and parcel of the entire revision of workers' compensation, and particularly in light of 4600(b) and 4604.5 which re-define and limit treatment that is available to injured employees. A big change, codified in 4610, is that treatment requests are now subject to limited medical review. Decisions to deny, modify or delay authorization must be reviewed by a qualified doctor. This means that a medical dispute or objection must come from someone who is qualified to render medical opinions. A claims adjuster alone cannot object to treatment; there must be a medical opinion that disagrees with the treatment request.

The lower courts' decisions have created additional delays and difficulties obtaining necessary treatment to the injured employees, and has also rendered 4610 superfluous (because they say its use is discretionary, so why have it at all).

The misuse of UR by some insurers is causing real and sometimes irreparable harm to many injured workers. This misuse occurs under 4610, and now, because of the Sandhagen decision, also occurs via 4062. A claims administrator's decision to object to a treatment request is a UR decision, but it falls under 4062 and outside of 4610 under the judicial construction applied by the appellate court. Therefore, the strict timelines under 4610 are avoided, and delays are increased.

Now that the A.D. (acting Administrative Director Carrie Nevans) has proposed the penalties against insurers for 4610 violations, some in industry are advising that they will ignore 4610 completely and use 4062. This makes sense from their perspective: They will have 20 days, rather than the usual five, to respond to the treatment request, and they will avoid the A.D. penalties.

I believe these are unintended consequences of SB228 and 899. I also believe that prompt, quality treatment is the most important legal benefit to injured employees, and is promised by our California Constitution. I hope that the Supreme Court agrees.

Marguerite Sweeney is a workers' compensation lawyer located in Redding, Calif.

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