CalChamber in Court: Protecting Workers’ Comp Independent Medical Review

Oral arguments have been set in a workers’ compensation case that deals with the constitutionality of the independent medical reviews (IMR) that were part of the cost-saving reforms of 2012.

The oral arguments in the case of Ramirez v. Workers’ Compensation Appeals Board (WCAB), et al., will be presented on March 20 in the Third Appellate District Court.

The California Chamber of Commerce filed a friend-of-the-court brief, arguing that the Legislature must be allowed to exercise its constitutionally granted powers to address the ever-increasing burdens on California’s Workers’ Compensation system by ensuring that medical necessity decisions are consistent, and made by medical professionals. The brief was prepared for the CalChamber by Ted Penny of Haight Brown & Bonesteel.

The CalChamber brief argues that as part of the difficult responsibility of designing and promulgating the state Workers’ Compensation system, the California Legislature must balance the medical needs of injured employees against the ever-increasing costs imposed on the system and on the employers responsible for ensuring that injured employees are provided with necessary medical treatment.

The Legislature designed the IMR process to increase efficiency for treatment disputes and to ensure physicians, not judges, make medical decisions.

The petitioner in this case argues the opposite, that instead, a judge must determine whether treatment is medically necessary, and that the IMR process denies the petitioner his right of due process.

Does Not Violate Due Process

The CalChamber brief points out that the petitioner’s dissatisfaction with the Legislature’s exercise of its constitutionally granted power, set forth in Section 4 of Article XIV of the California Constitution, falls short of showing that he is deprived of due process.

The first step in an IMR begins when an employee’s treating physician makes a treatment recommendation. The recommendation is submitted to the employer’s utilization review process for a determination of whether to approve, modify, delay, or deny the recommended treatment. A medical director designated by the employer or insurer reviews all information that is “reasonably necessary” to make the determination. The medical director’s decision shall be consistent with the medical treatment utilization schedules adopted pursuant to Labor Code section 5307.27 (f)(2). Therefore, the IMR process does not come into play until the utilization review makes a factual determination about whether the recommended treatment is medically appropriate.

This process means IMR is itself an appeal, the brief points out. IMR constitutes a second level of fact-finding and medical record review to answer the limited question of whether a particular course of treatment is medically appropriate. The IMR physician therefore resolves the dispute between the employer’s utilization review and the employee’s treating physician.

Other Arguments Refuted

The petitioner also argued that the Workers’ Compensation law as outlined in Labor Code Section 4610.6 deprived him of substantial justice and violated the separation of powers clause of the California Constitution.

The CalChamber brief refuted both arguments, pointing out that the Workers’ Compensation law is aimed toward achieving substantial justice expeditiously, inexpensively, and without encumbrance.

Although the Legislature may have previously provided for a different method and manner of reviewing medical decisions, this fact does not deem that method to be the only one that is constitutionally acceptable. Section 4 unambiguously provides the Legislature with the power to fix, control, and undoubtedly, to limit the manner of review of decisions rendered by the tribunal or tribunals designated by it, the CalChamber explains in the brief.

CalChamber continues that such a policy decision was the Legislature’s to make in light of the demands on California’s Workers’ Compensation system, and in an effort to avoid the encumbrance of time-consuming procedures that lead to potentially unfair, inconsistent, and non-scientifically based medical decisions.

Although the petitioner and, admittedly, the WCAB, may disagree with the effect that Section 4610.6 has on the WCAB’s power to change conclusions related to medical necessity, such was the effect expressly intended by the Legislature in enacting that section. The Legislature sought to put all such decisions on what is necessary medical treatment in the hands of medical professionals “to ensure that treatment decisions are consistent and based on the highest standards of evidence-based medicine,” the brief states.

In arguing that the Workers’ Compensation law violates the separation of powers clause, the petition wrongly assumed that the law precludes any judicial review of an IMR decision. In fact, the law provides five ways in which an applicant may appeal an IMR decision, the CalChamber brief explains.

Next Step

The court has 90 days to issue its ruling following the March 20 oral arguments.

Staff Contact: Heather Wallace