King v. Comppartners, Inc.

• Decision Date: 23 August 2018
• Docket Number: S232197
• Citation: 5 Cal.5th 1039,423 P.3d 975,236 Cal.Rptr.3d 853
• Parties: Kirk KING et al., Plaintiffs and Appellants, v. COMPPARTNERS, INC., et al., Defendants and Respondents.
• Court: California Supreme Court

5 Cal.5th 1039

423 P.3d 975

236 Cal.Rptr.3d 853

Kirk KING et al., Plaintiffs and Appellants,

v.COMPPARTNERS, INC., et al., Defendants and Respondents.

S232197

Supreme Court of California.

Filed August 23, 2018

Law Offices of Patricia A. Law, Patricia A. Law, Jonathan A. Falcioni, Riverside; Arias & Lockwood and Christopher D. Lockwood, San Bernadino, for Plaintiffs and Appellants.

Smith & Baltaxe and Bernhard Baltaxe for California Applicants' Attorneys Association as Amicus Curiae on behalf of Plaintiffs and Appellants.

Francisco J. Silva, Long X. Do, Lisa Matsubara and Stacey B. Wittorff, Sacramento, for California Medical Association as Amicus Curiae on behalf of Plaintiffs and Appellants.

Charles Edward Clark, Pasadena, for California Society of Industrial Medicine and Surgery, Inc., as Amicus Curiae on behalf of Plaintiffs and Appellants.

Joshua S. Meltzer, San Francisco; Munger, Tolles & Olson, Fred A. Rowley, Jr., Jeffrey Y. Wu, Los Angeles; Murchison & Cumming, William D. Naeve, Ellen M. Tipping, Terry L. Kesinger and David A. Winkle, Irvine, for Defendants and Respondents.

Law Offices of Alweiss & McMurtry and Michael A. Marks, San Francisco, for California Workers' Compensation Institute and American Insurance Association as Amici Curiae on behalf of Defendants and Respondents.

Crowell & Moring, David D. Johnson ; Lewis Brisbois Bisgaard & Smith and Raul L. Martinez, Los Angeles, for National Association of Independent Review Organizations, Coventry Health Care Workers Compensation, Inc., and ExamWorks, Inc., as Amici Curiae on behalf of Defendants and Respondents.

Mary C. Wickham, County Counsel (Los Angeles), Ralph L. Rosato, Assistant County Counsel, Derrick M. Au, Principal Deputy County Counsel, Susan T. Collins and Emily A Grospe, Deputy County Counsel, for County of Los Angeles as Amicus Curiae on behalf of Defendants and Respondents.

Finnegan, Marks, Theofel & Desmond and Randall G. Poppy for California Chamber of Commerce, the National Council of Self-Insurers, Property Casualty Insurers Association of America doing business in California as Association of California Insurance Companies (PCI) and CAJPA as Amici Curiae on behalf of Defendants and Respondents.

Fred J. Hiestand, Sacramento, for the Civil Justice Association of California as Amicus Curiae on behalf of Defendants and Respondents.

KRUGER, J.

By statute, California’s workers' compensation system provides an injured employee’s "exclusive" remedy against an employer for compensable work-related injuries. ( Lab. Code, § 3602, subd. (a).) Here we consider the application of workers' compensation exclusivity to claims arising from the workers' compensation utilization review process. Through that process, utilization reviewers, acting on behalf of employers, determine whether the plan recommended for the treatment of an employee’s industrial injury is medically necessary after consulting a schedule of uniform treatment guidelines. If the utilization reviewer concludes that a recommended treatment is not medically necessary, he or she may modify or deny the treatment request. ( Lab. Code, § 4610.)

In this case, a utilization reviewer denied a treating physician’s request to continue prescribing certain medication for an injured employee. Alleging that the utilization reviewer caused him additional injuries by denying the request without authorizing a weaning regimen or warning him of the possible side effects of abruptly ceasing the medication, the employee filed a lawsuit seeking recovery in tort. We conclude that the workers' compensation law provides the exclusive remedy for the employee’s injuries and thus preempts the employee’s tort claims.

I.

A.

First created more than a century ago, California’s workers' compensation system is now governed by the Workers' Compensation Act (WCA), "a comprehensive statutory scheme governing compensation given to California employees for injuries incurred in the course and scope of their employment." ( Charles J. Vacanti, M.D., Inc. v. State Comp. Ins. Fund (2001) 24 Cal.4th 800, 810, 102 Cal.Rptr.2d 562, 14 P.3d 234 ( Vacanti ); see Mathews v. Workmen’s Comp. Appeals Bd. (1972) 6 Cal.3d 719, 729–731, 100 Cal.Rptr. 301, 493 P.2d 1165 ; Lab. Code, §§ 3200 et seq. ) At the core of the WCA is what we have called the " ‘ "compensation bargain." ’ " ( Vacanti , supra , at p. 811, 102 Cal.Rptr.2d 562, 14 P.3d 234.) Under this bargain, " ‘the employer assumes liability for industrial personal injury or death without regard to fault in exchange for limitations on the amount of that liability.’ " ( Ibid. ) The employee, for his or her part, " ‘is afforded relatively swift and certain payment of benefits to cure or relieve the effects of industrial injury without having to prove fault but, in exchange, gives up the wider range of damages potentially available in tort.’ " ( Ibid. )

Under the WCA, an employer must provide an injured worker with all medical treatment reasonably required to cure or relieve the effects of his or her injury. ( Lab. Code, § 4600.) When an injured employee suffers an industrial injury, the employee reports the injury to his or her employer and then seeks medical care from a treating physician. After examining the worker, "the treating physician recommends any medical treatment he or she believes is necessary and the employer is given a treatment request to approve or deny." ( State Comp. Ins. Fund v. Workers' Comp. Appeals Bd. (2008) 44 Cal.4th 230, 238, 79 Cal.Rptr.3d 171, 186 P.3d 535 ( State Fund ).)

For many years, if an employer wished to challenge a treating physician’s recommendation, it had to invoke a "cumbersome, lengthy, and potentially costly" dispute resolution process involving review by qualified medical evaluators, litigation before a workers' compensation judge, and a right of appeal to the Workers' Compensation Appeals Board. (State Fund , supra , 44 Cal.4th at p. 238, 79 Cal.Rptr.3d 171, 186 P.3d 535 ; see id . at p. 239, 79 Cal.Rptr.3d 171, 186 P.3d 535.) To increase efficiency and reduce costs, the Legislature enacted several major reforms that took effect in 2004. These reforms included a process of mandatory utilization review, under which a reviewer assesses a treating physician’s recommendation according to a schedule that establishes uniform guidelines for evaluating treatment requests. ( Lab. Code, § 4610 ; see State Fund , at p. 240, 79 Cal.Rptr.3d 171, 186 P.3d 535 ; see also Smith v. Workers' Comp. Appeals Bd. (2009) 46 Cal.4th 272, 279, 92 Cal.Rptr.3d 894, 206 P.3d 430.)¹

Under the statute as amended, every employer is required to establish a utilization review process, "either directly or through its insurer or an entity with which an employer or insurer contracts for these services." ( Lab. Code, § 4610, former subd. (b), now subd. (g).) The utilization review process is "comprehensive," covering "any and all " treatment requests. ( State Fund , supra , 44 Cal.4th at pp. 236, 243, 79 Cal.Rptr.3d 171, 186 P.3d 535.) "If the treatment request is straightforward and uncontroversial, the employer can quickly approve the request—utilization review is completed without any need for additional medical review of the request." ( Id. at p. 241, 79 Cal.Rptr.3d 171, 186 P.3d 535 ; see id. at p. 240, 79 Cal.Rptr.3d 171, 186 P.3d 535.) But while an employer can unilaterally approve a treatment request, only a licensed physician competent to evaluate the "specific clinical issues" can modify, delay, or deny a treatment request. ( Lab. Code, § 4610, former subd. (e), now subd. (g)(3)(A).) The central issue for the utilization reviewer is whether the requested treatment is medically necessary. ( Id. , § 4610, subd. (a).) This medical necessity determination is to be made after consulting the schedule for medical treatment utilization ( id. , § 4610, former subds. (c), (f), now subds. (g)(1), (h) ), which is presumed to be "correct on the issue of extent and scope of medical treatment" (id. , § 4604.5, subd. (a); see ibid. [explaining that the presumption can be rebutted] ).

Labor Code section 4610 specifies the information on which utilization reviewers are to rely in making medical necessity determinations ( Lab. Code, § 4610, former subd. (d) ), as well as the timing of the determinations ( id. , § 4610, former subd. (g) ) and the nature of the explanations that must accompany the determinations ( id. , § 4610, former subd. (g)(4) ). When, for example, a utilization reviewer decides to deny the recommendation of a treating physician in the midst of treatment, that determination must be communicated to the requesting physician within 24 hours of the decision. ( Id. , § 4610, former subd. (g)(3)(A), now subd. (i)(4)(A).) In these so-called concurrent review cases, the statute provides that "medical care shall not be discontinued until the employee’s physician has been notified of the decision and a care plan has been agreed upon by the physician that is appropriate for the medical needs of the employee." ( Id. , § 4610, former subd. (g)(3)(B), now subd. (i)(4)(C).) The decision to deny the request must "include a clear and concise explanation of the reasons for the employer’s decision, a description of the criteria or guidelines used, and the clinical reasons for the decisions regarding medical necessity." ( Id. , § 4610, former subd. (g)(4), now subd. (i)(5).)

About a decade after it first instituted mandatory utilization review, the Legislature enacted a second set of reforms designed to streamline the resolution of disputes concerning utilization review determinations. (Stats. 2012, ch. 363, § 1, pp. 3719-3720.) The Legislature found that the then-existing dispute resolution system was "costly, time consuming, and [did] not uniformly result in the provision of treatment that adhere[d] to the highest standards of evidence-based medicine," all of which "adversely affect[ed] the health and safety of workers injured in the course of employment." (Id. , § 1, subd. (d), p. 3719.) To...