State Compensation Ins. Fund v. W.C.A.B.
| Decision Date | 03 July 2008 |
| Docket Number | No. S149257.,S149257. |
| Citation | 44 Cal. 4th 230,79 Cal.Rptr.3d 171,186 P.3d 535 |
| Court | California Supreme Court |
| Parties | STATE COMPENSATION INSURANCE FUND, Petitioner, v. WORKERS' COMPENSATION APPEALS BOARD and Brice Sandhagen, Respondents. Brice Sandhagen, Petitioner, v. Workers' Compensation Appeals Board and State Compensation Insurance Fund, Respondents. |
Robert W. Daneri, Suzanne Ah-Tye and Don E. Clark, San Francisco, for Petitioner and for Respondent State Compensation Insurance Fund.
Law Offices of Saul Allweiss, and Michael A. Marks, San Francisco, for California Workers' Compensation Institute as Amicus Curiae on behalf of Petitioner and Respondent State Compensation Insurance Fund.
Sweeney and Forbes and Marguerite Sweeney, Redding, for Respondent and for Petitioner Brice Sandhagen.
David Bryan Leonard for California Society of Industrial Medicine & Surgery, Inc., as Amicus Curiae on behalf of Respondent and Petitioner Brice Sandhagen.
Hinden, Grueskin, Rondeau & Breslavsky, Graiwer & Kaplan and Charles R. Rondeau, Los Angeles, for California Applicants' Attorneys Association as Amicus Curiae on behalf of Respondent and Petitioner Brice Sandhagen.
Neil P. Sullivan and Vincent Bausano, for Respondent Workers' Compensation Appeals Board.
This case presents two related workers' compensation issues: (1) When deciding whether to approve or deny an injured employee's request for medical treatment, must an employer conduct utilization review pursuant to Labor Code section 4610?1 (2) As an alternative to utilization review, may an employer elect to dispute a request for medical treatment under section 4062, which permits an employer to object to "a medical determination ... concerning any medical issues ... not subject to Section 4610...."? (§ 4062, subd. (a).) We conclude the Legislature intended to require employers to conduct utilization review when considering requests for medical treatment, and not to permit employers to use section 4062 to dispute employees' treatment requests. The language of section 4610 and 4062 mandates this result; this conclusion is especially clear when the language of those statutes is read in light of the statutory scheme and the omnibus reforms enacted by the Legislature in 2003 and 2004. (Sen. Bill No. 228 (2003-2004 Reg. Sess.) (Senate Bill No. 228); Sen. Bill No. 899 (2003-2004 Reg. Sess.) (Senate Bill No. 899).) Accordingly, we reverse the Court of Appeal's contrary judgment and remand for further proceedings consistent with our decision.
In October 2003, a car struck Brice Sandhagen while he was working as a foreman on a road construction project.2 He injured his neck, back, left elbow, and left wrist and has received medical treatment continuously since the accident. Sandhagen's physician referred him to SpineCare Medical Group, Inc., for a joint consultation by Drs. Goldthwaite and Josey. The physicians recommended a magnetic resonance imaging (MRI) test of Sandhagen's spine to determine if disc herniations or disc degeneration was causing his pain. The physicians submitted a report to Sandhagen's employer's insurer, State Compensation Insurance Fund (State Fund), on May 24, 2004, with a request to authorize the recommended MRI.
State Fund referred the matter to Dr. Krohn for "utilization review."3 On June 11, 2004, when State Fund did not communicate its decision within the 14-day statutory deadline (§ 4610, subd. (g)(1)), Sandhagen requested an expedited hearing. Ten days later (before the expedited hearing but 28 days after the MRI authorization request was submitted), Dr. Krohn sent a written denial of the medical treatment request, citing new medical treatment guidelines.
An expedited hearing took place on July 15, 2004, on the sole issue of the need for the recommended MRI. The workers' compensation judge found that State Fund's failure to comply with the statutory deadlines precluded it from relying on the utilization review process or Dr. Krohn's report to deny Sandhagen treatment. Only Dr. Goldthwaite's report remained admissible. The workers' compensation judge, finding the MRI authorization request to be consistent with the new treatment guidelines, ordered State Fund to authorize the MRI.
State Fund sought reconsideration by the Workers' Compensation Appeals Board (WCAB). State Fund argued that the consequences for failing to comply with utilization review guidelines are set forth in section 4610, subdivision (i), which provides for administrative penalties, and in section 4610.1, which allows possible penalties for delay, and that nothing in the statutory scheme allows for the exclusion of a utilization review report. Sandhagen disagreed, contending section 4610, subdivision (g) requires an employer to meet specific deadlines and that State Fund's failure to comply with the deadlines meant that it could not rely on the utilization review process to justify denial of treatment. In addition, Sandhagen argued that the workers' compensation judge properly excluded Dr. Krohn's denial letter. He further argued that he had met his evidentiary burden to prove that the requested treatment was medically reasonable and necessary.
The WCAB granted reconsideration. Due to the important legal issues presented and in order to secure uniformity of future decisions, the matter was assigned to the WCAB as a whole for an en banc decision. On November 16, 2004, the WCAB issued its decision, holding that the section 4610 deadlines are mandatory and State Fund's failure to meet the deadlines means that, with respect to the particular medical treatment dispute in question, it was precluded from using the utilization review process or any utilization review report it obtained to deny treatment. However, the WCAB also held that, while precluded from using the utilization review process, State Fund could nonetheless dispute the treating physician's treatment recommendation using the dispute resolution procedure set forth in section 4062.4 Accordingly, the WCAB vacated the workers' compensation judge's determination that Sandhagen was entitled to the MRI and instead gave State Fund an opportunity to proceed under section 4062.
State Fund filed a petition for writ of review. Sandhagen also sought review, specifically of the portion of the decision that held that State Fund could object to the treatment authorization under section 4062, notwithstanding its failure to comply with the procedures set forth in section 4610. The Court of Appeal granted both petitions.
The Court of Appeal affirmed both of the WCAB's holdings. The Court of Appeal agreed that State Fund's failure to comply with the mandatory deadlines precluded State Fund from using the process to deny Sandhagen's request for medical treatment. However, as did the WCAB, the Court of Appeal concluded that State Fund could nonetheless object to the medical treatment request under the dispute resolution process set forth in section 4062, reasoning that an employer is not required to use the utilization review process when considering employees' requests for medical treatment. We granted Sandhagen's petition for review.5
This case requires us to determine the meaning and effect of section 4610, in which the Legislature established the utilization review process, in relation to section 4062, which generally governs disputes between injured employees and their employers regarding "medical issues ... not subject to Section 4610...."6 In determining that the Legislature intended for employers' review of employees' medical treatment requests to be governed solely by section 4610, rather than section 4062, we rely primarily on the clear statutory language. (Hsu v. Abbara (1995) 9 Cal.4th 863, 871, 39 Cal.Rptr.2d 824, 891 P.2d 804.) In addition, comparing the current statutory scheme with previous iterations provides further support for our conclusion.
Section 4610 requires that "[e]very employer ... establish a utilization review process in compliance with this section" (id., subd. (b)), defining utilization review as "functions that prospectively, retrospectively, or concurrently review and approve, modify, delay, or deny, based in whole or in part on medical necessity to cure and relieve, treatment recommendations by physicians ..." (id., subd. (a)). Notwithstanding the breadth of this statutory directive, State Fund claims that section 4610 simply requires employers to "establish" a utilization review process, but does not require employers to actually use the process. We find this argument unpersuasive. Having broadly defined utilization review, and requiring every employer to establish such a process at considerable expense and with numerous statutory safeguards (discussed in further detail below), it is unlikely that the Legislature intended to allow employers to circumvent the process whenever an employer felt it expedient. To the contrary, the statutory language indicates the Legislature intended for employers to use the utilization review process when reviewing and resolving any and all requests for medical treatment.
Believing that it can "opt out" of the review process, State Fund claims that it can instead utilize the more general section 4062 dispute resolution procedures. Not so. State Fund's assertion is belied by the language of section 4062 itself. The statute permits employers to object to a treating physician's medical determinations, but only to those determinations regarding "medical issues not covered by Section 4060 or 4061 and not subject to Section 4610 ...." (§ 4062, subd. (a), italics added.) By contrast, section 4062 explicitly permits employees to use its provisions to object to an employer's "decision made pursuant to Section 4610 to modify, delay, or deny a treatment recommendation...." (Id., subd. (a), italics added.) In summary, section...
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