The law firm of Goldman, Magdalin & Krikes, LLP, makes regular news announcements to its clients and the workers' compensation community regarding significant events that are important and notable. Our news alerts appear on an irregular basis as important developments arise. The following is a compilation of recent news alerts covering key decisions since September 2007.
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Sandhagen v. Workers' Comp. App. Bd., 73 Cal. Comp. Cases --, 2008 Cal. LEXIS 7905
The California Supreme Court issued its decision in Sandhagen v. WCAB setting forth mandatory guidelines for utilization review procedures.
Utilization review is mandatory for employers. Employers may not rely on Labor Code 4062 to dispute medical treatment requests.
The important take-away points from the Sandhagen decision are as follows
- Utilization review is mandatory, not voluntary.
- An employer who approves a medical treatment request, has, in effect, performed utilization review on that request by issuing the approval.
- An employer who disputes a medical treatment request must use the utilization review procedures set forth in Labor Code Section 4610, and is constrained to the time frames of utilization review.
- An employer who disputes in medical treatment request may not use the procedures of Labor Code Section 4062. Only an employee may initiate the 4062 dispute resolution procedures, and must object in writing within 20 days to an adverse utilization review determination in order to initiate Labor Code 4062 dispute resolution process.
Bottom line: Employers must timely approve, or use utilization review to determine, all medical treatment requests. Failure to meet the timelines of Labor Code 4610 requires an employer to approve a medical treatment request. Employees must timely object (within 20 days, in writing) to an adverse utilization review determination in order to initiate the Labor Code 4062 dispute resolution process. An employee who fails to object timely is likely bound by the utilization review determination.
The Supreme Court discussed these principles in the following manner:
"… the language of sections 4610 and 4062 demonstrates that (1) the Legislature intended for employers to use the utilization review process in section 4610 to review and resolve any and all requests for treatment, and (2) if dissatisfied with an employer’s decision, an employee (and only an employee) may use section 4062’s provisions to resolve the dispute over the treatment request. An employer may not bypass the utilization review process and instead invoke section 4062’s provisions to dispute an employee’s treatment request. The correctness of this conclusion is particularly evident when the current statutory provisions are compared to prior schemes for handling employees’ treatment requests."
Accordingly, while medical review is not required if the employer approves the treatment request, section 4610 requires that a licensed doctor deny, delay, or modify the request. This represents a significant departure from the process in former section 4062, which permitted an employer or claims adjuster (without review by a physician) to object to a treatment request. (§ 4062, as amended by Stats. 2002, ch. 6, § 52.)
"While Senate Bill No. 899 did not alter the section 4610 utilization review process, it made a number of changes to the dispute resolution process in section 4062 that are particularly relevant here. First, the prior version of section 4062, subdivision (a) (Stats. 2003, ch. 639, § 17) permitted an employee or employer to object to a treating physician’s medical determination regarding “the permanent and stationary status of the employee’s medical condition, the employee’s preclusion or likely preclusion to engage in his or her usual occupation, the extent and scope of medical treatment, the existence of new and further disability, or any other medical issues not covered by Section 4060 or 4061 . . . .” (Italics added.) The Legislature amended section 4062, subdivision (a), eliminating “the extent and scope of medical treatment” from the list of things to which an employer may object. (Stats. 2004, ch 34, § 14.) Subdivision (a) of section 4062 now permits an employer to object only to medical determinations regarding “any medical issues not covered by Section 4060 or 4061 and not subject to Section 4610 . . . .” (Italics added.) Second, Senate Bill No. 899 made another change to section 4062, subdivision (a), adding that “[i]f the employee objects to a decision made pursuant to Section 4610 to modify, delay, or deny a treatment recommendation, the employee shall notify the employer of the objection in writing within 20 days of receipt of that decision.” (Stats. 2004, ch 34, § 14, italics added).
"We also conclude that section 4062 is not available to employers as an alternative avenue for disputing employees’ requests for treatment. The Legislature made clear that an employer may not use section 4062 to object to a medical determination concerning medical issues “subject to section 4610” while expressly permitting employees to use section 4062 to resolve disputes over an employer’s decision not to approve treatment requests (Stats. 2004, ch. 34, § 14) — i.e., the plain language of section 4062 establishes that only employees may use section 4062 to resolve disputes over requests for treatment. This limitation is made even clearer when the current section 4062 is compared to previous versions. Former section 4062 allowed employers to object to medical determinations concerning “the extent and scope of medical treatment . . . .” (Stats. 2003, ch. 639, § 17.) In Senate Bill No. 899, the Legislature deleted that phrase. (Stats. 2004, ch. 34, § 14.)"
"Accordingly, in light of the clear statutory language and the Legislature’s purpose in enacting the utilization review process in section 4610, we conclude the Legislature intended to require employers to conduct utilization review when considering employees’ requests for medical treatment. Employers may not use section 4062 as an alternative method for disputing employees’ treatment requests."
The Court then concluded that evolution of the review process demonstrates the Legislature’s Intent for employers to resolve treatment requests via the section 4610 process and that section 4062 is not available to employers as an alternative avenue for disputing employees’ requests for treatment.
Accordingly, both sides to a treatment request dispute face timelines and consequences for failure to timely act. Employers must be particularly vigilant in adhering not only to the timelines of Labor Code Section 4610, but must also assure that the information supplied to the utilization review physician is sufficiently complete in order to allow an appropriate decision to be made. In this regard, information regarding disputed body parts is particularly important to assure that utilization review has all of the information about what is accepted and denied about the claim prior to issuing a determination as to the reasonableness of the treatment.
The larger question left unanswered by the Sandhagen decision relates to the obligation of the employer to address treatment requests subsequent to an agreed medical examination. Many WCJs have taken the view that treatment requests subsequent to an AME evaluation must be approved, or timely referred back to the AME for a determination. As Sandhagan does not specifically address this situation, we recommend that any employer who undertakes utilization review of a treatment request subsequent to an AME evaluation should do so timely, and if the employee objects in writing within 20 days, the treatment request should be referred back to the AME. This method would be consistent with the requirement for mandatory utilization review, and allow the employee an opportunity to object to an adverse determination, and receive the benefit of independent (AME) review. If the employee does not object within 20 days to an adverse utilization review determination, the consequences to the employee remain unclear, but should likely be the same as the Sandhagen court has set forth – failure to timely act has consequences for either side to the dispute.
Verga v. Workers' Comp. App. Bd., 159 Cal. App. 4th 174, 73 Cal. Comp. Cases 63
In a published decision, the Third District Court of Appeals granted review and affirmed a WCAB decision denying benefits for a claimed psychiatric injury to an employee who berated her coworkers. The court adopted language from a leading treatise (Hanna, California Law of Employee Injuries and Workers Compensation) that the enactment of Labor Code Section 3208.3 was intended to overrule the Albertsons standard of subjective misperception that the employment was stressful, by imposing more stringent requirements for psychological injuries than the subjective standard set forth in Albertsons. The employee must now establish objective factors of harassment, persecution, or other basis for the alleged psychiatric injury.
Rosemary Verga was a staff representative in the Human Resources Department for United Airlines. She claimed injury to her psyche as a result of a departmental meeting in which her coworkers aired concerns and complaints regarding her behavior. According to testimony by her supervisor, Verga was rude to other employees and inflexible. During the departmental meeting, other coworkers aired concerns regarding Verga. One employee testified that the only way they could speak was to interrupt Verga, who was agitated and "just would not stop" yelling at them. Another coworker testified that Verga was not polite, not a team player, not tactful, and the office was very tense due to Verga's erratic and aggressive behavior. The meeting lasted for several hours. When Verga was given an opportunity to respond, she was overwhelmed by the critical backlash against her and reduced to tears. Later, Verga's job duties were changed after she complained about her supervisor to his boss.
The court construed Labor Code Section 3208.3(b)(1) as requiring a claimant to establish objective evidence of harassment, persecution, or other such basis for alleged psychiatric injury. The court found that Verga was the predominant cause of her psychiatric injury because her inappropriate conduct toward coworkers created their disdain toward her. The Court went on to say that "…there are limits when an employee intentionally causes his or her own injury. To allow an employee to harass coworkers and, when they respond unfavorably, to claim a stress-related injury to the employee's psyche would increase, not reduce workers compensation claims and create the potential for abuse of the system".
In so holding, the court acknowledged that irrespective of the fault of any party, there are limits on compensation for employees intentionally cause their own injuries. While California's no-fault workers compensation system is intended to permit recovery when an employee's own negligence causes his or her injury; it does not prohibit the Legislature from eliminating awards based on the employee's willful wrongdoing or misconduct.
The court rejected arguments that the employee's subjective perception of the events of employment (the Albertsons standard) and found incompatible with the intent of the legislature to establish a new and higher threshold of compensability. This threshold requires objective evidence of harassment or similar facts. The trial court concluded that the testimony of Verga’s supervisor and coworkers was more reliable than her own, and this was affirmed on appeal.
The rule can therefore be stated as follows:
Where the predominant cause of an employee's psychiatric injury claim is the employee's own misconduct toward their coworkers, the threshold of psychiatric compensability for actual events of employment is not met.
We believe this decision will enable a defendant to establish facts in an appropriate case demonstrating that an employee's own conduct led to the events which gave rise to their perception of stress. These events will not be the “actual events of employment” where action is taken in response to the employee's own conduct unless they involve evidence of harassment, persecution, or other such basis for the alleged psychiatric injury.
Diane Benson v. The Permanente Medical Group, PSI, Athens Administrators, OAK 297895, OAK 326228 (WCAB En Banc 12/13/07) – 72 Cal. Comp. Cases 1620
Wilkinson who? In a watershed decision, the WCAB has decided that the principle of awarding a combined permanent disability based upon two successive industrial injuries becoming permanent and stationary at the same time, is no longer the standard.
Dianne Benson was found to have a 62% permanent disability based upon the combined effects of a specific injury and a cumulative trauma injury. The total award was 62%. The AME in the case, apportioned 50% of the overall permanent disability to a specific injury, and 50% to a cumulative trauma.
The En Banc opinion gives great deference to the adoption of Labor Code Section 4663 and the repeal of Section 4750. This, according to the court, was a major shift in the rules of apportionment. A new “causation regime” was created which requires all potential causes of permanent disability to be separately addressed and considered when apportioning disability pursuant to Labor Code Section 4663. Thus, separate permanent disability awards are to be granted in the case of successive industrial injuries.
The court held that each separate injury requires a separate discussion by the medical expert in order to determine the causative sources of disability. There will be instances where an expert cannot parcel out with reasonable medical probability the approximate percentages to which each successive industrial injury contributes to the overall permanent disability.
In Ms. Benson’s case, her award of 62% permanent disability was worth $67,016.25. After reconsideration, she was awarded two separate awards of 31%, each worth $24,605.00, for a total award of $49,210.00. This represents a roughly 23% reduction in the value of her award.
We believe this decision will have a chilling effect on the filing of cumulative trauma claims be applicants. However, for the aggressive defendant, it will provide legal basis for filing a cumulative trauma claim where reasonable medical basis exists.
Paul Cruz v. Mercedes-Benz of San Francisco, 72 Cal. Comp. Cases 1281 (En Banc)
The WCAB has issued an En Banc decision on the amputation exception to the 2 year TD rule, holding that a spinal surgery that involved the cutting of an internal body part of the spine did not meet the common sense definition of an amputation.
The Board held that the word "amputations," as used in section 4656(c)(2)(C), means the severance or removal of a limb, part of a limb, or other body appendage, including both traumatic loss in an industrial injury and surgical removal during treatment of an industrial injury. This definition conforms to our understanding of the common meaning of the term "amputation," which encompasses external projecting body parts, not internal parts, even if they include bone.
This holding involved one of the exceptions under Labor Code §4656(c)(2), that, if triggered, would entitle an injured worker to temporary disability indemnity beyond the 104-week/two year cap set forth in Labor Code §4656(c)(1).
Daniel Vera v. Workers' Comp. App. Bd., 154 Cal. App. 4th 996, 72 Cal. Comp. Cases 1115
Vera concludes that a report cannot “indicat[e] the existence of permanent disability” within the meaning of LC 4660(d) unless: (1) the employee is P&S at the time the report issues; and (2) the employee has ratable disability at the time the report issues. This is now the first published case to specifically impose these limitations on the existence of PD exception in section 4660(d).
Background
Vera sustained a 3/14/03 injury to his neck, back and right shoulder. On 4/26/04 (i.e., seven days after SB 899), the treating physician issued a report stating:
“Mr. Vera’s condition is not permanent and stationary at this time, [however,] it is my opinion that Mr. Vera does currently have the existence of permanent disability. Based on this patient’s condition and the treatment that [he has] undergone, on a preliminary basis it is this examiner’s opinion that [his] permanent partial disability would be consistent with: [¶] Lumbar Spine: No heavy lifting, repetitive bending and stooping. [¶] Right Shoulder: No heavy lifting, no repetitive over shoulder work activity and no pushing/pulling of heavy weighted objects. [¶] At the time that I examine Mr. Vera for permanent and stationary status, I will subsequently render a Primary Treating Physician’s Permanent and Stationary Report in the near future.”
The WCJ (Judge Ellison) found that this report satisfied the “report by a treating physician indicating the existence of permanent disability” exception of LC 4660(d) and, therefore, applied the old PD Schedule. On recon, a split WCAB panel (Commissioners Cuneo and Miller, with Commissioner Rabine dissenting) found that the new PD Schedule applied.
The panel majority concluded that the 4/26/04 report “is not substantial evidence as to the existence of permanent disability in light of the report itself, subsequent reports, and subsequent treatment, and, therefore, is insufficient to bring this case under the old schedule.” The majority concluded that “having permanent disability ‘on a preliminary basis’, is not the same as ‘the existence of permanent disability’ ” under LC 4660(d). The majority also noted that, in a 6/04 report, the treating physician stated that Vera “remains TTD” and that Vera underwent surgery for his shoulder in 8/04. The majority stated that “[a] disability cannot be both permanent and temporary at the same time,” and that “[a] medical opinion that is internally inconsistent is not substantial evidence, and therefore, cannot be relied upon to support a decision.”
The Court of Appeal then affirmed the determination that the new PD Schedule applies on the basis that Vera was not P&S at the time the 4/26/04 report issued.