Seems like every 7 years or so the Legislature gets the “itch” to make significant reforms to the workers’ compensation system. SB 863 is by any measure a significant reform package and this is only a glance at five of the more common and/or controversial provisions that you have or are likely to encounter early in 2013 as the new law takes effect. Be sure to consult a more comprehensive summary (such as Susan England’overview), or a new version of the Labor Code, to bring yourself up to speed on all the changes and the effective date for each new provision. Case law will also help to define these changes as we move forward.

1. Labor Code Section 4062.2(b): Last Dance

The AME dance is no more. For all dates of injury, you are no longer required to propose an AME before requesting a Panel QME. However, you still have to provide the other side with 10 days notice before requesting a panel for an issue of compensability under LC Section 4060 or if you are objecting to the treating doctor’s opinions under LC Sections 4061 and 4062. It is not clear yet whether you need to allow an extra five days for mailing (CCP Section 1013), but the safer method until we know for sure would be to add the extra days before requesting the panel.

2. Labor Code Sections 4610.5 and 4610.6: (A Very) Independent Medical Review

There are many details that you need to know about the new Independent Medical Review (IMR) process, but perhaps the most important (and controversial) aspect is that IMR will be the exclusive remedy for an injured worker that decides to challenge a Utilization Review determination involving medical treatment. Decisions made by the Independent Review Organization (IRO) will be considered the determination of the administrative director and binding on all parties. The IRO must provide the parties and provider with an analysis of how they reached their decision, but the name(s) of the reviewer(s) will remain confidential.

There is a mechanism to appeal a determination to the WCAB on limited grounds, but the burden of proof is high and, even if successful, the determination is remanded for another independent review. The IMR process specifically does not allow the WCAB or higher courts to make a decision on medical necessity contrary to the determination made by the IRO. This is virtually certain to invite a constitutional due process challenge by applicants’ attorneys, so stay tuned.

The IMR process applies to all dates of injury after July 1, 2013.

3. Labor Code Section 4603.2(a)(2)-(3): Treatment Outside the MPN – Who Has Control?

For all dates of injury going forward, if you object to the injured workers’ choice of physician on the grounds the physician is not within your established Medical Provider Network (MPN), and there is a final determination that the injured worker was entitled to select the physician pursuant to Labor Code Section 4600, the injured worker will be allowed to continue treating with their choice of physician. This likely means your decision to accept or deny a claim becomes more critical in determining who will have long-term control of whether an MPN or non-MPN physician will provide medical treatment.

Disputes over whether the injured worker must treat within the MPN are now specifically allowed as an issue upon which to request an expedited hearing under LC Section 5502(b). In addition, it is important to note that when an expedited hearing is requested in reference to an MPN dispute, no other issues will be heard until it is resolved.

4. Labor Code Section 4658 (d)(2): No More Ups and Downs

Most everyone reading this is already pleased to know that for all injuries on or after January 1, 2013 there is no longer a requirement to increase or decrease an injured worker’s permanent disability by 15% based on whether or not the employer is able to return an employee to regular, modified, or alternative work. Unfortunately, you still need to do the math for claims made before the start of the year.

5. Labor Code Section 4660.1(c)(1)-(2): Catastrophe or Consequence

In an effort to eliminate questionable consequential claims for injuries occurring on or after January 1, 2013 caused by a physical injury, the Legislature created this new section to prevent add-ons for permanent disability due to alleged “sleep dysfunction, sexual dysfunction, or psychiatric disorder.” It is important to note this only prohibits permanent disability add-ons for these conditions, not medical treatment.

We can expect there will be litigation over when these conditions are considered the consequence of a physical injury versus when they are considered the direct result of a “catastrophic injury” or “violent act,” which are specific exceptions to the no add-on rule.