On February 27, 2014, the Workers’ Compensation Appeals Board issued a game-changing en banc decision concerning its power to adjudicate the medical necessity of recommended treatment and the role of Independent Medical Review (“IMR”). The decision is binding on all judges at all board district offices in California. Recall that legislation creating IMR was enacted to determine medical necessity following denied, modified or delay decisions by utilization review in order to relieve courts from the burden of litigation regarding medical necessity of treatment. Contrary to that purpose, the Dubon decision opens the doors for litigation at the Workers’ Compensation Appeals Board over the validity of utilization review decisions, thus increasing the potential for litigation over treatment requests.

Applicant Jose Dubon sustained accepted industrial injuries to his spine in 2003 and 2004. He had one Primary Treating Physician (“PTP”) for both dates of injury and a consulting orthopedic surgeon. Moreover, the parties referred the matter to an Agreed Medical Evaluator (“AME”). For approximately three years preceding the utilization review decision at issue, Applicant’s treating physicians had been considering spinal surgery. Diagnostic tests- including EMG/NCV studies of the lower extremities, a lumbar MRI and a discogram revealed pathology in the lumbar spine that correlated to the subjective complaints and formed a basis for a recommendation that Applicant undergo an anterior and posterior fusion from L4 through S1 with decompression.

Following a request for authorization for the subject surgery, utilization review (“UR”) issued a denial, opining the surgery was not medically necessary. The UR decision documented the review of the consulting orthopedic surgeon’s report, the lumbar MRI and “18 additional pages of medical records” described with no further specificity. The decision was notably absent of any documentation that the reports of the PTP, AME or other consulting or diagnostic testing reports were reviewed. The rationale for the denial was that (1) there was no documented imaging of nerve root compression or of moderate or greater stenosis; (2) there was no evidence that conservative treatment had failed; and (3) there was no documentation of a condition/diagnosis for which spinal fusion was indicated.

The consulting orthopedist invoked the internal UR appeal process. A second UR denial issued from a different reviewer that was, in all significant respects, identical to the initial UR report. Applicant submitted an application for IMR and filed a Declaration of Readiness to Proceed for an expedited hearing regarding his entitlement to spinal surgery, contending the UR denial was defective because there was an insufficient review of the medical record.

Following an expedited hearing on the issues, the WCJ issued a decision that any procedural defects in UR must be resolved through IMR and that she could not allow the surgery recommended by the treater. In her opinion, the WCJ identified several deficiencies in the UR reports, including: (1) the “18 additional pages of medical records” were not identified as required by Labor Code section 4610(g)(4) and AD Rule 9792.9.1(e)(5)(D); and (2) there was a “wealth” of relevant records the UR physician did not review. The WCJ described the failure to review all of the relevant medial records as a “critical error.” Applicant filed for reconsideration, and the Board granted the same.

There are six critical conclusions that the Board reached:

IMR presupposes a valid utilization review report. If there is no underlying valid UR report, the right to IMR does not arise. The Board noted that if an Applicant disputes the validity of a UR decision, he/she should invoke both IMR and jurisdiction of the Board concurrently, given the time requirements for IMR.

A UR decision can be determined to be invalid if it is (1) untimely or (2) suffers from material procedural defects that undermine the integrity of the UR decision. Prior to Dubon, it was largely believed that a timely UR was presumed valid. This conclusion by the Board broadens its jurisdiction to adjudicate UR defects beyond timeliness.

A “material procedural defect” includes (1) the failure of a UR reviewer to review all information that is reasonably necessary to the decision, (2) the reviewer’s reliance on incomplete or insufficient information (Labor Code section 4610) and/or (3) the failure of the written decision to contain a list of all medical records reviewed (8 CCR 9792.9(l)(3) and 9792.9.1(e)(5)(D)). The Board relied on the provisions of Labor Code section 4610, noting that each requirement set forth therein is a procedural requirement that must be followed, and is not limited to its timeliness mandates. Further, the Board declared that “[t]he need for a UR physician to be provided with and review sufficient medical records to determine the medical necessity of a treatment request and to disclose what those records are goes to the very core of a UR decision.”

The burden is on Defendant and/or the UR reviewer to ensure that all the information reasonably necessary to the decision is reviewed. Defendant’s burden in this regard is expressed unequivocally three times in the opinion. The Board also emphasized the UR reviewer’s burden to obtain information reasonably necessary to the UR decision based on Labor Code section 4610(d).

The WCAB has sole jurisdiction to decide whether a UR decision is invalid. Where the Board determines the UR decision is invalid, it then determines medical necessity, not IMR. The Board explained that judicial scrutiny of the validity of UR was of particular importance since SB863 amended the Labor Code to bar an injured worker from renewing a treatment request for twelve (12) months absent a documented material change in circumstances (Labor Code section 4610(g)(6)).

The employee still has the burden of proving medical necessity where UR is invalid. Rule 10451.2(c)(1)(C); State Comp. Ins. Fund v. Workers’ Comp. Appeals Bd. (Sandhagen) (2008) 44 Cal.4th 230, 242. At an expedited hearing, the Board will evaluate the evidence submitted by the parties to determine whether the requested treatment is reasonable and necessary. Thus, even if a UR decision is determined to be invalid, there must be substantial medical evidence to support a treatment request.

The Board’s opinion in Dubon, particularly the burden it places on claims examiners, seems inequitable and it is expected that on appeal a reversal or modification of this burden will eventually be sought in this or other litigation. Practically speaking, it requires a claims examiner to evaluate the request, identify all of the medical information in the file that is relevant to the request, forward all materials to UR and secure a UR decision – all within five (5) working days of receipt of the request. This is nearly an impossible standard considering the volume of claims and the time period involved.

One of the issues the Board did not address is the requirement that is now on the face of the Request for Authorization (“RFA”) form that the requesting physician must attach a report substantiating the requested treatment. (DWC Form RFA (version 01/2014)). If that information is not included with the RFA, section 9792.9.1(c)(2)(A) of the Code of Regulations allows the claims examiner to return the RFA to the requesting physician marked “not complete” within five (5) business days from receipt. There is no duty to process an incomplete RFA. (“Completed” is defined at section 9792.6.1(t)(2).) Thus, a thorough review of the RFA and its attachments is critical to avoid a possible Dubon scenario.

The second tier of protection against a Dubon-like result is the right of the UR physician to request additional information. Labor Code section 4610(d) provides that the UR decision must be based on information “reasonably necessary to make the determination.” The request for additional information must be made by UR within five (5) business days of receipt of the RFA. (8 Cal. Code Reg. §9792.9.1(f)(2)(B).) If information is not received within fourteen days (14) of receipt of the RFA, UR shall deny the request with the stated condition that the request will be reconsidered upon receipt of the information. (8 Cal. Code. Reg. §9792.9.1(f)(3)(A).) Thus, UR should issue a timely delay notice if there is not enough information upon which to base a determination, and a denial if the information requested is not received within 14 days of receipt of the RFA (prospective or concurrent review; different time requirements exist for retrospective and expedited review).

The Dubon decision is almost certain to result in more frequent concurrent filings of IMR applications and declarations of readiness requesting expedited hearings on the validity of the UR decision. Moreover, we anticipate that further Board opinions will follow Dubon wherein its rationale and/or conclusions will be clarified. In the meantime, careful review of RFA’s and the forwarding of complete information to UR should be incorporated as best practices in a claims setting.