Legislature’s Plenary Power Trumps Constitutional Attacks As Court Upholds IMR Process

A second district of the California Court of Appeal has now upheld utilization review (UR) and independent medical review (IMR) as constitutional means to manage medical treatment in California’s workers’ compensation system. In Daniel Ramirez v. Workers’ Compensation Appeals Board, State Department of Health Care Services, C07844, the Third Appellate District agreed with the 2015 opinion of the First Appellate District in Stevens v. Workers’ Comp. Appeals Bd. and rejected arguments attacking the constitutionality of the process for determining what is necessary medical treatment for an industrial injury.

Mr. Ramirez (“Ramirez”) sustained an industrial injury to his leg. He resolved his right to indemnity by entering into stipulations which entitled him to lifetime medical treatment. Under this award he received multiple sessions of acupuncture over the course of 1½ years. In July 2014 his primary treating physician prescribed another course of 12 sessions of acupuncture. The request for treatment included a diagnosis of chronic neuropathic pain and the explanation that the acupuncture helped to decrease the pain and allowed Ramirez to be more functional.

The UR review recommended that the acupuncture be denied. The reviewer stated, among other things, that Mr. Ramirez already completed the maximum number of recommended therapy sessions and there was no evidence that additional sessions would improve functionality. This recommendation was appealed to IMR. The IMR review noted the prior acupuncture, the lack of change in work restrictions or functional improvement, and denied the requested treatment. Ramirez appealed the IMR decision to the WCAB, raising issues of conflict of interest and of bias. Ramirez asked for the opportunity to take the deposition of the IMR reviewer and asked the Board to note his argument that the UR/IMR process was unconstitutional for its denial of substantive and procedural due process. The WCAB agreed to remove the issue to itself solely so that Ramirez could file his petition for writ of review with the Court of Appeal. The California Court of Appeal accepted the case to consider the constitutionality arguments.

The appellate court rejected each of Ramirez’s arguments. In response to the claim that the IMR decision could be reviewed by the WCAB because the review was “materially defective,” the court held that Dubon v. World Restoration, Inc. (Dubon II) establishes that timeliness is a factual issue to be determined by the WCAB and that in the absence of a timely UR, the WCAB must decide medical necessity. Further, the court ruled that there is no statutory basis to support the assertion that the question whether a review is “materially defective” is a factual question that the WCAB may review. In response to the argument that the IMR reviewer improperly made a credibility determination in concluding that there had been no functional improvement with past acupuncture treatment, the court holds that the reviewer properly drew a conclusion from review of the medical records.

In addressing the constitutionality attacks, the court quotes Stevens to find that there is no violation of separation of powers and that the constitutional grant of plenary power to the legislature provides the answer to whether there is a conflict between article XIV and the due process clause of the California constitution. Further, the court adopts the rationale set out in Stevens to find that absence of the right to cross-examine the IMR reviewer is not a violation of the right to due process under the U.S. Constitution, writing that IMR “‘is only one aspect of the process afforded to workers who request treatment, and we conclude that the process in its entirety provides sufficient due process protections.”’

Two panels of the California Court of Appeal have now upheld the constitutionality of the UR/IMR processes. Reasonably, we may expect that these issues have been finally interred. This is not to imply that there will be no future attacks on the medical management system in California’s workers’ compensation scheme. Indeed, there is language within both Stevens and Ramirez which, isolated from context and intention, will likely be argued to support the WCAB authority to take to itself the process of determining medical treatment. Follow Haight’s future Alerts to learn when these occur and the outcomes of these expected attacks.

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April 3, 2017