Failure to Serve Utilization Review Reports

By
Nicholas O. Webber

The consequences for failing to obtain and serve a timely Utilization Review (UR) report pursuant to Labor Code section 4610 (g) (1) are currently quite severe. However, recent litigation offers the potential of softening the strict standards seemingly imposed and required by the California Workers’ Compensation Appeals Board.

As you are no doubt aware, LC 4610 (g) (1) requires that all “prospective or concurrent” UR decisions shall be made within 5 days of receipt of the information necessary to make the determination, but in no event should such a determination be made after 14 days from receipt of the treating physician’s recommendation.

For some time the Workers’ Compensation defense bar has contemplated the risk of a defendant’s failure to serve a timely UR report, since the statute itself is silent on this matter. In a recent decision, the WCAB defined this “risk” in unambiguous manner.

In Sandhagen v. SCIF (2005), WCAB RDG 0115958, an en banc Board ruled that failure to comply with the deadlines prescribed in the statute makes UR reports inadmissible evidence and, as such, cannot be used by a medical-legal evaluator (QME or AME) to form conclusions. This is, indeed, one area of workers’ compensation law where the Board’s rules of admissibility are stricter than those present in the civil arena.

In a civil case, an independent medical examiner (equivalent to an applicant or defense QME) may review all evidence, irrespective of its admissibility, in order to derive at his or her opinion in a particular case. Such leniency is tolerated as both sides may use discovery tools, including depositions, to determine the basis of a medical evaluator’s opinion, and to in turn undermine said opinion if the opportunity avails itself. This rule, of course, errors on the side of allowing experts to consider more information instead of less.

As attorneys in the workers compensation system are equally able to conduct such discovery, the Sandhagen decision seems to leave workers compensation defendants without discovery allowed within the civil litigation system, without legal justification. Recently the defendant in Sandhagen filed a writ with the California Court of Appeal that should allow the civil system to correct what arguably appears to be a mistake of law. The appellate decision is pending.

In the interim, adjusters, examiners and defense attorneys alike should be aware that Sandhagen is controlling in cases where UR decisions are served untimely. Nevertheless, it is good practice to serve untimely peer reviews and offer them into evidence. Assuming a successful outcome of the SCIF appeal, what are now inadmissible reports could become admissible in the future. However, failure to offer untimely reports into evidence, despite the seemingly ironclad ruling in Sandhagen, may waive your right to rely on reporting in the future, assuming a positive outcome from the Sandhagen appeal.

The most effective approach to avoiding this issue altogether is to ensure that UR reports are timely issued. As Shakespeare appropriately opines in Julius Caeser, “The fault, dear Brutus, is not in our stars, but in ourselves.”