Scope of Utilization Review

By
David H. Parker

Many have recently inquired as to the scope of utilization review pursuant to Labor Code section 4610 and specifically whether or not an employer must subject all treatment requests to the utilization review process. No recent case law construes the scope of utilization review. Thus, we are left with the plain language of the statutes.

The logical conclusion based on the statutory language in effect as of today is that a utilization review process is mandatory, but use of the process is discretionary. It is, however, strongly recommended whenever an issue exists as to whether medical treatment is reasonably required to cure or relieve the injured worker from the effects of his or her injury.

Labor Code section 4610(b) is clear:

“...Every employer shall establish a utilization review process in compliance with this section, either directly or through its insurer or an entity with which an employer or insurer contracts for these services.”

Clearly, all employers must have a utilization system. The next issue is the scope of review. Must all treatment requests be reviewed?

Labor Code section 4610(a) defines utilization review as follows:

“... review or management functions that prospectively, retrospectively, or concurrently review and approve, modify, delay or deny...medical treatment services pursuant to (Labor Code) Section 4600...”

Labor Code section 4600(C)(3)(5) specifically references application of utilization review:

“...The insurer may require prior authorization of any nonemergency (sic) treatment or diagnostic service and may conduct reasonably necessary utilization review pursuant to (Labor Code) Section 4610.”

The plain statuary language reflects that use of utilization review is discretionary, not mandatory. This should not be construed as an opinion that utilization review should not be used. It should be used, but judiciously and only when it is “reasonably necessary.”

Labor Code section 4610(e) is instructive in this regard:

“... No person other than a licensed physician who is competent to evaluate the specific clinical issues involved in the medical treatment services...may modify, delay, or deny request for authorization of medical treatment for reasons of medical necessity to cure and relieve.”

Utilization review should therefore be employed whenever there is a question as to whether medical treatment is “reasonably required to cure or relieve the injured worker from the effects of his or her injury” and whenever it appears that treatment is not based on the guidelines adopted by the administrative director based on Labor Code section 5307.27 (currently the American College of Occupational and Environmental Medicine’s Occupational Medicine Practice Guidelines).

Establishment of a utilization review process is mandatory. However, use of the process is discretionary. A self-insured employer or insurer should avail itself of the process whenever an issue exists as to whether medical treatment is reasonably required to cure or relieve the injured worker from the effects of his or her injury.