Last week, the California Supreme Court issued its decision in King v. CompPartners S232197, perhaps the most eagerly awaited decision in 2018, with the potential for far-reaching impacts on the workers' compensation system.
The issue in King was whether a physician who performs utilization review in a workers' compensation case has any professional liability to the injured employee to whom they are providing the medical treatment decision.
The use of utilization review to modify and deny medical treatment is extremely popular with carriers as a way to control medical costs. However, Justice Liu, in his strongly worded concurring opinion in King, states:
"...the undisputed facts in this case suggest that the workers' compensation system, and the utilization review process in particular, may not be working as the Legislature intended... The record in this case does not indicate whether defendants followed the relevant statutory and regulatory requirements in discontinuing Kirk King's prescription for Klonopin. But the seizures King suffered as a result of his abrupt withdrawal from the drug provide grounds for skepticism that "a care plan . . . appropriate for the medical needs of the employee" was established before his prescription was discontinued... And even if defendants fully complied with the relevant requirements, it is questionable whether those requirements are enough to prevent similar injuries from occurring in the future... The limited record here raises doubts as to whether King's utilization review was handled properly. The Legislature may wish to examine whether the existing safeguards provide sufficient incentives for competent and careful utilization review."
The Supreme Court's primary holding in the King decision is that workers' compensation laws are the exclusive remedy for an employee's injuries and therefore the employee's tort claims against a doctor performing utilization review are preempted, stating: "As enacted by the Legislature and as interpreted by our court, this system provides the exclusive remedy not only for workplace injuries but also for injuries "collateral to or derivative of" workplace injuries. (quoting Charles J. Vacanti, M.D., Inc. v. State Comp. Ins. Fund (2001) 24 Cal.4th 800, 811.) Because "[t]he Kings seek to recover for injuries that arose during the treatment of [Kirk] King's industrial injury and in the course of the workers' compensation claims process . . . their claims fall within the scope of . . . the workers' compensation system."
The Court goes on to note "The Kings and their amici raise policy concerns about this conclusion. Utilization review has a significant impact on the medical care of injured workers. It follows, they argue, that utilization reviewers should be held accountable for their mistakes in the same way and to the same extent as treating physicians, who may be sued for their malpractice."
However, in supporting its decision, the Supreme Court states "...treatment of utilization reviewers is, however, consistent with the basic tradeoff that underlies the workers' compensation system as a whole: The employee is afforded swift and certain payments for medical treatment without having to prove fault, but, in exchange, gives up his right to sue in tort for those injuries that result from risks encompassed by the employment relationship."
A key component of the Court of Appeal decision which was reviewed by the Supreme Court was that a utilization review doctor does have a doctor-patient relationship with the person whose records are being reviewed and therefore owes a duty of care. The Supreme Court decision does not address this issue and the question remains on whether the utilization review doctor may have potential liability for an employee's injuries caused by their denial of care if their actions "fall outside the risks encompassed within the compensation bargain" or the conduct is "so extreme and outrageous that" the defendant "in effect stepped out of its role" as contemplated by the workers' compensation scheme. The Kings did not raise this issue in their case.
Many thanks to Bernie Baltaxe and CAAA's Amicus Committee for their tremendous effort and work participating in this case on behalf of CAAA as Amicus Curiae.
This decision should afford opportunities for CAAA to work with the legislature and administration to enact more effective measures to ensure injured workers are protected in the utilization review process, which as recognized by the court, they currently are not.
CAAA's Amicus brief filed with the California Supreme Court
can be read here.