01 May 2015

California: Diagnostic Testing: Is it Medical Treatment or Medical-Legal Expense?

An interesting question arises in whether diagnostic testing constitutes “medical treatment” or a valid “medical-legal” expense. If it’s deemed medical treatment, then it is subject to UR/IMR. Two recent panel decisions illustrate the complexities of this issue.

(Publisher’s Note: Citations link to lexis.com; bracketed citations link to Lexis Advance.)

Diagnostic Testing Was Medical-Legal Expense Subject to Adjudication by the WCAB

In Hubbard v. United Parcel Service, 2015 Cal. Wrk. Comp. P.D. LEXIS --, the WCAB, reversing the WCJ in a split panel opinion, held that neuropsychological testing provided to the applicant by the lien claimant was a medical-legal expense pursuant to Labor Code § 4620 [LC 4620], rather than a lien related to medical treatment as found by the WCJ. Therefore, it was recoverable even though the applicant’s claimed injury (anoxic brain injury with cognitive residuals from cardiac arrest) was found to be non-industrial.

The WCAB reasoned that diagnostic testing may be considered a cost of medical treatment or a medical-legal expense, depending on the purpose served by the testing results. Under Labor Code § 4620, the lien claimant seeking reimbursement for the diagnostic testing as a medical-legal cost must establish that the contested claim existed at the time the expenses were incurred, that the expenses were incurred for the purpose of proving or disproving a contested claim and that the expenses were reasonable and necessary at the time they were incurred.

The majority of the WCAB panel concluded that, here, although the applicant’s primary treating physician, Jens Dimmick, M.D., referred the applicant for neuropsychological testing, both Dr. Dimmick and the panel qualified medical evaluator, Paul Grodan, M.D., recommended neuropsychological testing to address industrial causation, which was contested by the defendant, and not in order to plan for the applicant’s ongoing medical treatment, thereby making the diagnostic services medical-legal expenses pursuant to Labor Code § 4620.

The dissenting Commissioner would uphold the WCJ’s finding that the diagnostic testing was medical treatment because the lien claimant stipulated that the applicant was referred for testing by his primary treating physician, and the lien claimant did not contend that any other provider recommended the neuropsychological evaluation for the purpose of determining industrial causation of the applicant’s brain injury.

Diagnostic Testing Was Medical Treatment Subject to UR/IMR

In Ponce De Mauleon v. Harris Woolf California Almonds, 2015 Cal. Wrk. Comp. P.D. LEXIS --, the WCAB, reversing the WCJ, held that diagnostic electromyography (EMG) and nerve conduction study (NCS) requested by the applicant’s primary treating physician, Jerome Robson, M.D., was medical treatment subject to utilization review and independent medical review under Labor Code §§ 4600 and 4610 [LC 4600, 4610] et seq., rather than a medical-legal cost subject to adjudication by the WCAB.

Here, the EMG/NCS diagnostic testing was requested by Dr. Robson as the primary treating physician to determine whether nerve damage was causing the applicant’s complaints of back pain and radiculopathy. Dr. Robson requested the testing using the Primary Treating Physician’s Progress Report PR-2 and Request for Authorization, which are utilized to request authorization for treatment by treating physicians. At the time the testing was requested, Dr. Robson was providing the applicant with ongoing treatment including examinations and prescriptions for various medications and had not reported the applicant permanent and stationary. Dr. Robson did not indicate that the purpose of the EMG/NCS diagnostic testing was to generate a final medical-legal report.

The WCAB concluded that the diagnostic testing requested by the treating physician in order to treat the injured employee is considered medical treatment, that the WCJ’s analogy of Dr. Robson’s services to medical-legal testing and reporting by an agreed medical examiner or qualified medical evaluator was inapplicable, and that the record in this case did not indicate the existence of a contested claim which is required for medical-legal expenses under Labor Code § 4620 [LC 4620] et seq.

Commentary

These cases emphasize the difficulty that exists in distinguishing between what constitutes “medical treatment” and what constitutes a valid “medical-legal” expense. The crux of the problem is that much of medical treatment, by its very nature, is diagnostic. The very nature of medical treatment is often investigatory instead of palliative. It is not possible to cure, or for that matter, relieve, a condition without first identifying what the underlying problem is. Labor Code Section 4620(a) defines medical-legal costs as those costs necessary for the purpose of proving or disproving a “contested claim”. Section 4620(c) further provides that medical evaluations, diagnostic tests and interpreters incidental to the preparation of a medical report do not constitute medical-legal costs unless the report is capable of proving or disproving a “disputed medical fact”. It is not difficult to argue that the nature and extent of the injured worker’s injury is a “disputed medical fact” in every case.

The problem with this analysis is that it has the potential of removing a significant number of “treatment” disputes from the mandate of Utilization Review and Independent Medical Review. Indeed, if all of the tests, injections, or even surgeries that are being used for diagnostic purposes, are being used to determine the nature and extent of an injured worker’s injury, a large number of the current “treatment disputes” are in fact medical-legal questions and not medical treatment disputes at all.

In conclusion, these recent cases reflect that whether a report, test or diagnostic study is considered medical treatment or a medical-legal cost is likely to be highly subjective and extraordinarily difficult to predict. Given the significant challenges getting treatment approved through UR and IMR, it would not be surprising to see both practitioners and physicians pursuing the payment of these costs based on the contention that the costs were incurred as the result of trying to prove a disputed medical fact and do not constitute “medical treatment” pursuant to Labor Code Section 4600.