California: Appellate Court Holds IMR Timeframes as Directive

The 2nd Appellate District has issued the first of what should prove to be several appellate decisions on the timeliness of IMR decisions and the assertion by a W.C.A.B. panel decision that IMR timelines were mandatory and late IMR vested jurisdiction with the W.C.A.B. to determine issues of medical necessity. The Court in SCIF v. W.C.A.B. (Margaris) therefore annulled the W.C.A.B. decision and remanded with instructions to issue a new decision consistent with the award.

The Court’s reason for accepting this case was set out early in the decision:

“…We issued a writ of review because this case presents an important issue of first impression regarding the interpretation of section 4610.6, and because it relates to an issue upon which the appeals board has rendered conflicting decisions.”

In its analysis the Court provided an extensive discussion of the history of authorization for medical treatment, the implementation of UR to review treatment requests and finally the enactment of the statutory scheme for IMR. As noted by the Court in SB 228 and 899, the legislature changed both the standards and process used by an employer to evaluate a request for medical treatment. This process involved adoption of the medical treatment utilization schedule (MTUS). The legislature then removed the existing process for resolving medical disputes using dueling doctors and required the use of utilization review which required review of treatment requests in light of the MTUS.

In 2012 the Legislature enacted another set of reforms to address disputes over UR determinations. As noted by the Court, a UR determination authorizing medical treatment was binding on the employer but became subject to further review through IMR, but only for the employee. The Court further observed that even where an IMR determination is ultimately reversed by the W.C.A.B., the issue of medical appropriateness was to be returned to IMR for further review, not decided by the W.C.A.B.

Turning to the specific issue before it, the Court determined the use of “shall: in Labor Code 4610.6 was directive, not mandatory:

“…The appeals board concluded that section 4610.6, subdivision (d), is clear and unambiguous.  According to the appeals board, “shall” is mandatory and any IMR determination issued after the 30-day time frame is necessarily invalid.  In support of this interpretation, the appeals board cited section 15, which provides “ ‘[s]hall’ is mandatory and ‘may’ is permissive.”  (§ 15.)  Thus, the appeals board concluded that construing “shall” as mandatory, such that an untimely IMR determination is invalid, comports with both the ordinary meaning and the statutory definition of “shall.”  As we explain, however, the issue is more nuanced than the appeals board recognized.

…

We note that section 15, upon which the appeals board relied in this case to support its interpretation of section 4610.6, subdivision (d), juxtaposes “mandatory” against “permissive,” which arguably suggests the Legislature used “shall” in the obligatory permissive sense rather than in the mandatory-directory sense, as the appeals board concluded.  (See McGee, supra, 19 Cal.3d at p. 960 [discussing section 15 and concluding that “on its face, the statutory language suggests that the Legislature intended the present provision to be mandatory (i.e., obligatory), rather than permissive”].)  However, given the difference in meaning given to “shall” in the statutory context, we conclude section 4610.6, subdivision (d), is ambiguous.  Accordingly, we move beyond the plain language of that section and consider its meaning with reference to the rest of the statutory scheme and the intent of the Legislature.”

The Court commented further on this issue:

“Generally, time limits applicable to government action are deemed to be directory unless the Legislature clearly expresses a contrary intent.  (Edwards, supra, 25 Cal.3d at p. 410.)  “ ‘In ascertaining probable intent, California courts have expressed a variety of tests.  In some cases focus has been directed at the likely consequences of holding a particular time limitation mandatory, in an attempt to ascertain whether those consequences would defeat or promote the purpose of the enactment.  [Citations.]  Other cases have suggested that a time limitation is deemed merely directory “unless a consequence or penalty is provided for failure to do the act within the time commanded.”

The Court also found the lack of a penalty or consequence for noncompliance to be significant. Citing similar language in actions by the State Personnel board which had been held to be directive rather than mandatory, the Court suggested a failure to meet the statutory time frame did not result in a loss of jurisdiction. The Court also indicates in its review of the mandatory vs. directory dichotomy that statutes which set for time frames for government actions that do not include a self-executing consequence are almost universally construed as directory.

The Court also noted that construing the 30 day time frame as directory furthers the legislative objective of SB 863.

“We conclude from these findings that the Legislature intended to remove the authority to make decisions about medical necessity of proposed treatment for injured workers from the appeals board and place it in the hands of independent, unbiased medical professionals.  Construing section 4610.6, subdivision (d), as directory best furthers the Legislature’s intent in this regard.  The appeals board’s conclusion in this case—that an untimely IMR determination terminates the IMR process and vests jurisdiction in the appeals board to determine medical necessity—is wholly inconsistent with the Legislature’s stated goals and their evident intent.

…

Finally, and perhaps most tellingly, the Legislature provided that “[i]n no event shall a workers’ compensation administrative law judge, the appeals board, or any higher court make a determination of medical necessity contrary to the determination of the independent medical review organization.”  (Stats. 2012, ch. 363, § 45, codified at § 4610.6, subd. (i).)  We find this portion of the statute—particularly the use of the phrase, “in no event”—to be a frank expression of the Legislature’s desire to remove the issue of medical necessity of proposed treatment from the jurisdiction of the appeals board in all cases subject to IMR.  The Legislature’s intent would be defeated by giving section 4610.6, subdivision (d), mandatory effect, as the appeals board did in the present case.”

The applicant attorney additionally argued that the W.C.A.B.’s holding in the Dubon case (Dubon 2) supported the W.C.A.B.’s usurpation of authority to decide medical treatment. The court noted the holding in Dubon 2 is supported by the AD’s regulations providing that IMR applies solely to timely and procedurally proper UR but that no similar regulation existed for IMR. The Court declined to comment on the W.C.A.B.’s decision in Dubon 2 as the issue was not before it.

COMMENTS AND CONCLUSIONS:

There are currently 2 other cases pending at the appellate courts, both in the 3rd appellate district, on this same issue and interestingly, this case was not the first grant on the issue. However the Court set a very aggressive briefing schedule and even with multiple amicus briefs it heard, considered and decided this case in, what is by appellate standards, a very short time (under 6 months). Clearly the Court was very interested in this issue which had multiple W.C.A.B. panel decisions with conflicting holdings.

The Court, in its decision, also rejected arguments offered by both the applicant and the W.C.A.B. that untimely IMR resulted in unnecessary delays, a rationale offered by the majority panel in both Dubon and Margaris. The Court, very astutely, noted this argument made no sense given the time frame for obtaining QME opinions or litigating medical treatment issues before the W.C.A.B. The Court pointed out that even with the delays in completing IMR, the W.C.A.B. decisions was more than 13 months after the initial decision in UR and over 10 months after Maximus rendered its decision. The Court was clearly, and properly, skeptical of the argument that letting the W.C.A.B. decide medical issues resulted in a more prompt disposition.

The Court did offer an option to applicant’s to challenge untimely UR through the ability to file a Petition for Writ of Mandate to compel a decision. While a statutorily viable option, it would appear this is an impractical option especially in light of the current timeliness of most IMR determinations. Further, the issue here has never really been the timeliness of IMR; the goal for the applicant attorney’ bar, and apparently some of the commissioners, has been to usurp the medical decision making process from being medically driven to being litigation based.

The decision does not provide a lot of nourishment for those of us who are waiting for some sliver of light on the Dubon 2 issue. The Court in its footnote declined to really comment on Dubon 2 but did note there was some basis for the W.C.A.B.’s decision. However, the very strong language of the Court emphasizing the public and legislative policy behind having medical decisions made by physicians and the much greater speed and certainty of the UR/IMR process over the legislatively disfavored litigation process, may provide some hope that, given a chance, the appellate court would also reject the W.C.A.B.’s arguments in support of Dubon 2.

© Copyright 2016 Shaw, Jacobsmeyer, Crain & Claffey PC. All rights reserved. Reprinted with permission.