Utilization Review

Calif. Case Could Redefine Peer Review

A lawsuit being argued in California could drastically change UR workers' comp statutes and drive costs through the roof.
By: | January 27, 2017 • 4 min read

A case in the California Supreme Court could disrupt the state’s workers’ compensation medical treatment approval process and expose utilization review doctors to medical malpractice liability, said California attorneys on both sides of the issue.

“The entire workers’ compensation community should take notice,” said Mike Lemrick, senior director, operations utilization review and IME at Coventry, because “although the high court is unlikely to uphold the appellate court’s decision, the consequences would turn the workers’ comp process upside down.”

The civil case in question is Kirk King v. CompPartners Inc. et al., in which a husband and wife sued a utilization review (UR) company, CompPartners Inc., and two of its employee physicians, primarily for medical malpractice.

Bernie Baltaxe, partner, Smith & Baltaxe, LLP

King suffered a back injury in 2008, and his treating physician prescribed the sedative Klonopin for depression and anxiety related to chronic pain. Two years later, a CompPartners utilization review physician, an anesthesiologist, determined the Klonopin was medically unnecessary.

When the CompPartners physician decertified the Klonopin, King was obliged to stop taking it or pay for it out of pocket. King’s suit alleged that his sudden withdrawal resulted in four seizures, which in turn resulted in additional physical injuries.

The trial court sided with CompPartners, and the Court of Appeals partially reversed the lower court’s decision. The decision to decertify was within the exclusive jurisdiction of workers’ compensation, said Bernie Baltaxe, partner, Smith & Baltaxe, LLP, a San Francisco law firm specializing in workers’ compensation cases, but the failure to warn was not.

Baltaxe, who filed a brief on the case on behalf of the California Applicants’ Attorneys Association, said the case is noteworthy because it raises questions about:

  • Duty of care for UR doctors
  • The exclusive remedy of workers’ compensation
  • The UR process and preemption

Who Bears Duty of Care?

Among the reasons this is a significant case, Lemrick said, is that it establishes a doctor-patient relationship with the UR peer reviewer.

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Contrary to the appellate court’s findings, he said, UR doctors’ role is not a doctor-patient relationship and so is not subject to duty of care obligations. Instead, their role is limited to “certifying, modifying, or denying treatment per medical treatment guidelines as established by the state.”

“The UR doctor never treats the injured worker or sees the entire medical file,” he said, only those the treating physician provides for episodic review of a specific treatment.

“The UR doctor isn’t allowed to make a diagnosis, a treatment plan or provide alternate treatments.”

“If upheld, it would drastically change the UR workers’ comp statutes and allow civil tort duties. It would change workers’ comp as we know it.” — Mike Lemrick, senior director, operations utilization review and IME, Coventry

Baltaxe disagrees. “When a physician is engaged in medicine and renders a professional opinion that affects treatment,” he said, “there’s a doctor-patient relationship.”

For purposes of malpractice, the court indicated that an essential element of a cause of action for malpractice is the existence of a doctor-patient relationship in order to give rise to a duty of care.

In this case, Lemrick said, “I believe the treating physician bore responsibility for the medical treatment and withdrawing King from Klonopin.”

That decision was made by the UR doctor, Baltaxe said. “There’s no methodology for the treating physician to ask for time to wean.” An appeal can take months, and an abrupt cessation of Klonopin can results in seizure in the first few days.

The UR doctors did, in fact, have a duty to warn, Baltaxe said. “When physicians make a medical recommendation, they’re required to warn of potential side effects. They also have obligation to not take action that will cause harm.”

Failure to warn does not fall within the exclusive remedy or workers’ compensation, he said, and injured workers should be permitted to seek legal recourse outside workers’ compensation statutes.

Workers’ Comp As We Know It

This could be a source of chaos and confusion in California, Lemrick said. If the appellate court’s decision is upheld, he said, “it will be more costly for companies do business in California because UR costs will go through the roof.”

Mike Lemrick, senior director, operations utilization review and IME, Coventry

If the duty of care for physicians who never sees a patient is upheld, all physician reviewers will require extra liability and malpractice insurance. “It will drive workers’ comp costs higher for California and delay care for injured workers,” Lemrick said.

Will the high court’s decision spill over to other states?

Absolutely, said Baltaxe. “Until this case came along, I hadn’t heard of any workers’ comp doctor immunized against negligence.”

Hopefully, he said, the state Supreme Court will rule that the decision to abruptly stop Klonopin does not fall within the exclusive remedy and that the doctor failed in his duty to warn. “All states should take notice.”

Lemrick is equally confident in the reverse outcome.

“If upheld,” he said. “It would drastically change the UR workers’ comp statutes and allow civil tort duties. It would change workers’ comp as we know it.”

Susannah Levine writes about health care, education and technology. She can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

4 Companies That Rocked It by Treating Injured Workers as Equals; Not Adversaries

The 2018 Teddy Award winners built their programs around people, not claims, and offer proof that a worker-centric approach is a smarter way to operate.
By: | October 30, 2018 • 3 min read

Across the workers’ compensation industry, the concept of a worker advocacy model has been around for a while, but has only seen notable adoption in recent years.

Even among those not adopting a formal advocacy approach, mindsets are shifting. Formerly claims-centric programs are becoming worker-centric and it’s a win all around: better outcomes; greater productivity; safer, healthier employees and a stronger bottom line.

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That’s what you’ll see in this month’s issue of Risk & Insurance® when you read the profiles of the four recipients of the 2018 Theodore Roosevelt Workers’ Compensation and Disability Management Award, sponsored by PMA Companies. These four programs put workers front and center in everything they do.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top,” said Steve Legg, director of risk management for Starbucks.

Starbucks put claims reporting in the hands of its partners, an exemplary act of trust. The coffee company also put itself in workers’ shoes to identify and remove points of friction.

That led to a call center run by Starbucks’ TPA and a dedicated telephonic case management team so that partners can speak to a live person without the frustration of ‘phone tag’ and unanswered questions.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top.” — Steve Legg, director of risk management, Starbucks

Starbucks also implemented direct deposit for lost-time pay, eliminating stressful wait times for injured partners, and allowing them to focus on healing.

For Starbucks, as for all of the 2018 Teddy Award winners, the approach is netting measurable results. With higher partner satisfaction, it has seen a 50 percent decrease in litigation.

Teddy winner Main Line Health (MLH) adopted worker advocacy in a way that goes far beyond claims.

Employees who identify and report safety hazards can take credit for their actions by sending out a formal “Employee Safety Message” to nearly 11,000 mailboxes across the organization.

“The recognition is pretty cool,” said Steve Besack, system director, claims management and workers’ compensation for the health system.

MLH also takes a non-adversarial approach to workers with repeat injuries, seeing them as a resource for identifying areas of improvement.

“When you look at ‘repeat offenders’ in an unconventional way, they’re a great asset to the program, not a liability,” said Mike Miller, manager, workers’ compensation and employee safety for MLH.

Teddy winner Monmouth County, N.J. utilizes high-tech motion capture technology to reduce the chance of placing new hires in jobs that are likely to hurt them.

Monmouth County also adopted numerous wellness initiatives that help workers manage their weight and improve their wellbeing overall.

“You should see the looks on their faces when their cholesterol is down, they’ve lost weight and their blood sugar is better. We’ve had people lose 30 and 40 pounds,” said William McGuane, the county’s manager of benefits and workers’ compensation.

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Do these sound like minor program elements? The math says otherwise: Claims severity has plunged from $5.5 million in 2009 to $1.3 million in 2017.

At the University of Pennsylvania, putting workers first means getting out from behind the desk and finding out what each one of them is tasked with, day in, day out — and looking for ways to make each of those tasks safer.

Regular observations across the sprawling campus have resulted in a phenomenal number of process and equipment changes that seem simple on their own, but in combination have created a substantially safer, healthier campus and improved employee morale.

UPenn’s workers’ comp costs, in the seven-digit figures in 2009, have been virtually cut in half.

Risk & Insurance® is proud to honor the work of these four organizations. We hope their stories inspire other organizations to be true partners with the employees they depend on. &

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]