SCIF v. WCAB (Margaris) 2016 Cal. App. LEXIS 491 (DCA opinion on 6/22/16)

As noted above and in previous Quarterly Reviews, SB 863 continues to generate controversy, the California workers’ compensation community is still trying to make sense of UR/IMR and learn how to incorporate the basic process into their practice. This 2016 case represents an example the Court’s continuing interpretation of the legal limits of the current UR/IMR process.  Specifically this case also holds that the that 30-day time limit in Labor Code §4610.6(d) requiring that independent medical review organization “shall” complete its review and make its determination in writing within 30 days of the receipt of the request is directory only, not mandatory.

In this case, SCIF sought review of a WCAB decision regarding the medical necessity of proposed treatment requested. Citing the 30-day time limit in Labor Code § 4610.6(d), the WCAB ruled that an IMR determination, issued 13 days late, was invalid and therefore jurisdiction to determine the reasonableness and necessity for denied medical treatment reverted back to the WCJ. The Court of Appeal reversed the WCAB decision and held that the 30-day time limit in Labor Code §4610.6(d), providing that independent medical review organization “shall complete its review and make its determination in writing … within 30 days of the receipt of the request for review and supporting documentation,” is directory only, not mandatory, so that an IMR determination issued after the 30-day time limit is valid and binding on parties as a final determination of the Administrative Director and does not vest jurisdiction in the WCAB to decide whether proposed treatment is medically necessary and appropriate.

Like Vega above, key to the Court of Appeal’s reasoning was that the legislature’s use of “shall” was ambiguous as to whether it is mandatory or merely “directory”. When government action is mandatory in a “directory” sense and government fails to act, it effectively loses jurisdiction to act in accordance with statute and, generally, time limits applicable to government action are deemed to be directory unless the legislature clearly expresses contrary intent. The Court held the legislature provided an exclusive means to challenge IMR via an appeal, expressly limited grounds upon which that appeal may proceed, that untimeliness of the IMR determination is not one of statutory grounds for appeal, that construing 30-day provisions as “directory” furthers SB863’s legislative objective of removing authority to make decisions about the medical necessity of proposed treatment for injured workers from the WCAB and place it in hands of independent, unbiased medical professionals.

Lastly the Court held that the proper remedy for a complete failure of the Administrative Director to issue an independent medical review determination is not to appeal to the WCAB but to issue a writ. Should the Administrative Director fail to render such a determination within the timeframe provided by Labor Code §4610.6(d) (for example,  failing to ensure that the independent medical review organization complies with applicable statutes and regulations) a writ of mandate under Code of Civil Procedure §1085 will apply, in appropriate circumstances, to compel the Administrative Director to issue an independent medical review determination.

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