The Florida workers' compensation marketplace was recently introduced again (This blog introduced the concept in July 2015: Another Unconstitutional Statute - and it's not Florida) to the idea of Independent Medical Review (IMR) by the publication of a report by Florida Tax Watch. The fundamentals of the IMR process are discussed in IMR in Florida? Beyond the overview of IMR, however, is the oft-noted "due process concerns" of the IMR process. Though IMR is reasonably recent, having been enacted by the California Legislature in 2012, there is some California decisional authority on that precise point.
In 2015, the California First District Court of Appeal decided Stevens v. Workers' Compensation Appeals Board, 241 Cal.App.4th 1074 (Cal. Ct. App. 1st 2015). It includes some history of California statutory changes in 2004 and again in 2012. The 2004 changes created a process called "Utilization Review," (UR) and established that "a request for treatment cannot be denied by a claims adjuster and must be approved unless a clinician determines that the treatment is medically unnecessary." The 2004 law also required the adoption of treatment guidelines, titled the "Medical Treatment Utilization Schedule," (MTUS).
California UR, the Court noted, is not bilateral. The UR decision can be challenged by the injured worker, but not by the employer. For employers, the UR process is binding. If the UR determines the requested care to be appropriate, it must be provided, and the employer has no recourse except to provide it. The Court explained that thereafter the 2013 statutory changes "built off the 2004 legislation and established a new procedure, 'Independent Medical Review,' (IMR), to resolve workers' challenges to UR decisions."
Ms. Stevens challenged "the constitutionality of the IMR process." The arguments included violation of separation of powers, the state Constitution's requirements that workers' compensation decisions be subject to review and the system “accomplish substantial justice,” and principles of due process. The Court was not convinced of any of these grounds and concluded that California IMR is constitutional.
As to the challenges related specifically to the California Constitution, the Court noted that "the Legislature has plenary powers over the workers' compensation system under article XIV, section 4 of the state Constitution." Furthermore, the Court concluded that IMR affords the injured worker with sufficient due process as guaranteed by the Fifth and Fourteenth Amendments to the U.S. Constitution. Essentially, the Court concluded that the ability to provide written arguments to the physician throughout the IMR process was sufficient.
Ms. Stevens' July 2013 claim was for four medications and the provision of a home health aide following a work accident. Notably, this case discusses "compensability" as it relates to the claimed benefits, but there was no dispute regarding "the general proposition that Stevens suffers from pain and other ailments and is entitled to receive" medical care. The UR process involved review by "a board-certified anesthesiologist," who denied the requests in "an extensive, nine-page" decision, sent to Ms. Stevens.
The Court's recitation of the grounds for denial focuses on the medical purpose and efficacy of the four medications (Ativan, Flexeril, diclofenac cream, and hydrocodone). The UR physician's conclusions and denial were essentially that other alternative treatments would be better, or at least should be tried before the claimed medication. Ms. Stevens disagreed and asked for a UR evaluation with "a different 'Physician Adviser,'” a re-review. Stevens was afforded and took "the opportunity to submit additional evidence for the (second) internal review."
A second "board-certified anesthesiologist" reviewed the request for care. For it, Ms. Stevens submitted "a seven-page report by Dr. Jamasbi dated August 14, 2013, addressing" the first UR decision/denial. The second UR physician nonetheless also denied "the request for the four medications." That was similarly provided to Stevens in a written, nine-page report. This illustrates how the UR process affords the injured worker two opportunities to submit evidence, the initial UR and an "internal review" that involves a second physician and can include additional documents.
On the basis of the second UR denial, Ms. Stevens sought an IMR. She was allowed to, and did, again submit additional medical documentation for the IMR review. Thus, there were a total of three opportunities to submit documentation. The IMR "final determination" was issued "in February 2014," and upheld the UR denial of home health aide and the four medications, based on the MTUS.
The denial did not identify "the IMR physician," but stated "the IMR reviewer was “Board Certified in Pain Management, had a subspecialty in Disability Evaluation, was licensed to practice medicine in California, . . . had been in active clinical practice for more than five years, and was currently working at least 24 hours a week in active practice.” The IMR determination "became" the determination of the Director of the Division of Workers' Compensation (director) as a matter of law. (§§ 3206, 4610.6, subd. (g)). That legal function made the IMR decision "state action" for the purpose of the due process discussion and analysis.
The injured worker appealed the IMR/Director's decision to the Workers' Compensation Board. The Board denied that appeal and affirmed the IMR/Director, noting Stevens had not proven "one or more of five grounds for appeal listed by the Legislature in section 4610.6(h) by clear and convincing evidence.” The Legislature provided specific reasons for which the IMR could be disregarded by the Board. As regards the "clear and convincing," there are those who find the California IMR similar to the Florida Expert Medical Adviser process in Section 440.13(9).
The Appellate Court reiterated that the California Constitution "gives the Legislature 'plenary power ... to create ... and enforce a complete system of workers' compensation.'” The use of "plenary" suggests "absolute or unqualified" power. Some suggest that is a distinction relevant to Florida's consideration of IMR, as there is no similar Florida grant of "plenary" power, affording such unfettered authority regarding workers' compensation.
Notably, in enacting the "IMR process," the California Legislature made specific findings as to the "then-existing system of resolving disputes about treatment requests." It concluded the process
"was 'costly, time consuming, and [did] not uniformly result in the provision of treatment that adhere[d] to the highest standards of evidence-based medicine, [and this] adversely affect[ed] the health and safety of workers injured in the course of employment.'”
It reached similar conclusions regarding the pre-IMR process for the appointment of "qualified medical evaluators (QME) to examine patients and resolve treatment disputes.
The Stevens Court stressed the independence of the IMR providers, the requirement of adherence to the MTUS, and the requirement for detailed decisions regarding requested reviews. The availability of appellate review by the Board, for specific grounds, also affords a level of due process according to the Court, although its power is limited to ordering a new IMR. And, ultimately, the decision can be reviewed "in the Court of Appeal" as in Stevens, but notably, the record may not include all of the documents involved in the various medical reviews. Each of these was found to include elements of due process.
The Court concluded that "both workers and employers benefited from the 2004 and 2013 reforms." Primarily, the Court noted the speed and efficiency of decisions, the UR finality if in favor of the employee, and the reduced "insurance costs by creating uniform medical standards and reducing litigation." Thus, at least arguably, the benefit of "standards" is perhaps less about IMR than it is MTUS, UR, and perhaps the California pharmacy formulary.
The Court concluded that Stevens' California Constitution challenges failed because of the plenary authority granted to the Legislature. That grant of power was intended to "remove all doubts as to the constitutionality of then-existing [workers'] compensation laws.” The Court concluded that the evolution of this "plenary power" clause "compels the conclusion that Section 4 supersedes the state Constitution's due process clause concerning legislation passed under the Legislature's plenary powers over the workers' compensation system.
The Court was equally unmoved by the "principles of due process under the federal Constitution." It noted that "to prevail on a federal due process claim, plaintiffs must show that the state deprived them of a property or liberty interest without affording sufficient notice and opportunity to be heard." The Court expressed some doubt that such a decision as to the appropriateness of medical care either "constituted state action" or "implicated a protected property interest."
It conceded that the due process issue is not settled by the United States Supreme Court, and discussed some similar factual medical necessity determinations in other cases, as well as some distinctions. In light of that uncertainty, the Stevens Court proceeded assuming that both "state action" and a "protected property interest" were present, so as to implicate the due process clause (of the Fourteenth Amendment by direct application, or potentially the Fifth Amendment subject to selective incorporation).
The Court concluded that Ms. Stevens was "afforded ample process." It noted this included the IMR process, but more. It found the ability to submit documentation and written explanations through UR and IMR persuasive. And, the Court balanced the constraints (seemingly "confrontation" and "cross-examination" against a "governmental interest" previously determined to be "strong," as regards other medical decisions (in group health) IMR processes in California. It noted that ultimately, "the risks of erroneous deprivations under the workers' compensation system appear to be fewer, and certainly no more, than the risks under the" other California IMR process previously upheld.
The Court specifically rejected the argument that due process was violated by the anonymity of the IMR physician. The physician is a "decision maker" and not an adversary. The Court found no legal protection for a party "to cross-examine such decision-makers." The person making an "initial decision" ("a clinician [that] determines that the treatment is medically unnecessary") might be subject to such examination, "to discover what that basis was." But, the Court explained, in California workers' compensation, patients "are given detailed explanations of the reasons for a denial" and "given multiple opportunities to submit evidence and challenge those decisions."
The Stevens Court also rejected due process concerns centered on the limited nature of available appeals. First, it noted that whether the "due process clause" guarantees "any review" is unclear. There may be no constitutional right to appeal. Furthermore, the Court concluded that "the IMR process is itself a review." And, furthermore, it found efficacy in "the Board's authority to review an IMR determination," despite the statutory limitations. The real limitation on the patient, according to the Court, is "the MTUS." (There was no challenge to the MTUS or formulary in Stevens).
Notably, one ground of the due process challenge was that the IMR statutory time limits are not subject to any "meaningful enforcement procedures." The process is intended to be completed within 30 days. However, the Court concluded that the failure of the IMR to comply with such a time constraint did not invalidate the IMR outcome. The 30-day limit is instructive, and directory, but not mandatory. That suggests that while IMR is intended to be more rapid, its promise may be illusory in some situations.
Of note, the Florida Courts have repeatedly concluded that the time constraints upon Judges of Compensation Claims holding hearings and making decisions are similarly "directory," see AT&T Wireless v. Frazier, 871 So. 2d 939 (Fla 1st DCA 2004); Brown v. Pumpian, 504 So. 2d 481 (Fla. 1st DCA 1987). See also Miller v. Oolite Industries, Inc., 336 So. 2d 1152 (Fla.1976); Scottie-Craft Boat Corp. v. Smith, 336 So. 2d 1150 (Fla.1976).
Stevens is not the last California word regarding due process concerns. In September 2018, the California Fourth District Court of Appeal rendered Barri v. Workers' Compensation Appeal Board, 28 Cal.App.5th 428 (Cal. Ct. App. 4th 2018). This is not an IMR analysis or decision, but it refers to Stevens in the context of due process. In Barri, the challenge instead involved a medical provider seeking payment (in California that is called a "lien"). The government cited Stevens and the "plenary power" in support of its actions.
Though the Court ultimately concluded the government action was appropriate in Barri, it expressed reservations as to the extent of the "plenary power." It noted:
"The Legislature cannot carte blanche exercise its plenary powers and create legislation (1) unnecessary to the workers' compensation system or that (2) conflicts with the federal due process clause."
Thus, while the concerns raised in Stevens and Barri were not found violative of due process, the Barri Court suggests that due process remains a factor to consider even in light of the "plenary" provision of California's Constitution. What that would require or preclude precisely remains unclear. However, there is the suggestion that "plenary" is perhaps not altogether unrestricted.
Some now advocate Florida adopt the IMR process. Others will argue that California first instituted UR and the MTUS. Though Florida has heard debate of treatment guidelines over the past decade, neither such guidelines nor a medication formulary have been adopted (or some argue even seriously considered). IMR would ultimately be dependent upon the existence of each of these critical elements. California's course was to adopt those changes first, in 2004, followed by IMR eight years later, in 2012. Some will argue that if IMR is the goal ultimately adopted by the Florida legislature, a similarly sequential process would be appropriate or even necessary.
There will likely be a debate on the importance of "plenary" authority. Some will find the presence of that language critical in the Stevens analysis. They may argue that without that authority, the IMR process fails to satisfy the other protections of the Florida Constitution. Notably, Florida does not have such a "plenary" power provision. Others may argue that the Stevens Court focus on Section 4610.6(h) occurred only because that section exists in California, but that the Court could have (or would have) reached the same decision if "plenary power" did not exist, merely upon other grounds.
There will also likely be some discussion of the persuasiveness of Stevens as an appellate decision. Some will argue that this is not a decision of California's highest court. The California Supreme Court did not review it. The United States Supreme Court was asked to review but declined. Stevens v. California Workers' Compensation Appeals Board, 137 S.Ct. 384 (2016). Proponents of this argument may point to the many Florida District Court decisions that concluded attorney fee constraints in Section 440.34 were constitutional in the years leading up to the Florida Supreme Court decision to the contrary in Castellanos v. Next Door Company.
In response, there will also likely be those who find the Castellanos argument unpersuasive. Some find that decision an unsupportable deviation from the standards of constitutional review. Arguably, the Castellanos Court did not address constitutionality following the expected precedential process, but inferred a "presumption" neither stated nor, they argue, appropriately demonstrated there. The Castellanos critics may perhaps argue that the dissent there was more persuasive and that a different result might well come from the Florida Court having a second chance in the future to review such a case. In that regard, the argument may be that the string of District Court cases were in fact correctly decided, and the Castellanos Supreme Court majority conclusion is atypical or aberrant, and therefore an erroneous, result.
Any or all of these arguments might be worthy of consideration or at least discussion. And, the arguments would likely require years of litigation and consideration. The constraint on Florida attorney fees passed in the 2003 reforms was litigated for years. The provisions of section 440.34 were again legislatively amended in 2009. The Supreme Court eventually decided Castellanos in 2016. Potentially, therefore, the next decade of Florida workers' compensation could be as interesting as the last, in the event that IMR is elected as the Legislature's chosen path.
