The recent significant panel decision in Timothy Bodam v. San Bernardino County/Dept of Social Services, 2014 Cal. Wrk. Comp. LEXIS 156 (W.C.A.B. Nov. 20, 2014), along with the holding in Dubon v. World Restoration (Dubon II), (2014) 79 Cal. Comp. Cases 1298, have clarified the elements of utilization review (“UR”) timeliness. Dubon II was discussed, along with the effects of untimely UR decisions on resolution of medical treatment disputes, in our October 2014 Newsletter (“Not so fast, The Workers’ Compensation Appeals Board Rescinds Dubon I and Issues New Determination”). Where a utilization review is not timely, the WCAB then has jurisdiction to adjudicate questions regarding medical treatment, and the comparative (if flawed) efficiency of the UR and Independent Medical Review process.

Labor Code section 4610 provides the time limits applicable to a UR decision. The time limits discussed in this article are for perspective treatments, those which have not yet been provided and represent the vast majority of requests for authorization. Bodam clarifies the separate time limits which apply to the distinct stages of a utilization review decision. First, a utilization review decision is required within 5 working days of receipt of all information necessary to make the UR determination. In no event shall the determination be made more than 14 days from the date of the medical treatment recommendation by the physician. (Labor Code section 4610(g)(1)).

After a utilization review decision has been made, that decision cannot merely be sent but must be communicated to the requesting physician within 24 hours. (Labor Code section 4610(g)(3)(A)). The Bodam case makes clear that the UR decision must be telephoned, faxed, or e-mailed to the requesting physician to ensure that it has been communicated. The communication standard is based on a reasonable expectation that the decision would have been received by the physician, whether in a voice-mail, a fax or in an email inbox. Providing written notice is not sufficient as it would not reasonable be expected to have reached the physician within the 24 hour time period, and therefore the decision would not have been communicated within 24 hours of the decision having been made.

The UR decision must be further provided in written notice to the requesting physician within two business days of the decision having been made and communicated as indicated above. (Labor Code section 4610(g)(3)(A) ). Unlike the communication requirement, the written notice requirement only requires the written notice be sent within two days of the communication of the utilization review decision.

The three time requirements for a prospective UR decision are therefore:

1. the decision requirement,
2. the communication requirement, and
3. the written notice requirement.

Each has a distinct time limit associated with it. Bodam makes clear that a failure of any one of the three time limits will render the UR decision untimely. In the Bodam case the UR decision was made timely after only three days but the decision was not timely communicated within 24 hours of the decision having been made. Because the communication never occurred, it did not trigger the time limit for the two business day written notice timely. In fact, the defendant in Bodam did not provide any evidence of written notice until well after the two business day time limit should have been initiated. However, even if the written notice had been provided in a timely fashion, the UR would still be invalid because of the failure to communicate the decision within 24 hours.

As had earlier been decided in Dubon II, it is within the jurisdiction of the WCAB to determine whether or not a utilization review is timely. So an applicant may challenge the timeliness of a UR decision at a hearing. If the UR decision is determined to be untimely then the WCAB has jurisdiction to determine the issue of medical necessity.

Where UR decisions are untimely, the costs of resolving questions of medical necessity grow exponentially. There will of course be the first hearing on whether or not the UR Decision is timely. As the burden to show medical necessity is the applicant’s, it would not be unlikely for the workers’ compensation judge to allow (or even require) further development of the record on the question of medical necessity. This would likely be followed by an expedited trial on the medical necessity question.

Thus where UR decisions are untimely for a failure to meet any of the three time limits, it could be expected that the issue would not be resolved until after two hearings and development of the medical record. This would clearly be a significant increase in cost and delay over the standard utilization review and IMR process. For more modest medical treatment requests, this may lead to a defendant authorizing the treatment to avoid litigation costs. Effectively then, a failure to timely make, communicate, and provide written notice of UR decisions could lead to authorization of lower cost treatment requests regardless of their medical necessity.

Although neither Bodam nor Dubon II deal with Independent Medical Review (IMR) decisions, both cases serve as a warning to ensure IMR deadlines are adhered to by defendants. It should be noted that none of the IMR time limits require communication as is required in the communication of UR decisions within 24 hours.

Bodam does not mark a dramatic change in our understanding of the law, but it serves to highlight the vital importance of rigorously complying with all UR time frames. A failure to strictly comply can result in costly and case-dragging litigation as well as potential authorization of unnecessary treatments.