Utilization Review and Medical Necessity
On June 24, 2009 in the panel decision of Vasquez v Colton Unified School District ADJ992523(SBR 0278781) in a case
dealing with Utilization Review the Appeals Board Decided that the School Boards failure to conduct a timely Utilization
review “renders its arguments that the treatment is not medically necessary moot”.
The facts of the case are not important other that to say that a request was made by the Provider for specific treatment
and the School district did not respond. The importance of the case is more compelling. The following is a discussion as
to the procedures required to be followed when dealing with a Utilization review;
Utilization Review (UR) is the process used by employers or claims administrators to review medical treatment
requested for the injured worker to determine if the proposed treatment is medically necessary. All employers or their
workers’ compensation claims administrators are required by law to have a UR program. This program is used to decide
whether or not to approve medical treatment recommended by a physician.
UR begins when the request for authorization is first received, whether by the employer, claims administrator or
utilization review organization (URO).
Authorization means assurance that appropriate reimbursement for a specific treatment will be paid. 8 CCR §9792.6(b)
sets forth how a doctor requests treatment, diagnostic tests or other medical services for an injured worker. A request for
authorization may initially be made verbally, but it must be confirmed in writing within 72 hours of the doctor’s “First
Report of Occupational Injury or Illness” (form DLSR 5021), the “Primary Treating Physician Progress Report” (DWC
form PR-2), or in a narrative report that contains the same information required in the PR-2 form. If a narrative report is
used, the document must be clearly marked at the top as a request for authorization. (8 CCR §9792.6(o))
In the Supreme Court Case of Sandhagen vs Workers Comp Appeals Board (2008) 44 Cal. 4th 230, 233 to 234 (73 Cal.
Comp. Cases 981) the Court held “
“The insurer referred the matter for utilization review but did not communicate its decision within the 14-day statutory
deadline set forth in § 4610, subd. (g) (1). A workers' compensation judge found that the insurer's failure to comply with
the statutory deadlines precluded it from relying on the utilization review process or on its doctor's report to deny the
requested treatment”
“Thus, employers and their insurers could not use § 4062 as an alternative method for disputing employees' treatment
requests. Only an employee could use the provisions of § 4062 to resolve a dispute over a treatment request; an
employer could not do so.”
In the Vasquez supra a recent Appeals Board Panel Decision further interpreted mandatory utilization review holding
that the failure to perform utilization review made the issue of medical necessity moot (i.e. medical necessity as requested
was established)
This raises several questions including what happens when the case is denied AOE / COE, with respect to UR and
causation decisions.
As held in the En Banc Decision of Simmons v. California, 70 Cal. Comp. Cas. (MB) 866 (W.C.A.B. 2005)
“However, we further hold that Dr. Pegram's utilization review reports are not admissible for the purpose of determining
the issue of whether applicant's industrial injury caused or contributed to her need for right shoulder surgery. To admit
Dr. Pegram's reports for this purpose would be inconsistent with the utilization review scheme established by section
4610.
In this regard, section 4610(a) states:
"''For purposes of this section, 'utilization review' means utilization review or utilization management functions that
prospectively, retrospectively, or concurrently review and approve, modify, delay, or deny, based in whole or in part on
medical necessity to cure and relieve, treatment recommendations by physicians, as defined in Section 3209.3, prior to,
retrospectively, or concurrent with the provision of medical treatment services pursuant to Section 4600.'' (Emphasis
added.)"
Thus, by section 4610(a)'s express terms, utilization review is directed solely at determining the ''medical necessity'' of
treatment recommendations. Therefore, section 4610 does not authorize a utilization review physician to determine
whether the employee's industrial injury caused or contributed to a need for treatment.
This interpretation of the utilization review statutory scheme is consistent with section 4610(f)(2), which provides that
utilization review criteria shall be consistent with the medical treatment utilization review schedule adopted pursuant to
section 5307.27. Section 5307.27, in turn, states that this medical treatment utilization schedule ''shall address, at a
minimum, the frequency, duration, intensity, and appropriateness of all treatment procedures and modalities commonly
performed in workers' compensation cases.'' (Emphasis added.) Accordingly, section 4610(f)(2) and section 5307.27,
when read together, demonstrate that utilization review does not encompass an assessment of whether a need for
treatment is causally related to the industrial injury”.
So the question and anticipation of further litigation with respect to this issue; when an insurance company denies a claim
with UR and UR is requested does that request for authorization turn into an implied authorized for the services if the
claim is later determined to be industrially related? (There does not seem to be at this point an appellate on this dealing
with this specific issue)
Who can make UR decisions:
A non-physician reviewer may:
• Request appropriate additional information necessary to render a decision (8 CCR §9792.7(b)(3))
• Approve a request for authorization (8 CCR §9792.7(b)(3))
• Discuss applicable medical guidelines with the requesting physician when requested treatment appears to be
inconsistent with medical guidelines (8 CCR §9792.7(b)(3))
The non-physician reviewer may discuss the treatment plan with the requesting physician. If the requesting physician
decides to make a change in the treatment plan, the physician should provide documentation for that change. (8 CCR
§9792.7(b)(3))
For example, the URO or claims adjuster could fax the modified request to the requesting provider to approve, sign and
return it.
.
A "reviewer" is a medical doctor, doctor of osteopathy, psychologist, acupuncturist, optometrist, dentist, podiatrist or
chiropractic practitioner licensed by any state or the District of Columbia, competent to evaluate the specific clinical
issues involved in the medical treatment services that are the subject of the request for authorization, where these services
are within the scope of the reviewer's practice. (8CCR §9792.6(q))
The significant of the Vasquez supra case is that it specifically states that if utilization review is not done properly after
a request for authorization, medical necessity is established. This case at first glance seems to resolve an issue of
utilization review, but in this writer’s opinion may well open up a flood gate of litigation against insurance carriers
because of past practices of not conducting utilization review properly.
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