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California High Court Clarifies Comp Denial Duties

July 8, 2008
Related Topics: Workers' Compensation, Medical Benefits Law, Benefit Design and Communication, Compensation, Latest News
Self-insured employers and insurers must conduct utilization review when disputing employee requests for workers’ compensation medical treatment, California’s Supreme Court ruled Thursday, July 3.

Ruling on State Compensation Insurance Fund v. Workers’ Compensation Appeals Board and Brice Sandhagen, the court said applying California Labor Code Section 4062 does not allow employers and insurers to opt out of performing utilization review conducted by a licensed doctor.

Section 4062 discusses provisions for resolving objections to a treating physician’s medical determinations. Only employees, and not employers, can base challenges to medical determinations on that section of the code, the Supreme Court ruled.

A car struck Sandhagen in 2003 while he was working on a road construction project, causing neck, back and other injuries. Doctors submitted a request to perform an MRI.

State Compensation Insurance Fund conducted utilization review and denied the MRI request based on its findings.

Both the Workers’ Compensation Appeals Board and an appeals court found that State Compensation Insurance Fund could not rely on its utilization review to reject the MRI because the insurer failed to respond to the treatment request within a mandatory deadline.

But the board and appeals court agreed an employer is not required to use utilization review and State Compensation Insurance Fund could rely on Section 4062 to object to the MRI.

The high court disagreed and remanded the case for a hearing consistent with its finding that California legislators intended for employers to conduct utilization review when considering employees’ requests for medical treatment.

Filed by Roberto Ceniceros of Business Insurance, a sister publication of Workforce Management. To comment, e-mail

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