High Court Puts Alleged Utilization Review Injury Back into Workers’ Comp

The California Supreme Court has wrested back into the workers’ compensation system a claim of medical malpractice by a worker who alleged injury from a utilization review decision. The case overrules a lower court decision handed down in 2016. 

In 2008, plaintiff Kirk King sustained a back injury at work. Three years later, Mr. King suffered anxiety and depression from the chronic pain from his back injury and received a prescription for Klonopin. The Klonopin was provided to Mr. King through workers’ compensation, which in 2013 conducted a utilization review to determine whether the drug was medically necessary. Dr. Naresh Sharma, an anesthesiologist, conducted the utilization review and determined that the drug was unnecessary and decertified it. A psychiatrist who conducted another review reached the same conclusion.

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Mr. King claims that the denial required him to immediately stop taking Klonopin and that the sudden cessation caused him to suffer four seizures, resulting in additional injury. Mr. King sued CompPartners, Inc., and Dr. Sharma for both professional medical negligence and general negligence.

The events described in the Supreme Court’s decision are based on the allegations of Mr. King and his wife. The defendants did not yet have the need to contest the truth of any allegations. 

At the trial court level, the defendants instead successfully argued that the allegations of medical malpractice and general negligence should be barred outright because the state workers’ compensation system is the exclusive remedy for any injuries suffered by Mr. King. The Court of Appeal agreed that the decertification decision by Dr. Sharma fell within the workers’ compensation system, but held that insofar as the Kings challenged Dr. Sharma’s failure to warn Mr. King of the risks of Klonopin withdrawal, the plaintiffs would be afforded another effort to plead their case in the civil court system.

In reversing the Court of Appeal, the Supreme Court reviewed the history of the workers’ compensation system, describing the “basic tradeoff” of the legislative scheme: “The employee is afforded swift and certain payments for medical treatment without having to prove fault, but, in exchange, gives up the right to sue in tort for those injuries that result from risks encompassed by the employment relationship.”

In King v. CompPartners, the state high court cited precedent for limiting an employee to the workers’ compensation system when a work injury contributes to a subsequent non-industrial injury, such as a new or aggravated injury resulting from medical or surgical treatment for the industrial injury.

“Because the Kings allege injuries that are derivative of a compensable workplace injury, their claims fall within the scope of the workers’ compensation bargain and are therefore compensable within the workers’ compensation system,” the Supreme Court said.

In its unanimous decision, the high court distinguished the industrial origins of Mr. King’s seizures from an earlier California case that allowed an injured hospital worker to proceed outside workers’ compensation after she slipped and fell at the same hospital where she had chosen to have her original injuries treated. That earlier decision reasoned that the slip and fall injury was entirely independent of the hospital worker’s employment relationship with the hospital and that the hospital’s duty to her in that instance was as a landowner, not as an employer.

Utilization review in workers’ compensation is required by statute and is done on behalf of an employer. The Supreme Court warned that permitting plaintiffs to bring tort suits against such reviewers in the same manner as they might bring tort suits against treating physicians would subject utilization reviewers to a second – “and perhaps competing” – set of obligations rooted in tort rather than statute.

“That result does not sit easily with the Legislature’s overarching purpose of replacing a dispute resolution process that was cumbersome, lengthy, and potentially costly with one that instead balances the dual interests of speed and accuracy."

 

Gordon Ownby is CAP’s General Counsel. Questions or comments related to “Case of the Month” should be directed to gownby@CAPphysicians.com.