California Workers’ Comp: A Shift in Power – What the Rodriguez Ruling Means for the Future
The California workers’ compensation landscape just experienced a significant tremor. The Second District Court of Appeal’s decision in Midwest Ins. Agency, LLC v. WCAB/Rodriguez is more than just a reversal of a prior ruling; it signals a potential turning point in how ongoing medical treatment is authorized – and challenged. For years, the “Patterson exception” allowed authorizations to effectively become permanent, placing a heavy burden on employers to prove a “change of circumstance” to modify them. That’s now changed.
The Demise of the “Patterson Exception” and What It Means
The Rodriguez ruling essentially throws the burden back where it arguably belonged all along: on the utilization review (UR) process itself. Instead of needing to demonstrate a change in a patient’s condition to *stop* treatment, insurers can now rely on evidence-based medicine and the UR reviewer’s rationale for termination. This is a critical shift. Previously, a claims professional facing perpetually authorized physical therapy or home healthcare – even with no demonstrable improvement – was often stuck, fearing costly penalty petitions.
Consider a real-world scenario: a construction worker sustains a back injury. Initial authorization for physical therapy is granted, and it’s reasonable. But months turn into years, with no objective improvement reported by the treating physician. Under the old system, cutting off that therapy risked a penalty. Now, the UR reviewer, guided by medical evidence, can justify termination without needing to prove the worker’s condition has worsened – simply that continued treatment isn’t demonstrably beneficial.
The Rise of “Chronic and Progressive” Claims – A Potential Counter-Strategy
However, this isn’t a complete win for employers. Experts predict a surge in claims asserting “chronic and progressive” conditions – diagnoses like complex regional pain syndrome (CRPS), certain cancers, or neurological disorders – where treatment is inherently ongoing. These conditions, often insidious and worsening over time, present a different challenge.
Pro Tip: Claims administrators should proactively strengthen their UR processes to rigorously evaluate the medical necessity of *all* ongoing treatment, especially in cases where a chronic or progressive condition is alleged. Detailed documentation and a clear rationale for decisions will be paramount.
The legal team at Gilson Daub anticipates increased litigation surrounding these claims, with applicant attorneys attempting to circumvent the Rodriguez ruling by framing treatments as essential for managing a chronic, worsening condition. This will likely lead to more independent medical reviews (IMRs) and potentially, more cases heading to the Workers’ Compensation Appeals Board (WCAB).
Lien Claims and the Potential for Reduced Litigation
On a brighter note, the Rodriguez decision offers potential relief from the ever-growing problem of outrageous lien claims. A robust UR and IMR process, empowered to challenge the necessity of prolonged treatment, can effectively dismantle inflated or unsubstantiated liens. This could significantly reduce litigation costs and settlement amounts.
Did you know? California lien filings have been steadily increasing in recent years, contributing to a backlog in the WCAB system. The Rodriguez ruling could help stem the tide by providing a stronger defense against questionable claims.
SB 863 and the Court’s Reminder to the WCAB
The Court of Appeal didn’t just address the “Patterson exception”; it also subtly rebuked the WCAB for straying from the intent of Senate Bill (SB) 863, enacted in 2012. SB 863 aimed to reduce the influence of applicant attorneys in medical treatment decisions, reinforcing the role of UR and IMR. The court’s decision in Rodriguez is a clear message: the Labor Code should be read and applied as written, and the UR process should remain the controlling standard.
FAQ: Rodriguez and Workers’ Comp
- Will all ongoing treatment be cut off? No. Treatment will still be subject to utilization review, but decisions can now be based on medical necessity and evidence-based medicine, not solely on a “change of circumstance.”
- What is the “Patterson exception”? It was a WCAB holding that required employers to prove a change in circumstances before modifying an existing utilization review.
- How does this affect lien claims? It provides a stronger defense against inflated or unsubstantiated lien claims by empowering UR and IMR.
- What should claims administrators do now? Strengthen their UR processes, focus on detailed documentation, and prepare for potential challenges related to “chronic and progressive” conditions.
The Rodriguez ruling isn’t a silver bullet, but it’s a significant step towards restoring balance and rationality to the California workers’ compensation system. It’s a reminder that medical treatment should be guided by evidence, not by inertia or the fear of penalty. The coming months will be crucial as all stakeholders – employers, insurers, applicant attorneys, and the WCAB – adapt to this new landscape.
Want to learn more about navigating the complexities of California workers’ compensation? Explore our resources at Gilson Daub or contact us for a consultation.
