MICHAEL SULLIVAN & ASSOCIATES BLOG

In an important development, the well-known Patterson case has been reversed by a Court of Appeal. Patterson is the significant panel decision that held that certain types of continuing care were not subject to utilization review (UR) and independent medical review (IMR). This decision, Illinois Midwest Insurance Agency LLC v. WCAB (Rodriguez) has held that the Patterson reasoning was inapposite of the statutory language, and has subjected continuing care to UR/IMR.

BACKGROUND

With the enactment of Senate Bill 863 in 2012, the California Legislature established the independent medical review (IMR) process. It became effective for all treatment requests Jan. 1, 2013. The IMR process replaced judicial review as the method to appeal UR decisions regarding all proposed medical care. Under the statutory scheme, all proposed medical care is to be requested by a physician submitting a request for authorization (RFA). That request is reviewed by UR, and may be appealed only to IMR. Judicial review of such care for reasonableness was no longer allowed (later case law established the sole exception — being for late UR).

California Senate Bill 487, signed into law in 2025, brings significant changes to the way employers and insurers can recover costs in workers’ compensation cases involving peace officers. The new law, heavily opposed by the employer community, places strict limits on subrogation recovery and eliminates a long-standing credit right that has been a cornerstone of cost control in public safety claims.

These changes will have a substantial impact on counties, cities, and other public entities that handle workers’ compensation claims for law enforcement officers.

For more than two decades, the law governing the identification of liable parties has been shaped by the Workers' Compensation Appeals Board’s en banc decisions in Coldiron v. Compuware Corp. In Coldiron I,^[1] the WCAB held that a third-party administrator (TPA) has a duty to disclose the identity of its client — whether a self-insured employer or an insurance carrier. Crucially, if the client is an insurance carrier, the TPA also must disclose whether the policy includes a "high self-insured retention," a large deductible or any other provision that affects the identity of the entity ultimately liable for payment. The WCAB warned that failure to do so could result in sanctions.

In Coldiron II,^[2] the WCAB declined to impose sanctions, as it was a case of first impression, but reiterated that the disclosure holdings remained in full force and effect.

Effective Jan. 1, 2022, the Workers' Compensation Appeals Board (WCAB) adopted regulations regarding electronic hearings. Remote hearings initially were used during the COVID-19 pandemic, but because such proceedings increased access to the workers' compensation system for parties, their representatives and the public, the WCAB believed that making the changes permanent would benefit the public and the administration of the workers' compensation adjudicatory system.

California Code of Regulations, Title 8, § 10745 states that the WCAB "may order that hearings be conducted electronically." CCR 10750 states that a notice of hearing must include "whether the hearing will be conducted electronically and how to access any electronic hearing."

California Code of Regulations 31.3 establishes the rules for scheduling appointments with a qualified medical evaluator (QME) selected from a panel. CCR 31.3(e) establishes when a QME must be available for an appointment and states, "If a party with the legal right to schedule an appointment with a QME is unable to obtain an appointment with a selected QME within ninety (90) days of the date of the appointment request, that party may waive the right to a replacement in order to accept an appointment no more than one-hundred-twenty (120) days after the date of the party's initial request for an appointment." CCR 31.3(e) also allows either party to report the QME's unavailability and requires a replacement panel to issue "when the selected QME is unable to schedule the evaluation within one-hundred-twenty (120) days of the date of that party's initial request for an appointment" unless the parties waive the time limit for scheduling an initial or subsequent evaluation. CCR 31.3(f) applies the provisions in CCR 31.3(e) to both comprehensive medical-legal evaluation by a QME and follow-up comprehensive medical-legal evaluations by a QME.

Under former Labor Code § 5909, a petition for reconsideration was deemed denied by operation of law unless the Workers' Compensation Appeals Board (WCAB) acted on it within 60 days from the date of filing. Effective July 2, 2024, LC 5909 states:

• "(a) A petition for reconsideration is deemed to have been denied by the appeals board unless it is acted upon within 60 days from the date a trial judge transmits a case to the appeals board.
• "(b)(1) When a trial judge transmits a case to the appeals board, the trial judge shall provide notice to the parties of the case and the appeals board.
• "(2) For purposes of paragraph (1), service of the accompanying report, pursuant to subdivision (b) of Section 5900, shall constitute providing notice."

LC 5909(c) specifies that the statute will be repealed as of July 1, 2026. The Court of Appeal has explained that LC 5909 was amended as a short-term fix to the WCAB's need for resources, and gives it the additional time to act on petitions it needs to resolve normal human errors or administrative irregularities. (Mayor v. WCAB (2024) 104 Cal. App. 5th 1297.)^[1]

On Nov. 5, 2024, the WCAB issued a significant panel decision, Reed v. County of San Bernardino, applying the time limits to act on a petition for reconsideration and explaining when a petition for reconsideration is appropriate.

The 2024 California legislative season is over. The Legislature had until Aug. 31, 2024, to pass bills, and Gov. Gavin Newsom had until Sept. 30, 2024, to sign or veto them. The bills signed by the governor take effect Jan. 1, 2025.

The 2024 legislative session was fairly quiet as it relates to the California workers' compensation process. Aside from the electronic signature provision, it is probably more notable for the bills that were vetoed than those signed into law.

In 2013, the WCAB held in Athens Administrators v. WCAB (Kite) that an injured worker's disabilities are not required to be combined using the Combined Values Chart (CVC). The WCAB explained that although the AMA guides favor the combined values method, "physicians may, under certain circumstances, employ a different method of determining impairment if they remain within the four corners of the AMA Guides."

For more than 10 years, Kite became shorthand for combining disabilities by simple addition. Although the case is not binding, such addition is a common method accepted for combining an injured worker's disabilities. Over the years, many cases have applied Kite, but none of the cases was binding nor did any fully elaborate on the circumstances when disabilities could be combined by addition, rather than by using the CVC. The cases also largely depended on how well the physicians explained their opinions.