Time Limit for Utilization Review After Deferral

Labor Code § 4610(l) allows an employer to defer conducting utilization review (UR) of a request for medical treatment "while the employer is disputing liability for injury or treatment of the condition for which treatment is recommended pursuant to Section 4062." Former California Code of Regulation (CCR) 9792.9.1(b) and new CCR 9792.9.2(a), effective April 1, 2026, state that a request for authorization "may be deferred if the claims administrator disputes liability for either the occupational injury for which the treatment is recommended or the recommended treatment itself on grounds other than medical necessity." That procedure protects defendants from having to immediately determine the medical necessity of treatment for a potentially nonindustrial condition.

LC 4610(m) establishes the time periods to conduct UR if it has been deferred. It states that after "[I]t finally determined that the employer is liable for treatment of the condition for which treatment is recommended, ... the time for the employer to conduct prospective utilization review shall commence from the date of the employer’s receipt of a treatment recommendation after the determination of the employer’s liability." New CCR 9792.9.2(c) similarly states that after UR is deferred, and it is finally determined that the claims administrator is liable for treatment of the condition for which it's recommended, either by a decision of the WCAB or by agreement of the parties, "The time for the claims administrator to conduct prospective utilization review shall commence from the date of the claims administrator’s receipt of a request for authorization after the final determination of liability." So, both the statute and the regulation state that prospective UR commences on receipt of a treatment request after the final determination of liability.

But a recent panel decision, Habtes v. United Facility Solutions dba Command Guard Services, 2025 Cal. Wrk. Comp. P.D. LEXIS 450, held that the UR clock begins immediately on resolution of the liability dispute and that an applicant is not required to resubmit a new or original request for authorization (RFA) to trigger the defendant's duty. The decision places the onus on the defendant to act on a previously received request for authorization once liability is established.

FACTS OF THE CASE

In Habtes, the applicant’s treating physician submitted an RFA for an inpatient rehabilitation program to treat a traumatic brain injury (TBI) Feb. 12, 2024. The defendant timely deferred UR of the RFA, citing that the TBI was a disputed body part. More than a year later, on May 7, 2025, the defendant accepted the TBI as an industrial injury. The defendant then issued a UR decision denying the requested inpatient program May 15, 2025.

The matter proceeded to a hearing in which the workers' compensation judge (WCJ) found that the UR decision was untimely. The defendant filed a petition for reconsideration, arguing that the time to complete UR did not begin until the applicant either resends the original or new RFA to the defendant after the liability dispute was resolved.

WCAB'S DECISION

The WCAB denied the defendant’s petition and affirmed the WCJ's finding that the UR was untimely. The panel explained that LC 4610(m) dictates that the time frame for conducting prospective UR commences from the date of receipt of an RFA after the determination of liability.

The WCAB interpreted that to mean that the clock starts once both necessary conditions are met: (1) the defendant has received the RFA, and (2) liability has been determined. The WCAB held that because the defendant had received the RFA Feb. 12, 2024, the five-day prospective UR clock began to run immediately on May 7, 2025 — the day the liability dispute was resolved.

Because the defendant’s UR decision was issued on the sixth business day, it was untimely. The WCAB explicitly rejected the defendant’s argument that an applicant must resend the RFA, noting that such a requirement "would also encumber applicant with the duty to monitor a claim until the dispute is resolved and then either resend the original RFA or have a treating physician send a new RFA. Such interpretation is plainly not tenable nor warranted."

ANALYSIS OF THE DECISION

To this writer, the Habtes decision appears to contradict the specific language in LC 4610(m) that prospective review following a UR deferral "shall commence from the date of the employer’s receipt of a treatment recommendation after the determination of the employer’s liability." A strict interpretation of that language could suggest that a new RFA is required to restart the UR process.

This statutory language could be interpreted as a deliberate legislative decision not to force an employer, on an adverse court determination, to review all past requests for care. While a dispute over liability for injury or a condition is ongoing, it is not uncommon for an injured worker's condition to change, and prior treatment requests might not be germane to a worker's current condition.

The Habtes, however, prioritized the policy of expediting medical care over a rigid statutory interpretation. The decision places an affirmative duty on defendants to act promptly once a threshold liability issue is resolved. Defendants cannot place the burden on the applicant or treating physicians to re-initiate a treatment request that has already been made. They will be required to send all prior requests for UR.

Although not binding, the Habtes decision is citable and provides a clear roadmap for defendants. This decision underscores the importance of robust internal tracking systems. When UR is deferred pending a liability dispute, claims administrators must calendar a follow-up for when that dispute is resolved. On acceptance of a body part or a final determination of liability, the claims administrator immediately must review the file for any previously deferred RFAs and commence the UR process.

A failure to act will render the subsequent UR decision untimely. In such cases, jurisdiction over the medical necessity of the requested treatment falls to the WCAB, bypassing the independent medical review (IMR) process entirely. Practitioners on both sides must be acutely aware that the resolution of a liability dispute immediately and automatically starts the clock on any pending UR.

For further discussion on this topic, see Sullivan on Comp Section 7.33 Utilization Review — Delay Due to Threshold Issue.