Valdez v. Workers' Compensation Appeals Board , 57 Cal. 4th 1231 ( 2013 )

Filed 11/14/13
IN THE SUPREME COURT OF CALIFORNIA
ELAYNE VALDEZ, )
)
Petitioner, )
) S204387
v. )
) Ct.App. 2/7 B237147
WORKERS’ COMPENSATION )
APPEALS BOARD and WAREHOUSE ) W.C.A.B. No ADJ7048296
DEMO SERVICES et al., )
)
Respondents. )
____________________________________)
This case concerns the admissibility of doctors’ reports in workers’
compensation proceedings. The Court of Appeal granted writ review and annulled
decisions by the Workers’ Compensation Appeals Board (the Board) restricting
the admission of reports from a doctor retained by petitioner Elayne Valdez. We
affirm.
I. BACKGROUND
A. The Relevant Statutes
Division 4 of the Labor Code sets out an extensive, regulated system for
compensation and medical treatment of employees injured at work. (Lab. Code,
§ 3200 et seq.)1 While employers are responsible for the costs of treating injured
workers (§ 4600), employees have the right to retain consulting or attending
physicians at their own expense (§ 4605). In 2004, the Legislature added article
1 Further statutory references are to the Labor Code.
1
2.3 to chapter 2 of part 2 of division 4, allowing employers to create medical
provider networks (networks or MPNs). (§ 4616 et seq.; Stats. 2004, ch. 34, § 27,
p. 140; hereafter, article 2.3.) Article 2.3 and its implementing regulations provide
detailed requirements for establishing and operating these networks. When an
MPN is in place and an employee reports an injury, the employer must arrange for
a medical evaluation and initiation of treatment. (§ 4616.3, subd. (a).) The
employer must notify the employee of the existence of the MPN, and the
employee’s right to change treating physicians within the network after the first
visit. (§ 4616.3, subd. (b).)
Two different statutory schemes for dispute resolution have a bearing on
the issue before us. Section 4060 et seq. were in effect for some years before the
enactment of article 2.3. They provide for comprehensive medical evaluations by
“qualified medical evaluators” (evaluators) to resolve disputes over compensation
for workplace injuries. (§§ 4062.1, subd. (b), 4062.2, subd. (b).) The employer is
liable for the cost of properly authorized evaluations. However, “no party is
prohibited from obtaining any medical evaluation or consultation at the party’s
own expense. . . . All comprehensive medical evaluations obtained by any party
shall be admissible in any proceeding before the appeals board except as provided
in Section 4060, 4061, 4062, 4062.1, or 4062.2”2 (§ 4064, subd. (d).)
Article 2.3 establishes a different process for employees who dispute the
diagnosis or treatment provided by an MPN doctor. The employee may seek an
opinion from a second network doctor, and if dissatisfied may turn to yet a third
doctor in the network. (§ 4616.3, subd. (c).) If the dispute persists after three
consultations within the MPN, the employee may request an “independent medical
review.” (§ 4616.4, subd. (b).) These reviews are performed by doctors or medical
2 Currently, none of the statutes referenced in section 4064, subdivision (d)
include any specific restriction on the admissibility of medical evaluations.
2
organizations retained by the administrative director of the Division of Workers’
Compensation (the director). (§ 4616.4, subd. (a).)
The independent medical reviewer (reviewer) receives all documents
related to the request, and may also conduct a physical examination of the
employee and order diagnostic tests. (§ 4616.4, subd. (e).) The reviewer
determines whether the disputed treatment is consistent with approved medical
standards.3 (§ 4616.4, subd. (f).) If the reviewer disagrees with the MPN
physician’s diagnosis or treatment, the employee may seek medical services
approved by the reviewer from a doctor within or outside the MPN, at the
employer’s expense. (§ 4616.4, subd. (i); 8 Cal. Code Regs., § 9768.17.) The
reviewer issues a written report to the director, who must adopt the reviewer’s
determination. (§ 4616.4, subds. (f), (h).) The director’s decision is then
appealable to the Board. (§ 5300, subd. (f); 8 Cal. Code Regs., § 9768.16,
subd. (b).)
This case centers on the scope of section 4616.6, an article 2.3 provision
that declares in its entirety: “No additional examinations shall be ordered by the
appeals board and no other reports shall be admissable [sic] to resolve any
controversy arising out of this article.” The question is whether section 4616.6
applies only in proceedings to resolve diagnosis and treatment disputes under
article 2.3, or more broadly in proceedings to determine disability benefits.4
3 The reviewer may rely on the “medical treatment utilization schedule” set
out in 8 California Code of Regulations, section 9792.20 et seq. (see § 5307.27),
or on the American College of Occupational and Environmental Medicine’s
Occupational Medicine Practice Guidelines, as appropriate. (§ 4616.4, subd. (f).)
4 We use the term “disability benefits” to refer to compensation for lost
wages or earning capacity, as opposed to benefits in the form of medical
treatment. (See Livitsanos v. Superior Court (1992) 2 Cal. 4th 744, 753.)
3
B. The Proceedings Below
Petitioner Valdez was injured by a fall at work. She began treatment with
Dr. Nagamoto, a physician in her employer’s MPN, but was dissatisfied. She did
not exercise her right to change physicians within the network, or seek a second or
third opinion from an MPN doctor. Instead, she undertook treatment with a doctor
outside the network, Dr. Nario, who was recommended by her attorney.
Valdez subsequently applied for temporary disability benefits, relying on
reports by Dr. Nario. Her employer objected that reports from non-MPN doctors
were inadmissible under section 4616.6 for purposes of the disability hearing.5
The workers’ compensation judge (WCJ) overruled the objection, stating that
“records from treating doctors have always been admissible.” Valdez was
awarded temporary disability benefits and attorney fees. The employer sought
reconsideration. Again, the WCJ ruled that reports from all treating doctors were
admissible, though he noted that the employer might not be liable for the cost of
Dr. Nario’s treatment and reports. The WCJ pointed out that the employer could
have objected to Valdez’s request for a hearing and sought a qualified medical
evaluation to resolve the dispute over temporary disability, but “appear[ed] to have
been so certain that non-MPN reports are inadmissible that it looked forward to
the trial and establishing the MPN, rather than objecting.”
The Board granted reconsideration en banc, and rescinded the WCJ’s
decision. Assuming for purposes of its opinion that the employer had established
a valid MPN and given Valdez proper notice, the Board held that section 4616.6
precluded the admission of reports from any doctor outside the MPN. The Board
further found that Dr. Nario was not Valdez’s primary treating physician, and
5 Valdez’s employer, Warehouse Demo Services, is aligned in these
proceedings with its insurer, Zurich North America, and the adjuster, ESIS
Chatsworth. We refer to these respondents collectively as “the employer.”
4
therefore was not qualified to issue an opinion regarding her eligibility for
compensation. For that proposition, the Board relied on Tenet/Centinela Hospital
Medical Center v. Workers’ Comp. Appeals Bd. (2000) 80 Cal. App. 4th 1041
(Tenet).
The Board recognized that section 4605 permits employees to consult with
any doctor at their own expense. It noted, however, that section 4605 does not
address the admissibility of “unauthorized” medical reports.6 The Board also
acknowledged that “[r]eports of attending or examining physicians” may be
received as evidence under section 5703, subdivision (a), but reasoned that it
would be an abuse of discretion to admit an unauthorized report. It remanded for
further proceedings on the existence of a validly established and noticed MPN,
noting as well that if substantial medical evidence were lacking, the record should
be further developed.
Valdez sought reconsideration, arguing in part that section 4616.6 applies
only to diagnosis and treatment disputes covered by article 2.3. The Board
reaffirmed its conclusions in a second en banc opinion. The Board acknowledged
that by its terms, section 4616.6 bars the admission of “other reports” only in
controversies arising from article 2.3. However, the Board asserted that it did not
rely “predominantly” on section 4616.6. It also considered the employee’s right to
change doctors within an MPN, the multiple-level article 2.3 process for obtaining
second and third opinions and an independent medical review, the requirement
that the primary treating physician render opinions on all medical issues relevant
to a compensation claim (§ 4061.5), and the comprehensive medical evaluation
6 When the opinions of the Board and the Court of Appeal below were
rendered, section 4605 provided: “Nothing contained in this chapter shall limit the
right of the employee to provide, at his own expense, a consulting physician or any
attending physicians whom he desires.” As discussed below, a subsequent
amendment to this provision sheds considerable light on the issue before us.
5
process set out in sections 4061 and 4062 for resolving disputes over temporary
and permanent disability.
Nevertheless, the Board seemed to take an expansive view of section
4616.6 in its second en banc opinion, reasoning that “because section 4616.6
specifically precludes the admissibility of non-MPN medical reports on disputed
issues of diagnosis, a report from a non-MPN treating physician finding an
applicant to be temporarily disabled, for example, based on a different diagnosis
from the MPN physician, should not be admissible under section 4616.6.” The
Board concluded by restating its view that when a validly established and properly
noticed MPN is in place, no doctor outside the network may become the primary
treating physician or submit an admissible report on medical issues relating to
eligibility for compensation.
The Court of Appeal granted Valdez’s petition for review and annulled the
Board’s decisions. The court reviewed the procedures set out in article 2.3, and
reasoned that section 4616.6 pertains only to the independent medical review
process for resolving controversies over treatment or diagnosis within an MPN.
The court declared, “once that review has been concluded and the controversy . . .
has been resolved, the matter should be at an end. Further medical reports and
examinations would not only be likely to be duplicative, but would also add time
and expense to the process. . . . [¶] It does not make sense . . . to construe section
4616.6 as a general rule of exclusion, barring any use of medical reports other than
those generated by MPN physicians. Section 4616.6 states nothing of the sort. If
the Legislature intended to exclude all non-MPN medical reports, the Legislature
could have said so; it did not.”
The court further held that nothing in the broader statutory scheme excludes
reports by non-MPN doctors from the Board’s consideration. It observed that
during a comprehensive medical evaluation, the evaluator is provided with reports
6
from the employee’s treating physician, who is not necessarily a member of an
MPN. (§ 4062.3, subd. (a).) The court noted that a rule barring reports from
privately retained physicians would eviscerate employees’ right under section
4605 to consult with any doctor at their own expense. Finally, the court found no
support in Tenet, supra, 80 Cal. App. 4th 1041, for the WCAB’s conclusion that Dr.
Nario’s report was inadmissible because he was not Valdez’s primary treating
physician.
We granted the employer’s petition for review, in which the claim of error
was limited to the Court of Appeal’s interpretation of section 4616.6. The Board
supported a grant of review, concurring with the employer’s argument that the
Court of Appeal opinion would effectively nullify the statutory scheme providing
for MPNs. Subsequently, the 2012 Legislature revised the workers’ compensation
statutes, amending section 4605 in the process. (Sen. Bill No. 863 (2011-2012
Reg. Sess.), hereafter Senate Bill 863.) The following italicized language was
added: “Nothing contained in this chapter shall limit the right of the employee to
provide, at his or her own expense, a consulting physician or any attending
physicians whom he or she desires. Any report prepared by consulting or
attending physicians pursuant to this section shall not be the sole basis of an
award of compensation. A qualified medical evaluator or authorized treating
physician shall address any report procured pursuant to this section and shall
indicate whether he or she agrees or disagrees with the findings or opinions stated
in the report, and shall identify the bases for this opinion.” (Stats. 2012, ch. 363,
§ 42, italics added.) The Legislature did not amend section 4616.6.
The changes made by Senate Bill 863 apply generally to proceedings that
have not resulted in final award: “This act shall apply to all pending matters,
regardless of date of injury, unless otherwise specified in this act, but shall not be
7
a basis to rescind, alter, amend, or reopen any final award of workers’
compensation benefits.” (Stats. 2012, ch. 363, § 84.)
The Board’s brief on the merits was filed after the passage of Senate Bill
863. The Board claims the amendment of section 4605 was a legislative effort to
nullify a core underpinning of the Court of Appeal opinion, which the Board
locates in the court’s observation that excluding reports of privately retained
physicians would eviscerate employees’ right to contract with doctors of their own
choice. The Board explains that its decision in Valdez’s case was intended to
“minimiz[e]” employees’ incentive to procure doctors at their own expense and
use those doctors’ reports to obtain benefits. Now that the Legislature has dealt
with this problem by specifying that compensation awards may not be based solely
on reports prepared by privately retained doctors, the Board suggests the central
issue in this case has been resolved, and recommends we dismiss our grant of
review. The employer, however, vigorously maintains its claim that section
4616.6 imposes a strict and broad rule of exclusion. We address this argument to
dispel any continuing uncertainty.
II. DISCUSSION
“[T]he Board has extensive expertise in interpreting and applying the
workers’ compensation scheme. Consequently, we give weight to its
interpretations of workers’ compensation statutes unless they are clearly erroneous
or unauthorized.” (Brodie v. Workers’ Comp. Appeals Bd. (2007) 40 Cal. 4th
1313, 1331.) Here, the Board’s interpretation of section 4616.6 was clearly
erroneous. Even before the recent amendment of section 4605, the idea that
section 4616.6 bars the admission of reports from non-MPN doctors in
proceedings to determine disability benefits was tenuous. The Legislature
specified that “[n]o additional examinations shall be ordered by the appeals board
and no other reports shall be admissable [sic] to resolve any controversy arising
8
out of this article,” limiting the evidentiary exclusion to proceedings originating
under article 2.3. (§ 4616.6, italics added.) Article 2.3 does not address disability
benefits. In this case, there were no article 2.3 proceedings.
The Court of Appeal sensibly limited the scope of section 4616.6 to matters
arising during the independent medical review process set out in article 2.3.
Reading section 4616.6 broadly to apply to all compensation proceedings is a
manifest distortion. As the Court of Appeal noted, the comprehensive medical
evaluation process set out in section 4060 et seq. for the purpose of resolving
disputes over compensability does not limit the admissibility of medical reports.
Section 4062.3, subdivision (a) permits any party to provide the evaluator with
“[m]edical and nonmedical records relevant to determination of the medical
issue.” Under section 4064, subdivision (d), “no party is prohibited from
obtaining any medical evaluation or consultation at the party’s own expense,” and
“[a]ll comprehensive medical evaluations obtained by any party shall be
admissible in any proceeding before the appeals board,” except as provided in
specified statutes. The Board is, in general, broadly authorized to consider
“[r]eports of attending or examining physicians.” (§ 5703, subd. (a).) These
provisions do not suggest an overarching legislative intent to limit the Board’s
consideration of medical evidence.
Any doubts over the scope of section 4616.6 are dispelled when we
consider the reforms enacted by Senate Bill 863. The Legislature did not revise
section 4616.6 to extend its reach beyond article 2.3 proceedings. Nor did it
narrow employees’ right to seek treatment from doctors of their choice at their
own expense, or bar those doctors’ reports from admission in disability hearings.
Rather, it provided that privately retained doctors’ reports “shall not be the sole
basis of an award of compensation.” (§ 4605.) The clear import of this language
is that such reports may provide some basis for an award, but not standing alone.
9
The employer protests that Valdez is not exercising her right to retain a
private physician under section 4605, because she has sought reimbursement for
Dr. Nario’s fees and thus is not retaining him at her own expense. The record
before us includes no ruling on Valdez’s request for reimbursement, and that issue
is not before us. However, the exclusionary rule the employer seeks to derive
from section 4616.6 would bar the admission of reports from privately retained
and compensated physicians in disability proceedings, even when no
reimbursement of medical fees is sought or awarded. Such a rule would be
inconsistent with the terms of section 4605, as amended by Senate Bill 863.
The employer’s attempts to transform section 4616.6 into a general rule of
exclusion rest largely on its insistence that MPNs, when established, must be the
exclusive source of diagnosis and treatment for injured employees. The
Legislature has imposed no such requirement. Section 4605 has long permitted
employees to consult privately retained doctors at their own expense, and the
amendments enacted by Senate Bill 863 maintain that right. The amendments also
include provisions strengthening the role of article 2.3’s independent medical
review process, enhancing the effectiveness of MPNs, and limiting employers’
liability for the costs of out-of-network treatment. But none of the new provisions
require MPNs to be exclusive providers of medical treatment.
Senate Bill 863 amended sections 4061 and 4062 to make the
comprehensive medical evaluation process unavailable in disputes over diagnosis
or treatment covered by article 2.3. (§§ 4061, 4062, subd. (c).) It added
provisions governing the resolution of disputes over employees’ right to seek
treatment outside an MPN at the employer’s expense. (§ 4603.2, subd. (a).) It
specified that reimbursement is not available for expenses incurred without the
employer’s authorization, with limited exceptions. (§ 4903.1, subd. (b).) These
statutory changes may encourage employees to use MPN services. However, they
10
do not foreclose other avenues of treatment, or bar the Board from considering
medical reports generated outside of an MPN when it reviews applications for
disability benefits.
We conclude that section 4616.6 restricts the admission of medical reports
only in proceedings under article 2.3 to resolve disputes over diagnosis and
treatment within an MPN. Our resolution of the admissibility issue on statutory
grounds obviates the need to address Valdez’s constitutional claims. We note that
on remand to the Board, the amendments effected by Senate Bill 863 are
applicable to Valdez’s award, which is not yet final.
III. DISPOSITION
We affirm the Court of Appeal’s judgment.
CORRIGAN, J.
WE CONCUR:
CANTIL-SAKAUYE, C. J.
KENNARD, J.
BAXTER, J.
WERDEGAR, J.
CHIN, J.
LIU, J.
11
See next page for addresses and telephone numbers for counsel who argued in Supreme Court.
Name of Opinion Valdez v. Workers’ Compensation Appeals Board
__________________________________________________________________________________
Unpublished Opinion
Original Appeal
Original Proceeding
Review Granted XXX 207 Cal. App. 4th 1
Rehearing Granted
__________________________________________________________________________________
Opinion No. S204387
Date Filed: November 14, 2013
__________________________________________________________________________________
Court:
County:
Judge:
__________________________________________________________________________________
Counsel:
Perona, Langer, Beck, Serbin & Mendoza, Ellen R. Serbin and John A. Mendoza for Petitioner.
David Bryan Leonard for California Society of Industrial Medicine & Surgery, Inc., as Amicus Curiae on
behalf of Petitioner.
Law Offices of Susan M. Garrett and Carl A. Feldman for California Lien Professionals Association, Inc.,
as Amicus Curiae on behalf of Petitioner.
Charles E. Clark; The Rondeau Law Firm, Charles R. Rondeau; Goldflam & Barth and Stuart I. Barth for
California Applicants’ Attorneys Association as Amicus Curiae on behalf of Petitioner.
Neil P. Sullivan and James T. Losee for Respondent Workers’ Compensation Appeals Board.
Grancell, Lebovitz, Stander, Reubens and Thomas, Grancell, Stander, Reubens, Thomas and Kinsey,
Timothy E. Kinsey, Sam L. Lebovitz, Stewart Reubens; Sedgwick, Christina J. Imre and Michael M. Walsh
for Respondents Warehouse Demo Services and Zurich North America.
Law Offices of Saul Allweiss, Law Offices of Allweiss & McMurty and Michael A Marks for California
Workers’ Compensation Institute and American Insurance Institute as Amici Curiae on behalf of
Respondents Warehouse Demo Services and Zurich North America.
Roxborough, Pomerance, Nye & Adreani, Michael B. Adreani and David R. Ginsburg for Crossroads
Staffing, Inc., as Amicus Curiae on behalf of Respondents Warehouse Demo Services and Zurich North
America.
Dietz, Gilmor & Chazan and Robert H. Potter for San Diego County and Imperial County Schools Risk
Management Joint Powers Authority as Amici Curiae on behalf of Respondents Warehouse Demo Services
and Zurich North America.
Counsel who argued in Supreme Court (not intended for publication with opinion):
John A. Mendoza
Perona, Langer, Beck, Serbin & Mendoza
300 East San Antonio Drive
Long Beach, CA 90807-0948
(562) 426-6155
Charles R. Rondeau
The Rondeau Law Firm
879 W. 190th Street, Suite 400
Gardena, CA 90248
(310) 545-9292
Christina J. Imre
Sedgwick
801 S. Figueroa Street, 19th Floor
Los Angeles, CA 90017
(213) 426-6900