Exclusive Remedy Affirmed
Aug 29, 2018


The California Supreme Court ruled that workers’ compensation remains the exclusive remedy for resolving disputes related to utilization review (UR) arising from a workplace injury.  The court upheld established law that injuries sustained during the worker’s compensation process remain in the workers’ compensation system and cannot become a tort claim.



In February 2008, the employee sustained a back injury while at work.  In the course of treatment, he was prescribed medication, which was later found to be medically unnecessary during a UR.  The employee alleged that the utilization reviewer caused him additional injuries by denying the prescription without authorizing a weaning regimen or warning of the possible side effects of abruptly stopping the medication.  The employee brought a tort claim against the utilization reviewer.    



All employers or their workers’ compensation claims administrators are required by law to have a UR program.  Utilization reviewers act on behalf of the employers and determine whether the physician’s treatment plan recommended for an employee’s injury is medically necessary and based on medical treatment guidelines. 



The court ruled that the employee’s injury arose out of and in the course of the UR– a statutorily required part of the workers’ compensation process.  The UR injury is then compensable under the Workers’ Compensation Act.  The court also reasoned that the exclusive remedy preempts tort claims against certain other persons and entities, such as insurers, independent claims administrators and adjusters, and now includes utilization reviewers. 


Work Comp Reforms


Last week Gov. Bill Walker signed into law a workers’ compensation reform bill (H.B. 79) that strives to modernize the system to prevent fraud and increase efficiency.  The bill will close the Second Injury Fund to any injury occurring after August 31, 2018 and defines who can be categorized as an independent contractor.  The bill also streamlines the process for obtaining a corporate exemption from workers’ compensation coverage, allows businesses to report data and make payments electronically, and increases funding for the Workers’ Compensation Safety Administrative Account, which funds the fraud unit that tracks down fraud and abuse.



Gov. Bruce Rauner’s amendatory veto of the insurance omnibus bill sends it back to the Illinois House for consideration during the November Veto session.  The bill would have reformed the Illinois Insurance Code’s regulatory framework for captive insurance companies.  However, Gov. Rauner’s amendatory veto eliminated the new workers’ compensation rate regulation changes and the new regulation for short-term limited-duration (STLD) health plans from the bill.  Gov. Rauner indicated that the omnibus bill would have his approval if these provisions were taken out of the bill.  We’ll keep watching this as it could have significant impact on the captive industry.


Making Our Way Around the Country


The Wyoming Supreme Court ruled that an injured worker who requests a device not approved by the U.S. Food and Drug Administration (FDA) must provide sufficient objective medical support for its use to be compensable under workers’ compensation.  The court affirmed a prior decision that considered the non-FDA treatment as “alternative medicine,” and not reasonable and necessary since the employee did not produce the necessary documentation of its safety and effectiveness, and the benefits were properly denied.  Moving to the Land of Lincoln, Illinois Gov. Bruce Rauner signed into law a medical marijuana expansion bill as alternative to opioid painkillers.  The bill allows physicians to authorize medical marijuana for any patient who has or would qualify opioids.  The measure removes some of the major restrictions on the medical marijuana program, including removing fingerprinting and criminal background checks.  The state has until Dec. 1 to implement the new rules for the program.



The U.S Food and Drug Administration (FDA) has awarded a contract to the National Academies of Sciences, Engineering, and Medicine (NASEM) to create new opioid prescribing evidence-based guidelines.  Unlike the Centers for Disease Control and Prevention (CDC) guidance in 2016, the NASEM plans to lay out treatment recommendations for specific conditions and procedures.  In the meantime, the California Legislature passed a bill (A.B. 186) that would allow safe injection sites in San Francisco under a three-year pilot.  The sites would allow for people suffering from addiction to use drugs at facilities under the supervision of trained staff.  However, in an op-ed piece in the New York Times, Deputy Attorney General Rod Rosenstein said that “cities and counties should expect the Department of Justice to meet the opening of any injection site with swift and aggressive action.”  The bill heads to Gov. Jerry Brown for his signature.



This past week Senator John McCain (R-Ariz.) died at the age of 81 after a battle with brain cancer.  Sen. McCain served America for sixty years both in uniform and public office.  Thank you for your service.  Godspeed.


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