2009-EB-10 (2009). Jesus Cervantes vs. El Aguila Food Producs Inc.; Safeco Insurance Co. of Illinois;Superior National Insyrance Co. In Liquidation; California Insurance Guarantee Association; and Broadspire (Servicing Facility).

CourtCalifornia
California Workers Compensation Decisions 2009. 2009-EB-10 (2009). Jesus Cervantes vs. El Aguila Food Producs Inc.; Safeco Insurance Co. of Illinois;Superior National Insyrance Co. In Liquidation; California Insurance Guarantee Association; and Broadspire (Servicing Facility) WORKERS'COMPENSATION APPEALS BOARD STATE OF CALIFORNIAJESUS CERVANTES,Applicant,vs. EL AGUILA FOOD PRODUCTS, INC.;SAFECO INSURANCE CO. OF ILLINOIS;SUPERIOR NATIONAL INSURANCE CO., In Liquidation; CALIFORNIA INSURANCE GUARANTEE ASSOCIATION; and BROADSPIRE (Servicing Facility),Defendant(s).Case Nos. ADJ3675309 (SAL 0081669) ADJ2967795 (SAL 0101259) ADJ3517685 (SAL 0077391) ADJ1962561 (SAL 0077392)OPINION AND DECISION AFTER RECONSIDERATION (EN BANC)We granted the petition for reconsideration of defendant, Safeco Insurance Company of Illinois (Safeco), to allow time to further study the record and applicable law. Thereafter, to secure uniformity of decision in the future, the Chairman of the Appeals Board, upon a majority vote of its members, assigned this case to the Appeals Board as a whole for an en banc decision (Lab. Code, § 115)(fn1) regarding the proper procedure to be followed when an injured employee's treating physician has recommended spinal surgery. We hold that the procedures and timelines governing objections to a treating physician's recommendation for spinal surgery are contained in Labor Code sections 4610 and 4062(fn2) and in Administrative Director (AD) Rules 9788.1, 9788.11, and 9792.6(o)(fn3) and are as follows: (1) when a treating physician recommends spinal surgery, a defendant must undertake utilization review (UR);(fn4) (2) if UR approves the requested spinal surgery, or if the defendant fails to timely complete UR, the defendant must authorize the surgery; (3) if UR denies the spinal surgery request, the defendant may object under section 4062(b), but any objection must comply with AD Rule 9788.1 and use the form required by AD Rule 9788.11; (4) the defendant must complete its UR process within 10 days of its receipt of the treating physician's report, which must comply with AD Rule 9792.6(o), and, if UR denies the requested surgery, any section 4062(b) objection must be made within that same 10-day period; and (5) if the defendant fails to meet the 10-day timelines or comply with AD Rules 9788.1 and 9788.11, the defendant loses its right to a second opinion report and it must authorize the spinal surgery. We expressly disapprove of Brasher v. Nationwide Studio Fund (2006) 71 Cal.Comp.Cases 1282 (Appeals Board significant panel decision) (Brasher) to the extent it holds: (1) a defendant may opt out of UR and instead dispute the requested spinal surgery using only the procedure specified in section 4062(b); and (2) if a defendant's UR denies spinal surgery, it is the employee that must object under section 4062(a). I. BACKGROUND Applicant, Jesus Cervantes, sustained several industrial injuries to his low back in 1996, 1997, and 1998, while employed by El Aguila Food Products, Inc. (El Aguila). El Aguila was insured by Safeco for two of these injuries. On September 2, 2003, a stipulated Findings and Award issued which determined, among other things, that applicant is entitled to further medical treatment, administered by Safeco. Applicant began treating with Catalino Dureza, M.D, who sent four narrative reports to Safeco between September 2008 and January 2009. All four reports described applicant's current problems and diagnosed "lumbar discopathy with disc displacement" and "lumbar radiculopathy." The September 30, 2008 report requested authorization for a lumbar MRI; the November 4, 2008 report said that applicant "may be a surgical candidate" pending the results of the MRI; and the December 13, 2008 report set forth the MRI findings, but said Dr. Dureza would continue to provide applicant with medication for symptomatic relief. In the January 16, 2009 report, Dr. Dureza said: "I do feel somewhat confident that the patient would benefit from surgery ... Therefore, I am requesting L4-L5 and L5-S1 posterior lumbar interbody fusion with pedicle screw fixation and extensive decompression by a Gill Procedure. ... [¶] Authorization should be forthcoming in order to prevent further neurological and musculoskeletal deterioration." However, the January 16, 2009 narrative report did not clearly state at the top that Dr. Dureza was requesting authorization for surgery. On February 25, 2009, Dr. Dureza sent Safeco a fax captioned "WRITTEN REQUEST FOR SURGERY AUTHORIZATION," which referenced his earlier reports and requested that Safeco authorize an "L4-5 + L5-S1 posterior lumbar interbody fusion with pedicle screw fixation." On March 4, 2009, Safeco obtained a UR report from Allen Deutsch, M.D., who concluded that the requested surgery "is not recommended as medically necessary" based in part on the ACOEM Guidelines.(fn5) An expedited hearing was held before a workers' compensation administrative law judge (WCJ), at which the reports of Dr. Dureza and Dr. Deutsch were admitted in evidence. At trial, applicant argued that he is entitled to surgery because: (1) Dr. Dureza's January 16, 2009 report clearly requested authorization for surgery and, therefore, Safeco's March 4, 2009 UR denial was untimely under section 4610(g); and (2) Safeco did not object to Dr. Dureza's January 16, 2009 report within 10 days of receipt and, therefore, it could not avail itself of the spinal surgery second opinion dispute resolution procedure of section 4062(b). Defendant argued that applicant is not entitled to surgery because: (1) AD Rule 9792.6(o) requires that any narrative report requesting authorization for proposed treatment "shall be clearly marked at the top that it is a request for authorization"; (2) Dr. Dureza's February 25, 2009 fax was the first written communication that was clearly marked at the top that he was requesting authorization for spinal surgery and, therefore, Safeco's March 4, 2009 UR denial was timely; and (3) once Safeco issued its timely UR denial, it was applicant's burden to initiate the spinal surgery second opinion process by timely objecting to the UR denial, but he did not do so. On May 13, 2009, the WCJ issued a Findings and Order determining that applicant is entitled to lumbar spinal fusion surgery, concluding that "Dr. Dureza's recommendation for lumbar spinal fusion surgery appears reasonable and appropriate" and that Dr. Deutsch's UR report is "not persuasive." Accordingly, the WCJ said the legal issues were "moot." Safeco filed a timely petition for reconsideration that essentially raises the same legal arguments it presented at trial, but also asserts that Dr. Dureza's opinion is not substantial evidence. Applicant filed an answer that essentially raises the same legal arguments he made at trial, but also contends that Dr. Dureza's reports support the finding of entitlement to spinal surgery. We granted reconsideration to further study the factual and legal issues presented. II. DISCUSSION In this opinion, we interpret certain provisions of section 4610 and section 4062, and we consider the interrelationship of these provisions together with the application of relevant AD Rules, in the context of a treating physician's request for authorization of spinal surgery. A. Principles of Construction The fundamental rule of statutory construction is to effectuate the Legislature's intent. (DuBois v. Workers' Comp. Appeals Bd. (1993) 5 Cal.4th 382, 387 [58 Cal.Comp.Cases 286, 289] (DuBois).) "When interpreting any statute, it is well-settled that we begin with its words because they generally provide the most reliable indicator of legislative intent." (Smith v. Workers' Comp. Appeals Bd. (2009) 46 Cal.4th 272, 277 [74 Cal. Comp. Cases 575, 578] (Smith) [internal quotation marks omitted].) "We are required to give effect to statutes according to the usual, ordinary import of the language employed ... ." (DuBois, 5 Cal.4th at p. 388 [58 Cal.Comp.Cases at p. 289]).) "If the language is clear and unambiguous, there is ordinarily no need for judicial construction [and, therefore,] we presume the Legislature meant what it said and the plain meaning governs." (Smith, 46 Cal.4th at p. 277 [74 Cal. Comp. Cases at p. 578] [internal quotation marks omitted]; see also DuBois, 5 Cal.4th at pp. 387-388 [58 Cal.Comp.Cases at p. 289].) Nevertheless: "At the same time, we do not consider ... statutory language in isolation. Instead, we examine the entire substance of the statute in order to determine the scope and purpose of the provision, construing its words in context and harmonizing its various parts. Moreover, we read every statute with reference to the entire scheme of law of which it is part so that the whole may be harmonized and retain effectiveness." (San Leandro Teachers Ass'n v. Governing Bd. of San Leandro Unified School Dist. (2009) 46 Cal.4th 822, 831 [internal quotation marks and citations omitted]; see also Chevron U.S.A., Inc. v. Workers' Comp. Appeals Bd. (Steele) (1999) 19 Cal.4th 1182, 1194 [64 Cal.Comp.Cases 1, 22] (Steele) ("The words of the statute must be construed in context a and statutes or statutory sections relating to the same subject must be harmonized, both internally and with each other, to the extent possible.").) Generally, the rules of statutory interpretation also govern the interpretation of regulations (Cal. Drive-In Restaurant Ass'n v. Clark (1943) 22 Cal.2d 287, 292.) Therefore, our duty is to effectuate a...

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