Case Title: State Comp. Ins. Fund v. WCAB (Sandhagen)

Citation: 44 Cal. 4th 230 original opinion

Docket Number: S149257

State: california

Court: California Supreme Court

Date: 2008-07-03T00:00:00Z

Document:
1
Filed 7/3/08 
 
 
 
IN THE SUPREME COURT OF CALIFORNIA 
 
 
 
STATE COMPENSATION INSURANCE ) 
FUND, 
) 
 
 
) 
 
Petitioner, 
)  
S149257 
 
 
) 
 
 
v. 
)  
Ct.App. 3 C048668 
 
 
) 
 
WORKERS’ COMPENSATION  
)  
(W.C.A.B. No. RDG 115958) 
APPEALS BOARD and BRICE  
)  
 
SANDHAGEN,  
) 
 
 
 
) 
 
Respondents. 
) 
___________________________________ ) 
 
) 
BRICE SANDHAGEN, 
) 
 
 
) 
 
Petitioner, 
) 
 
 
) 
 
 
v. 
) 
Ct.App. 3 C049286 
 
 
) 
 
WORKERS’ COMPENSATION  
)  
(W.C.A.B. No. RDG 115958)  
APPEALS BOARD and STATE  
) 
 
COMPENSATION INSURANCE FUND,  ) 
  
 
) 
 
Respondents. 
) 
___________________________________ ) 
 
 
This case presents two related workers’ compensation issues: (1) When 
deciding whether to approve or deny an injured employee’s request for medical 
treatment, must an employer conduct utilization review pursuant to Labor Code 
 
2
section 4610? 1  (2) As an alternative to utilization review, may an employer elect 
to dispute a request for medical treatment under section 4062, which permits an 
employer to object to “a medical determination . . . concerning any medical issues 
. . . not subject to Section 4610 . . . .”?  (§ 4062, subd. (a).)  We conclude the 
Legislature intended to require employers to conduct utilization review when 
considering requests for medical treatment, and not to permit employers to use 
section 4062 to dispute employees’ treatment requests.  The language of section 
4610 and 4062 mandates this result; this conclusion is especially clear when the 
language of those statutes is read in light of the statutory scheme and the omnibus 
reforms enacted by the Legislature in 2003 and 2004.  (Sen. Bill No. 228 (2003-
2004 Reg. Sess.) (Senate Bill No. 228); Sen. Bill No. 899 (2003-2004 Reg. Sess.) 
(Senate Bill No. 899).)  Accordingly, we reverse the Court of Appeal’s contrary 
judgment and remand for further proceedings consistent with our decision. 
I.  BACKGROUND 
 
In October 2003, a car struck Brice Sandhagen while he was working as a 
foreman on a road construction project.2  He injured his neck, back, left elbow, 
and left wrist and has received medical treatment continuously since the accident.  
Sandhagen’s physician referred him to SpineCare Medical Group, Inc., for a joint 
consultation by Drs. Goldthwaite and Josey.  The physicians recommended a 
magnetic resonance imaging (MRI) test of Sandhagen’s spine to determine if disc 
herniations or disc degeneration was causing his pain.  The physicians submitted a 
report to Sandhagen’s employer’s insurer, State Compensation Insurance Fund 
(State Fund), on May 24, 2004, with a request to authorize the recommended MRI.  
                                              
1  
All further unlabeled statutory references are to the Labor Code. 
2  
The factual and procedural history is largely taken from the Court of 
Appeal’s opinion. 
 
3
 
State Fund referred the matter to Dr. Krohn for “utilization review.”3  On 
June 11, 2004, when State Fund did not communicate its decision within the 14-
day statutory deadline (§ 4610, subd. (g)(1)), Sandhagen requested an expedited 
hearing.  Ten days later (before the expedited hearing but 28 days after the MRI 
authorization request was submitted), Dr. Krohn sent a written denial of the 
medical treatment request, citing new medical treatment guidelines.  
 
An expedited hearing took place on July 15, 2004, on the sole issue of the 
need for the recommended MRI.  The workers’ compensation judge found that 
State Fund’s failure to comply with the statutory deadlines precluded it from 
relying on the utilization review process or Dr. Krohn’s report to deny Sandhagen 
treatment.  Only Dr. Goldthwaite’s report remained admissible.  The workers’ 
compensation judge, finding the MRI authorization request to be consistent with 
the new treatment guidelines, ordered State Fund to authorize the MRI. 
 
State Fund sought reconsideration by the Workers’ Compensation Appeals 
Board (WCAB).  State Fund argued that the consequences for failing to comply 
with utilization review guidelines are set forth in section 4610, subdivision (i), 
which provides for administrative penalties, and in section 4610.1, which allows 
possible penalties for delay, and that nothing in the statutory scheme allows for the 
exclusion of a utilization review report.  Sandhagen disagreed, contending section 
4610, subdivision (g) requires an employer to meet specific deadlines and that 
State Fund’s failure to comply with the deadlines meant that it could not rely on 
the utilization review process to justify denial of treatment.  In addition, 
Sandhagen argued that the workers’ compensation judge properly excluded Dr. 
                                              
3  
“Utilization review” is the process by which employers “review and 
approve, modify, delay, or deny” employees’ medical treatment requests.  (§ 4610, 
subd. (a).)  The scope and effect of the term will be more fully addressed below. 
 
4
Krohn’s denial letter.  He further argued that he had met his evidentiary burden to 
prove that the requested treatment was medically reasonable and necessary.  
 
The WCAB granted reconsideration.  Due to the important legal issues 
presented and in order to secure uniformity of future decisions, the matter was 
assigned to the WCAB as a whole for an en banc decision.  On November 16, 
2004, the WCAB issued its decision, holding that the section 4610 deadlines are 
mandatory and State Fund’s failure to meet the deadlines means that, with respect 
to the particular medical treatment dispute in question, it was precluded from 
using the utilization review process or any utilization review report it obtained to 
deny treatment.  However, the WCAB also held that, while precluded from using 
the utilization review process, State Fund could nonetheless dispute the treating 
physician’s treatment recommendation using the dispute resolution procedure set 
forth in section 4062. 4  Accordingly, the WCAB vacated the workers’ 
compensation judge’s determination that Sandhagen was entitled to the MRI and 
instead gave State Fund an opportunity to proceed under section 4062.  
 
State Fund filed a petition for writ of review.  Sandhagen also sought 
review, specifically of the portion of the decision that held that State Fund could 
object to the treatment authorization under section 4062, notwithstanding its 
failure to comply with the procedures set forth in section 4610.  The Court of 
Appeal granted both petitions. 
 
The Court of Appeal affirmed both of the WCAB’s holdings.  The Court of 
Appeal agreed that State Fund’s failure to comply with the mandatory deadlines 
precluded State Fund from using the process to deny Sandhagen’s request for 
                                              
4  
Section 4062, subdivision (a) permits an employee or employer to object to 
“a medical determination made by the treating physician concerning any medical 
issues not covered by Section 4060 or 4061 and not subject to Section 4610 . . . .” 
 
5
medical treatment.  However, as did the WCAB, the Court of Appeal concluded 
that State Fund could nonetheless object to the medical treatment request under 
the dispute resolution process set forth in section 4062, reasoning that an employer 
is not required to use the utilization review process when considering employees’ 
requests for medical treatment.  We granted Sandhagen’s petition for review.5 
II.  DISCUSSION 
 
This case requires us to determine the meaning and effect of section 4610, 
in which the Legislature established the utilization review process, in relation to 
section 4062, which generally governs disputes between injured employees and 
their employers regarding “medical issues . . . not subject to Section 4610 . . . .”6  
In determining that the Legislature intended for employers’ review of employees’ 
medical treatment requests to be governed solely by section 4610, rather than 
section 4062, we rely primarily on the clear statutory language.  (Hsu v. Abbara 
(1995) 9 Cal.4th 863, 871.)  In addition, comparing the current statutory scheme 
with previous iterations provides further support for our conclusion. 
A.  Statutory Scheme Requires Employers to Conduct Utilization 
Review When Resolving Requests for Medical Treatment  
 
Section 4610 requires that “[e]very employer . . . establish a utilization 
review process in compliance with this section” (id., subd. (b)), defining 
                                              
5  
State Fund did not seek review of the Court of Appeal’s holding that its 
failure to comply with the section 4610 deadlines precluded it from using the 
utilization review process to deny the medical treatment request and rendered the 
Dr. Krohn’s report inadmissible. 
6  
The WCAB’s interpretation of these statutes is subject to de novo review.  
While we typically give great weight to the WCAB’s administrative construction 
of the statutes it is charged to enforce and interpret, we will annul clearly 
erroneous interpretations.  (Lockheed Martin Corp. v. Workers’ Comp. Appeals 
Bd. (2002) 96 Cal.App.4th 1237, 1241.) 
 
6
utilization review as “functions that prospectively, retrospectively, or concurrently 
review and approve, modify, delay, or deny, based in whole or in part on medical 
necessity to cure and relieve, treatment recommendations by physicians . . .” (id., 
subd. (a)).  Notwithstanding the breadth of this statutory directive, State Fund 
claims that section 4610 simply requires employers to “establish” a utilization 
review process, but does not require employers to actually use the process.  We 
find this argument unpersuasive.  Having broadly defined utilization review, and 
requiring every employer to establish such a process at considerable expense and 
with numerous statutory safeguards (discussed in further detail below), it is 
unlikely that the Legislature intended to allow employers to circumvent the 
process whenever an employer felt it expedient.  To the contrary, the statutory 
language indicates the Legislature intended for employers to use the utilization 
review process when reviewing and resolving any and all requests for medical 
treatment.  
 
Believing that it can “opt out” of the review process, State Fund claims that 
it can instead utilize the more general section 4062 dispute resolution procedures.  
Not so.  State Fund’s assertion is belied by the language of section 4062 itself.  
The statute permits employers to object to a treating physician’s medical 
determinations, but only to those determinations regarding “medical issues not 
covered by Section 4060 or 4061 and not subject to Section 4610 . . . .”  (§ 4062, 
subd. (a), italics added.)  By contrast, section 4062 explicitly permits employees to 
use its provisions to object to an employer’s “decision made pursuant to Section 
4610 to modify, delay, or deny a treatment recommendation . . . .”  (Id., subd. (a), 
italics added.)  In summary, section 4062 simultaneously precludes employers 
from using its provisions to object to employees’ treatment requests but permits 
employees to use its provisions to object to employers’ decisions regarding 
 
7
treatment requests.  The Legislature’s intent regarding employers’ use of section 
4062 to dispute treatment requests could not be more clear.   
 
Taken together, the language of sections 4610 and 4062 demonstrates that 
(1) the Legislature intended for employers to use the utilization review process in 
section 4610 to review and resolve any and all requests for treatment, and (2) if 
dissatisfied with an employer’s decision, an employee (and only an employee) 
may use section 4062’s provisions to resolve the dispute over the treatment 
request.  An employer may not bypass the utilization review process and instead 
invoke section 4062’s provisions to dispute an employee’s treatment request.  The 
correctness of this conclusion is particularly evident when the current statutory 
provisions are compared to prior schemes for handling employees’ treatment 
requests.   
B.  Prior Schemes Demonstrate the Legislature Intended for Section 
4610 to Govern Employers’ Review 
 
In order to better understand what the Legislature intended when it adopted 
the procedures in section 4610 and 4062, it is helpful to consider the way in which 
the process for reviewing employees’ treatment requests has changed over time.  
1.  Historical Evolution of the Treatment Request Process  
 
The workers’ compensation scheme makes the employer of an injured 
worker responsible for all medical treatment reasonably necessary to cure or 
relieve the worker from the effects of the injury.  (§ 4600, subd. (a).)  When a 
worker suffers an industrial injury, the worker reports the injury to his or her 
employer and then seeks medical care from his or her treating physician.  After 
examining the worker, the treating physician recommends any medical treatment 
he or she believes is necessary and the employer is given a treatment request to 
approve or deny.  The standards applied in evaluating these treatment requests and 
the process by which treatment requests are resolved have both been significantly 
 
8
modified in the recent past.  For our purposes, the relevant periods are:  (1) the 
time preceding passage of Senate Bill No. 228, (2) after Senate Bill No. 228 went 
into effect on January 1, 2004, and (3) after Senate Bill No. 899 went into effect 
on April 19, 2004. 
a.  Before Senate Bill No. 228 
 
Before the passage of Senate Bill No. 228, there were no uniform medical 
treatment guidelines in effect.  Whether a medical treatment request was 
“necessary” depended solely upon the opinion of the treating physician measured 
against the general standard that “necessary” treatment was that which was 
“reasonably required to cure or relieve the injured worker of the effects of his or 
her injury.”  (Former § 4600, as amended by Stats. 1998, ch. 440, § 2.)  Moreover, 
former section 4062.9 provided a rebuttable presumption that the findings of an 
injured employee’s treating physician were correct.  (Stats. 2002, ch. 6, § 53.)   
 
If an employer wanted to obtain a report from a doctor other than the 
treating physician regarding the necessity of certain medical treatment, essentially 
the only option for the employer was to initiate the rather cumbersome, lengthy, 
and potentially costly process under former section 4062, a catchall dispute 
resolution provision.  Former section 4062, subdivision (a) provided that, “[i]f 
either the employee or employer objects to a medical determination made by the 
treating physician concerning . . . the extent and scope of medical treatment . . . or 
any other medical issues not covered by Section 4060 or 4061,[7] the objecting 
party shall notify the other party in writing of the objection . . . .”  (Stats. 2002, ch. 
6, § 52, italics added.)   
                                              
7  
Sections 4060 and 4061, like section 4062, are dispute resolution 
provisions.  Section 4060 governs disputes over the compensability of an injury, 
and section 4061 covers disputes over permanent disability. 
 
9
 
An employer objecting to a treatment request had to do so within 20 days if 
the injured employee was represented by counsel, and within 30 days if the 
employee was unrepresented, although the time limits could be extended for good 
cause.  (Former § 4062, subd. (a), as amended by Stats. 2002, ch. 6, § 52.)  In the 
case of a represented employee, the statute directed the parties to seek agreement 
on a physician to prepare a comprehensive medical evaluation resolving the 
disputed issue.  (Ibid.)  If the parties were unable to pick an agreed medical 
evaluator (AME) within 10 days (or 20 days if the parties agreed to extend the 
time), the parties could not thereafter select an AME.  (Ibid.)  After the time for 
reaching an agreement had expired, the objecting party could select a qualified 
medical evaluator (QME) to conduct a comprehensive medical evaluation.  (Ibid.)  
The nonobjecting party could choose to rely on the treating physician’s report or 
could select a QME of its own, to conduct an additional comprehensive 
evaluation.  (Ibid.)8   The employer was liable for the cost of a medical evaluation 
obtained by the employee pursuant to former section 4062.  (§ 4064, subd. (a).) 
 
After the injured worker was examined, the scheduling of which often 
resulted in further delays, the AME or QME had 30 days in which to prepare an 
evaluation, addressing all contested medical issues, and serve the evaluation and a 
summary on the employee, employer, and the Administrative Director of the 
Division of Workers’ Compensation (administrative director).9  (Former § 139.2, 
subd. (j)(1), as amended by Stats. 2000, ch. 54, § 1; former § 4062, subd. (c), as 
amended by Stats. 2002, ch. 6, § 52.)  If a dispute remained after the 
                                              
8  
Former section 4062 established a different procedure for unrepresented 
employees.   
9  
Under former section 139.2, subdivision (j)(1), the AME or QME could, for 
good cause, seek an extension of the 30-day deadline.  (Stats. 2000, ch. 54, § 1.) 
 
10
comprehensive medical evaluations were completed, either party could request an 
administrative hearing.  (§ 5500.)  If the hearing failed to satisfy the parties, they 
could seek reconsideration by the WCAB (§ 5900) and, ultimately, review by the 
Court of Appeal (§ 5950).  
 
There was also an administrative (rather than statutory) utilization review 
alternative to proceeding under former section 4062.  (Cal. Code Regs., tit. 8, 
former § 9792.6, Register 98, No. 46 (Nov. 13, 1998).)  However, use of the 
process was voluntary and, because the administrative process contained no 
uniform medical standards, interested employers had to first undertake a 
complicated effort to design and submit their own medically-based criteria to the 
administrative director.  (Id., subds. (b), (c), (d) & (e).)10  As a result, the 
administrative process was little used and most treatment requests were resolved 
via the procedures in former section 4062.   
b.  Senate Bill No. 228 
 
Senate Bill No. 228, effective January 1, 2004, enacted comprehensive 
workers’ compensation reform.  The Legislature, reacting to escalating costs, 
made a number of critical changes to the statutory scheme.  Particularly relevant 
here are changes to the standards used in evaluating medical treatment requests as 
well as alterations to the process for resolving the treatment requests. 
 
The Legislature added section 5307.27, directing the administrative director 
to adopt a medical treatment utilization schedule to establish uniform guidelines 
for evaluating treatment requests.  (Stats. 2003, ch. 639, § 41.)  The provision 
further provides that this schedule shall incorporate “evidence-based, peer-
                                              
10  
This process was also unattractive to employees, as it permitted a treatment 
decision to be delayed as long as the employer gave notice of the delay in a timely 
manner.  (Cal. Code Regs., tit. 8, former § 9792.6, subd. (c)(1).) 
 
11
reviewed, nationally recognized standards of care” and address the 
“appropriateness of all treatment procedures . . . commonly performed in workers’ 
compensation cases.”  (§ 5307.27.)  The Legislature also amended section 4062.9, 
limiting the presumption of correctness that had previously applied to a treating 
physician’s opinion (Stats. 2003, ch. 639, § 20), and added section 4604.5, which 
created a rebuttable presumption that the treatment guidelines in the utilization 
schedule were correct on the issue of extent and scope of medical treatment.11  
(Stats. 2003, ch. 639, § 27.)   
 
In addition to changing the standards for evaluating treatment requests, 
Senate Bill No. 228 also made a number of important changes to the process of 
resolving treatment requests.  Most significantly, the Legislature enacted a 
statutory utilization review process in section 4610.  (Stats. 2003, ch. 639, § 28.)  
In addition to requiring every employer to “establish a utilization review process” 
(§ 4610, subd. (b)), section 4610 also enacted a number of procedural and 
substantive requirements.  Most notably, subdivision (e) of section 4610 allows 
only a licensed physician, who is competent to evaluate the specific clinical issues 
involved, to modify, delay, or deny requests for treatment.  Accordingly, while 
medical review is not required if the employer approves the treatment request, 
section 4610 requires that a licensed doctor deny, delay, or modify the request.  
This represents a significant departure from the process in former section 4062, 
which permitted an employer or claims adjuster (without review by a physician) to 
object to a treatment request.  (§ 4062, as amended by Stats. 2002, ch. 6, § 52.) 
                                              
11  
Former section 4604.5 provided that until the administrative director 
adopted a utilization schedule, guidelines promulgated by the American College of 
Occupational and Environmental Medicine be used as interim standards and be 
presumed to be correct on the issue of extent and scope of medical treatment.  
(Former § 4604.5, subd. (c), added by Stats. 2003, ch. 639, § 27.) 
 
12
 
Section 4610, subdivision (g) imposes a number of additional requirements 
that must be met as part of the utilization review process.  Among them are:  
(1) treatment decisions must be made in a timely fashion, not to exceed five 
working days from the receipt of information reasonably necessary to make the 
determination, and in no event more than 14 days from the date of the request for 
treatment (§ 4610, subd. (g)(1)); (2) if the request is not approved in full, disputes 
shall be resolved in accordance with section 4062 (§ 4610, subd. (g)(3)(A)); and 
(3) if an employer cannot make a decision within the specified timeframes because 
it (a) is not in receipt of all the information reasonably necessary and requested, 
(b) requires consultation by an expert reviewer, or (c) has asked that an additional 
examination be performed on the employee that is reasonable and consistent with 
good medical practice, the employer must immediately notify the physician and 
the employee.  (Id., subd. (g)(5).)  Upon receipt of all information reasonably 
necessary and requested by the employer, the employer shall approve, modify, or 
deny the request for authorization within the specified time frames.  (Ibid.) 
 
As the Court of Appeal here recognized, the Legislature intended utilization 
review to ensure quality, standardized medical care for workers in a prompt and 
expeditious manner.  To that end, the Legislature enacted a comprehensive process 
that balances the dual interests of speed and accuracy, emphasizing the quick 
resolution of treatment requests, while allowing employers to seek more time if 
more information is needed to make a decision.  (§ 4610, subd. (g).)  If the 
treatment request is straightforward and uncontroversial, the employer can quickly 
approve the request — utilization review is completed without any need for 
additional medical review of the request.  If the request is more complicated, the 
employer can forward the request to its utilization review doctor for review, since 
the statute requires that the employer seek a medical opinion before modifying, 
delaying, or denying an employee’s request for medical treatment.  (Id., subd. 
 
13
(e).)12  This ensures that a physician, rather than a claims adjuster with no medical 
training, makes the decision to deny, delay, or modify treatment. 
c.  Senate Bill No. 899  
 
As we recently noted, Senate Bill No. 899 was passed as an urgency bill in 
response to “a perceived crisis in skyrocketing workers’ compensation costs.”  
(Brodie v. Workers’ Comp. Appeals Bd. (2007) 40 Cal.4th 1313, 1329.)  Like 
Senate Bill No. 228, Senate Bill No. 899 was an omnibus reform that made a 
number of significant changes to the workers’ compensation scheme, including, as 
particularly relevant here, altering the standards used in evaluating workers’ 
requests for medical treatment and the process for evaluating them. 
 
With Senate Bill No. 899, the Legislature amended section 4600 to define 
“medical treatment that is reasonably required to cure or relieve the injured worker 
from the effects of his or her injury” as “treatment that is based upon the 
guidelines adopted by the administrative director pursuant to Section 5307.27 or, 
prior to the adoption of those guidelines, the updated American College of 
Occupational and Environmental Medicine’s Occupational Medicine Practice 
Guidelines.”  (Stats. 2004, ch. 34, § 23.)  Senate Bill No. 899 also repealed section 
4062.9, which had contained a presumption of correctness for the findings of an 
injured employee’s treating physician (Stats. 2004, ch. 34, § 22), while making 
slight modifications to section 4604.5, which contains a presumption of 
correctness for the treatment guidelines.  (Stats. 2004, ch. 34, § 25.)   
                                              
12  
Senate Bill No. 228 also repealed former section 4062 (Stats. 2003, ch. 639, 
§ 16.5) and replaced it with a new section 4062 (Stats. 2003, ch. 639, § 17) 
addressing the same subject matter.  The new section 4062 was the same as the 
previous version, except for the addition of language concerning requests for 
spinal surgery.  (Compare Stats. 2002, ch. 6, § 52 with Stats. 2003, ch. 639, § 17.) 
 
14
 
The Legislature amended section 3202.5 to underscore that all parties, 
including injured workers, must meet the evidentiary burden of proof on all issues 
by a preponderance of the evidence.  (Stats. 2004, ch. 34, § 9.)  Accordingly, 
notwithstanding whatever an employer does (or does not do), an injured employee 
must still prove that the sought treatment is medically reasonable and necessary.  
That means demonstrating that the treatment request is consistent with the uniform 
guidelines (§ 4600, subd. (b)) or, alternatively, rebutting the application of the 
guidelines with a preponderance of scientific medical evidence.  (§ 4604.5.)   
 
While Senate Bill No. 899 did not alter the section 4610 utilization review 
process, it made a number of changes to the dispute resolution process in section 
4062 that are particularly relevant here.  First, the prior version of section 4062, 
subdivision (a) (Stats. 2003, ch. 639, § 17) permitted an employee or employer to 
object to a treating physician’s medical determination regarding “the permanent 
and stationary status of the employee’s medical condition, the employee’s 
preclusion or likely preclusion to engage in his or her usual occupation, the extent 
and scope of medical treatment, the existence of new and further disability, or any 
other medical issues not covered by Section 4060 or 4061 . . . .”  (Italics added.)  
The Legislature amended section 4062, subdivision (a), eliminating “the extent 
and scope of medical treatment” from the list of things to which an employer may 
object.  (Stats. 2004, ch 34, § 14.)  Subdivision (a) of section 4062 now permits an 
employer to object only to medical determinations regarding “any medical issues 
not covered by Section 4060 or 4061 and not subject to Section 4610 . . . .”  
(Italics added.)  Second, Senate Bill No. 899 made another change to section 4062, 
subdivision (a), adding that “[i]f the employee objects to a decision made pursuant 
to Section 4610 to modify, delay, or deny a treatment recommendation, the 
employee shall notify the employer of the objection in writing within 20 days of 
receipt of that decision.”  (Stats. 2004, ch 34, § 14, italics added.) 
 
15
 
Senate Bill No. 899 also changed the AME/QME process, eliminating the 
competing comprehensive evaluations that often existed under former section 
4062.  In the case of represented employees, the bill repealed former section 
4062.2 (Stats. 2004, ch. 34, § 17) and replaced it with new section 4062.2 (Stats. 
2004, ch. 34, § 18).  As with the procedure under former section 4062, new 
section 4062.2 instructs the parties to attempt to select an AME.  If the parties 
cannot reach an agreement within 10 days (or 20 days if the parties agree to extend 
the time), either party may request a three-member panel of QME’s be assigned.  
(Ibid.)  The parties must then confer and attempt to agree on one of the QME’s.  
(Ibid.)  “If the parties have not agreed on a medical evaluator from the panel by 
the 10th day after the assignment of the panel, each party may then strike one 
name from the panel” and “the remaining [QME] shall serve as the medical 
evaluator.”  (Ibid.)13  “[N]o other medical evaluation shall be obtained.”  (§ 4062, 
subd. (a).)14 
2.  Evolution of the Review Process Demonstrates Legislature’s Intent 
 
Understood against this historical backdrop, it is clear the Legislature 
intended for employers to resolve treatment requests via the section 4610 process.  
As discussed above, Senate Bill Nos. 228 and 899 were aimed at controlling 
skyrocketing costs while simultaneously ensuring workers’ access to prompt, 
                                              
13  
As with evaluations performed under former section 4062, evaluations 
performed under section 4062.2 must be prepared and submitted within 30 days 
unless the evaluator has sought, and received, an extension of time.  (§ 139.2, 
subd. (j)(1)(A), amended by Stats. 2004, ch. 34, § 2.)  If the QME fails to 
complete the evaluation within the timeline, either party can request a new 
evaluation and the process begins again.  (§ 4062.5, amended by Stats. 2004, ch. 
34, § 20.) 
14  
As under former section 4062 (added by Stats. 2003, ch. 639, § 17), the 
procedure is different for unrepresented employees. 
 
16
quality, standardized medical care.  To accomplish those goals, the Legislature 
made a number of significant changes, the most relevant of which was adopting 
the comprehensive utilization review process in section 4610 along with the 
concomitant changes to the dispute resolution procedure in section 4062.   
 
In place of the often lengthy and cumbersome process employers used to 
dispute treatment requests prior to the passage of Senate Bill No. 228, the 
Legislature created a utilization review process that combines what are typically 
quick resolutions (§ 4610, subd. (g)(1)) with accuracy — employers can have their 
utilization review doctors review treatment requests, employers can seek 
additional time to obtain additional information or examinations (id., subd. (g)(5)), 
and medical review is required before the utilization review doctor can modify, 
delay, or deny a treatment request (id., subd. (e)).  State Fund asserts that there are 
instances when, or reasons why, it might not be reasonable to subject a treatment 
request to the utilization review process.  We are not persuaded — indeed, the 
cited examples betray a fundamental misunderstanding of the scope of utilization 
review and its requirements.   
 
For example, State Fund claims that “if the employer determines, without 
[utilization review], that the recommended treatment is reasonably required, 
‘imposing the [utilization review] process would be both time consuming and 
expensive.’ ”  But when the employer in the hypothetical reviews the request and 
determines that treatment is reasonably required, the employer has engaged in 
utilization review.  (See § 4610, subd. (a).)  The hypothetical actually 
demonstrates that utilization review provides an expeditious manner of resolving 
treatment requests, being neither time consuming nor expensive, especially when 
compared to the process previously in place.  In light of the comprehensive nature 
of section 4610 and the goals the Legislature sought to accomplish, we conclude 
 
17
the Legislature intended for the utilization review process to be employers’ only 
avenue for resolving an employee’s request for treatment.  
 
We also conclude that section 4062 is not available to employers as an 
alternative avenue for disputing employees’ requests for treatment.  The 
Legislature made clear that an employer may not use section 4062 to object to a 
medical determination concerning medical issues “subject to section 4610” while 
expressly permitting employees to use section 4062 to resolve disputes over an 
employer’s decision not to approve treatment requests (Stats. 2004, ch. 34, § 14) 
— i.e., the plain language of section 4062 establishes that only employees may use 
section 4062 to resolve disputes over requests for treatment.  This limitation is 
made even clearer when the current section 4062 is compared to previous 
versions.  Former section 4062 allowed employers to object to medical 
determinations concerning “the extent and scope of medical treatment . . . .” (Stats. 
2003, ch. 639, § 17.)  In Senate Bill No. 899, the Legislature deleted that phrase.  
(Stats. 2004, ch. 34, § 14.)  “We presume the Legislature intends to change the 
meaning of a law when it alters the statutory language [citation], as for example 
when it deletes express provisions of the prior version . . . .”  (Dix v. Superior 
Court (1991) 53 Cal.3d 442, 461.)  State Fund would have us read “the extent and 
scope of medical treatment” back into the statute as one of the matters employers 
may object to under section 4062.  We decline to do so.      
 
Accordingly, in light of the clear statutory language and the Legislature’s 
purpose in enacting the utilization review process in section 4610, we conclude the 
Legislature intended to require employers to conduct utilization review when 
considering employees’ requests for medical treatment.  Employers may not use 
section 4062 as an alternative method for disputing employees’ treatment requests.  
 
18
III. DISPOSITION 
 
The judgment of the Court of Appeal is reversed and the matter is 
remanded to that court for further proceedings consistent with this opinion. 
 
 
 
 
 
 
MORENO, J. 
WE CONCUR: GEORGE, C. J. 
 
BAXTER, J. 
 
WERDEGAR, J. 
 
CHIN, J. 
 
CORRIGAN, J. 
 
 
1 
 
 
 
 
 
 
 
 
CONCURRING OPINION BY KENNARD, J. 
 
 
I agree with the majority’s conclusion and much of its analysis.  
Specifically, I agree that the “utilization review” process set forth in Labor Code1 
section 4610 is mandatory.  I also agree that, if an employer fails to meet section 
4610’s deadlines, it may not object to the employee’s requested medical treatment 
under section 4062.  Certain language in the majority’s opinion, however, might 
be misread to suggest that utilization review is a dispute-resolution process that 
replaces the “cumbersome, lengthy, and potentially costly” dispute-resolution 
process that previously applied under former section 4062.  (Maj. opn., ante, at 
p. 8.)  As I understand the statutory scheme, utilization review process adds a new 
step that the employer must take before section 4062 comes into play, but it does 
not replace the section 4062 process.  Section 4062 remains the means for 
resolving any dispute between the parties regarding medical treatment, as I explain 
below. 
Section 4600 requires employers to provide their employees with medical 
treatment for their work-related injuries.  When disputes arise regarding the 
conclusions and recommendations of the treating physician, section 4062 sets 
forth the primary procedural mechanism for resolving those disputes.  Among 
                                              
1  
All further statutory references are to the Labor Code. 
2 
other things, section 4062 governs disputes regarding which specific medical 
treatments are appropriate.  Section 4062 played this role in the statutory scheme 
before the Legislature mandated utilization review in the year 2003, and it 
continues to play this role now.2  Utilization review, by contrast, is not concerned 
with dispute resolution; rather, it governs the process by which the employer 
makes its initial decision whether to approve or deny the proposed medical 
treatment.  Section 4610, subdivision (g)(3)(A), makes this point expressly.  It 
states that if the employer, having followed the utilization review process, does 
anything short of fully approving the employee’s request for medical treatment, 
any resulting dispute is resolved under section 4062, same as ever. 
One purpose of utilization review is to prevent disputes about medical 
treatment from ever arising.  Before 2003, the medical treatment the employer was 
obligated to provide for work-related injuries was only vaguely defined as 
“treatment . . . that is reasonably required to cure or relieve from the effects of the 
injury.”  (Former § 4600, as amended by Stats. 1998, ch. 440, § 2.)  This indistinct 
standard left a lot of room for disagreement.  The Legislature’s reforms of the 
workers’ compensation law in 2003 and 2004 much more precisely define the 
employer’s medical treatment obligation in terms of detailed treatment guidelines.  
(See §§ 4600, subd. (b), 4610, subd. (c).)  Because proper application of these 
treatment guidelines requires medical expertise, the decision to modify, delay, or 
deny a treatment request must be made by a licensed physician.  (§ 4610, subd. 
(e).)  Thus, utilization review is best understood as a threshold procedure that the 
employer must follow before any dispute about medical treatment has arisen.  It 
                                              
2  
Section 4062 remains the means for resolving medical treatment disputes, 
but in 2004 the Legislature changed the specifics of this dispute-resolution 
procedure in significant ways. 
3 
governs the employer’s evaluation of the treating doctor’s recommendation.  If the 
employer approves the requested treatment, then there is no dispute and likewise 
no need to resort to dispute-resolution procedures.  A dispute might arise only if 
the employer modifies, delays, or denies the requested treatment, in which case the 
employee may invoke section 4062’s dispute-resolution mechanism.  (§§ 4610, 
subd. (g)(3)(A), 4062, subd. (a).) 
Hence, section 4610’s utilization review is not to be conflated with the 
process of dispute resolution.  Section 4062 continues to govern medical treatment 
disputes, as it did before the reforms.  The statutory scheme does not create two 
separate dispute-resolution tracks for employers and for employees.  Instead, it 
sets forth two successive stages of a single-track process:  The employer first 
proceeds with utilization review under section 4610, and then the employee may 
dispute the employer’s conclusion under section 4062.  (§ 4610, subd. (g)(3)(A).)  
The fact that the “employee (and only the employee)” (maj. opn., ante, at p. 7) 
initiates the dispute-resolution process set forth in section 4062 is not intended to 
exclude employers from that process; rather, it merely reflects the circumstance 
that utilization review has been interposed as a threshold step.  The employer who 
seeks to object to a proposed medical treatment must follow the utilization review 
process.  If that process results in a modification, delay, or denial of the requested 
treatment, then naturally the employee is the party that invokes the section 4062 
dispute-resolution mechanism, because the employee is the aggrieved party. 
To summarize, after the reforms enacted by the Legislature in 2003 and 
2004, section 4062 remains the only process for resolving disputes regarding 
medical treatment (see § 4610, subd. (g)(3)(A)), and its cumbersomeness and 
4 
lengthiness merely reflect the Legislature’s desire to ensure fairness to the parties.3  
Section 4610’s utilization review does not supplant section 4062’s dispute-
resolution process; rather, it adds a new threshold step to that process.  It can only 
be said to supplant that process in the practical sense—that is, it might prevent 
some disputes from ever arising, thereby making resort to that process 
unnecessary. 
 
 
 
 
 
 
 
KENNARD, J. 
                                              
3  
The 2004 reform streamlined the section 4062 dispute-resolution process in 
several ways that are not at issue here.  In particular, the 2004 reform created the 
single-medical-examiner rule, thereby reducing the likelihood of litigation over 
medical questions.  (§ 4062.2, subd. (c).) 
 
 
See next page for addresses and telephone numbers for counsel who argued in Supreme Court. 
 
Name of Opinion State Compensation Insurance Fund v. Workers’ Compensation Appeals Board 
__________________________________________________________________________________ 
 
Unpublished Opinion 
Original Appeal 
Original Proceeding 
Review Granted XXX 144 Cal.App.4th 1050 
Rehearing Granted 
 
__________________________________________________________________________________ 
 
Opinion No. S149257 
Date Filed: July 3, 2008 
__________________________________________________________________________________ 
 
Court: 
County: 
Judge: 
 
__________________________________________________________________________________ 
 
Attorneys for Appellant: 
 
Robert W. Daneri, Suzanne Ah-Tye and Don E. Clark for Petitioner and for Respondent State 
Compensation Insurance Fund. 
 
Law Offices of Saul Allweiss and Michael A. Marks for California Workers’ Compensation Institute as 
Amicus Curiae on behalf of Petitioner and Respondent State Compensation Insurance Fund. 
 
 
 
 
__________________________________________________________________________________ 
 
Attorneys for Respondent: 
 
Sweeney and Forbes and Marguerite Sweeney for Respondent and for Petitioner Brice Sandhagen. 
 
David Bryan Leonard for California Society of Industrial Medicine & Surgery, Inc., as Amicus Curiae on 
behalf of Respondent and Petitioner Brice Sandhagen. 
 
Hinden, Grueskin, Rondeau & Breslavsky, Graiwer & Kaplan and Charles R. Rondeau for California 
Applicants’ Attorneys Association as Amicus Curiae on behalf of Respondent and Petitioner Brice 
Sandhagen. 
 
Neil P. Sullivan and Vincent Bausano for Respondent Workers’ Compensation Appeals Board. 
 
 
 
 
 
 
 
 
Counsel who argued in Supreme Court (not intended for publication with opinion): 
 
Don E. Clark 
State Compensation Insurance Fund 
1275 Market Street, Room 399 
San Francisco, CA  94103 
(415) 565-1266 
 
Marguerite Sweeney 
1414 Gold Street 
Redding, CA  96001 
(530) 245-1860 
 
Charles R. Rondeau 
Graiwer & Kaplan 
3600 Wilshire Boulevard, Suite 2100 
Los Angeles, CA  90010 
(213) 380-7500