Murchison & Cumming LLP

Murchison & Cumming Prevails at California Supreme Court

August 29, 2018

"On August 23, 2018 the California Supreme Court issued a far-reaching decision in the case of King v. CompPartners, Inc. (S232197) which positively impacts the workers' compensation system and represents a significant victory for the utilization review industry and the physicians with whom they work. The Riverside County Superior Court sustained a demurrer, without leave to amend, on behalf of defendants, a utilization review company and a utilization review physician, to a complaint filed by an injured worker (Kirk King) and his wife against defendants for medical malpractice and general common law negligence. The dismissal was appealed to the California Court of Appeal which, on January 5, 2016, issued a decision that affirmed the order sustaining the demurrer, but reversed the denial of leave to amend and remanded the case to the lower court for the filing of an amended complaint. The Court of Appeal decision was appealed to the California Supreme Court. The issue before the Supreme Court was whether a physician performing utilization review in a workers' compensation case can be liable to the injured worker to whom they provided a decision regarding medical treatment. Defendants argued, among other things, that Plaintiffs' claims were pre-empted by the exclusive remedy rule codified in the workers' compensation statutes. The California Supreme Court agreed. Prior to the Supreme Court's opinion, there was no hard and fast rule holding that the exclusive remedy rule barred tort claims from being advanced against utilization review physicians and the companies which retain them. The Supreme Court stated in its opinion that "[v]iewing the question against the backdrop of our precedents, we conclude the answer is yes."

In its August 23, 2018 opinion, the California Supreme Court held that workers' compensation laws provide the exclusive remedy for a workers' injuries and, thus, the worker's tort claims against a physician who performs utilization review are preempted:

"It is by now well established that the WCA's exclusivity provisions preempt not only those causes of action premised on a compensable workplace injury, but also those causes of action premised on injuries 'collateral to or derivative of' such an injury." (Charles J. Vacanti, M.D., Inc. v. State Comp Ins. Fund (2001) 24 Cal.4th 800, 811, quoting Snyder v. Michael's Stores, Inc. (1997) 16 Cal.4th 991, 997). "[A]s we read the statute the Legislature enacted, the workers' compensation system provides the exclusive remedy for otherwise compensable injuries stemming from alleged mistakes in the utilization review process. Here the Kings' tort claims concerning Dr. Sharma's decertification of [Kirk] King's prescription are collateral to and derivative of a compensable injury and defendants performed a statutorily recognized utilization review function on behalf of King's employer. Because the acts alleged do not suggest that defendants stepped outside of the utilization review role contemplated by statute, the Kings' claims are preempted." Because '[t]he Kings seek to recover for injuries that arose during the treatment of [Kirk] King's industrial injury and in the course of the workers' compensation claims process . . . their claims fall within the scope of . . . the workers' compensation system." The Supreme Court further states that "[t]he Kings and their amici raise policy concerns about this conclusion. Utilization review has a significant impact on the medical care of injured workers. It follows, they argue, that utilization reviewers should be held accountable for their mistakes in the same way and to the same extent as treating physicians, who may be sued for their malpractice. The statute's treatment of utilization reviewers is, however, consistent with the basic tradeoff that underlies the workers' compensation systems as a whole: The employee is afforded swift and certain payments for medical treatment without having to prove fault, but, in exchange, gives up his right to sue in tort for those injuries that result from risks encompassed by the employment relationship."

The California Supreme Court's decision in King v. CompPartners, Inc. limits the liability of utilization review companies and review physicians, and marks a significant chapter in the applicability of the workers' compensation laws. In California, it is now the law that the workers' compensation exclusive remedy rule bars tort claims from being advanced against utilization review physicians and the companies which retain them.

Murchison & Cumming LLP's counsel for Defendants on appeal were William D. Naeve, Esq. and Terry L. Kesinger, Esq.

Click here to read the full decision.

 

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