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State Board Issues Important Decision Regarding Board Rule 205

May 06, 2010 BY Def Admin

As employers and insurers are aware, the seemingly simple process of evaluating and approving medical treatment in the workers’ compensation arena is actually anything but simple.  This is because there is often a chain of events that must take place before treatment that is recommended by an authorized treating physician can be authorized.

For example, say the authorized treating physician diagnoses a problem, such as depression, and a referral is made to a psychiatrist.  As insurers and self-insurers are fully aware, the process does not and cannot end until there has been further action and evaluation by the employer/insurer and, if in litigation, its legal counsel.  That is, after the diagnosis and referral is made, the employer/insurer—and only after they receive notification of the diagnosis—must obtain the medical records and make a determination as to whether the requested treatment is coming from an authorized provider, is causally related to a compensable condition, and is reasonably required and appears likely to effect a cure, give relief, and restore the employee to suitable employment.  Typically, this chain of events takes several days, if not weeks, and in certain cases (especially in those instances in which a recommendation for surgery is made) may even take months.

In light of this problem, the State Board of Workers’ Compensation drafted Board Rule 205, which is intended to streamline the process of making decisions regarding medical treatment.  Board Rule 205 is essentially a mechanism whereby treating physicians can request “pre-authorization” of testing, treatment, or referrals by sending a Board Form WC-205 to the insurer.  But most significantly, it imposes additional time constraints upon employers and insurers that seemingly go above and beyond the statutory requirements of the Workers’ Compensation Act as well as cases issued by the Georgia Supreme Court and Court of Appeals interpreting the medical liability of employer/insurer’s under the Act.  Specifically, Board Rule 205 requires that employer/insurer’s respond to a Board Form WC-205 twice, first within five (5) business days after receipt of a request for pre-authorization of treatment, and again twenty-one (21) days later in greater detail, specifying the reasons for controverting.  Provision (b)(4) of Board Rule 205 mandates that a failure to comply with Board Rule 205 results in “pre-approval” of the treatment, and further instructs employer/insurer’s to pay for the “pre-approved” treatment.

The problem is that, as written, Board Rule 205 appears to not only establish procedural deadlines for employer/insurer’s to meet when making decisions as to whether to authorize treatment, but also createssubstantive rights that claimants are otherwise not afforded by the Workers’ Compensation Act.  In essence, the Board Rule suggests that a failure to properly respond to a request for pre-authorization of treatment results in a complete and total waiver of the right to controvert the testing, treatment, or referral requested by the treating physician.  Thus—and this was been the position taken by the claimant’s bar—if an employer/insurer failed to timely respond to a Board Form WC-205 sent by an authorized treating physician requesting, for example, authorization of psychiatric treatment, the employer/insurer was presumably automatically liable for the cost of psychiatric treatment even if the claimant could not prove that the need for such treatment is medically necessary and causally related to his or her on-the-job accident!

As a result of the apparent over-reaching of Board Rule 205, this Firm challenged the legitimacy of Board Rule 205 in a recent workers’ compensation claim.  Factually, the claim involved an employee who was injured in a motor vehicle accident who contended that he was entitled to psychiatric treatment for depression. In defense of the employer/insurer, we took the position that the claimant did not have a psychiatric diagnosis in the first place, and that any alleged need for treatment was both causally unrelated to the accident and not reasonably necessary to effect a cure, provide relief, or restore the claimant to suitable employment. 

At the hearing, the only medical testimony admitted was from a psychiatrist who agreed with the employer/insurer’s position.  However, in this case, the claimant’s authorized treating physician issued a Board Form WC-205, requesting pre-authorization of a referral for psychiatric treatment, which was not timely responded to by the insurer.  As a result, the claimant took the position that this resulted in a complete and total waiver of any defenses to causation or necessity that the employer/insurer may have had.  This was the only evidence presented by the claimant at the hearing, and the Administrative Law Judge (“ALJ”) ruled in favor of the claimant, holding that the employer/insurer were responsible for psychiatric treatment despite the fact that the employer/insurer had shown that the need for such treatment was neither medically necessary nor causally related to the on-the-job accident.

The ALJ’s decision was appealed on the grounds that either Board Rule 205 is invalid as written, or that the ALJ improperly interpreted Board Rule 205 when he ruled that a failure to timely respond to a Board Form 205 sent by a treating physician resulted in a waiver of any defenses to medical causation and/or necessity. Ultimately, the Appellate Division of the State Board reversed the ALJ’s ruling, and issued a thorough and well-written opinion interpreting Board Rule 205 which could set very important precedent regarding the ability of employers and insurers to controvert medical treatment even when employer/insurer’s fail to properly respond to a physician’s request for pre-authorization of treatment pursuant to a Board Form WC-205.  In essence, the Board clarified that the failure to timely respond to a request for pre-authorization of treatment does not result in a waiver of the ability to challenge the requested treatment on the grounds of causation or medical necessity. However, the Board cautioned that any treatment or testing provided in reliance on a request for pre-authorization of treatment would be the responsibility of the employer/insurer which failed to timely respond to a Board Form WC-205.

The Board’s clarification that the failure to timely respond to a Board Form WC-205,  Requesting for Pre-Authorization of Testing or Treatment, cannot result in a waiver of any defenses to causation or medical necessity is obviously a good decision for employers and insurers.  A contrary decision would have meant that employers and insurers could face medical liability for injuries entirely unrelated to a compensable accident simply due to the technical failure to timely respond to a Board Form WC-205.  It should be cautioned that the decision issued by the Appellate Division in the employer/insurer’s favor has been appealed by the claimant to the Superior Court.  Therefore, a final ruling on this issue has not been made.  However, at least in our opinion, the decision issued by the Appellate Division constitutes the proper application and interpretation of Board Rule 205. In any event, it is now clear, at least until the appeal has run its course, that the language of Board Rule 205(b)(4) cannot operate as a complete waiver of an employer/insurer’s defenses to medical necessity and causation despite an employer/insurer’s failure to timely respond to a Board Form WC-205.

The Journal is a publication for the clients of Drew Eckl & Farnham, LLP. It is written in a general format and is not intended to be legal advice to any specific circumstance. Legal Opinions may vary when based upon subtle factual differences. All rights reserved. 

Editorial Board:

H. Michael Bagley
(Editor-in-chief)