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Defendant sought reconsideration of the WCJ's decision, contending that there was no unreasonable delay of medical treatment, that the WCJ failed to address the issue of unreasonableness under Labor Code section 5814, that the WCJ erred in using utilization review (UR) to determine whether there was unreasonable delay, and that the medical penalty award was excessive.

The relevant facts in White were that prior to March 31, 2008, applicant's attorney had been pursuing the provision of medical treatment per the Medical Provider Network (MPN) without success. Applicant's attorney sent a letter to the defendants on March 31, 2008 advising them that none of the doctors was available, that he was not getting any response from their MPN contact person, and requested treatment outside the MPN. Defendant did not respond to the letter within 10 days. Defendant agreed to provide the treatment at the Expedited Hearing 28 days later on April 28, 2008.

The WCJ determined that the defendants should have responded within ten days of the March 31, 2008 letter. He compared this time frame to the ten day requirement for utilization review. The WCJ opined that failing to provide or authorize treatment within that period was unreasonable and subjected the defendants to a penalty on all treatment delayed after March 31, 2008.

In reviewing the arguments raised by defendants, the commissioners noted:

"At the outset, we disagree with the WCJ's analysis that defendant's failure to respond to applicant's attorney's letter of March 31, 2008 is subject to the ten-day requirement for utilization review, and that defendant's failure to provide or authorize treatment within that 10-day period is automatically unreasonable and subjects defendant to a penalty under section 5814. For instance, an employer who delays immediate treatment necessary to save an injured worker's limb may be subject to a penalty for a delay of something less than 10 days. On the other hand, a delay of more than 10 days in authorizing a treating physician's recommendation for treatment by a different specialist or sub-specialist might not be unreasonable depending on the circumstances. There is no "bright line" ten-day rule for reasonableness in furnishing medical treatment. Rather, the touchstone of a penalty under Labor Code section 5814 is a delay or refusal to pay benefits that is unreasonable under the circumstances. (State Comp. Ins. Fund v. Workers' Comp. Appeals Bd. (Stuart) (1998) 18 Cal. 4th 1209 [63 Cal. Comp. Cases 916, 919.])"

The commissioners nevertheless did find a forty-five day delay and further found that delay to have been unreasonable. The court opined:

"Thus, the evidence presented at trial shows that applicant had a prior award of medical treatment, her attorney requested treatment pursuant to that award on March 14, 2008, and there was no effective response to the request until April 28, 2008, a delay of 45 days. Applicant proved the delay in medical treatment, upon which the burden shifted to defendant to show genuine doubt about liability for treatment. (Kerley v. Workmen's Comp. Appeals Bd. (1971) 4 Cal. 3d 223 [36 Cal.Comp.Cases 152]; Kamel v. West Cliff Medical (2001) 66 Cal.Comp.Cases 1521 (Appeals Board en banc).) However, defendant presented no evidence of genuine doubt. In the face of a Stipulated Award of further medical treatment, followed by an apparently empty offer to investigate whether Dr. Feilteau was in defendant's MPN, the delay of 45 days was unreasonable. Thus applicant established an unreasonable delay in authorizing medical treatment and the basis for imposing a penalty under section 5814. We also agree that the WCJ was correct in assessing a penalty of 25% of the expense of medical treatment incurred between March 31, 2008 and April 28, 2008."

In examining whether a full twenty-five percent penalty was appropriate, commissioners observed:

"In Ramirez v. Drive Financial Services (2008) 73 Cal. Comp. Cases 1324 [en banc], the Appeals Board held that the amount of the penalty under Labor Code section 5814(a), which allows up to 25%, is discretionary and should be determined upon consideration of the various factors enumerated in the Ramirez opinion. Those factors include recognition that the purposes of section 5814 are both remedial and penal, that each of these purposes is equally important, that the penal aspect of section 5814 provides an incentive to employers and insurance carriers to pay benefits promptly by making delays costly, and that the remedial aspect of section 5814 is to ameliorate the economic hardship on the injured employee that results from the delay in the provision of benefits. In addition, some factors relevant to the assessment of reasonableness also are relevant to the assessment of the amount of the penalty to be awarded, i.e., up to 25 percent of the amount delayed or $10,000, whichever is less. These factors include, but are not necessarily limited to: (1) evidence of the amount of the payment delayed; (2) evidence of the length of the delay; (3) evidence of whether the delay was inadvertent and promptly corrected; (4) evidence of whether there was a history of delayed payments or, instead, whether the delay was a solitary instance of human error; (5) evidence of whether there was any statutory, regulatory, or other requirement (e.g., an order or a stipulation of the parties) providing that payment was to be made within a specified number of days; (6) evidence of whether the delay was due to the realities of the business of processing claims for benefits or the legitimate needs of administering workers' compensation insurance; (7) evidence of whether there was institutional neglect by the defendant, such as whether the defendant provided a sufficient number of adjusters to handle the workload, provided sufficient training to its staff, or otherwise configured its office or business practices in a way that made errors unlikely or improbable; (8) evidence of whether the employee contributed to the delay by failing to promptly notify the defendant of it; and (9) evidence of the effect of the delay on the injured employee."

Based on these factors, the commissioners concluded that the WCJ properly assessed a penalty of 25% of the medical treatment billed between March 31, 2008 and April 28, 2008.

This case illustrates that the WCAB continues to apply the pre-SB899 cases in evaluating whether a defendant has engaged in unreasonable conduct. Though the value of the penalty assessed in this particular case is not evident from the decision, there are many instances where a 25% penalty on the delayed benefit may be significant. The penalty, particularly when combined with an attorney fee under Labor Code Section 5814.5, may prove to be a more significant deterrent to unreasonable conduct, not to mention a more valuable remedy, than many may have assumed post-SB899.

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