Utah Supreme: Appearance of Conflict Enough to Disqualify Medical Evaluator

Utah Supreme: Appearance of Conflict Enough to Disqualify Medical Evaluator

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Workers’ compensation claimants don’t have to prove that the physicians appointed to resolve medical disputes have an “actual bias” — the mere appearance of a conflict of interest is enough to disqualify them from evaluating a claim, the Utah Supreme Court ruled Thursday.

The decision could mean trouble for the Rocky Mountain Center for Occupational and Environmental Health. The center provides about half of the independent medical evaluations conducted in Utah even though it receives funding from the WCF Mutual Insurance Co., formerly known as the Workers’ Compensation Fund, said Virginius Jinks Dabney, a claimants’ attorney based in St. George, Utah.

Virginius Dabney

“They are appointed and they are doctors who owe their allegiance to the Fund,” he said. “It’s one thing for the Fund to create this unholy alliance and it’s another when the Labor Commission allows it and protects them.”

Dabney represents Luis G. Gamez, who sought workers’ compensation benefits after he injured his left shoulder and low back in a workplace accident. WCF accepted the shoulder injury but contested the low-back injury.

An administrative law judge appointed Dr. Jeremy Biggs to a medical panel to review the claim. Biggs selected an occupational physician to serve with him on the evaluating panel.

Jeremy Biggs

Gamez objected to the appointment because Biggs is an occupational medicine physician, not a low back pain specialist. Gamez also charged that Biggs has a conflict of interest because his employer receives funding from WCF.

Dabney said he and his co-counsel presented evidence at trial that the Rocky Mountain center has received $250,000 annual contributions from WCF since at least 2015. The insurer’s chief counsel, Dennis Lloyd, is chairman of an advisory board that oversees the center’s operations.

Dabney said WCF holds training sessions for doctors employed by the center.

“It’s an incestuous relationship,” he said.

After an administrative law judge appointed Briggs to the evaluating panel, Dabney appealed the decision to the Labor Commission’s Appeals Board. The board rejected his arguments, ruling that the statute requires that only one member of a medical panel must be a specialist in the claimant’s medical condition and that Gamez would have to show that Biggs had an “actual bias” to disqualify him.

The medical panel concluded that the industrial accident had aggravated Gamez’s low back pain, but the injury had “returned to baseline” and was not permanent. Gamez appealed and the Supreme Court took up the case.

In a 5-0 decision, the high court agreed with the Labor Commission’s Appeals Board that only one physician on a medical panel must be a specialist. But the court said the board’s ruling that Gamez must show an “actual bias” was in error.

The opinion says nothing in the Workers’ Compensation Act states that medical evaluators cannot be biased, but the statute does say, indirectly, that claimants are entitled to “an impartial medical evaluation.” In a 2013 case, Johnson v. Labor Commission, the Court of Appeals rejected a claimant’s argument that a medical evaluator was biased because he shared office space with insurance medical examiners. Since then, the Labor Commission Appeals Board has routinely cited that case to assert that anything less than “actual malice” is insufficient to prove claims of bias or conflict of interest.

The Court of Appeals did not use that term in Johnson, the Supreme Court said. To be impartial, a person must be disinterested, the opinion says. That means they must be free of a conflict of interest.

Requiring “actual bias” to prove a claim that a medical evaluator is biased obscures the “element of disinterestedness,” the opinion says. Bias includes both “real and seeming incompatibility between one’s private interests and one’s public or fiduciary duties.”

“And recognizing the scope of the term ‘impartial,’ we hold that where a medical panelist’s impartiality could reasonably be questioned, the statutory requirement for an impartial medical evaluation has not been met,” the opinion says.

The ruling requires the Appeals Board to hold a hearing to consider Gamez has proved his bias claim without insisting on the “actual bias” standard. The court did not rule on whether Biggs’ affiliation with the Rocky Mountain center constitutes a conflict of interest or if the medical panel’s opinion about his condition is legitimate.

Biggs is the medical director for the Rocky Mountain center’s Specialty Services Clinic. Dabney said he will be able to present ample evidence to present a reasonable question that the WCF’s regular contributions to the Rocky Mountain Center create a disqualifying conflict of interest.

“They’ve got their fingers all over that place,” Dabney said.

WCF held 50% of the Utah workers’ compensation market in 2021, according to its latest annual report.

Executives at the Rocky Mountain Center and at WCF did not respond to requests for comment on Thursday.

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