California's Wickline decision revisited.

0 In a recent California appellate decision, Wilson v. Blue Cross of Southern California, 222 Cal. App 3d 660, 271 Cal Rptr 876 (2d Dist., 1990), the court cut back on its earlier decision in Wickline v. State of California, 192 Cal. App. 3d 1630, 239 Cal Rptr 810 (2d Dist. 1986), which had provided substantial protection for third-party payers against liability for utilization review decisions. The Wilson decision not only limits Wickline to its particular facts, but also criticizes some of its rationale. "Health Law" is a regular feature of Physician Executive contributed by Epstein Becker & Green. Douglas Hastings, Esq., a partner in the firm's Washington, D.C., offices, serves as column editor.

In Wickline, the plaintiff was a hospitalized patient whose payment for services was covered, generally, by California's medical assistance program, MediCal. Her physician sought Medi-Cal authorization for an additional eight day's hospitalization. The physician consultant retained by the Medi-Cal program authorized payment for only four additional days.

As a result, her principal treating physician, with the concurrence of two other treating physicians, discharged the plaintiff after four additional days of hospitalization. The principal treating physician did not utilize a reconsideration procedure within the Medi-Cal system to seek an additional extension of benefits. Nine days after her discharge, the plaintiff suffered further complications, resulting in the loss of a leg.

In its analysis, the Wickline court noted the general rule, "All persons are required to use ordinary care to prevent others being injured as a result of their conduct."' The court went on to indicate that this general rule may be varied by a clear enunciation of public policy. The court then went on to discuss the policy behind encouraging cost containment measures and the various MediCal statutory provisions indicative of such public policy. The Wickline court did state, however, "The patient who requires treatment and who is harmed when care which should have been provided is not provided should recover for the injuries suffered from all those responsible for the deprivation of such care, including, when appropriate, health care payers.", Notwithstanding this language, the Wickline court held that, as a matter of law, the State and its Medi-Cal reviewer/consultantwere not liable.

The Wilson case was brought by the parents of a boy who had been admitted for inpatient psychiatric care for major depression, drug dependency, and anorexia. His treating physician recommended three to four weeks of inpatient care. However, the utilization review company for the insurer refused to certify the hospitalization beyond 10 days, and the patient was discharged. Less than three weeks later, he committed suicide.

The trial court granted summary judgment for the defendants on the basis of Wickline. The appellate decision reversed the summary judgment and remanded the case for trial. The court concluded that there was no reason to exempt third-party payers from the natural consequences of their actions and that an issue of fact existed as to whether the review decision proximately caused the youth's suicide.

The Wilson decision is explained, in part,by a provision in the insurance policy covering the decedent. The policy was written by Blue Cross and Blue Shield of Alabama and expressly provided for coverage of the cost of hospitalizations "as the member's physician determines the hospitalization is necessary." Notwithstanding this provision, Blue Cross of California, acting as agent for the Alabama company, referred the matter to its outside utilization review consulting company. Given the terms of the policy, there was little room to argue that the insurer had an expressed or implied right to review the physician's determination of medical necessity. Although the California Supreme Court has held that an insurer has an implied right to review medical necessity decisions by the treating physician,(3) it is doubtful that such a right would exist in view of the express policy language at issue in Wilson. The Wilson court did not address this issue in its opinion.

Although Wilson could have easily been decided on the basis of the insurance policy language at issue, the court went out of its way to discuss other issues as well and to criticize the Wickline decision. The Wilson court noted three key legal elements that it characterized as forming the basis for Wickline and that were not present in Wilson.

First, as a matter of law [emphasis added], the discharge decision met the standard of care for physicians.... Second, the funding process was not pursuant to a contract; rather, the determination as to whether the state had a duty to provide funds was made pursuant to statute and provisions of the California Administrative Code. The statutes and regulations altered the normal course of tort liability set forth in [the] Civil Code... Third, Wickline was not a case where a cost limitation program such as the Medi-Cal review process was permitted to corrupt medical judgment."(4) One key issue where Wilson disagreed with Wickline was causation. Wickline focused its analysis of causation on the treating physician's certification of the discharge because, without that certification, the discharge would not occur. Wilson deemed the Wickline analysis flawed because, in a multiple causation case (i.e., where there are multiple defendants who may have acted jointly or independently to cause plaintiff's injury), tort liability exists where one's actions were a "substantial factor" in causing the result. In most utilization review cases, it is difficult to argue that the act of cutting off payment is not a substantial factor in the decision to discharge. The practical effect of Wilson will be to prevent summary judgment in many cases of this nature. Additionally, Wickline is widely known for criticizing the treating physician for failing to appeal the reviewer's discharge decision. This has been of particular concern to providers, who feel that the Wickline decision unfairly placed liability on them for failing to appeal all adverse review decisions. Wilson is careful to point out that it is not absolving the treating physician from responsibility to challenge an adverse review decision that the physician believes is medically wrong. The effect of Wilson is to expand the scope of potential liability to include the review entity.

On balance, the Wilson and Wickline decisions are not inconsistent. Both decisions recognize the general tort principle that one who acts without ordinary care and causes injury to another may be held liable for such conduct. If Wickline can be criticized, it is for its determination on summary judgment that, "as a matter of law," the utilization review process was not liable for the injuries sustained by the plaintiff. However, the particular facts in Wickline were very strong in showing that the discharge was proper at the time. Wilson merely indicates that such issues ordinarily will be difficult to resolve on the basis of summary judgment. C3

References 1. Wickline v. State of California, 239 Cal Rptr at 818. 2. Wickline v. State of California, 239 Cal Rptr at 819. 3. Sarchett v. Blue Shield of California, 43 Cal. 3d (1987). 4. Wilson v. Blue Cross of Southern California, 271 Cal Rptr at 879.