A PUBLICATION BY THE LAW FIRM OF

Clifton, Mueller & Bovarnick, P.C.

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ATTORNEYS AT LAW

2008

july

COURT OF APPEALS REJECTSCHALLENGE TO DIME BASED ON CONFLICT

In Benuishis v. Industrial Claim Appeals Office, Cheyenne Mountain Zoological Society, and Pinnacol Assurance, the Court of Appeals rejected the claimant’s challenge to the rating of Division independent medical examiner based on the physician’s contracts with her employer’s insurance company, Pinnacol Assurance, as both a provider and an advisor.  The court concluded that nothing in the statute or implementing regulations limits a physician with such contracts from performing an IME absent any direct or substantial relationship with the treating physician.

In Benuishis, the claimant was injured in an admitted accident while working at the Cheyenne Mountain Zoo.  The zoo’s workers’ compensation insurer was Pinnacol Assurance.  Following the injury, the claimant was treated by Dr. Thomas Eckestrand.  Dr. Eckestrand placed the claimant at MMI with 65 percent whole person impairment.  Respondent Pinnacol Assurance disputed this finding and requested a Division IME.  The parties selected Dr. Franklin Shih as the DIME.  Dr. Shih found the claimant not at MMI and re-examined her over the next several years.  Eventually, after the claimant underwent extensive additional treatment, Dr. Shih placed the claimant at MMI and assigned 40 percent whole person impairment.  The claimant stipulated she could not overcome this rating and was awarded permanent partial disability benefits based on the DIME’s 40 percent whole person impairment.  Shortly thereafter, the claimant, through counsel, Steve Mullens, learned Dr. Shih was a Pinnacol SelectNet physician, meaning he was a physician in Pinnacol’s provider network and had a contract with Pinnacol to treat insured patients at a reduced fee.  He was also a Pinnacol Physician Advisor and met with Pinnacol adjusters once a month to answer their questions about medical practices and procedures.  Dr. Shih served in these roles during the time he was evaluating the claimant.  Claimant requested a hearing to overcome Dr. Shih’s findings, arguing that his relationship with Pinnacol created an actual or apparent conflict of interest that should have prevented him from performing the DIME.

After hearing the ALJ found that $112,000 of Dr. Shih’s gross annual income was from Pinnacol.  However, the claimant had not established an actual or apparent conflict of interest because Dr. Shih (1) had no personal or financial interest in the claimant’s case, and (2) had not discussed the case with any representative of Pinnacol.  On review, ICAO found substantial evidence supported the ALJ’s determinations and affirmed the Order.  On appeal, the claimant argued that both an actual and apparent conflict of interest existed.  The court rejected both arguments.  The court found there was no actual conflict of interest as Dr. Shih testified he (1) did not pay attention to the insurance carrier for a patient unless the patient needed treatment or referral authorized; (2) had not noticed Pinnacol insured the claimant’s employer until he received a subpoena from the claimant’s attorney; (3) never discussed claimant’s case with anyone associated with Pinnacol; (4) did not receive compensation from Pinnacol that was conditioned on giving opinions favorable to Pinnacol; and (5) no longer would be a Pinnacol advisor if Pinnacol tried to dictate medical decisions to him.  Interpreting C.R.S. § 8-42-107(8)(c) and Rule 11, W.C.R.P. the court rejected the claimant’s argument that Dr. Shih had an apparent conflict of interest, holding Rule 11 states that the circumstances that give rise to an apparent conflict of interest, and prohibits a physician from evaluating a claimant include when the IME physician and someone in the physician’s office has treated the claimant and (2) when the IME physician and a physician who has previously treated the claimant have a relationship “which involves a direct or substantial financial interest.”  Those are not the facts of this case.  The findings of the ALJ on the conflict of interest are factual.  The court found there was substantial evidence to support the ALJ’s factual findings.

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