CorVel Healthcare, a workers’ compensation system MPN, terminated the contract of Douglas J. Roger M.D., an orthopedic surgeon for two reasons: First, he was unreachable by independent reviewing physicians hired by the network to evaluate four nonstandard treatments he was regularly prescribing for his workers’ compensation patients. Second, he was prescribing those nonstandard treatments on a wholesale basis, and not taking the time to justify their application to particular patients. The Court of Appeal in the unpublished case of Roger v. CorVel Healthcare held that CorVel was well within its rights in terminating his contract.
The case becomes more complicated. The MPN did not comply with the contract as regards the process of termination. The contract provided for a graduated, three-step disciplinary process based on first, second, and third offenses: first a warning letter, second a set of counseling “sessions,” and only then, third, actual termination. And that did not happen. The network terminated the physician after one lengthy telephone discussion with one independent reviewing physician about one patient. The record is clear that Dr. Roger was not about to change his practice to conform to the network’s utilization review procedure, either by making himself readily accessible for peer review consultations, or by taking the time and effort to justify his nonstandard treatments on a patient-specific basis.
Dr. Roger regularly prescribed four nonstandard treatments for his workers’ compensation patients. The first is known as a “surface EMG.” An EMG can be done by needle, which is considered a separate procedure from surface EMGs, or it can be done by surface electrodes – hence the term “surface EMGs.” Surface EMG’s are controversial. Insurers, generally speaking, don’t like them. The other nonstandard treatments were two ointments and one “medical food.” The two ointments were a capsaicin compound referred to by the parties as wasabi-rub, the other a compound of various ingredients called Gaba-2K rub. The “medical food” was theramine tablets.Dr. Roger did not dispute that none of these four treatments are recommended for use in the medical treatment utilization schedule (MTUS) adopted by California Division of Workers’ Compensation. He prescribed them over 90 times, either individually or in some combination, over the course of the year following his sign-up with CorVel. And in each of those more than 90 cases, the proposed treatment was not “certified” for payment. Dr. Roger denigrates the non-certification memos as “cut and paste jobs” performed by nurses rather than actual doctors (even though they were signed by doctors), but cites no evidence to that effect. But Dr. Roger made himself practically unreachable during his tenure with CorVel. He testified he operated four offices during this period, and he had a personal policy of never returning any phone call from an independent reviewing physician unless he was at the office where the patient’s file was kept.
Even worse – and “worse” is the precise word the trial judge used for it – Dr. Roger resorted to the unethical practice of upcoding in order to be paid for the surface EMGs he prescribed.
Dr. Roger’s main theme, which is that a network like CorVel has no business telling fully qualified physicians – under the guise of utilization review – that they can’t prescribe what they think is best for their patients if it is otherwise perfectly legal. The Court of Appeal noted that “Dr. Roger himself was perfectly willing to accept denial of a prescribed treatment and simply assert a workers’ compensation lien later.”
The Court of Appeal affirmed the trial court judgment that Dr. Roger take nothing by his breach of contract action. The Court noted that “While Dr. Roger’s workers’ compensation business may have declined considerably as a result of his termination, we cannot say that his termination was as a result of CorVel’s failure to follow the three-step termination process. Termination was inevitable, independent of that process.”