In an unpublished opinion filed on May 16, 2013, the California Court of Appeal (Fourth Appellate District, Division Three) ruled in Roger v. CorVel Healthcare Corp. that a doctor who sued a workers’ compensation medical provider network (MPN) for terminating its contract with the doctor was not entitled to recover any damages from the MPN, even though the MPN failed to follow the termination procedure specified in the contract. As an unpublished opinion, the Court of Appeal’s opinion may not be cited as precedent.
Dr. Douglas Roger entered into a contract with CorVel, an MPN. Under the contract, CorVel agreed to market Dr. Roger’s services as a participating provider in its network. The contract stated that Dr. Roger retained his right to exercise his independent judgment in treating workers’ compensation patients; however the contract also obliged Dr. Roger to “cooperate fully” with CorVel’s utilization review program. That program gave CorVel the right to deny treatment outside of the medical treatment utilization schedule (MTUS) but also provided Dr. Roger with right to dispute any denial through the MPN’s appeal process.
The contract stated that CorVel could terminate Dr. Roger’s participation in the MPN by following a three-step discipline procedure. Dr. Rogers regularly prescribed nonstandard treatments which were not included in the MTUS. Under the utilization review program, CorVel referred the requested nonstandard treatments to an independent reviewing physician, and in each case the proposed treatment was not certified for payment.
CorVel made efforts to resolve the treatment disputes, but Dr. Roger made it practically impossible to reach him and continued to ignore the utilization review guidelines. CorVel decided to remove Dr. Roger from the MPN.
Dr. Roger sued CorVel for breach of contract and claimed that the percentage of his practice devoted to workers’ compensation, which had been about 90 percent when he was in the MPN, had dropped to 30 to 40 percent. The trial court ruled that Dr. Roger should not recover anything from CorVel. The Court of Appeal affirmed the trial court’s judgment.
The Court of Appeal concluded that CorVel was well within its rights in terminating Dr. Roger’s contract. The court observed, “The record is clear the physician 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.”
The court acknowledged that CorVel did not terminate Dr. Roger according to the three-step discipline procedure outlined in its contract with the doctor. However, the court held there was no causal connection between the absence of the three-step process and Dr. Roger’s termination. The court observed, “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.”
The Court of Appeal’s opinion is available at www.courts.ca.gov.