Finander: A Self-Insured Employer That Ignored an IMR Medication Approval Faced Sanctions

When Independent Medical Review (IMR) overturns a denial, the claims administrator has to put the decision into effect, appeal it, or show that it already disputes liability on non-medical grounds. In Marlene Finander v. Los Angeles Unified School District, Nos. ADJ4173897 and ADJ3091647 (WCAB Oct. 23, 2026), the Appeals Board upheld $1,500 in sanctions against a self-insured school district that neither implemented nor appealed an IMR approval for an allergy medication. It also kept an order to reimburse the injured teacher for out-of-pocket medication costs, limited to medications the district, its utilization review (UR) or IMR had approved. It deferred the amount of any late-payment penalty because the record did not show which medications required payment.

Commissioners Paul F. Kelly, José H. Razo and Katherine Williams Dodd decided the case as a panel.

An IMR approval for brand-name Zyrtec was filled once

Marlene Finander, a teacher, had two old injury claims with stipulated awards: an orthopedic injury in 2000 and a lung and psychiatric claim covering 1984–1985. Future medical care remained open in both. Sedgwick CMS administered the claims, with Optum Rx acting as its agent.

A September 19, 2024 UR decision denied a prescription for Zyrtec. Ms. Finander requested IMR. On November 5, 2024, IMR overturned the denial for “Zyrtec (Cetirizine) 10mg brand name only” with refills. The medication still did not arrive. At a January 30, 2025 hearing, the district agreed to “authorize medication exactly as IMR determined on 11/5/2024”, and a workers’ compensation judge ordered it to address or provide the Zyrtec within five working days. At trial, Ms. Finander testified that she received the medication once, in February 2025, and never again.

The trial judge ordered reimbursement, sanctions and a conditional penalty

The July 8, 2026 joint findings resolved many issues. Three matter most. The judge ordered the district to reimburse Ms. Finander for Zyrtec, Advair HFA, Ventolin, Flonase and Albuterol costs documented in her Exhibit 25, 70 pages of costs, bills and invoices that included pharmacy expenses as well as litigation costs, provided each medication had been approved by the district, its UR or IMR. The parties were to work out the exact amount, with the judge keeping jurisdiction over disputes. The judge found the district had not complied with the IMR decision and imposed $1,500 in Labor Code section 5813 sanctions, payable to the state General Fund. He also added a 15 percent penalty under section 5814 if the district paid within 30 days, reserving a possible increase to 20 or 25 percent if it did not.

The worker’s petition was denied on the trial judge’s reasoning

Both sides sought reconsideration. Ms. Finander, through her husband as a non-attorney representative, wanted more: a lump-sum payment of estimated lifetime medical costs, larger sanctions, reimbursement of a gym membership and findings of retaliation. The Board quoted the judge’s report, agreed with it and denied her petition. Commutation applies to indemnity payments, not future medical care, and the district could not be forced into a compromise and release. The gym claim had been decided earlier and not appealed. The claimed pattern of misconduct was too vague, because a petition must cite specific parts of the record.

The employer had to appeal the IMR decision, not ignore it

The district argued that pages were missing from the IMR determination in evidence and that the record needed more development of the reviewer’s reasoning. The judge’s report, which the Board agreed with, rejected that argument. The exhibit clearly showed the approval. If the district could not understand the reviewer’s rationale, “Defendant had a remedy by filing an appeal of the IMR determination with the WCAB.” It did not appeal, so it could not dispute the determination at trial.

The report then tied the sanction to specific rules. Labor Code section 4610.6 requires an employer to promptly implement an IMR decision finding treatment medically necessary. California Code of Regulations, title 8, section 9792.10.7 imposes the same duty unless the employer appeals or disputes liability on non-medical grounds. Failing to implement and failing to appeal violated both, and WCAB Rule 10421(b) makes such statutory and regulatory violations sanctionable.

The Board added its own reasons. Sanctions had been raised before trial and litigated, so the district had notice and a chance to be heard. Given its January 2025 agreement, the earlier hearing order and Ms. Finander’s unrebutted testimony, the Board agreed that $1,500 in sanctions was appropriate.

Reimbursement rested on the IMR approval, Exhibit 25 and testimony

The district also argued that Ms. Finander offered no treating physician’s reports or requests for authorization, so nothing showed it had failed to provide the medications. The judge answered that the IMR decision already established approval of brand-name Zyrtec. Exhibit 25 contained pharmacy expenses, and she testified credibly that the same problem happened with other medications. “Testimony is evidence,” the report said. Combined with Exhibit 25, that testimony made a prima facie case, shifting the burden to the district to show which medications had not been approved. Leaving the exact amount for the parties to adjust, with disputes reserved, was routine. The Board agreed.

The late-payment penalty needed a clearer list of medications

The Board parted from the judge on one point. A decision must rest on admitted evidence, and the judge must identify the evidence supporting it, as the Board explained through Hamilton v. Lockheed Corporation, 66 Cal.Comp.Cases 473 (2001) (en banc). The reimbursement order was limited to approved medications, but “it is not entirely clear which medications require payment.” Without that list, the Board could not tell which payments were delayed, so it deferred the section 5814 penalty.

The Board added a warning: “to the extent payments for approved medications are untimely, penalties may be owed.” It recommended that the district adjust the penalty when it pays.

The disposition: the Board denied Ms. Finander’s petition, granted the district’s petition, and affirmed the joint findings except for amending Finding 10 and the order to defer the amount of section 5814 penalties. The reimbursement order stands, with payment due within 30 days and the amount to be adjusted by the parties.

What the decision means for a similar dispute

In our reading, Finander separates three remedies. Reimbursement depends on proof that a medication was approved and that the worker paid for it. Sanctions depend on a duty the employer ignored, here a binding IMR decision it neither implemented nor appealed, coupled with an agreement and an order it did not follow. A section 5814 penalty depends on showing which payment was late, which requires a medication-by-medication record.

For a worker whose approved prescription is not being filled, the most useful documents are the IMR or UR approval itself, every pharmacy receipt, any hearing minutes or orders requiring compliance, and a list matching each purchase to its approval. Our guide to an IMR-approved medication the insurer will not provide explains those steps.