The Fight Over MPNs Isn't About Treatment

I learned very early on in my workers' compensation legal career that medical control was control over the entire case.

My mentor, the legendary Rene Thomas Folse, PhD, JD, and probably the smartest man I have ever known, emphasized this lesson to me many times very early on as I was gaining experience in workers' compensation litigation - control over who engages the injured worker for medical considerations will control how the case concludes.

Indeed, it is this reality that drove the creation of Medical Provider Networks in California's "reform" law of 2004, and other states' reforms.

And it is this reality that is STILL driving intense litigation as the sides battle over medical control so that the "winning party" can get the upper hand in the cards being dealt in the determination of temporary and permanent disability indemnity, because as we all know, it is the indemnity component of a work comp case that drives its value to the parties (and in particular the injured worker and those working for him or her).

Recent California Workers' Compensation Appeals Board (WCAB) panel opinions highlight the importance, and illogical madness, of the fight for control.

In Matancias v. Milk Maid Dairy et al. WCAB Commissioners Ronnie G. Caplane and Frank M. Bass ruled that Milk Maid Dairy did not give proper notice of its MPN to employee Juan Carillo Matancias and therefore had to pay for the treatment that Mantacias obtained on his own at the San Joaquin Accident & Medical Group.

Matancias was injured on Oct. 31, 2007, when a cow giving birth to a calf pushed him through a fence. He received treatment that day from Dr. William Yale, who was part of Milk Maid's MPN.

Milk Maid sent Matancias a notice of its MPN and his rights on Nov. 15, 2007, but this notice did not identify which doctors were part of the network.

In May 2008, Dr. Yale released Matancias from his care. Matancias then began seeing Dr. Charles Lewis, who was part of the San Joaquin Accident & Medical Group, but not part of Milk Maid's network.

Milk Maid and its insurance carrier sent multiple letters to the medical group objecting to the services being provided by Dr. Lewis, which gave rise to the group's lien claim for $15,005.33.

Matancias and Milk Maid settled his workers' compensation claim for $20,000 in 2010. As part of the settlement, Milk Maid agreed to pay, adjust or litigate any liens of record.

The dispute over the San Joaquin Accident & Medical Group's lien went to trial before Workers' Compensation Administrative Law Judge Robert Norton last year, four years to the day after the date of Matancias' injury.

Norton determined Matancias had self-procured reasonable medical treatment from the medical group with a reasonable value of $6,304.87 and awarded that amount.

Milk Maid sought review by the WCAB, which denied reconsideration.

Caplane, writing for the majority, said Milk Maid had failed "to provide proper notice to applicant of his rights in the MPN," noting specifically that it never told Matancias "he could challenge his release from care by Dr. Yale as part of his rights in the MPN," and it provided no evidence showing that Matancias was notified that his later treating doctors were not part of the MPN.

"Moreover, defendant did not establish that it ever cured the defects in its notice to applicant after he began treating (out-of-network) so that he could be transferred into its MPN in conformity with applicable statutes and regulations," she added.

All of this, Caplane said, "evidence(d) a failure to provide reasonable medical treatment, such that defendant is liable for the medical treatment applicant self-procured."

Moresi, however, opined that "defendant established at trial that the initial treating physician Dr. Yale was in its MPN and he provided medical treatment for seven months before applicant chose to treat outside the MPN."

"The record also shows that defendant notified applicant of his rights in the MPN on November 15, 2007, while he was treating with Dr. Yale, and that defendant repeatedly notified lien claimant that it was not in defendant's MPN and was not authorized by defendant to provide medical treatment," Moresi contended.

He added that he did not think Milk Maid should have been obligated to prove that its MPN was authorized since the "lien claimant did not raise authorization of the MPN as an issue at the pretrial conference notwithstanding its obligation to identify all evidence and issues in dispute at that time," and " because it is reasonable to infer that the 'law has been obeyed' unless a party asserts otherwise."

Moresi pointed out that "the status of defendant's MPN may be easily determined from a reliable source by accessing the Department of Workers' Compensation website, which shows that defendant's MPN has been approved by the (Division of Workers' Compensation) administrative director since Dec. 30, 2004."

Disputes over proper MPNs have prompted a series of decisions from the WCAB, including Knight v. UPS, where a panel ruled that a payer must notify the applicant of the employer's properly-established MPN or it will be liable for the reasonable cost of medical treatment self-procured by the employee.

The WCAB also issued an en banc decision in Valdez v. Warehouse Demo Services, which held that when an employee has obtained unauthorized treatment outside of an employer's properly noticed and validly established MPN, reports from a non-MPN physician are inadmissible.

Earlier this year, the WCAB released a panel decision in Clifton v. Sears Holding Corp., which said employers may use judicial notice to show that they have a properly established MPN and satisfy the initial burden of proof that they provided valid notice of the MPN to the applicant by introducing the MPN notices that were given to the applicant into evidence.

But all of these decisions miss the reality of the situation, which is that medical control is not about delivering proper treatment - it is about driving the indemnity equation.

And wasn't that the basis for the 2004 reform laws in the first place - minimizing the amount of indemnity paid to injured workers?

Many of those who read this blog will place blame on the attorneys representing injured workers, and in my opinion that is misdirecting the argument, because attorneys are going to do what attorneys are trained to do - apply the law to specific factual situations in an attempt to drive the outcome for which the greatest motivation is rewarded, and in workers' compensation it is indemnity.

What happens with law over the years is that "holes" in the law are discovered as different fact patterns emerge that legislative authors could not anticipate (or choose to let courts figure it out…). This natural evolution of the law is derided by those objecting to the outcome as "manipulation", but the when the coin flips such evolution is celebrated.

So it is with MPNs. The assumption when the MPN law was put on the books was that certain notices would issue from the employer to the employee, but there was no consideration for HOW that was going to be accomplished.

And that is what the problem is with MPNs - the carrier community that supported the proposition does not take sufficient control over the notification process, leaving most of the process up to the employer to execute.

The employer in most cases does not have the resources, the skills, the knowledge or the motivation to do all that is necessary for the proper enforcement of an MPN.

But, if the carrier community took control over the notification process I suspect it would find that doing so would drive the costs up so high that there would be no net savings behind MPNs. Carriers would have to know who all of an employer's employees were at all times and would have to keep records of all of the notices supplied at all times through out an employer's policy history - this would be an incredibly complex, and expensive task.

So, I said it before and I'll say it again - the root of the problem isn't medical treatment, it is the motivation that drives the medical treatment.

Change the reward system and change behavior. Until then, deal with the law as it evolves.