Wednesday, February 13, 2013

It's Not What IMR Costs, but the Costs of IMR

What the debate about the cost of independent medical review (IMR), and the pay schedule for IMR doctors fails to capture is that the publication of the fees and costs establish a competitive landscape so that when Maximus must compete with other firms for IMR business everyone will know what the numbers are.

This will make or a very competitive landscape when the introductory phase of IMR is over.

One of the concerns expressed by critics of the fee/reimbursement schedule recently revealed is that the physicians will not be motivated to perform IMR adequately due to the low perceived pay scale.

From the interviews in this morning's WorkCompCentral news story on the topic, the fees proposed for employers, and the pay to doctors, is similar to those paid in the general health model.

Data on the Department of Managed Health Care’s website shows that between 2007 and 2011, Maximus approved a group health plan’s decision to deny a treatment in 44.16% of the 8,529 cases it reviewed. In 36.64% of cases, Maximus overturned the decision to deny a procedure or treatment, and in 19.21% of cases, the group health plan agreed to approve the procedure before the IMR process was completed.

In my mind those statistics seem relatively neutral.

Applicant attorneys have expressed that the low pay to physicians means that doctors won't be motivated to pore over hundreds or thousands of pages of records and will miss details. Since details will be missed, and since there is no review process out of an IMR decision, then it is possible that an injured worker's treatment request will be unfairly denied.

In some cases that may be the case.

My guess, however, is that in the vast majority of cases that is not a true concern.

An IMR doctor is going to get the same records, same patient chart, and use the same treatment utilization schedule as a utilization review doctor/reviewer.

And I bet that most UR decisions don't get to the IMR stage because of the pre-IMR processes and the fact that the employer must front the cost of the IMR. There are motivations built in to promote treatment approval and dis-incentives to deny treatment requests.

As I've said before, it is the quality of reviews that will be a factor in whether any challenges to the appealability of IMR passes judicial retrospection. By the time that provision gets to the higher courts, my guess is that Maximus will be gone from the IMR picture, and if the quality of review is as poor as some critics suggest due to the low flat fees then IMR won't be around at all.

Plus, after the first year or so of testing the waters the volume of requests is going to deteriorate after claims departments versus injured workers test the waters to see how much resistance there is going to be and where the typical IMR approval/denial response rate is going to end up.

In addition I think that after a couple of years of experience carriers will have in place some fundamental operational rules developed that minimize the number of IMR requests due to the costs of obtaining an IMR (not just the processing fee, but the ancillary costs of developing and communicating the medical record and other related costs).

This process needs to become operational and the parties need to get some experience with it for a couple of years before one can claims success or failure of IMR.

I like the IMR idea, and as opined in the past, I don't think the real issue with IMR is either the fees, pay, anonymity or appealability in the process, but rather the stringent time deadlines that are in the code that don't have any meaningful enforcement mechanism.

From an earlier post:

The only enforcement mechanism is found in Labor Code section 4610.5(i):

"An employer shall not engage in any conduct that has the effect of delaying the independent review process. Engaging in that conduct or failure of the plan to promptly comply with this section is a violation of this section and, in addition to any other fines, penalties, and other remedies available to the administrative director, the employer shall be subject to an administrative penalty in an amount determined pursuant to regulations to be adopted by the administrative director, not to exceed five thousand dollars ($5,000) for each day that proper notification to the employee is delayed. The administrative penalties shall be paid to the Workers’ Compensation Administration Revolving Fund."

The key words in subsection (i) are "that proper notification to the employee is delayed."

Note that this subsection doesn't say that the review itself is delayed - it is the "proper notification" that is the triggering event for the $5,000/day penalty.

I'm assuming that the drafters of this provision mean than "proper notification" is whether or not the employee is given notice in the form prescribed by the AD of the reviewer's decision. But doesn't the penalty apply if the decision itself is delayed? What if the decision is timely and what if "proper notification" failed due to an issue with the US Mail or whatever other communication protocol is used to notify the employee? What if there is untimely action on the part of the employer that does not delay "proper notification" (i.e. engaging in some other games that are not within the spirit of proper IMR)?

The preamble to SB 863 states that "The bill would prohibit an employer from engaging in any conduct that delays the medical review process, and would authorize the administrative director to levy certain administrative penalties in connection with this prohibition, to be deposited in the Workers’ Compensation Administration Revolving Fund."

But that's NOT what the actual law says.

The reviewer has certain time lines by which to issue the decision. But the employer's obligation seems to have been confused in the legislative drafting process.

Labor Code section 4610.5(h)(3) states, "If the employer fails to comply with subdivision (e) at the time of notification of its utilization review decision, the time limitations for the employee to submit a request for independent medical review shall not begin to run until the employer provides the required notice to the employee."

But 4610.5(e) has nothing to do with notice - subsection (e) provides that a utilization review (UR) decision can only be appealed to the IMR and that there is no liability for treatment provided without authorization of the employer unless the UR decision is changed by the IMR.

It seems to me that the arguments should not be about whether IMR costs too much or pays too little, but whether employer/carriers have their processes in place sufficiently to meet the notice requirements - those are where the real costs are hidden in the reformed process.

Meeting new deadlines means overhauled processes, and usually increased staffing, until a system emerges that is as efficient as can possibly be designed given the limitations of the underlying law.

"Most people don't plan to fail; they fail to plan." John L. Beckley

Beckley's quote is as universally applicable now as ever. Anyone who wants to get into the IMR business knows what the competitive financial landscape looks like. It's a matter of quality now. In the meantime employer/carriers have more to worry about than whether a treatment request should or shouldn't be independently reviewed.


  1. The numbers show that treatment is improperly denied more than 50% of the time. But it is the lien claimants who are abusing the system?

  2. JG - I think you might be misinterpreting the stats. IC decisions denying treatment were overturned in IMR 36.64% of the cases. Treatment requests were upheld and/or capitulated the majority of the time: 63.36%. Also remember that these stats are for general health. There is no experience yet with WC.