IMR Costs

One of the fastest growing costs in workers' compensation claims is cost containment services.

Ironic, isn't it?

SB 863 in California introduced a whole new category of costly cost containment: independent medical review (IMR) and independent bill review.

This morning, WorkCompCentral reporter Greg Jones reviewed the current status of IMR results in a monitor of results to determine if there is any bias.

What he found is that about 65% of treatment requests sent to IMR have been decided in favor of California employers, based on his review of the 124 decisions posted on the Division of Workers’ Compensation website.

This shows an ameliorating trend compared to the last WorkCompCentral analysis of the IMR decisions, which found that in the 26 decisions published as of May 21, the utilization-review determination to deny a treatment was affirmed in 25 of the 34 IMR decisions, an affirmation rate of 73.5%.

But what caught my attention was not the fact that there are still 2 out of 3 requests being denied, but that in this small sampling there were so many failures to supply requested information.

Jones cites at least 3 denials based on failure of the claims administrator to supply medical reports and other information despite repeated requests.

The emergency regulations currently in effect provide that after DWC determines a request for IMR is valid, the claims administrator is required under Regulation 9792.10.5 to send to Maximus documents including:

• All treating physician reports regarding the employee within one year prior to the date of request for authorization.
• All reports and records of the employee’s medical treatment that are identified in the request for authorization in the UR determination.
• A copy of the UR determination.
• A copy of all information provided to the employee concerning the UR decision.
• A copy of any materials the employee or employee’s medical provider submitted in support of the request for authorization.
• A copy of all other relevant documents.

The division also allows the employee or a designee to submit to Maximus the treating physician’s recommendation or other information indicating the disputed medical treatment is necessary and any newly developed or discovered medical records that are relevant to the treatment being disputed.

Additionally, if Maximus asks for additional information, the DWC says the party “must send the requested information to Maximus with concurrent service on all other parties within five business days of a regular review or within one calendar day of an expedited review.”

Emergency rule 9792.12(a)(23) provides for mandatory fines of $250 for each day that a claims administrator fails to provide a copy of all reports of the employee’s treating physician for the past year, up to a maximum of $5,000.

Jones notes that in one case, IMR Decision 13-35 overturned a UR decision denying a Salonpas patch on the grounds that it is recommended by both the American College of Occupational and Environmental Medicine and the Official Disability Guidelines. The patches sell for $10 online and can be picked up in retail stores for about $15.

In this case, however, the employer will end up paying for the requested medication, as well as the $350 cost for utilization review and another $560 for IMR.

I have two observations:

1. Is DWC serious about fining non-compliant claims administrators? If so, then we should see some publication of such enforcement action so the rest of the community "gets it."

2. How much is IMR going to add to the expense of "cost containment"? My prediction - like bill review, utilization review, and all of the other reviews out there, this is just another cottage industry expense that ultimately will increase overall costs with minimal impact, if not a negative impact, on quality in claims management.