Wednesday, December 3, 2014

Eliminate Relevancy

The claims paying community is having consternation about the California Division of Workers' Compensation's recent announcement that it is going to start fining them $500 per day, capped at $5,000, for each day that relevant medical records don't timely make it to the Independent Medical Reviewer.

The reason for the heartburn, they say, is that judges will once again end up deciding medical treatment rather than doctors - going against the intent of SB 863.

The DWC said that as of Monday it will commence the penalty procedure if IMR contractor, Maximus, has not received relevant medical records by Dec. 15.

The issue seems to be: what is "relevant?"

Under the provisions of SB 863, after Maximus accepts an injured worker's application for IMR, it sends a notice to the claims administrator that the case was accepted. At that point, the claims administrator has 10 days to send a copy of all the worker's medical records in its possession that are "relevant" to:
  • The worker's current medical condition.
  • The medical treatment provided by the employer.
  • The disputed medical treatment requested by the worker.
The claims handler must also send a copy of all information sent to the worker explaining the decision regarding the disputed treatment, all materials the injured worker submitted in support of the request for authorization and any newly discovered "relevant" medical records. Finally, the claims administrator must send a copy of "any other relevant documents or information used by the employer or its utilization review organization in determining whether the disputed treatment should have been provided."

According to Maximus, about 19,000 of the 42,000 cases that were pending as of Oct. 22 were missing medical records after the deadline for submission.

This is again an example of the system working as it was designed, not as intended.

The design is flawed because the word "relevant" requires decision making, which is a gray area.

The simple solution is to require ALL medical records be sent along with the treatment dispute, regardless of relevancy.
Just send ALL the records...

Otherwise, if it's not a judge making a medical decision (determining what records are "relevant") then it's the claims adjuster - regardless, it's not a doctor making the decision.

Claims folks are going to cite the cost and expense of doing so, particularly in large files. It comes down to the numbers and I get that.

So, here's a simple way to avoid claims adjusters or judges from making medical decisions: determine the cost of the treatment appeal (UR or IMR) versus the cost of just approving the treatment. If the cost of appeal is more, then just approve the treatment.


I know, there are complications like duration of temporary disability, probability of a good outcome, etc. etc. Those can all be factored in to the decision point.

Here's a proposed formula:

Cost of treatment + anticipated TD + anticipated PD = $X


Cost of all records + TD pending appeal (say 30 days, but given usual delays 60 may be better) + anticipated PD without treatment + anticipated TD post denial of treatment (if any) + TD (again if any) pending judicial review (90 days if expedited) + TD (you know the caveat) pending WCAB review X percent of probability that judicial review will determine the UR/IMR timeline wasn't followed = $X

Build your own model ...

I know there isn't empirical evidence that claims folks are either intentionally omitting records, or filtering to achieve a desired UR/IMR result, but the fact is that 45% of all IMR requests don't include records Maximus reviewers have determined are necessary for a review decision.

That's a problem.

Not only are injured workers being denied and/or delayed on their treatment requests, but it completely undermines the credibility of the system and of the operational objectives of SB 863: provide more benefits to injured workers while saving employers money.


Shameless Plug

Saturday at the LAX Sheraton Gateway Hotel WorkCompCentral hosts its 3rd Annual Comp Laude Gala and Awards. This is going to be Huge!

We start off at 1 p.m. and I will present WorkCompCentral's Word on the Industry - a review of the past year (and other significant events) concluding with a single word that WorkCompCentral editors have decided best defines the system.

Following Word on the Industry motivational speaker and injured worker, Dwight Johnson, a double amputee as the consequence of two separate industrial accidents, will tell us his story about injury, recovery, injury, recovery - and keeping life in focus through it all.

Then I will moderate a panel consisting of: Christine Baker, Director, Department of Industrial Relations; James Butler, Founding Partner at Butler Viadro and President of CAAA; William "Bill" Zachry, Vice President, Risk Management at Safeway, Inc.; Robert Rassp, Applicant Attorney, Legal Specialist and Author; Mitch Seaman, Member of the Governing Committee of the WCIRB (Worker's Compensation Insurance Rating Bureau); and Sean McNally, Member of Commission on Health and Safety and Workers' Compensation. We're going to debate SB 863: what's good, what's bad, and what are we going to do with it.

That's 3.5 hours of continuing education for professionals: attorneys, claims adjusters, QMEs, and others.

Drinks, food, socializing and networking follow and then the awards for the best in our industry.

We'll continue partying until 9 p.m. when the hotel kicks us out of the room...

There's special pricing if you bring a Toy for Tot or are a claims adjuster.

Go to for more information or just call 805-484-0333.

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