My presentation, ''A National Perspective on Workers' Compensation: How Texas Compares,'' ironically follows a presentation by well known Texas work comp consultant Julie Shank, 'Unintended Consequences in Workers' Compensation.''
I say "ironically" because California just passed an enormous reform bill which is now awaiting Governor Brown's signature, and the unintended consequences of that massive law change are just now starting to be exposed as legal scholars and other workers' compensation industry experts review the bill in detail.
While the politicians have promised the miracle of increased benefits and reduced costs, the insurance industry is taking a less optimistic view, waiting to see how things shake out before making any prognostications as to whether the numbers add up.
And that is because the carriers know all too well about unintended consequences (UC).
For example: some time ago, when I was a young defense lawyer, the legislature in its infinite wisdom decided that the physician that is actually treating the injured worker was in the best position to determine the extent of the workers' permanent disability, if any. So a presumption in favor of the treating physician's determination of permanent disability was created.
It didn't take long for injured workers to take control of the medical process for the purpose of inflating permanent disability awards.
This led to the elimination of the presumption several years later and institution of the Qualified Medical Examiner process - a Byzantine system of medical opinion elimination that put stresses on the resources of the Division of Workers' Compensation (DWC) resulting in late or lost QME referrals, medical reports that didn't meet evidentiary standards, disqualified QMEs, etc.
That is just one example of many that could be cited regarding UC.
The UCs that may arise our of SB 863 I'm sure are numerous - there just wasn't enough time to vet the bill because the political need to expedite its passage was greater than ensuring its accuracy. It is the hope of legislators that "clean up" legislation will follow next session as deficiencies in SB 863 become known.
To the extent that UCs can be predicted, though, is to look at other states where similar provisions may already be law and examining the experience of those states. As you likely know, SB 863 has instituted a new practice for California to resolve both medical treatment disputes and medical billing disputes.
In this regard, my trip to Texas should prove fruitful, for the Texas system for years has had an Independent Medical/Bill Review system in place, and in fact new rules and regulations have been adopted that further refine that system.
Texas calls their independent bill review process a Medical Fee Dispute Resolution (MFDR) system; the Texas system for independent medical treatment review is called Medical Necessity Dispute Resolution (MNDR). Providers in this process are referred to as "sub-claimants."
In Texas, such disputes go to a Benefit Review Conference (BFR) first. A BRC is an informal mediation session. If a requestor does not request a BRC within 20 days, the Division’s fee reimbursement decision on the fee dispute is final. A BRC request shall include a copy of MFDR decision.
If parties are not successful mediating their dispute, they now have a choice: binding arbitration or a Contested Case Hearing (CCH) at the State Office of Administrative Hearings (SOAH). The state keeps a list of arbitrators and the process for selecting an arbitrator is similar to that used by the American Arbitration Association. There are detailed rules governing the conduct of the arbitration.
If the parties go to a SOAH hearing, the non-prevailing party pays the costs of a SOAH hearing, unless the injured worker is the non-prevailing party. The requestor, other than the injured worker, shall also reimburse DWC for SOAH costs in the event of a dismissal. The carrier pays for all costs if the injured worker dismisses the case or is the non-prevailing party.
An MNDR is to resolve questions concerning reasonableness and the necessity of medical treatment regardless of the amount in dispute (i.e. medical fee dispute resolution) or the compensability, liability, or extent of the injury (i.e. income dispute resolution). Medical necessity disputes can involve prospective determinations (preauthorization and concurrent review) and retrospective review.
MNDRs are determined by an Independent Review Organization doctor (IRO) who must hold the appropriate credentials and comply with the personnel and credentialing requirements set forth by the DWC. There are rules prohibit conflicts of interest and give the DWC powers that include audits, investigations and discipline should an IRO fall outside the boundaries of acceptable review behavior.
A party may appeal the IRO’s decision within 20 days by requesting a contested case hearing. Previously, the forum for a retrospective review dispute was based on the amount in controversy. New medical necessity disputes are appealable to a contested case hearing conducted by DWC.
In my discussions with some Texas attorneys earlier this year after the IMR process was divulged by SB 863 negotiators, I learned that in fact the Texas MNDR system is rarely used now. Treatment decisions no longer appear to be a source of conflict in the Texas system - but that wasn't always the case.
Note that the Texas MNDR system provides for an appeals process (unlike the California version which has limited rights of appeal) - this has not proven to be a source of consternation to workers' compensation practitioners it seems: strict adherence to treatment guidelines, rejection of questionable treatments, and respect for medical network care leaves disputes about treatment out of the system.
While the California IMR process does not leave much room for appellate review, if the constitutionality of such restriction is not upheld there may not be much impact anyhow, if the Texas experience is realized.
I get invited to speak at events such as ICT's annual conference to bring some California perspective to other states. Most often folks in other jurisdictions like to see what is going on in California to get some flavor as to what might happen in their states.
But this time we can look to Texas to see what has happened in that state regarding IMR and IBR - the effect was a pronounced declination in the number of disputes concerning treatment and billing.
That may not be a UC - in fact the consequence was entirely intended. If this is the intention of the California reform bill drafters, then the California DWC can take a queue from the Texas DWC and plagiarize a good amount of their regulations, and hopefully avoid dreaded UC.
Many thanks to Texas attorney Stuart Colburn with the Downs Stanford, P.C. law firm, who prepared a rules update from which much of my information on MBDR and MNDR is taken.