Tuesday, March 4, 2014

Point At The Moon

The other day the California Workers' Compensation Appeals Board issued an en banc decision, ruling that Independent Medical Review can not be enforced if the original Utilization Review process was deficient.

Yesterday I celebrated a couple of vignettes about doing the right thing.

The case of Dubon v. World Restoration has litigators in the California system abuzz. Defense attorneys are saying that it is going to create chaos. Applicant attorneys say its about time that their clients' procedural rights were recognized.

And is there any wonder why 11% of the totality of claims (those that have attorney involvement) consume 77.7% of all of the costs?

Or that defense attorney fees continue to escalate well beyond the rate of inflation, from $608 million in 2010 to $773 million in 2012, and likely much, much more than that in 2013?

Workers' compensation has become so procedurally controlled that substantive decision making, and ergo, substantive control over a claim is nearly irrelevant any longer.

The claims system in California is all about fighting the wrong thing.

This is not just about attorneys. Cases don't get to attorneys unless there is some dispute, or at least a perception that there is a dispute.

But the Dubon case nearly ensures that there is going to be a dispute because the applicant attorneys are going to examine every single element of the UR process for procedural deficiency.

Procedural deficiency is easy to uncover in any workers' compensation case - the volume of cases foisted upon handlers at many claims shops nearly guarantees a missed deadline, an incorrect address, a failed notice, some defect somewhere along the process.

The Dubon case talks about "material" defects - but who's to say what's "material"? You got it - the courts...

The rules and requirements are so complex that it is nearly impossible for the less than expert employer to follow them without some mistake.

The forms that the Division of Workers' Compensation approves are so intimidating, so legal, and yes, complex, that they scare the injured worker into seeking legal advise.

Jose Dubon had suffered injuries to his back in 2003 and 2004 while working for World Restoration. Last July, he requested authorization from his employer's insurance carrier – the State Compensation Insurance Fund – for surgery. State Fund's agent, Bunch CareSolutions, denied the request last July based on a UR report by Dr. Donald A. deGrange, a board-certified orthopedic surgeon.

After Dubon unsuccessfully invoked Bunch CareSolutions' internal UR appeal process, he filed for IMR.

Pursuant to the new administrative dispute-resolution process that was created by Senate Bill 863, an applicant or applicant attorney has 30 days after receiving an adverse UR decision to apply for IMR. But the IMR contractor, Maximus Federal Services Inc., will not look at any case in which there has not yet been a UR denial.

The WCAB found the UR decision in the Dubon case to be invalid because the UR doctor either did not receive or did not review all of the relevant medical records related to Dubon's condition.

I.e., there could have been no effective denial because of the lack of records.

There seems to be a bit of debate as to whether or not Dubon will increase litigation. Some say that all treatment cases will be combed through by applicant attorneys for UR deficiency, others say that this is already a strategy and that Dubon just reflects reality.

All of that is immaterial - these cases ARE ALREADY LITIGATED! They have already gotten to an attorney.

It's not about whether a case goes litigated, it's about the volume of cases for which expedited hearings will be requested because of medical treatment disputes.

Look again at the stats above: 11% of claims consume over 77% of all costs.

It's not rocket science. It's not even science. It's very elemental.

The process is stacked against the claims payer. There is no way to effectively combat this fact - if you're a claims administrator you WILL pay. If you are going to rest your laurels on procedure, you WILL PAY MORE.

Attorney involvement drives up costs exponentially - that's pretty darn obvious. So it is a very basic proposition that in order to lower costs in the state then don't let a case get to an attorney.

The way to keep a case from getting to an attorney - just pay the claim.

Provide medical. Provide indemnity. Keep the injured worker informed about the claim, make sure they understand what is going on, and just give them what they need to move on.

We don't need UR. We don't need IMR.

We just need sensible claims handling which means moving away from procedure and just dealing with substance.

Yesterday I highlighted a couple of cases where the administrator ignored the rules, ignored her bosses, risked professional ostracism, and did the right thing; got the cases closed quickly, efficiently, without litigation and with lower costs.

Imagine that - a claims administrator using her head rather than the book. Getting things done; if you don't dispute then attorneys don't get involved. That's how it works.

Stop whining about costs. That's a misdirected conversation.

A friend reminded me the other day of a Chinese Proverb: ‘The difference between a human and a dog is that, when you point at the Moon, the dog looks at your finger."

Not so in work comp.

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