Tuesday, July 1, 2014

Cost Containment Isn't Contained

You mean you didn't get the memo?
I was talking with our Education Department's Curriculum Developer and Instructor Manager the other day about his experience within the education world, specifically about punctuality when a meeting is called.

"Mr. Weiss," as we like to address him, comes from the public education world and worked his way up from teacher, principal, to school district supervisor and other top level administrative positions.

Mr. Weiss was regaling about how there were so many in his experience at the higher levels of education administration who disdain any notion of punctuality and tend to arrive at meetings on their own schedules.

The sad part of his experience is that such behavior is condoned from the top down - a teacher that was over an hour late for a meeting told Mr. Weiss that it was "okay, my principal is right behind me."

Of course there are only a few that don't respect the time of others or the authority of the supervisor, and the behavior of The Few affect the attitude and mindset of the many. The majority are on time, ready to meet, discuss, learn...

So when a senior official finally got disgusted with the blatant tardiness and disrespect shown to others by The Few non-compliant passive aggressive individuals, a memo would go out to ALL employees chastising late comers to meetings and threatening some disciplinary action (albeit, being a public school district and union/tenured instructors, such threats are without any enforcement teeth).

Mr. Weiss commented on how dissociative it is to send a memo to EVERYONE for the transgressions of The Few because it reinforces the mindset of The Few; the psychology of The Few is first to deny that they are doing anything wrong or disrespectful, and then to read that memo and think to themselves that it's okay to be late because other people must be doing it, otherwise such a memorandum would not issue.

I realized that Mr. Weiss' experience with meetings in the public education world is descriptive of workers' compensation and the laws, regulations and rules we live by - those "memorandums" excoriate the behavior of The Few, with deleterious affect on the rest of us who don't need such constrictions on behavior because we have our own sound, reasonable boundaries and respect those of others.

So while The Few think to themselves that it really is okay to "cheat" the system because obviously others do it, the rest of us suffer the consequences.

This is what I think when I see Utilization Review Run Amok.

During the past six years, data from the Workers' Compensation Insurance Rating Bureau show that medical cost containment expenses have almost doubled since 2006.

The total expenses for medical cost containment were $446 million in California in 2013, representing about 8.58% of the $5.2 billion in total medical costs associated with workers' compensation claims in 2013.

The total amount for medical cost containment in 2006 was $226 million.

Commenters quoted in the WorkCompCentral News story this morning about the latest WCIRB's numbers blame the Supreme Court's 2008 Sandhagen decision, saying that the Court held that UR is mandatory under Labor Code section 4610.

That's not really what the Supreme Court said - the court said that a carrier cannot transgress the mandatory provision of UR and instead invoke LC 4062 to dispute an employee's treatment request.

Quoting the Sandhagen Court:

"We also conclude that section 4062 is not available to employers as an alternative avenue for disputing employees' requests for treatment. The Legislature made clear that an employer may not use section 4062 to object to a medical determination concerning medical issues 'subject to section 4610' while expressly permitting employees to use section 4062 to resolve disputes over an employer's decision not to approve treatment requests...

"Accordingly, in light of the clear statutory language and the Legislature's purpose in enacting the utilization review process in section 4610, we conclude the Legislature intended to require employers to conduct utilization review when considering employees' requests for medical treatment. Employers may not use section 4062 as an alternative method for disputing employees' treatment requests."

To paraphrase the psychology evoked by that tardy memo to the teachers: The Few didn't use UR to dispute treatment requests, so now ALL treatment requests must go through UR.

Not only is that NOT what the Sandhagen court said, it is completely illogical. A claims adjuster's review can fulfill the law's UR requirement - there is nothing in the code or regulations that says there must be formal submission to a UR company to APPROVE treatment.

"When the employer ... reviews the request and determines that treatment is reasonably required, the employer has engaged in utilization review," the supreme court wrote in its decision.


Ergo, any wholesale requirement that all treatment requests go through UR must be coming from the top down, or we have a huge population of claims professionals who are either overworked, lazy, passive aggressive or a combination of all three, and I don't think it really is at that level.

The court is saying that IF the employer disputes the treatment request, THEN it must go through UR.

Instead we get URRA, increasing overall costs on the system directly, and indirectly by swelling the amount of time it takes to get an injured worker treated and off the temporary disability indemnity rolls.

Hey, but it's not my fault; everyone is doing it...

Oh, am I late to the meeting?


  1. You hit the nail on the head, David, with your assertion about the "deleterious effect" that the memo about being late to work had on most of us teachers. For crying out loud, I beat the principal in to work by an hour every morning. She needed to grow some courage and address the issue with the offending parties only...not the entire group! Signed, Mr. Weiss

  2. Well said, David. Just as in driving instructions, ‘the best way to get out of a skid is to turn into the direction of a skid’, the best way to resolve a workplace injury is to ‘lean into the injury’.

    If an employer will actively engage the primary care physician to determine the best treatment plan, then engage the claims adjuster to insure the treatment plan is authorized, as much as 60% of the total cost of work comp claims would be eliminated.

    Yes, there will be times when a claim is fraudulent or the injured worker has gotten an attorney. In both cases, the claims will be very expensive. But those will be the exception and, while individually expensive, will not have the positive impact that handling claims intelligently and responsibly will have.

    When the employer, employee, physician, and adjuster are all involved in the discussion and resolution of treatment plans, Utilization Review is never necessary. I’ve been involved in this for over a decade. I have never had a physician tell me anything but the truth about what the best treatment plan is, especially when the physician knows I will go to bat for him with the claims adjuster – both in getting authorization and getting the bill paid.

    This is ‘The Message’ David and I appreciate you bringing it to the masses. It may seem one-note, but keep it up. For everyone that wants to get the work comp system working better, it is simple – ‘Do the Right Thing, don’t do things right’.

  3. Keep on blowing your horn my friend.the injure workers and all the stake holders in the system I think, really need to hear what you have to say. Thanks.

  4. Great post about UR. Some adjusters are sending all requests through UR. I agree this was not the intent of Sanhagen. A claims adjuster can approve OR send the request through UR. Many patients and treaters are not aware of how to appeal a UR denial. This is because it is complicated and you need a patients medical file in many cases. There is a UR appeal process that many do not use.

    I do believe for insurance companies this UR cost containment procedure is working. Many injured workers are basically getting denied all treatment requests and testing's. If they do not get the MRI then the complaints remain subjective. Many injured workers are not receiving proper medical treatment, they remain disabled due to this, their 104 weeks of TTD are used up, then they begin losing their home, cars possessions and in some cases their spouse. Complete loss of power is what injured workers go through in this system, and for many this is a loss of dignity.

    Then there is the other side of the coin where an injured worker gets a PTP that over tests over treats and does unnecessary surgeries that may disable the patient more.

    Both of the above examples are injured workers who are being victimized by the system.. I don't know which is worse.

    In regards to being late to a meeting. I was taught that is disrespectful. Treating each other with respect is important.

  5. David - This is a daily fight for employers who are trying to help their injured workers so they don’t hire an attorney and increase the claims cost x 3. I suggest this process cost the employer between $50,000 and $100,000 each time an employee hires the attorney. Who we kidding UR is a profit center for the carriers and Sanhagen is the excuse that keeps on giving. Funny thing is I am on the Employers’ side having to fight for simple treatments even post surgery – what a joke!