Tuesday, October 28, 2014

Mandatory UR?

Perhaps one of the reasons that the California workers' compensation system spends so much on cost containment services is because there are no incentives not to spend so much.

In other words, the folks that benefit the most from cost containment services are the folks that are charged with overseeing such utilization - the proverbial fox in the henhouse.

I heard from one claims insider that some companies, including the one she worked at, use utilization review as a cost containment system, rather than a treatment control system.

According to this lore, the philosophy is tied to quotas; claims adjusters are told that they are measured on denial volumes, the intent that a certain percentage of treatment requests essentially will just go away after a series of UR denials, and whatever is left over now goes to independent medical review.

IMR upholds the few UR denials three quarters of the time because either the request in fact fails to meet Medical Treatment Utilization Schedule protocol, records are incomplete, or requests aren't timely.
Again, I don't know if this is true, but this is what I'm hearing on the street.
Screenshot 2014-03-18 11.39.48.png
source WCIRB 6/26/2013

Medical providers are telling me this is happening much more than is accounted for, and that they just get frustrated, as expected in the claims management philosophy outlined above, and consequently just give up.

I spoke at a conference few weeks ago to an audience that was, by my hand count estimate, comprised of about 75% claims adjusters. The vast majority of that part of the audience were "seasoned" claims professionals - they had been working the job for longer than 10 years.

I noted in part of my presentation that it seemed to me that in many claims departments adjuster discretion had been taken away and that there were policies in place at many claims houses mandating that ALL treatment requests, except emergency requests, be sent to UR.

I thought I would get challenged on that statement.

Instead I watched all of the heads in the room nod up and down in agreement and several came up to me later and confirmed my observation.
I hear anecdotes all the time from injured workers and physicians about benign treatment requests going through formal UR processes prior to approval, if there is approval, sometimes for several passes (remember in California that the first UR must be appealed to UR a second time, then it can go to IMR, and then IMR again...).

I hope this isn't true, but I suspect that this kind of nefarious claims behavior is more prevalent than I want to believe. I suspect that there are indeed some bad apples in the claims world that are not only using UR as an additional profit center, but also using UR to deny reasonable treatment requests in order to control medical treatment costs, rather than curtail inappropriate medical vendor activity.

I also suspect that there are plenty of good actors out there where the claims adjuster actually is the first UR line, and takes appropriate action rather than using the system to benefit a claim company's net profit.

But here's what happens to an industry with just a few bad apples infecting the fruit bowl - the entire bowl gets cleaned up and regulated.

Cost containment, at least in California, and I suspect in many other states too, is not transparent whatsoever. We don't know who owns what UR company. We don't know what company has quotas. We don't know if there is systemic denial of reasonable treatment requests. We don't know if there are policies in place or the reasons for such policies that might be tied to net profit goals.

Remember that it wasn't until 2011 that the Workers' Compensation Insurance Rating Bureau started breaking out cost containment services from the overall medical treatment expense numbers - the first step in transparency.

Now I think such transparency needs to go further, because, unfortunately, folks just can't be trusted.

Is is fraud? I don't know. But if these anecdotes are accurate, if there are quotas, if there are goals tied to treatment denial, if there are ownership conflicts of interest, then this is behavior that is not right because it is harmful to the system overall.

I wrote before that workers' compensation is a system based on mistrust, and this mistrust runs deep. Suspicions of conflicts of interest in the approval or denial of medical treatment requests serves to deepen this mistrust and harms the entire industry.

So there are a couple things that can be done.

First, of course, is for claims houses to come clean with their policies, procedures and ownership interests. The good apples will have no problem with this request. The bad apples will fight it.

Second is regulation, hate to say it. I hate more regulation, but bad apples bring it upon an entire industry.

Third is just plain peer pressure - if one company does the right thing and becomes transparent with its UR practices, and uses that as a market advantage, other companies will do so too. The ones that won't do so will either lose business, or will be forced to comply to stay in business.

Maybe I'm right. Hopefully I'm wrong. At some point someone in the governmental chain of oversight will want to take a look at this issue though in the least to put the public's mind at ease that either things are working just fine, or that the government is taking action to make sure the system will run fine.


  1. Thanks Mr.s Depaolo, Your making a positive difference in our World. Peace

  2. Most requests are being sent through UR. I don't know if this is due to some companies are not allowing their claims adjuster to make a decision to approve the request, OR claims adjusters are just doing this because it is easier for them.

    Some doctors offices are asked by the claims adjuster to send all requests directly to the UR company and copy the claims adjuster. Some are asked to send the request to the adjuster and then the adjuster can approve or send to the UR company.

    Here is the problem I am seeing with having doctors send requests directly to UR....who is sending relevant medical records to UR with the request? No one and why it is being denied.

    This system is providing UR companies and now Maximus with a lot of money to review treatment requests. These treatment requests often times do not include the injured workers full history and records. UR and IMR are denying these half ass requests and many injured workers are not receiving needed treatment.

    UR and IMR have become a good cost containment tool for the insurance industry.

    Those of us on the applicant side need to find a way to get around this.

  3. If it's fraud for an injured worker to make a false statement to obtain workers comp benefits, how is it not fraud for an employer to improperly deny medical treatment that is needed to save money. If doctors and lawyers can't refer to providers where they have a financial interest, how is it ok for insurance companies and administrators to refer to cost containment vendors in which they have a financial interest.

  4. From a penalty/sanctions petition I filed recently: "Sedgwick's website notes its more than 40 years' experience and proclaims that "our clients experience some of the best outcomes and lowest overall claims costs. Our integrated approach to workers’ compensation claims management helps clients to meet these challenges…and more." https://www.sedgwick.com/claims/Pages/workerscompensation.aspx. As part of their "integrated approach" they have established a medical provider network from which applicant had to select a Primary Treating Physician. They have their own utilization review service. They have set up their system of claims administration from "soup to nuts" but apparently have not included a process by which they can timely comply with the WCAB's rules concerning service of medical reports. This amounts to "institutional neglect" and cannot excuse their delay. Waters v. WCAB (2000) 80 Cal. App. 4th 652."

  5. Mandatory UR? Perfect title for what is going on with out-of-control cost containment procedures. It is time for some transparency and regulation. Some utilization review companies are actually in-house with some insurance carriers or are wholly owned subsidiaries so there is absolutely no incentive not to send everything to utilization review. Cost containment is driving up premiums for employers and is an effective tool to deny care to injured workers. Now that the statistics show that independent medical review essentially rubber-stamps utilization review denials, the system is rigged against the injured worker.

    Over the past year I've been receiving emails and inquiries from injured workers who have stipulated their cases over the last 20 years. They are all shocked to find out that the medical care they been receiving for many years since they received their Award is effectively cut off due to utilization review and independent medical review. Many claims examiners have told me informally that sending everything to utilization review is not their idea but comes straight down from upper level management. Transparency in Utilization Review referral policy as well as financial interests in utilization review companies should be disclosed. This would benefit all stakeholders in the system.

  6. The recent Dubon ruling allows claims adjuster who are not providing relevant records to UR to get away with it. Why would they send records that show a request is warranted?

    I would also like some transparency with IMR reviewers. Why was language added in SB863 that stated IMR reviewers can remain anonymous? What was the purpose of that, really? It states that injured workers can appeal an IMR if there is fraud or a conflict of interest. How can an injured worker know if the IMR reviewer is anonymous?

    I have seen conflict of interest with a few UR reviewers and appealed the review. The UR company quickly responded. I was only able to do this by checking the UR reviewers background. I cannot do this with IMR reviewers as they do not have to give their name.

    Applicant attorney's I do think you may have to change what you are doing and start getting more involved with UR appeals. Otherwise your injured workers are going to get denied treatment that is warranted and that they need. This will mean sending advocate letters to the UR reviewer that give medical treatment guidelines to warrant the request, and also send relevant records that state the request is warranted. Some applicant attorney's are already doing this, but very few.

    We also need to support legislation that "un-riggs" this system.

  7. I have also seen recently through appealing UR denials through the UR appeal process, that even when the medical evidence is provided with MTUS guidelines, the UR reviewer has blatantly lied about what the medical records stated. This was done to uphold the UR denial. For a UR reviewer to make inaccurate statements about medical records to deny request is beyond gamming the system.

    So even when the medical records are provided as well as the guidelines, injured workers can still be denied due to UR reviewer listing things that are inaccurate for the sole purpose to deny a request.

    I do not know if the above scenario can be taken to a judge, if the inaccurate review was not late. Apparently only late reviews can be taken to court.

  8. While I have just ran across this trail of messages re: the UR/IMR fiasco, I say let DIR, the AD for it & DWC, learn from their own mistakes. I haven't had an atty. for most of the 4 yrs. in a system that is sort of funny. I mean, when actions such as described above are being done by people Ms. Baker allegedly assigned to review what's being filed w/Maximus, to ensure the request has all necessary reports, info., ect., I have to ask while laughing, "how is anyone with Maximus familiar enough to identify what's needed when 3 reps. didn't know what an RFA was"! Or how about a review completed which actually overturned C.I.D Mgmts decision to deny me meds, states the medical reviewer based his decisions on medical reports received from the Claims Admin., when 1) there are no claim administrator's @ State Farm Fire & Casualty of Bakersfield. Only people acting like adjuster's, who failed to send any reports & 2) Of course, I won't complain being found eligible for my meds, but it's been over 2 yrs ago that the decision was made & neither Ms. Overpeck or Baker have done anything about it or the fact that at no time has there ever been an approved, active MPN during any UR'S/URO'S for an IMR to be found eligible. TWICE!! You all do understand, when there is no network, there's no medical control on part of the insurer/employer, so ALL IMR requests are stopped; allowing all treatment requests to be authorized by the adjuster until a new MPN is approved. Same with any treatment disputes - there can't be any unless the DIR/DWC has an approved application on file showing the insurer is compliant. If you don't have any atty., just keep an eye out for all time limits for the insurer to approve the treatment. Any longer than 5 days to receive an authorization in writing, call 'em on it. Without a Network, ALL treatment is to be automatically approved by the adjuster, calling & faxing written authorization that same day. Don't believe anything goes to the external URO 1st. It's the adjuster who is to approve all requests, with ALL medical reports, diagnostic reports, ect. More likely than not, whenever an authorization comes from the adjuster, it's through the same system as their URO in order to type up a quick review using the URO letterhead & # system. What happens though, is not ALL reports get forwarded to the URO when all the internal approvals are being done. Then, if/when the URO gets a request & tries to process it, there's MONTHS of no activity! Guess what, instead of the URO asking for all medical reports from the adjuster or the Dr., they delay the whole process by asking for more current medical info. So you tell me - if an insurance co. like State Farm Fire & Casualty of Bakersfield doesn't have any type of network, contract, control, ect., telling all injured worker's to find their own Dr's & all treatments will be pd. for & are; @ what point does the URO, let's say CID Mgmt, believe they can review ANY treatment requests when having full knowledge there is no network or control on theirs or any others except the employee's, who even provides samples of reports they DON'T HAVE. All while the head's of this shaddy system is fully aware of it all & hasn't done a thing but allow further denials of treatments, w/out any penalties yet, while also being aware there is no dispute to be had in the 1st place without rights on both sides to determine medical necessity. No MPN, No URO, IMR, much less any denial though it all.