This Could Be Huge

My blog post on fraud and audits on June 7 attracted the attention of Christine Baker, Director of the Department of Industrial Relations, State of California.

She took issue with my statement that the Brown Administration was actively inhibiting audits of anti-fraud activity.

Baker explained that while an audit is a great process for keeping government in check, she has been through this process numerous times in the past and the issue is that the auditors don't understand work comp, don't understand the nature of work comp fraud, they come in and ask a bunch of questions then make budget recommendations and suggest which agencies could or should coordinate more...

In the meantime the auditors do not get to the root cause of the issue and create a huge distraction away from actually combatting the crime.

I get it. Any of us who have been in positions of accounting for where the money goes have been through audits, and for the most part, unless one is truly trying to hide something, audits are a huge expenditure and a significant distraction that take up a lot of resources for little return other than to assuage the bill payer...

In my blog I had suggested that keeping the consumer/injured worker informed via some explanation of benefits or other reporting mechanism would go a long way, not only in deterring fraud, but also towards increasing consumer engagement in their own treatment and case activity.

Baker isn't interested in another form, and another piece of paper to accompany the 30 million medical bills that get through the system every year. She is interested in a more robust solution.

What hasn't been clear to the workers' compensation public is that the administration has been using EAMS data (more specifically lien filings) and marrying it up with Independent Medical Review to see which providers are operating in the shade.

Some of those providers have already been indicted, and surprisingly continue to pursue lien collections (perhaps to fund their legal defenses?); others are in the indictment cross hairs as the administration works with the FBI and other law enforcement to build cases.

This activity is the start of something bigger, more comprehensive, and hopefully will result in not just capturing criminals but getting consumers more engaged in their own claims.

The future will bring us, Baker promises, a portal for anyone on any given case to log in and see everything that is going on, and in particular medical billing. This is the administration's answer to giving consumers/injured workers an EoB for every medical bill - instead of individual pieces of paper, the administration proposes that folks will have essentially real time access to the complete status of their cases (and I'm assuming even those that are not litigated) for more engagement, greater understanding, increased transparency.

This is a huge task.

Making all of this disparate information and complex workers' compensation metrics accessible without violating privacy, and also making it understandable to the consumer is going to be very, very difficult.

I hope that those who are planning this project engage some of the best user interface designers they can hire because while information is great, if it can not be understood by the consumer of that information then it is of no utility.

If the administration can pull this off, however, it will be a model that all other jurisdictions can, and should, adopt.

Medical Standards

The Journal of Occupational and Environmental Medicine has published a study confirming the assumption that medical treatment in accordance with the current suite of published evidence based guidelines results in shorter disability duration and, ergo, better health outcomes for the subject.

The study used 45,951 indemnity claims with two years of development filed between 2008 and 2013 from the Accident Fund, United Heartland, Third Coast Underwriters and CompWest.

A compliance score was devised by comparing diagnosis and treatment codes, and seeing whether Work Loss Data Institute’s UR Advisor product rated the selected treatment as “green flag,” meaning the treatment is recommended for that diagnosis; black flag, meaning denial recommended; red flag when a review of the treatment is advised; and yellow flag if the treatment is allowed on a limited basis. Using a calculation based on how often green or yellow versus black flags appeared, claims were sorted into low-compliance and high-compliance groups.

WLDI provided access to the Official Disability Guidelines database but did not ask the researchers to conduct the study, didn’t participate in it and provided no funding, according to WLDI. The UR Advisor product used in the study is a tool for looking up information in the Official Disability Guidelines, they said.

According to the research, claim duration was 13.2% longer, and medical costs were 37.9% higher for claims in the low-compliance group compared to the high-compliance group. In a subset of the most medically complex claims, duration for the low-compliance group was 18% longer than for the high-compliance group, and medical costs were 38% higher.
More, similar conclusions were made based on the data.

Though the study used ODG, rival publishers were equally enthusiastic about the report and are interested in how the methodology used to test ODG can be applied to other guidelines.

It has always interested me why different jurisdictions have different treatment guidelines since, presumably, all humans possess the same anatomy and biology regardless of location.

Ultimately, the difference between ODG and the American College of Orthopedic and Environmental Medicine guidelines is in the presentation of information and timeliness of incorporation of new research.

Different states, however, essentially succumb to special interests pressure to develop their own guidelines at great expense.

More importantly, though, is that state guidelines will eventually lag behind the research, becoming out of date, because the cost of staffing, reading, cataloging, reviewing, and confirming the vast universe of medical research is too costly, too daunting.

While there is usually a provision in the law for other EBM guidelines to supplant the state presumed default, doing so is thwarted by costs to the subject, or by operation of law.

California is a classic example. There is really no reason for California to have separate guidelines, yet the state continues to rely on its own, antiquated, Medical Treatment Utilization Guidelines. The law provides that the MTUS may be rebutted with other EBM, but if the payer's Utilization Review doesn't accept that argument, and the matter goes to Independent Medical Review, it's over.

Because IMR will follow the MTUS. And, once in the rabbit hole of IMR, there's no getting out.

Other states don't have any guidelines, and the JOEM study is a great argument for those states to adopt one of the standards (and hopefully shy away from the special interests intent on creating their own standards).

For instance, Pennsylvania law makers have before them House Bill 1800, a proposal to adopt “nationally recognized,” evidence-based medical treatment guidelines in workers’ compensation. Opponents say the guidelines are a one-size-fits-all approach to treatment.

Nebraska's attempt failed last year against the same arguments.

Buying into those arguments simply reflects a lack of understanding what treatment guidelines are and ignores the fact that the general health insurance industry has been following guidelines since, basically, forever...

Whether I'm in California, Florida, Arkansas or Alaska, my physiology doesn't change, and neither should treatment protocol.

There has been a lot of talk lately about standards across state lines. Medical treatment protocol should be one of them.

It's Getting Transparent

Transparency is an issue in workers' compensation, probably more so than other industries, because the complex nature involving the intersection of medical, indemnity and liability creates too many potential shadows.

Opaqueness breeds mistrust.

This is particularly true when a state legislature creates an anonymous sub-system, like California's Independent Medical Review process.

The thought behind anonymity in IMR was to alleviate excess litigation by reducing the probability of medical disputes - if a party does not know who is making the IMR decision then there is very little likelihood that the party can subpoena that individual for interrogation.

But the statute doesn't say that the entire process has to be anonymous - just the name or identity of the person making the IMR decision.

So the State of California's Division of Workers' Compensation has rolled out a huge new feature in the IMR website that hosts decisions that allows users to search independent medical review decisions by the specialty of the reviewer and whether the underlying utilization review decision was upheld, overturned or partially overturned.

DWC’s new web page allows users to sift through IMR decisions by treatment request categories such as pharmaceuticals, surgery and diagnostic testing. For some categories including pharmaceuticals, it includes sub-categories including benzodiazepines, opioids and topical compounds.

The page also allows sorting individual treatment decisions by outcome.

This is huge.

While agency officials have not yet elaborated on DWC's expectations for this new tool, I for one think it is a tremendous vote of confidence in the process, and should lead to much better oversight and administration of the IMR process, in addition to providing parties with much needed confidence that the system is, or isn't as the case may be, working properly.

California Applicant Attorneys Association president, Bert Arnold, told WorkCompCentral that he was concerned about the ratio of cases being decided by different specialties which are not indicative of the proportion of medical specialities being submitted for review.

That's a valid critique, and one that should be noted by officials as they seek to improve the system.

In the past such criticism would not be afforded simply because nobody knew, other than Maximus, who was doing what with the disputes.

At least now we have some idea as to qualifications for opinions.

It's not perfect, but it is a giant step in the right direction.

Kudos to DWC for the foresight in providing this information, and its confidence that providing more transparency is good for the system. Perhaps in small chunks some trust can be restored.

Define Transparency

Workers' compensation and trust - the two go together like the proverbial peas and the pod.

Or I should say, "mistrust," not trust.

The fact that mistrust permeates so much of workers' compensation is intolerable, but frankly completely understandable ... since the perception of mistrust is perpetuated by that one stakeholder responsible for setting the rules and then enforcing them: the government.

Anonymous doctors. Reviews based on "the case file and all medical records." And a governmental agency more intent on maintaining a policy of obscurity rather than transparency.

It wasn't until a recent public slip by a staff attorney during the Division of Workers' Compensation's educational conference in Los Angeles last month that the there was any indication the division had issued orders to show cause for tardy supply of records to Independent Medical Review contractor Maximus.

The division responded to a public records request by WorkCompCentral with copies of Orders to Show Cause why enforcement penalties should not be assessed against various carriers and third party administrators, but otherwise desires to remain mute.

"The Division of Workers’ Compensation is pursuing its legal remedies regarding the various Orders to Show Cause and is engaged in discussions with claims administrators regarding the penalties set forth," Erika Monteroza, DIR spokesperson, told WorkCompCentral. " Such discussions are confidential under California law. It is inappropriate at this time to provide any additional information."

The vast majority of the carriers and TPAs contacted by WorkCompCentral for this morning's story on these transgressions are also staying quiet following the time honored, legal-counsel-directed, public relations tactic, that it's better to say nothing and have others assume fault or guilt than to admit something and take responsibility...

Kudos, however, to the California State Compensation Insurance Fund for manning up and not only taking responsibility, but pointing out the farcically ludicrous process that medical care review has become under California law.

The State Fund faced $510,000 in penalties for 102 cases in which it allegedly sent records late, according to an Aug. 17 order to show cause.

But the carrier says at least 30% of its alleged violations were cases in which it had proof that medical records were submitted on time, suggesting Maximus does not know what records it has actually received.

And the carrier admits the evidence of late records in the other cases demonstrate that the State Fund has more work to do on its processes. Bully for State Fund - acknowledging the problem, admitting to an issue and taking action.

That's the reaction needed - the purpose of the enforcement phase of governmental action is strong encouragement of compliance; not the collection of fines.

Compliance is a dirty word in workers' compensation. Ask nearly any front line claims adjuster at nearly any large carrier or TPA and they'll tell you that the bulk of the pressure felt doing their jobs is compliance based - dotting "I's" and crossing "T's" - rather than administering benefits with care and compassion.

Compliance based claims administration assumes people won't "do the right thing," for whatever reason. It also perpetuates dispute and mistrust.

While a failure in compliance may or may not result in enforcement action, and may or may not be embarrassing to the non-compliant entity, the surest way to engage compliance is public review, and if necessary public rebuke.

Why is administrative enforcement of one of the most contentious pieces of California work comp sacrosanct against public review?

Another arm of the Department of Industrial Relations, Cal-OSHA, has no problem calling out the non-compliant. The Grace L. Ferguson Airline and Storm Door Co. (fictitious companies) leaves a broom two inches too close to a fire escape, and all the documents relating to the Cal-OSHA citation are available online. Hell, Cal-OSHA issues a statement with quotes and all talking about how dangerous that broom was.

But a TPA takes 110 days to submit medical records for an administrative review process of medical necessity with no patient examination, the results of which by law remain in effect for 12 months, and the DWC can't say peep.

Trust is a top down characteristic. Communication is the foundation of trust. Brutally honest communication.

Instead the government perpetuates obfuscation.

Leadership of DIR has stated commitment to transparency.

It's unclear to me which dictionary they use to define "transparency."

Clear The Ears

Friday was, I think, the first business day I did not post in this blog other than when I was on vacation in Italy last May.

Even when I was ill in the past I managed enough energy to get some of my thoughts out.

This past Friday was different. I just couldn't muster the energy to do so. I took a sick day.

That's very foreign to me - sick day. I don't like being sick, and I don't like admitting that I'm sick. So reality bites hard when it comes knocking on my door.

I was supposed to be in Las Vegas for a speech. That didn't happen.

Instead I remained prone most of the day, drenching my shirt and sheets in perspiration, sucking up as much water as my belly could manage, hacking, coughing and discharging mucus with loud, honking noises.

Yech.

Illness is that sort of vague, I felt like doodie, thing that prevents normal operation.

Kind of like a high performance automobile engine trying to struggle under a high load situation on ethanol infused 87 octane fuel. Knock, knock - nobody's home....

Saturday arrived and most of the illness departed, but like an engine that's toiled through bad fuel, there was some sludge sticking to the valves. Timing was good and ignition sharp, but the exhaust had some trouble venting.

Which is why my ears didn't clear descending Forty One Mike into Oceanside that morning.

One of the weirdest, and most frustrating, things to experience is hearing through an aviation communications system with blocked sinus passages. It's sort of like talking through the tin cup and string network that we made when kids.

It didn't hurt, it was just weird.

On the ground the pressures eventually equalized and I was able to clear my ears and hear normally (which with tinnitus, means poorly anyhow).

The California Commission on Health and Safety and Workers’ Compensation hearing (pun intended) on utilization review and independent medical review on Friday was like blocked sinus cavities while descending in an airplane.

Researcher Barbara Wynn of the Rand Center delivered the report on UR. Basically she said what everybody has been saying but doing nothing about - it's over-utilized (pun intended, again).

Rand came up with a couple of suggestions: accreditation, an exemption of certain procedures, review standardization - basically more bureaucracy to remedy the existing bureaucratic morass.

In addition to the redundant advice on UR, CHSWC learned that the Division of Workers’ Compensation received 253,771 applications for IMR in 2015, an 11.2% increase from the previous year. Counting only eligible applications (where medical records were provided timely), the division received 165,619 last year, a 13.6% increase.

In other words, the hamster's wheel has gotten bigger.

There's more UR so there's more IMR. That seems pretty basic. While the California Workers' Compensation Institute has mind-numbingly detailed numbers on IMR, the bottom line is that most UR that gets to IMR is affirmed.

The story I'm hearing through all of these statistics, reports and commissions is that there's a lot of people that aren't following the operating handbook.

After all, workers' compensation in California (and in most states) involves guidebook medicine - the rules are written, the guides are in place, the recipes have been published. In California we call them the Medical Treatment Utilization Schedule. Other states use other guides or combination of guides, and they go by different acronyms like ACOEM or ODG...

If medicine is so standardized, then how can so many treatment requests end up in to the black hole of the UR/IMR space game?

Seems to me it's a sinus cavity infection. The path to clarity is there, but there's a lot of mucus in the way.

Physicians are going to scoff. Claims payers are going to sneer. Claimants are going to jeer.

But here's what we know: Nearly all the time the identity of the claims payer is known. The vast majority of injuries follow well-defined pathways of treatment and disability. And all of that activity is accounted for in a payer's UR processes.

The moment a First Report of Injury hits the claims system the diagnosis reported should trigger the dissemination of accepted treatment protocol, with a checklist, to the physician. In fact, it should occur even before the claims payer gets that First Report.

In other words, even though there are published treatment guidelines, there aren't readily available UR guidelines - so the medical portion of claims proceed into a guessing game. Maybe the request is adequately documented, maybe not - the provider doesn't know until the request is submitted.

The provider should know BEFORE the request is submitted.

Remember we have this marvelous communication invention called the Internet. There's no reason the payer's UR standards for the most common injuries isn't published and readily available, with a checklist for the provider to ensure compliance.

How can one play by the rules if one doesn't know the rules?

I know. It's too simple.

On Sunday the mucus was gone, my sinuses were clear, I could hear (albeit with tinnitus) and everything was back to normal.

That simple.

Separate Powers

One of the most interesting debates going on in the country about workers' compensation is the constitutionality of changes to state systems that delegate certain acts and authority in non-traditional ways.

A major tenet of Constitutional Law is the doctrine of Separation of Powers. In short, the founders of this country had the foresight to set up a tripartite government: executive, legislative and judicial branches which are not to intrude into the functions of the other.

This system of checks and balances was designed to prevent monopoly powers in any single governmental branch. If the legislature (or the executive for that matter) does something that The People feel is wrong, then the judicial branch is supposed to be able to review it.

How far that doctrine goes in the real world is subject to all sorts of different review standards and competing interests.

Who's got The Power?

In the work comp world, a prime example is pending before the California Supreme Court in the Stevens v. WCAB (Outspoken Enterprises) case.

Last year the California 1st District Court of Appeals upheld the constitutional validity of the independent medical review process, basically saying that the state constitution gives the Legislature the power to do whatever it wants with workers' compensation, including defining its own constitutional powers and limitations.

In other words, because the state constitution gives the California Legislature plenary, or supreme, power on the topic of workers' compensation, that power exceeds any limitation the constitution may otherwise impose.

At least with regard to workers' compensation, the 1st DCA infers, the Legislature is not bound by the California Constitution.

Stevens is arguing to the Supreme Court that the Legislature is not so free to do as it wants with workers' compensation when it comes to violating the Separation of Powers doctrine, because by making Independent Medical Review a one-way process the judicial branch is usurped.

The flip side to that argument, and why this is such an interesting constitutional issue, is that there still is some judicial review, albeit limited, and that limited review is arguably balanced by the speed, efficiency and cost (financial and social) savings of IMR.

The justices in the 1917 US Supreme Court case of NY Railroad, which declared compulsory workers' compensation constitutional, said a review of workers' compensation statutes had to be done in totality - no single facet could be declared constitutionally erroneous without balancing against competing interests.

This is the sort of thing that drives engineers crazy - because the litmus test is vague. There's no clear yes or no answer. We can argue the merits all day long, and with good solid analysis for either proposition, but at the end of the day whether seven very intelligent, highly educated, people in robes agree is a gamble.

This is not a game, and certainly not made for TV entertainment - and the risk to a $30 billion system, and to the people it's to serve, puts the stakes high.

Which may be why this is so fascinating - the Stevens case has all the elements of high drama, and there's only three things the court can do: affirm, deny, or punt.

Just how much power does the California Legislature have? I reckon we'll find out soon enough.

A Bigger Hammer

My maternal grandfather lived with us when I was growing up.

We called him "Daddy Harry" at his insistence. His legal name was Harry David Bonacci, given to him "by Decree of court from Enrico Davide Bonacci, as part of the Naturalization" according to the testament by Deputy Clerk Martha Stone for Clerk William H. Tallyn.

He was forty seven years old, five foot six and 130 pounds on April 1, 1946. That was thirteen years before I was born when he became an American citizen. He'd immigrated thirty three years earlier, started a trucking company with his five younger brothers, which grew from a single bob tail into the biggest transport company on the East Coast.

Prohibition was in full swing back then, and my grandfather knew that good money could be made, with little risk, by transporting the raw materials needed by the moonshiners.

But his love was mechanics. After getting the business going he handed over management to his brothers so he could run the maintenance shop. Back then the trades were valued, and there was such a thing as a "master diesel mechanic."

That was my Daddy Harry.

Of course he was retired when he came to live with us. He was separated from my maternal grandmother - she lived in Phoenix, AZ. I recall in my teenage years my parents "forcing" the two to live together, and that was a bit acrimonious, and a story for another post.

The glory to my brother and I, though, was Daddy Harry's garage. Well, it was the household garage, but Dad was too busy being a dentist, Mom had no interest in anything in the garage, so it was my brother and I mesmerized by Daddy Harry's meticulously organized and maintained garage.

I still have many of the tools he passed along, and what I don't have my brother does.

As my brother and I grew older we would tease our grandfather about his mechanical skills. He of course was an extraordinary mechanic, and seemingly could fix, or build, anything, even with the most basic of tools.

Which led to a phrase we would attribute to Daddy Harry, but really we made it up as descriptive of his mechanical prowess: "If it doesn't fit ... use a bigger hammer!"

Following that philosophy is dangerous of course. Making things fit by pounding away with a bigger hammer will, in most cases, just ruin whatever is being "fixed." If you're successful in making it fit, generally the fit won't last long, and the collateral damage to the object being "fixed" can be irreversible, or at least more expensive to repair than had finesse and the proper tools been used in the first place.

We seem to use a bigger hammer when it comes to things in workers' compensation.

And the results are predictable.

In California we used a bigger hammer in 2012, and we made things fit pretty well, at least temporarily.

But the problem with that brute force was that the fit tolerances were sloppy. This may be why the Workers' Compensation Insurance Rating Bureau is finding that the first part of 2015 is reflecting an increase in medical costs, running contrary to the first two years that SB 863 hammered those costs down.

Though still well under what the system started out with prior to SB 863, 2015 is showing so far a 4% increase over 2014 - largely due to utilization, or the number of services being provided (as opposed to unit costs).

And utilization is what drives medical inflation in workers' compensation.

What's interesting about this trend is that Independent Medical Review should impact utilization - and for the first two years that's exactly what happened; utilization following SB 863's implementation of IMR dropped significantly.

But the mix of utilization may be changing, causing this reversal in medical inflation. We know, based on recent research by the California Workers' Compensation Institute, that most requests for treatment do not get challenged, and that compliance rate has been growing, which probably reflects adjustments to the environment by medical vendors.

My Daddy Harry used to nap in the television room every afternoon in his recliner. He would snore "like nobody's business" (a phrase, by the way, that he used to use often), mouth wide open, facing the ceiling, lower jaw moving rhythmically to inhales and exhales. I recall vividly the beautiful dental work Dad had executed so nicely displayed to all the world...

The challenge for my brother and I was to input an index finger into his mouth while open, and withdrawing it just in time before being "bitten." The game was to see how long we could pull off this stunt before waking our grandfather.

And when he woke he would yell at us, "Why you little monkeys!"

Of course we snickered, and took on the challenge another day during another nap. It never got old. We just couldn't resist the bait of Daddy Harry's undulating orifice, the rattle of his sinus cavity and the eventual interruption of his snoring when he sensed a foreign digit in his mouth.

Kind of like the workers' compensation medical game. The challenge of not getting an index finger bit is just part of the fun. How long it can go is another part of the dare.

And eventually a big hammer is brought out to try and fix things, and when that doesn't seen to work an even bigger hammer is used until all has been forced back into place.

Daddy Harry never really told us to use a bigger hammer. That was a fiction my brother and I concocted because it was fun.

So was the finger game.

IMR Is What We Have

The California Workers' Compensation Institute has released its latest study on Independent Medical Review, and the conclusions shouldn't be surprising.

Overall, in the vast majority of workers' compensation claims, IMR is said to be working.

Keep in mind that this evaluation includes ALL workers' compensation claims, including medical only.

And since medical only claims comprise over 70% of all claims, the conclusion shouldn't be surprising.

What is surprising to me, however, are some of the less obvious items that are stated in the report, and if studied further, may provide some insight into why many of the negative comments and reactions to IMR occur.

First, "There was wide variation among claims administrators in the proportion of RFAs [requests for authorization of treatment] forwarded for physician UR review (ranging from 1.5 percent to 45.9 percent), which also affects the proportion of RFA services modified or denied by the physician."

That's a surprising range. If you have a case that is being managed by one of the 45.9 percenters, then you are more likely to have an adverse experience and denied treatment request than a claim administered by a 1.5 percenter.

Second, and related to First, "Within the study sample the percentage of treatment services in which an RFA was submitted varied by claims administrator, ranging between about 9 percent and 19 percent of services."

What this means is that some claims administrators are much more liberal and lenient with requests for treatment than others, so if you're on the 19 percent side then you're more likely to encounter friction in getting medical treatment approved.

Third and related to Second and First, "Although overall, 4.3 percent of all workers’ compensation medical services were modified or denied in the UR process, as noted earlier, modification/denial rates as a percent of all treatment services showed significant variation among payors, ranging from a low of 0.2 percent to a high of 5.0 percent."

What would  help us understand the real efficacy of the entire medical review process in workers' compensation, and whether or not there is value (cost versus benefit analysis) in the entire review process, would be to study ancillary issues attendant to the medical review process: duration and extent of disability, return to work success, overall costs of employment (i.e. substitution of injured workers and/or burden on existing work force), etc.

Fourth, there is an unexplained concentration of physicians who contest UR up through IMR: "The top 10 percent of all physicians (961 individual treaters) involved in IMR disputes were identified in more than 80 percent of all IMR letters; while the top 1 percent (97 individual physicians) were named in 40 percent of the IMR decision letters."

This is sort of like the unexplained concentration of claims, and ergo, claims costs, in the Greater Los Angeles basin area - a subject of investigation by a senate committee yesterday (which saw lots of data, lots of theories, and no conclusions). Coincidentally, or perhaps not, the CWCI study affirmed that there were more IMR reviews in the Los Angeles area, than any other region, representing 34% of all decisions out of 23% of all claims.

The impact of litigation on the review process also stands out, but there is again compression in the numbers, affirming the preliminary findings earlier this year: "The Institute’s analysis of 2014 IMR outcomes published in April 2015 found that nearly two-thirds of all IMR decision letters were addressed to the injured workers’ attorneys. Furthermore, that analysis found that a relatively small number of employee representatives – either the injured worker’s attorney or physician – were named on a majority of the IMR decision letters, with the top 10 percent of the representatives named on 65 percent of the 2014 IMR determination letters."

This could mean that some representatives are more aggressive about pushing treatment issues, it could mean that the providers these representatives work with aren't using guidelines effectively, it could mean that inadequate documentation is being processed, it could mean that claims payers in litigation are more likely to be a 45.9 percenter, it could mean a lot of things...

Comments in the WorkCompCentral story covering the study release dispute, affirm or modify its findings, reflecting the experience of the commentators. Most agree with the overall statistical conclusions, but have some anecdotal observation that challenges the data on a case by case basis.

And frankly, while workers' compensation can not be 100% effective all of the time in the medical care delivery process, the fact is that the relatively small number of cases for which IMR reverses the UR decision affects tens of thousands of treatment requests, potentially affecting tens of thousands of claimants, and we know that small percentage can comprise a disproportionate cost to the system, employers and injured workers. 

What this study tells me is that there is still a great amount of work to be done by claims payers, by medical providers, by litigators - the expectations that preceded SB863 have not yet adjusted, nor have the practice habits of those involved.

The research will support the policy of taking medical decisions out of the litigation process. Until there is a judicial determination that the UR/IMR process is unconstitutional (and the Stevens case has already resolved at least one constitutional argument in favor of the process) or the legislature makes changes (unlikely given this research), this is the system we have, and need to work within.

The $1000 Ibuprofen

The following is a guest blog post from Lesley Anderson, MD, a practicing knee and shoulder surgery specialist in San Francisco, CA.

Yesterday it was reported that the California Workers' Compensation Insurance Rating Bureau found more savings in SB 863 than imagined, but that IMR volume was much higher than predicted, and that the cost of review likewise was much higher.

This anecdote may, in an unfortunate way, explain why...

******************

After practicing for 32 years, I have finally had it. People complain all the time about how dysfunctional the health care system is. In many ways it is, with rules and regulations dictating choices caregivers have, and roadblocks for patients to obtain care.

I have a 53 yo patient who has fairly significant arthritis of her knee. She injured her knee on the job, and her job requires her to be on her feet most of the day. She has had surgery twice over the past 10 years and needs a knee replacement, but she is too young. She has been able to continue working by using Ibuprofen when her pain increases.

She called about 3 months after her last visit asking for a refill for her Ibuprofen, which costs about $10-12. She did not feel a need to come in for an exam, as it would take time away from her work. She used it occasionally.

We have to submit a form to her workers’ comp insurance company for approval rather than just calling in a refill, and the adjuster sent it to another doctor to be “reviewed for medical necessity”. This reviewing doctor denied our request. Said they had called the office twice to try to speak to me.

Our notes: "Mark with Mitchell UR called and said you can speak with Dr. Brooks, reviewing physician, if there is any other info you would like to add to the ibuprofen refill request. Mark said you do not necessarily have to call if there is nothing else to add. They already have the last report.”

So I appealed his decision, thinking this was a mistake. I sent our request to the next level appeal, to the “Independent Medical Review”, a board of reviewers the legislature passed in 2012, set up as the final word. Kind of like God… you really don’t know what he/she looks like…There is no list of who is on the board, it is a secret, and after all the records were sent for review, to my surprise, it was denied again.

The 4 page denial stated the according to the Chronic Pain Guidelines I needed to document that she had failed a trial of Tylenol. (She had Tylenol use documented, just not the statement that it had FAILED.) NSAIDS such as Motrin are not for long term use”… This was the first refill in 3 months. What- they want me to give her Percocet instead?

The problem is the law also states that we cannot ask for a review for 12 months. She will have to pay for it herself.

What did it cost to deny a $10 bottle of Ibuprofen?

Request for refill of Ibuprofen……….$NA

Cost to fill out Request for Authorization form 10 min……….$40

Phone call from physician reviewer to me (2 times)……….$60

UR Reviewer denial estimated fee……….$100

Administrative time to send initial 7 page denial est ………. $50

My time to prepare appeal, talk to patient to explain denial……….$125

Filing costs to IMR ……….$400

Estimated physician reviewer fee #2……….$100

Phone call to patient explaining denial #2……….$50

Total estimated cost to deny Motrin……….$925

Time away from actually treating patients……….priceless

So let’s see… what happened to common sense for a $10 medication? Why is this happening?

Several years ago, then Gov Schwarzenegger and a few key legislators (called the Gang of 5) put together a bill that required utilization review for all care patients receive in the workers compensation system (SB 899). This was supposed to hold down the rising cost of premiums for employers, avoid unnecessary tests, surgeries, and use of narcotics. In the big picture, there was some abuse, and some of the tenants seemed reasonable.

Instead, an entire new industry was born- Utilization Review Companies, whose job it is to review requests for medications, crutches, a simple sling to surgery requests and every postoperative need the patient may have. Some of the companies deny as much care as possible to save money for the insurance company and have every request from a sling to Motrin reviewed. A few are reasonable and leave the decision to protocols for the adjuster. Many of the physicians are hired from out of state, are not required to practice here, just have a California license. Many are retired from actively practicing. I met one recently at an orthopedic meeting who was at least 80 years old, and clearly was not practicing and had in fact denied an anti-inflammatory for one of my patients.

Has this system saved money for the employer and improved care for the injured worker? NO.

One recent study indicated that over 50% of the cost of care for the patient is in utilization review. If a bottle of Motrin can cost $1000, no wonder.

The people getting hurt here are hardworking blue collar workers, many of whom have never had an injury in their work life. Many do not have English as their primary language, and have limited recourse for denials. Or they hire a workers’ compensation attorney, and this too can increase costs and complicate the case. As physicians, our main goal is to help heal the patient. 90% of the doctors caring for these patients are doing just that.

Only the legislature who passed this bill can make this better. Will I continue to treat injured workers? For the few companies that have reasonable review, yes. But my no-fly list is getting longer by the month. Maybe, only when access becomes a crisis will anything change.

IMR... Again!

Maximus, the Independent Medical Review firm for disputed California workers' compensation medical treatment requests, is in the news again, this time for not itemizing all of the records reviewed in a determination.

When the firm started three years ago, documents reviewed were titled, dated, and the author identified.

Now, according to a review by WorkCompCentral reporter Greg Jones, Maximus has reverted to listing documents in a date range, which, attorneys for injured workers say, makes it impossible to determine whether there has been a plainly erroneous review - one of the five reasons under the Labor Code in which a second bite at the apple would be provided.

While that is a problem in itself, failure to itemize with detail just costs more money because if there is doubt about whether a particularly important document was reviewed then, at no cost to the injured worker or the attorney, but at a cost of $350 to the claims payer, a second review can unnecessarily inflate that loss cost expense.

Not again!

And we know what the fastest growing cost component in California work comp is...

An important potential benefit of IMR determinations, that is currently a missed opportunity, is educating the medical community via the determinations. If there were sufficient detail in the determination letters as to why, or why not, a particular treatment consideration decision was made then the community could adjust, and perhaps the quantity of IMR requests would go down.

But that is not how the system is set up.

Division of Workers' Compensation spokesman Peter Melton told Jones Thursday he was researching questions about how Maximus is identifying medical records.

I wrote a couple of posts ago that data is good, but there is a story behind the data that will either explain it, or contrast it.

This is one of those stories - and that the issue was brought to the attention of DWC via the story is demonstration that the data is not the end, but the beginning, of understanding.

Fly The Claim

Four One Mike over the LA basin managing risk...

Heading back to California today from the 70th annual WCI Educational Conference in Florida, it's been a week since Bonanza Six Six Four One Mike has been in the air and it's been 8 days since I checked up on Mom.

Last week Mom was still dealing with a bit of pneumonia in the lower left lobe of her lung. She was happy as she normally is, and even referred to me accurately as her son (normally she gets this confused and I've been called grandson, nephew, husband, cousin ... everything but her son).

But Mom still had a bit of a cough, and still required oxygen because her O2 uptake without the supplement was in the low 80s.

My brother had stopped by a few days ago to install new safety cords to her hearing aids because the original installation had broken. He reported an otherwise "normal" Mom.

And of course, Four One Mike hasn't been in the air since then. I know she'll need a half quart of oil before I fire up that Continental IO 520 tomorrow; she may need some air in the tires, and the windshield will need a good cleaning. The GPS database needs its 28 day cycle update.

Otherwise I don't expect any surprises from Four One Mike - the pitch servo is still in Kansas for repair but once properly trimmed the plane flies hands off just fine and the pitch servo is only missed when doing an instrument approach (without a pitch servo there is no autopilot coupling to the vertical gradient, so it must be hand flown).

A couple of days ago the airport manager at Oceanside called and left a message that the left rear window was still open (doh!), but that there didn't appear to be anything amiss with the car I use to visit Mom after landing ... phew!

Here it is, well more than 24 hours in advance and I'm already thinking of what needs to be done to accomplish the mission of checking on Mom.

In our world, we would call this a part of risk management.

Risk management entails thinking ahead and making sure that contingencies are in place to deal with the unexpected. Certainly tomorrow things could go wrong. Part of this phase of risk management, however, is planning.

Planning is a primary and critical risk management technique. It is the basis of risk management.

Risk management isn't rocket science. Hell, it's barely science at all - it's mostly common sense. We have thousands of years of existence on this planet and there's not a whole lot of risk that hasn't yet been experienced by human beings.

The lessons we have learned over those thousands of years have been reinforced by experience. We have documented and chronicled the unexpected. We have studied those events. We have devised methods of minimizing such events in the future, and have strategies for dealing with them in case similar events do occur.

Risk management is, by definition, a conservative practice. It has to be because you can't manage the unknown; one doesn't experiment with risk.

Which is why I cringe when I see phrases touting, "Cutting edge risk management techniques."

That phrase is an oxymoron. There is nothing "cutting edge" about risk management. Being "cutting edge" strongly implies operating outside the norm, on the fringes of what is known and established.

Workers' compensation has no place for "cutting edge." We live in a very basic, fundamental world. Work place safety essentially means don't be stupid, and prevent other people from being stupid, or at least minimizing the possibility that someone will be stupid.

Flying epitomizes risk management, and trust me, there's nothing "cutting edge" about making sure planes don't fall out of the sky or hit things that break them.

The lessons have been learned and repeated, and get repeated thousands of times every day: planning, communication, decision making.

Fail any of those three fundamental risk management techniques in aviation and ... you die.

It's a pretty simple concept.

Pilots and airplane owners can make things complicated. We can get tangled up about operational details: manifold pressure readings at certain altitudes, propeller RPM, indicated airspeed versus angle of attack, comm one or comm two, ATIS reports, TCAD settings, frequencies, approach plates, departure procedures, etc., etc.

Lots of details.

But when something bad happens pilots revert to basic, fundamental risk management techniques and the single most basic those is, "fly the airplane."

"Fly the airplane." Simple, concise, easy to remember ... which is what humans need when panic sets in.

We panic a lot in workers' compensation. We talk about medical marijuana, opt out, reform, fee schedules, waiting periods, and other topics that induce industry anxiety.

We get all confused about "flying the airplane" in workers' compensation. We get hung up on the operational details: TTD, PTD, RTW, ACOEM, ODG, MTUS, MPN, QME, etc., etc.

Ugh ....

There's lots of "cutting edge" risk management techniques propounded by "experts" who sell products and services to keep the industry "cutting edge."

The reality is that all these cutting edge risk management techniques just increase costs because it takes away from just "flying the airplane," or in the case of workers' compensation, just paying the claim.

I know, I know - it's not that simple. There are rules to abide by, hoops to jump through, things to be audited, checks and balances ... all sorts of details to pay attention to.

I suggest that it IS that simple; that it doesn't have to be that hard. Is there an injury - yes or no? Does that injury require treatment - yes or no?

When a pilot "just flies the airplane" he or she makes binary decisions - yes or no. There's no time to consider whether the FAA might get mad or ATC might have an issue. There's no time to fiddle with gadgets, dials and knobs.

Everything is a yes or a no, broken down to the most simple, basic risk management fundamentals.

Tomorrow, I'll check flight conditions. My pre-planning today suggests that everything should be fine and within the capabilities of Four One Mike and its pilot.

I'm planning to fly Four One Mike. I'll check the weather and decide, yes or no, whether to go. I'll preflight the plane and then make a yes or no "go" decision.

I'm planning on seeing you tomorrow Mom! I'm hoping for a "yes" risk management decision, but hope you're not disappointed if it's a "no."

Simply Complex

California workers' compensation claims stay open longer, much longer, than the national average and as a consequence cost a whole lot more when compared to other states, and according to the Workers' Compensation Insurance Rating Bureau much of this has to do with when medical treatment is paid for.

Only 39% of ultimate accident year medical payments in California are made within the first 36 months of an injury, compared to a national average of 67%.

As a consequence, California employers pay more for workers' compensation insurance than any other state no matter what study is used to compare statistics.

The WCIRB analyzed 1 million claims and $4.4 billion in medical benefit payments. The claims were divided into categories based on the interval between the date of the accident and the date of medical service.

Of the claims reviewed, 84% had medical services provided within the first three years following the accident. These claims accounted for 66% of total medical payments reviewed.

About 12% of claims had medical services being provided between three to 10 years from the date of injury, accounting for $970 million, or 22% of payments reviewed. And while only 4% of claims were still getting medical services between 10 and 30 years after an injury, payments for these claims totaled $559 million, or 13% of costs.

Greg Johnson, director of medical analytics for the WCIRB, said in a WCIRB Research Forum webinar yesterday that claims start to develop similar patterns the longer they stay open: Prescriptions for narcotic painkillers and psychoactive drugs increase for workers still receiving medical care three years following an injury.

Prescription drugs account for 10% of payments made for services provided up to three years following an accident. That number increases to 27% of payments services provided three to 10 years following an injury and 37.2% of payments 10 to 30 years after the accident.

Johnson noted that the amount spent on drugs is about 4% to 5% higher than the amount paid to pharmacies for each cohort, and that physician dispensing is the culprit, and that the longer a claim stays open the more likely narcotic prescriptions become involved.

Johnson couldn't say whether there was a cause and effect in the relationship, only that we know there is a relationship.

In addition, three years after an injury payments for services such as physical therapy and chiropractic care drop off considerably, which makes sense given California's hard cap and reimbursement restrictions on those service codes.

Physical medicine accounts for 11.1% of payments for services up to three years following an injury, 4.2% of payments for services provided three to 10 years after an injury and 2.2% of payments 10 to 30 years after an injury.

Of course those conditions evolve from acute to chronic in nature, further complicating the treatment picture.

"This shows me we've got an aging population," Johnson said. "If you look at the health care statistics in the population, these chronic problems obviously develop with other people, and the comp system is paying for many medical problems of aging. The acute injuries are related to the original injury, but the individuals here evolve in terms of the primary diagnosis to more chronic problems over time."

I'm sure there's all sorts of other explanations as well, and everyone can point a finger at someone else for this phenomenon.

All that doesn't matter. Everyone's to blame and no one does anything about it.

The fact of the matter is that behavior of everyone in the system is a product of the laws and regulations that establish the boundaries. Those boundaries drive incentives. Incentives drive behavior. Behavior drives costs.

I wrote on Tuesday about trust. There is very little trust in workers' compensation. There's even less trust in California.

That's why we have artificial limitations on physical medicine services - because there was a group of providers who couldn't be trusted.

That's why we have fee schedules for copy and interpreting services - because there was a group of vendors who couldn't be trusted.

That's why there's a claims audit process and a penalty system - because there was a group of claims payers who couldn't be trusted.

That's why there's payroll audit and employer premises inspections - because there was a group of employers who couldn't be trusted.

That's why there's sub rosa investigation and prying into the private lives of injured workers - because there was a group of employees who couldn't be trusted.

With each level of mistrust there's greater gesticulation by the conductor, and all of us react in amplified manners to the point where the entire "orchestra" is flailing and creating the comedy that gets ridiculed and despised.

If you look at the top performers in the self-insured/administered category you don't find these statistical anomalies, and claims get closed faster, employees return to work and have less disabilities - because the employers trust their providers and their employees, and the providers trust the employers and the employees, and the employees trust their employers and providers.

It's a complex trusting relationship that takes a lot of work to establish and maintain and frankly it comes down to money.

The friction in the system is money. But the lubrication in the system is also money. There's a fine line between the two. That distinction is understood by those top performers and they use those incentives to drive their claims cultures.

Those with good experiences look at the moon, not at the finger pointing at the moon. They pay for good results up front, not for bad results at the end.

It's really quite simple, yet unnervingly complex.

Life At 8000 RPM

265 miles.

That's how far it is, point of origin my house, up Highway 33 through the Los Padres National Forest, into the Cuyama Valley, then to the coast and back home via the 101.

Except for the fast sweeping turns of Hwy 33, The Sewing Machine was not ideally suited for this mission, particularly since the ergonomics had been altered by me a few weeks ago. The majority of the ride was between 70 and 75 miles per hour, where TSM stoically spins the engine at 8,000 RPM without cough, hesitation or complaint. I was tucked in much of the time for aerodynamics to help that little engine, twisted up like a pretzel.

But it was a circuit I had been wanting to complete for some time, in part because I knew the scenery in the back country would be awesome, in part just because I wanted to experiment with the "sport touring" capabilities of TSM. I had time yesterday afternoon, so I suited up, gassed up, and headed for the hills.

The scenery didn't disappoint, and in fact I'd say for the most part was world class spectacular. A stop in Ventucopa and Los Olivos for hydration were small-town charming, and a stop in Santa Maria for fuel relieved the anxiety that started when the fuel gauge started blinking indicating reserve status.

Three counties in five hours. For some reason I thought it could be done in four.

The California workers' compensation insurance industry took a long trip with cost containment. It was something the carriers had been wanting to do for some time, and they embarked on that mission through legislative, regulatory and in-house routes.

Based on the latest report from the California Workers' Compensation Insurance Rating Bureau, the carriers now appear to be benefiting from their cost containment investments.

Though the gross spend on cost containment services has grown yet again, the rate of growth is abating, and the net pay to medical providers has been trimmed considerably.

Carriers paid 5.4% more for medical cost containment last year than they did in 2013, increasing to $471 million last year from $447 million in 2013.

But carriers paid $5.035 billion in medical benefits last year compared to $5.221 billion in 2013, a drop of 3.6%, which compares favorably to general health which saw medical costs increase 2.4%.

In the mid-1990s, total medical costs (both medical-only and indemnity claims) were in the $2.5 billion neighborhood (after deflating from about $3 billion).

Back then, if there was "cost containment" it wasn't separately stated as an allocated expense - that expense was lumped into the overall medical expense category. It wasn't until 2011 that the WCIRB started breaking cost containment out as a separate line item.

Based on the consumer price index inflation rate, that $2.5 billion in 1995 medical expenditure would be $3.9 billion in 2015 dollars.

Using a calculator specifically programmed for medical cost inflation, 1995's $2.5 billion would be $4.9 billion in today's dollars.

Since cost containment is less than half-billion dollars per year, then at least compared to general inflation, the mission hasn't succeeded: $5.2 billion minus $3.9 billion equals $1.3 billion, minus the half billion in services, means a net increase over inflation adjusted dollars of $800 million.

Okay, even compared to the medical inflation index, workers' compensation cost containment doesn't look that successful.

I don't know when cost containment became so prevalent in work comp. WCIRB's chart shows in 2007 the industry spent $245 million but in the next year that figure grew by $100 million. Now it's $471 million.

I'm having a hard time justifying the expense of cost containment services based on that simple analysis. Would it be worse without those services? I don't know, because we can't rewrite history, but based on past activity it certainly doesn't seem so.

What's worse is that these programs benefit the carriers nicely now, but I don't see those savings being passed along to the policy consuming employers. Not only have premiums continued to escalate, but delays, avoidance and denial inherent in cost containment "services" seems to interfere with good claims management: claims stay open longer, much longer, now than in the past and the indirect costs of greater disability frequency and severity come back to haunt the policyholder as well as the injured worker.

It's been an interesting trip these cost containment years. It started out with some compelling winding road as the industry found its way up the mountain, but down in the valley of reality the road straightened out, the hum of 8,000 rpm travelled relentlessly to the bars, numbing our hands and making our knees ache.

If I'd kept TSM's ergonomics stock, the trip wouldn't have been so fatiguing. I would have still had to put up with a singing engine most of the trip, but at least I would have been sitting more upright.

True, I saw some spectacular scenery in a lightly traveled part of California that is essentially in my back yard ... but I wouldn't do it again, not on TSM.

I have to wonder the same about cost containment - what really is the net effect, and should we continue traveling that road?

Frictional Costs

Friction is the force resisting the relative motion of surfaces sliding against each other.

The byproduct of friction is thermal energy, and that can result in wear, which consequently may lead to performance degradation and/or damage to components.

It should be noted that friction is not a fundamental force - which means that it is reducible to more basic interactions.

We talk all the time about "friction" in workers' compensation, and generally I think most people tend to refer to various processes in workers' compensation as being friction.

There are processes that get in the way of the delivery of medical treatment - this is often deemed frictional.

There are processes that get in the way of paying bills that are seen as contributing friction to the system.

The government may introduce friction through various compliance programs.

Those are just examples. There are many other frictional details.

In workers' compensation we usually refer to friction in the delivery of benefits to the injured worker. These are costs that are not direct benefits to the injured worker.

Industry statistics reflect that the friction costs of work comp is at, or above, 40%.

An insurance company's frictional costs include adjusters, attorney fees, rent, overhead, etc. It includes external costs like broker’s commissions, marketing, fraud, etc.
In other words, it takes 40% of all costs to deliver benefits.

Compared to other delivery systems this is appalling.

Medicare claims a 3% delivery cost. Its worst detractors claim 8%. Even with $712 million in a single fraud bust Medicare's delivery costs are significantly lower than workers' compensation.

But we're just looking at direct frictional costs. Remember that friction is not a fundamental force, so it can be broken down into many other basic interactions, and there is another kind of frictional cost that is greater.

It is the Friction that arises from the inefficiencies of the system and that friction is the result of misdirected motivations unintentionally arising out of unchecked legal and regulatory mandates.

For instance, claims payers use Utilization Review and Independent Medical Review as a legal cudgel. No one can blame them, they are just doing what the system tells them they can and should do (e.g. in California UR is "mandatory"). Consequently medical providers don't want to do their job: Why spend two hours writing a ‘medical necessity’ report when they stand a poor chance of authorization? Even if they got authorization, the fee would be less than reasonable for keeping a medical practice open.

The first frictional cost places a direct burden on the employer and an indirect cost on the consumer. Imagine if that could be reeled in, and indeed these costs are under constant scrutiny.

But this first set of costs are a consequence of those motivations because to perform the operational duties of claims management according to the law there are adjusters, lawyers, executives, buildings, phones, paper, etc. - all first tier frictional costs.

The second tier of frictional cost has greater impact because it affects the bigger workers' compensation population: the injured worker and his or her employer. 

Delay and deny to an injured worker that needs knee surgery causes both financial and physical suffering. Even if the procedure is authorized six weeks later, imagine the physical and mental pain, and delayed recovery.

The employer suffers as well. It's no secret that the bulk of litigated claims is caused by poor claims handling, largely the product of poor communication. We know a litigated claim costs upwards of ten times the normal indemnity claim. Those costs are passed on to the employer in the form of a higher X-MOD which leads to higher premiums.

Very efficient claims payers have very little friction. Their coefficient of friction (if I had a mathematical brain I would have some cool algorithmic equation here) is very low, ergo their costs are very low, and their productivity is very high.

Poor claims systems have lots of heat. They get audited by the state. They face civil actions for bad faith. They have high employee turnover.

And they damage the basic components of the workers' compensation engine.

Friction is the greatest enemy of an efficient work comp system. Lubrication reduces friction. It must be applied liberally and early in the combustion cycle.

Enforce What Exists

The ink isn't yet dry, but a bill introduced into the California legislature would unwind a portion of three year old SB 863 to exempt certain medical treatment requests from utilization review, and thus, independent medical review.

Senate Bill 563, authored by Sen. Richard Pan, D-Sacramento, and sponsored by the California Medical Association, would establish that utilization review is prohibited for:

• Treatments proposed solely to maintain an injured worker’s current health care regimen due to a preexisting injury.
• Treatment requests already approved on the grounds of medical necessity.
• Unaltered treatment requests when there has been no change in the injured worker’s condition necessitating a corresponding change in care.

According to those interviewed by WorkCompCentral for the story, the bill arose out of a survey by CMA of its members who overwhelmingly expressed frustration with UR after SB 863.

Bill language needs clarification, something that hasn't gone unnoticed by CMA.

Molly Weedn, a CMA spokesperson, told WorkCompCentral the word “preexisting” doesn’t refer to nonindustrial injuries and that the association will work with the Senate Labor and Industrial Relations Committee, where the bill was introduced, to amend the language.

The California Chamber of Commerce has labeled SB 563 a “job killer,” their tired old phrase for a proposed law that they vehemently oppose, even though they have no data or evidence that it would actually "kill jobs." It's such a worn out, over-sensational, cliche that any time the Chamber attaches that label to proposed legislation my reaction is the opposite of what they intend.

But, opponents to SB 563 have a point - this legislation could likely result in returning some of the medical treatment decision process back to the courts.

This is yet again part of the relentless "reform" cycle that grips California (and other state) workers' compensation. The ebb and flow of interests modifying the law to achieve their special desires ultimately complicates the system even more, resulting in even less efficiency and more harm to injured workers and their employers.

The real issue is enforcement.

If medical treatment that was promised as part of a settlement agreement, or ordered by an Award, is now being subject to UR post SB 863, then the Division of Workers' Compensation and/or Department of Insurance needs to step in and exact some discipline.

And not namby-pamby administrative penalty discipline either, but full scale business practices findings as warranted, where the penalty is maximum (but in my mind still a paltry $500,000 - perhaps enough to get some attention but not enough to affect the profit margin, where it would truly be felt, and consequently effective).

There are no more effective judicial sanctions available. Bad faith is trumped by exclusive remedy. The only party left that can do anything about a bad situation is the government.

We don't need more laws. We need stronger, much stronger, enforcement of the laws that exist.

It's Mandatory

A recent California Workers' Compensation Appeals Board panel decision may cause a bit of tumult in the already contentious forum of Independent Medical Review.

In an order granting reconsideration by applicant Diane Garibay-Jimenez, Commissioners Rick Dietrich, Deidra Lowe and Cristine Gondak found that not only is it the employer/administrator's sole responsibility to make sure that IMR is provided with all relevant medical records (in a timely fashion) but that failure to do so means that an IMR reviewer, and thus the Administrative Director under Labor Code section 4610.6, acts without or in excess its powers.

Garibay-Jimenez had an admitted injury to her cervical spine and elbows. The treating doctor sought authorization for surgery: left ulnar nerve decompression.

Utilization review denied the request and that denial was upheld by IMR.

IMR did not get a copy of reports issued by the Agreed Medical Examiner that allegedly support the treatment recommendation.

The applicant filed an appeal of the decision of the Administrative Director (IMR decisions get formally adopted by the AD as, essentially, an "order") which the Workers' Compensation Judge denied.

The WCJ held that applicant failed to establish a statutory basis for the appeal because she did not provide the Agreed Medical Examiner reports to IMR, and that it would be unreasonable to make the defendant pay for another IMR. Specifically the WCJ noted that the applicant "provided various medical records" but "inadvertently left out submitting the AME reports, notwithstanding they were in their possession at the time the other records were forwarded to IMR."

By the time applicant noted the omission and mailed the AME reports to Maximus an IMR denial had already issued.

The WCAB panel reversed noting that it is the employer's statutory, mandatory obligation to provide all relevant records under Labor Code section 4610.5(1). This is supported by Administrative Director's Rule 9792.10.5, again using the word "shall" relative to supplying records.

Consequently the WCAB said there were grounds for the appeal:

"By failing to provide the IMR reviewer with all material and relevant medical records, the determination of the IMR organization, and thus the Administrative Director, was an act without or in excess of its powers," the Board ruled. "The IMR process can only work if the parties meet their obligations to provide the necessary medical records. The WCJ's determination that it would be unfair to defendant to pay for another IMR appeal fails to recognize that it is defendant, not applicant, who is mandated to provide the medical records... unfairness to defendant is not a valid basis upon which to make a determination, where defendant has not met its statutory obligation to serve medical records."

The WCAB also chastised the WCJ for failing to formalize the record on review:

"The preparation of an adequate record is mandatory. When a case is submitted for decision to the WCJ, it is the responsibility of the parties and the WCJ to ensure that the record of the proceedings contains, at a minimum, the issues submitted for decision, the admitted evidence and the stipulations of the parties.."

The case goes back to IMR now for another bite at the apple, so to speak.

While a panel decision is not citable as binding precedence, it is demonstrative of the WCAB's current thinking on immediate issues. Certainly the WCAB has had issues with IMR in the past...

The latest issue with IMR involved the Maximus spreadsheet reflecting a lot of missing medical records. Some blame Maximus, some blame counsel, some say it's not a problem.

And the Division of Workers' Compensation is mulling electronic records submissions.

Regardless, the point is that IMR can't work unless it is procedurally sufficient. IMR can't be procedurally sufficient if mandatory statutory and regulatory processes are not followed.

I've railed against the heavy procedural burden that has overtaken California workers' compensation in the past, but if we're going to have procedures, then they have to be followed as written, particularly when procedure is mandatory (as in "shall").