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.

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.

The Whole Picture

Applicant attorney Keith More asked the 800 or so attendees to our panel session at the California Applicant's Attorneys' Association conference Friday for a show of hands: how many had utilization review requests denied based on lack of, or missing, records? (LC 4062(g)(4))

Every person raised a hand. Every single one.

And that didn't count the overflow rooms where our session was broadcast via television to about 300 other attendees.

Sure the crowd represented outliers - litigated cases; less than 20% of all workers' compensation responsible, however, for more than 80% of all system costs.

Truth is, that observation should make one really cringe.

After all, if the system can't comply with the law to ensure relevant medical records get to the reviewing physician when the injured worker has someone looking out for them, then what about that majority who have no idea what's going on, probably don't understand the UR process, and likely aren't savvy enough to realize that the utilization review isn't complete?

We don't know how many unrepresented injured workers are the recipients of failed UR. Heck, we don't know how may represented workers are the recipients of failed UR (though the informal CAAA poll would peg it at 100%).

We don't know how many treatment requests are denied, ultimately, on lack of records, because there's no process in place for capturing such information when workers with or without an attorney are involved.

So while California administrators may be pugnacious in defending statistics favorable towards UR (and IMR) reducing medical costs, the truth is that no one REALLY knows because the vast majority of workers' compensation claimants - the unrepresented - aren't polled or studied.

It just may be that medical treatment savings are simply the product of people just giving up and going away.

The system is obsessive about costs. I'd like to say, let's forget about costs. After all, our cost neurosis is what gets workers' compensation into trouble in the first place.

But we can't. There's only so much to go around.

Costs are important, of course, for budgeting. Budgeting is a necessary discipline anytime there is income and expense to account for. Someone along the chain of financial resources is going to demand an accounting and want to know why something is the way it is.

That makes sense. Money goes in, and money goes out, and someone, somewhere, has to be responsible to make sure that the flow of money is going where it is supposed to.

So be it.

Also along the chain of financial resources are people. Some are benefactors. Others are recipients.

Some are profiteers.

This is America, after all, and the world of workers' compensation falls within the ambit of a capitalist economy, which means along the chain of financial resources there are people that want or must be paid some of that money in order to make things happen the way they are supposed to happen.

Some overstate their value to the system, some understate it, and some don't care what their value is as long as they get a piece of the action.

The point is that there is no reason why there should ever be any lack of documentation to a reviewing physician, other than someone's decision that there's too much paper to copy, too much to mail, too much to review... too much cost in the process.

Editorial decisions on medical records are made by someone along the way to UR; editorial decisions that, in effect, becomes the practice of medicine ... illegally I'd say, if not done by a medical doctor or other professional recognized by the law as authorized to provide medical care and advise.

When I was taught how to cross examine physicians, albeit many years ago, the first and most important tactic was medical history - because medical history is paramount to diagnosis which is paramount to treatment decision.

Without an adequate, accurate, and complete medical history, any medical decision or determination that follows is subject to challenge. Challenge is another word for dispute, which is what causes "friction."

Medical records are the single most common, affordable, and accessible way of communicating past medical history. Failure in records is failure in history. And failure in history is failure in medical expertise. There's oodles of case law confirming this logic.

There's a simple legislative or regulatory fix to the inadequate medical records issue - mandate that all medical records be supplied to the reviewing physician and that failure to do so results in automatic approval of the requested treatment subject to disapproval upon subsequent receipt and review of records (if not too late by then).

In other words, remove the word "reasonably" from Labor Code section 4062. That word is subjective, and one person's reasonable is not another person's.

Whenever there's the possibility of subjective evaluation, there's the probability of dispute. So why do we insist on inserting subjectiveness into a process that clearly requires objectivity? And why do we allow non-medical professionals to editorialize on medical records?

If the reasons are all about costs, then we're not looking at the whole picture.

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.

Sam vs. Jane

The Workers' Compensation Research Institute's latest study essentially states that financial incentives influence treatment considerations - that capitated systems will cause a case shift away onto fee for service systems, like workers' compensation.

Sometimes those incentives get reversed too - and it's all about who's paying, and who's receiving.

The following comparison that was communicated to me by a reader is anecdotal for sure, but it is illustrative, and alarming. The only real difference in the quantity of similar medical treatment rendered is an elderly man via Medicare versus a middle age woman on workers' compensation. Guess who loses?

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

Sam vs. Jane

What a contrast Jane's situation with Sam's dad's situation. 

We can't get the rehab people to stop treating Same's dad (Medicare), versus Jane (workers' compensation) who can't get anyone to treat her. 

Sam's dad, 97,  fell 4 times a few months ago and now the rehab people won't quit. They stop by with questionnaires (all the same) but 3 people have to fill out the same forms. They treat him with occupational therapy 3X/day. He does not want occupational therapy. He's 97, he wants to sit in his chair and read and at 97 he's entitled to do that. 

Sam had several meetings telling them to stop the rehab. Then coming up in the elevator after the last meeting to again tell them - NO REHAB for at least 2 weeks.... when the elevator door opened on the 4th floor ..... guess who was standing there waiting to come downstairs -- the rehab woman!  

Sam politely asked her if she wasn't possibly at his father's apartment and sure enough she had been -- she'd stopped by to "say hi" even though less than 1 hour earlier Sam had had a 20 minute conversation with her and never uttered anything other than "No, we do NOT WANT REHAB."

Contrast to Jane who fell and has had to beg for care. And has had DOZENS of denials of care for her witnessed, admitted, injury.

The rehab woman for Sam's dad gets paid per treatment, and probably an incentive bonus when she treats over 50 times/week, or something.

By contrast, utilization review, the adjuster and the defense counsel get rewarded for refusing care. Defense counsel gets paid more for every hour he works the file to deny care. UR gets paid per review, and they know the expectation is to deny care. The adjuster doesn't really care since the employer has, no doubt, a large deductible policy and they still get their Allocated Loss Expense. The vendors are allowed to run wild.

Sam's dad is in a high quality, expensive facility with vendors that are ruling the roost, running wild providing unwanted treatments. He was an Colonel in Army, and a university Dean, but is now treated like an idiot by the rehab people.

Jane, on the other hand, has had to find her own care, pay for it herself (including the lodging necessary because the only facility she could afford was too far away for a normal commute) and eventually ran out of money, and options.

Anyway, it's interesting to watch the two different systems and how, in different ways, they mistreat those they serve.

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

While the WCRI was focused on case shifting into or away from workers' compensation, the real take away is further confirmation, reprehensible as it is, that providers of medical care (and those responsible for managing them) will go where the dollars are, and unfortunately that's not always in the best interests of the patient or injured worker.

Business, after all, is business...

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 A Digital World

If one waits long enough opportunities appear, almost magically.

Early EAMS observers will remember this scene...

Medical records reproduction companies in California have been waiting now for 2 years to get a fee schedule.

Still waiting.

In the meantime the California Division of Workers' Compensation has come up with an alternative revenue generation program for them assuming the record companies wish to adapt and change their business models: mandating electronic medical records for the review process, specifically Independent Medical Review.

Timely submission (and more to the point, receipt) of medical records has been cited as a significant problem with the IMR process.

WorkCompCentral ran a series of articles a couple weeks ago based on a spreadsheet inadvertently obtained from Maximus Federal Services, the IMR contractor for California, highlighting the records problem.

Commentators, and the Division itself, lay a big chunk of the blame on Maximus for failing to have an adequate records management system.

Based on the spreadsheet, 6,743 IMR cases were missing medical records past the 15-day time limit for administrators to submit the documents. The records had been missing for 90 days or more in the majority of those cases.

Rupali Das, the Division of Workers' Compensation's medical director, presented statistics at Thursday's Commission on Health Safety and Workers' Compensation's review of SB 863 showing that the amount of time Maximus takes to issue a final determination letter dropped from an average of about 60 days in September last year to 24 days this month – but only in cases where complete medical records have been submitted. 

The average age for an IMR, including cases where Maximus has yet to receive records, has risen from about 60 days to 91 during the same time period.

DWC is now proposing that electronic records be mandated to hopefully eliminate this records management issue.

“One of the main issues right now is the paper process that is slowing down our (system),” Das said, noting during the meeting that claims administrators can already provide medical records electronically if they choose.

“We are working with claims administrations to encourage electronic submission of medical records,” she told the commission.

CHSWC voted to endorse the proposition and voted at its Thursday meeting to ask DWC to devote staff time to the issue with an aim toward putting out regulations.

I think this is a good idea, IF done correctly - it's one thing to mandate TRANSMISSION of electronic records, and another to mandate RECEIPT of electronic records.

Remember the key issue seemed to be failure by Maximus to match records to cases, so expert technical guidance will be necessary to promulgate effective regulations on a technical level to ensure smooth, accurate and seamless digital transactions. 

The sender has to be told what to send, and Maximus has to be told how to receive what is sent.

It occurs to me that the much-maligned document copy services have this expertise in place already; perhaps in this new age of records management these companies actually have a compelling place in the system post SB 863.

Regardless, this is a positive step towards modernizing California's system. 

My only caveat - recall all of the painful lessons from the design, development, release and maintenance of the Electronic Adjudication Management System...

IMR Talk

Healing?

It's been easy to criticize Independent Medical Review in California, due to evidence of records mismanagement, unanticipated volume, and late determinations.

But statistics reviewed last week at the California Workers' Compensation Institute's annual meeting implicate a very small percent of overall IMR requests poisoning the well.

For instance, according to Rena David, chief operating officer and chief financial officer for CWCI, almost half of the 138,000 IMR decision letters issued in 2014 were the result of treatment requests from only 134 providers.

134 physicians in the top 1% accounted for approximately 60,720 IMR decisions, while the 1,323 providers in the top 10% accounted for about 114,540 final decisions.

10 individual providers accounted for 11% of the decisions issued last year covering 15% of the disputed medical services and 14% of the claims with treatment issues that were eligible for IMR.

More than 91% of the approximately 15,180 decisions attributed to these 10 providers had determinations that the requested treatment was not necessary.

25% of IMR decisions are sent directly to the injured worker, 5% are sent to the care provider as the patient representative for the process.

Two-thirds of the decisions were sent to the injured worker's attorney.

72 attorneys, representing the top 1% of litigators measured by volume of IMR decisions, were associated with 18% of all decisions issued in 2014, David said. The top 10% of attorneys – 718 in all – accounted for 65% of the final decision letters.

And of course most of this action comes from the greater Los Angeles area, which has been identified in the past by CWCI as an anomaly in claims statistics.

Approximately 24% of workers' compensation claims in California originate in Los Angeles, but the area accounts for 36% of IMR decisions, David said. The Bay Area produces about 19% of claims and accounts for 19% of IMR decisions, while the Inland Empire and Orange County generate 18% of claims and account for 16% of IMR decisions. Counties in Northern California and in the Sierras account for about 5% of industry claims, combined, but only 3% of independent medical-review decisions.

In 91% of service request reviews, IMR upheld the UR decision, according to David, which means IMR agreed with the original UR decision that the service was not medically necessary. It also means that 8.6% of UR decisions were reversed, which means IMR felt it was medically necessary.

When put into context, that's a rather large percentage - nearly 10% of the time UR gets it wrong according to these stats, so it seems that if you aren't happy with the UR decision then it's worth the while to seek an IMR review.

About 75% of all medical treatment requests in California are approved by the claims administrator without further review, according to CWCI. Of the other 25% elevated to physician level UR, 94% of requests were approved and 6% were denied.

It is just these 6% of cases that are eligible for IMR. And even with 91% of these treatment disputes being denied through IMR, David said the vast majority of treatment requests are ultimately approved.

"Rather than a wholesale denial of care, we're estimating anywhere between 94% and 95% of treatment requests are approved," she said.

Pharmaceuticals (principally opioids and related drugs) accounted for 44.7% of services, and the UR decision was upheld on those denial of drugs 91.9% of the time. At the low end was evaluation and management services, which accounted for 1.7% of the decisions and were upheld 79.5% of the time.

So is there a problem with UR and IMR? If you're talking about timeliness and efficiency of records management (even according to anecdotes from claims administrators themselves), yes, Maximus and DWC need to do a better job.

If you're talking about gross numbers and the vast majority of service requests (typically not litigated cases, and likely medical only cases or cases with very little disputed disability claims) then the process works just fine, though there may be some issue with timeliness and efficiency.

We also know for certain that a small percentage of cases account for a large, disproportionate, share of costs to the system. It's those cases where most of the "noise" comes from.

Much of the other presentations at the CWCI meeting dealt with paying for value - perhaps paying a little more for quality medical care in return for better outcomes (which means lower disability terms).

When I compare the stats on UR and IMR as presented by CWCI, I'm not sure paying more to that small percent of providers who create most of the dispute would change things. Something tells me that those providers aren't really in the game of healing...

What The Doctors [Don't] Know

I was honored to be on The Great Debate panel at the California Applicants' Attorneys Association Winter Convention in San Diego on Friday afternoon.

Presenting with me were:

• Christine Bouma, a member of the California Commission on Health Safety and Workers' Compensation;
• Dan Bagan, a member of the California Commission on Health Safety and Workers' Compensation;
• Jamie Berenson, a partner in the applicant law firm of Glauber/Berenson; and
• Barry Pearlman, founding partner in the defense law firm of Pearlman, Borska & Wax

Adam Dombchik, a partner in the applicant law firm, Gordon, Edelstein, Krepack, Grant, Felton & Goldstein, LLP, moderated (and input his opinion on occasion).

The Great Debate was, as you would expect, about SB 863, whether it's meeting expectations, how it has impacted employers, workers, and the industry, and observations as to its efficacy.

As one would expect with such a diverse selection of experience, opinions diverged on some issues, and interestingly, converged on more issues that I expected.

But one part of the presentation really caught my attention and points to a significant problem with California workers' compensation, and perhaps many other states: doctors don't know how to interface with the system, and the more complex the requirements on physician participation, the less likely they are to understand their roles, the expectations and the rules.

And this means failure in compliance, less effective treatment, increased disability, failed outcomes and increased expense.

Pearlman raised this issue with an anecdote about a recent presentation he gave to a large Medical Provider Network group of physicians.

Pearlman said that there were about 150 doctors in the audience, and he asked them several questions that drew complete blank stares: what is an MPN, are you in an MPN (remember this was a presentation TO an MPN!), what is the Medical Treatment Utilization Schedule, what is ACOEM, etc.

Blank stares. None of these physicians had any clue about workers' compensation regulation of their professional activity.

No wonder Utilization Review and Independent Medical Review are such road blocks - the physicians that are supposed to be complying with various standards don't even know a) that there are standards, or b) how to comply.

Ugh!

Remember that this is an anecdote and is not necessarily representative of all physicians that become involved in industrial medicine.

But it is a troubling anecdote nevertheless.

I don't think it's just a matter of education. I think it's a matter of motivation - what is the motivation to learn all this complexity if there is no financial or other incentive? The practice of medicine, in the end, is a business and that means that there are income and expense columns that get interpreted to profit.

If profit is not a positive number then either the expense column needs to be trimmed, or the income column needs to be bolstered.

Trimming the expense column is easier than bolstering the income column - nearly anyone that runs a business will tell you that. The amount of resources necessary to capture new revenue increases exponentially compared to retention of existing business.

Part of the expense column is education. There is the direct expense of acquiring the education, but there are also all of the indirect expenses, including intrusion into personal time.

And the more complicated a system is (as can be evidenced by the number of acronyms in any given system), the more expensive it becomes to become and stay educated, and deploy that education into practice.

This doesn't portend well for workers' compensation because part of the Grand Bargain is delivery of medical benefits: treatment and the reporting necessary for the legal/indemnity end to work.

Without doctors in the system able to do what the system asks of them means the system will fail.

There's a difficult balance between regulating the behavior of the professionals that make the system run in an efficient manner, and regulation to the point of stifling participation. If what Pearlman described is more that just a passing anecdote then we're on the wrong side of the fulcrum.

*************edited 01/27/2015*************

Steve Cattolica, Director of Government Relations for the California Society of Industrial Medicine and Surgery, provided this response to the above post - it was too long for a comment so I have included it as part of this original post:


David, while I agree with you for the most part, having heard the “Debate” panel, Barry Pearlman’s revelation absent any detail, may have led listeners to draw errant conclusions or diverted them from a clear picture of a much different and pervasive source of the problem he seemed to want to convey.

Regarding physician education and expertise; motivation to learn is important and that certainly tracks to some degree with reimbursement. However, one must keep in mind that some providers’ reimbursement comes in the form of a salary check or a contracted percentage based on production. Therefore, in what could be a surprisingly high number of instances, the profit motive lies with the network itself, with a leased sub-network or with another corporate entity, rather than the provider.

To this attendee, this segment of the “Debate” seemed to lay the blame for poor results on the ignorance of physicians. Notwithstanding your statement that it was, “not necessarily representative of all physicians that become involved in industrial medicine,” I believe it is an extreme disservice to providers to lay that ignorance or their motivation to learn about the comp system, solely at the feet of their own reimbursement.

Pearlman did not choose to tell the audience to which MPN he was speaking. I can understand at least one reason why – as I outline below, the MPN might become open to unwanted (if not deserved) scrutiny.

He also left out the background of his physician audience – were they specialists or primary care? Were they solo or small group practitioners? Were they independent contractors to a large health insurer’s medical group or employees? Did they even know that they were contracted with the MPN in the first place? All of these facts matter, when for lack of them the speaker leaves the audience to draw an over-generalized conclusion regarding the training, competency and motivation of the provider community at large.

Often employee physicians, even in specialized work comp clinic chains, have little idea how the work comp system actually functions. They are trained in their employer’s operating system and someone else takes care of the rest. In this context, the chain’s corporate decision how to “train” its physicians could be based upon the notion that rote compliance with policies and procedures equals the lowest cost (and highest margins).

More importantly, he did not mention how his audience came to be contracted to the MPN in the first place. He may not have known that information. As I queried above, did these providers even know they were providing services in a work comp network? Were these providers part of a leased network? How did they get in? Who is watching the store?

He also did not offer to explain the reason why a work comp network would contract with these providers in the first place. I suspect he did not know this information either. What was the network thinking when it presented these physicians to its workers’ compensation clients and prospects as being part of an MPN? Did the network bother to tell the client or prospect about the providers’ lack of knowledge or expertise about the comp system? Did the network even know this information itself? What kind of an informed buying decision could any carrier, TPA or employer make when the baseline expertise of the contracted providers is unknown or its disclosure may be withheld? Caveat emptor doesn’t really do justice to this situation. From this point of view, Barry’s education program appears to have been motivated by the network’s or its customer’s need for damage control rather than quality healthcare.

We have long maintained that direct contracting between providers and employers is the best and least expensive relationship available to assure the highest quality healthcare for injured workers. That’s motivation.

Mandated Burden

I have a great idea - let's make the burden on physicians in the California workers' compensation system even greater by requiring additional documentation on requested medical treatment, even before it is rejected by either utilization review or independent medical review.

This would force physicians to just stick to the Medical Treatment Utilization Schedule and there would be nearly instantaneous control over medical treatment requests!

Just think - fewer out of schedule recommendations, fewer experimental prescriptions, lower treatment costs, lower billing, review and containment expenses...

... and even fewer physicians willing to put up with such nonsense.

Yet, the California Division of Workers' Compensation in its latest revision to the MTUS regulations is proposing just such a regulatory change.

The proposed update to the MTUS, its first revision since 2009 would require doctors seeking to deviate from the schedule’s recommendations to provide research to back up their requests.

When doctors request treatment for a worker that deviates from the schedule’s recommendations, the new provision would require that physician to attach with the request “a copy of the entire study or the relevant sections of the guideline containing the recommendation he or she believes guides the reasonableness and necessity of the requested treatment that is applicable to the injured worker’s medical condition or injury.”

Doctors that wish to go outside the MTUS basically are already required to support such treatment requests with evidence to avoid denial up the UR and IMR food chain. What does making this requirement a part of the law have to do with efficient, efficacious or adequate medical treatment?

Further, because the DWC updates the schedule only once every five years, but medical research is ongoing, there will be an increasing body of evidence outside of the state’s recommendations thus increasing the burden on physicians just to comply with the regulation.

Physicians aren't paid to support their treatment requests under the present fee schedule - I can't imagine any would go the extra mile with the regulatory mandate as proposed. It would be much easier, and financially safer, to ignore the medical interests of the injured worker regardless of whether there would some better treatment options.

Or just get out of industrial medicine altogether.

And, even if a doctor went that extra mile and supplied the studies or evidence, that does not mean it will pass muster at the UR or IMR level. If DWC wants doctors to support their requests, and doctors do so, then there should be a concomitant obligation on UR/IMR to approve the proposed treatment.

The category of cost containment services is receiving the dubious distinction of being the fastest growing expense category as measured by the Workers' Compensation Insurance Rating Bureau. Adding more documentation to the mix adds more time to the UR/IMR reviewer's job, and more money needed to pay utilization-review doctors.

This is a bad idea, plain and simple. California is already the most regulated, most burdensome workers' compensation system in the United States, and probably all of the world. Heck, there are still parts of SB 863 that have yet to be implemented more than 2 years since that legislation upended the system.

This part of the proposed update is unnecessary over-regulation.

The division is accepting comments on the proposal until 5 p.m. Tuesday. Written comments can be emailed to dwcrules@dir.ca.gov or faxed to Maureen Gray at 510-286-0687. Commenters can also mail their input to Maureen Gray at the Department of Industrial Relations, P.O. Box 420603, San Francisco, CA 94612.

A Cultural Challenge

Independent Medical Review is probably the most contentious change introduced to the California workers' compensation system in history because it upends, in dramatic fashion, The Culture.

Over the course of a hundred years physicians had sought, and were granted, great latitude to order up pretty much any "treatment" desired for an injured worker, and frankly there were many that abused this privilege.

Doctor's orders were sacrosanct - for instance, I recall when practicing law many cases where the physician ordered up a new, specific mattress, regardless of the cost and regardless of less costly alternatives, and the carrier/employer would be obligated to pay for it.

Any objection to such orders were stymied at the workers' compensation judge level because, the reasoning went, if the doctor ordered it then it must be necessary. After all, I wasn't a doctor, the claims adjuster wasn't a doctor, the judge wasn't a doctor. It didn't matter that the physician didn't have any evidence of treatment efficacy - he or she is a doctor!

There was a period of time when chiropractors ran amok, and it wasn't unusual to see "treatment" consisting of chiropractic adjustments and massage every week for years regardless of what published treatment guidelines said.

Again, objections to such over treatment abuse was stifled at the hearing level because doctor's orders trumped everything. A hard cap on chiropractic visits put the issue to rest eventually and survived judicial scrutiny and constitutional challenge.

There are many, many such examples where the medical profession's elevated status cleared the path for the provision of "treatment" that would not be tolerated in any other medical setting.

Guidelines didn't change that culture, push back from carriers/employers didn't change that behavior, Utilization Review didn't make much of a difference. The Culture remained - if a doctor ordered something called "treatment" then the carrier/employer was obliged to provide it.

It's very difficult to effect change to The Culture.

This is my preferred Culture.

Culture means a practice is deeply embedded and accepted by a large population.

If you're absolutely truthful with yourself, you'll agree that The Culture of medical treatment in workers' compensation had taken on preposterous qualities.

That's why we have IMR now - frankly because the people that could not behave themselves took it too far, for one reason or the other.

It's a huge, radical shift and resulted in a revolution. New rules, new mandates, new systems - old expectations, old operations, old sentiment: a confluence of mixed emotions seeking to either vilify or justify this new process.

And this is not to say that there are injured workers who are not getting medical treatment that they otherwise should be getting - because there are many case examples where reasonable doctor's orders aren't being granted now - a very public example is when Comp Laude Award winner Dwight Johnson, a double amputee, was denied handicapped modifications to his restroom so he didn't have to travel to the municipal gymnasium just to take a shower.

Those were doctor's orders that were initially denied in UR, but ultimately provided after a change in adjuster, a lawyer, and more well written orders from the doctor.

Late Friday afternoon the California Department of Industrial Relations released the first report on the IMR system, and declared it a success. Whether one agrees with that conclusion is dependent on your personal position relative to SB 863, of course.

And I'm not going to pass judgment at this time on whether IMR is a success or not, but there are some very interesting observations made in the report.

For instance, it seems that an unrepresented injured worker is more likely to succeed in an IMR review than one with attorney representation, albeit by a small margin.

And where additional consultation or diagnostic testing is involved, IMR overturns the UR denial over a third of the time.

Nearly half of all IMR requests involves pharmaceuticals, and most of those involve opioids. I would expect those numbers to ameliorate over time, bowing to the next medical trend that hits work comp.

Indicating to me an acceptance of restrictions in medical practice via treatment guidelines, the report says that UR was overturned more often by IMR in cases where date of injury was 2013. UR in earlier cases was more often upheld.

You certainly can draw your own conclusions from DIR's report, but I think DWC is correct in its analysis regarding the high rate of IMR upholding UR:

"Our analysis highlights two reasons for the comparatively high uphold rate in the DWC IMR program. First, disputed treatment requests that were not consistent with evidence-based guidelines were highly likely to be overturned. Additionally, medical records for IMR FDLs that upheld UR decisions frequently did not contain adequate documentation to justify medical necessity."

To state it more succinctly: doctors don't practice evidence based medicine and records aren't getting to reviewers.

Both are real problems. Docs that aren't following guidelines, or offering alternative evidence aren't doing their jobs. And we've all heard many anecdotes of records not making it to reviewers either intentionally or through gross negligence.

The real legal question of course is whether injured workers are getting the medical care that is guaranteed them via the state Constitution: "full provision for such medical, surgical, hospital and other remedial treatment as is requisite to cure and relieve from the effects of such injury."

The word "requisite" means necessary. This is tied to "cure and relieve." For many years this concept expanded, as noted above, to include many items that may not actually be medical, or even "other remedial" treatment, but the stated public policy of the state's workers' compensation laws were that they be liberally construed in favor of the injured worker. So if a doctor said it was necessary then it was...

Now, the First District Court of Appeals for California has agreed to hear a constitutional challenge to the IMR process.

A date and time for the oral argument in Stevens v. WCAB, No. A143043, has not yet been set. Briefing in the matter is set to wrap up next Monday.

All of the usual players have weighed in with predictable arguments: California Applicants' Attorneys Association, Division of Workers' Compensation, California Workers' Compensation Institute, Property and Casualty Insurers Association of America, California Chamber of Commerce, and of course defendant State Compensation Insurance Fund.

This is the second time the case has gone to the appellate court. The first time it was kicked back for failure to exhaust administrative remedies. Those remedies have now run the course.

Appellant's argument is that the IMR procedure codified in Labor Code Section 4610.6 violates the state constitution because of the anonymity of the decision-maker and the limited ability of an aggrieved party to appeal the decision reached.

Injured worker Stevens tripped over an area rug and fell while carrying boxes of magazines while at work in 1997. She suffered a broken foot, but her recovery did not go smoothly.

Through the years, Stevens has undergone numerous surgeries and is now confined to a wheelchair. The combination of her chronic pain and lack of mobility has left her struggling with depression and unable to work.

In 2013, a workers' compensation judge declared her to be permanently and totally disabled. Following this decision, her doctor recommended she receive medication management and home health care assistance.

SCIF submitted the doctor's recommendations to utilization review and then denied authorization for the requested services.

Maximus Federal Services, the contractor providing IMR services to the workers’ compensation system, affirmed that decision in February.

DWC, in its report, says it will continue to maintain IMR program transparency, though their definition of transparency isn't the same as everyone's. But, I do believe that the division is being as transparent as the law permits it to be.

The 1st DCA may have a different idea on transparency.

Regardless, this much is true: liberal interpretation is no longer. Now there must be evidence, and it is reviewed in a stratified manner, with some evidence better than other evidence. That requires doctors, not used to following the rules, to change their practices.

That also requires claims payers to follow the rules and change their practices too - they are responsible for ensuring ALL records (some may not be "relevant") get reviewed.

The Culture change affects everyone, and everyone has to adjust.