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.

The Moving Fulcrum

When I started in the workers' compensation field, medical treatment requests needed only a physician's opinion that it was reasonable and necessary. Virtually anything that a doctor wanted for the injured worker was ...

That led, of course, to abuses, and a long line of injured workers who didn't get better, who didn't return to work, who incurred intractable disability and a few medical providers that benefited from the liberality financially.

Along came guidelines.

Guidelines were first introduced by the general health insurance industry to assist meting out treatment dollars. While efficacy was a paramount concern, the primary consideration for the medical insurance companies was controlling the outflow of dollars - prescriptions, if you will, for what would and wouldn't be paid.

The health carriers provided appeals processes, largely in response to federal mandates, to allow for exceptions where the standard treatment protocol wasn't effective but where a technique or service that hadn't yet been fully vetted could be implemented and investigated. If it worked, super, and if not, on to the next thing.

It took a couple of decades for guidelines to merge into workers' compensation. Now virtually every jurisdiction uses some form of medical guideline to regulate the administration of treatment.

This works most of the time for most people.

Some people fall outside the bell curve of guidelines, though. For those people the usual remedy is to find other evidence either not recognized by the guidelines in place or for which the guidelines had not yet been updated and then convincing someone up the appellate process that the evidence sufficiently supports the treatment attempt.

An interesting debate occurring in Oregon demonstrates the forces at work.

The Oregon Workers’ Compensation Division isn’t impressed with platelet-rich plasma injections despite evidence that professional athletes have used the therapy as a way to heal injuries faster and get back on the job sooner.

At least not yet.

WCD and is moving toward renewing a policy that the treatment is not compensable in workers' compensation claims.

Platelet-rich plasma ("PRP") injections take a sample of the patient’s own blood and process it to produce a concentrate of platelets, cells best known for their role in blood clotting. The platelet-rich plasma also contains growth factors that can help with healing, the theory goes. A doctor injects the PRP into the injury site, repeating the treatment every few weeks as needed.

According to an information page posted by the American Academy of Orthopaedic Surgeons, PRP has been found to be most effective in treatment of chronic tendon injuries, such as tennis elbow. Although more evidence is needed regarding the therapy’s effectiveness for other injuries, AAOS says risks of the procedure are about the same as for cortisone injections.

The Medical Advisory Committee subgroup of the Oregon WCD evaluated PRP treatment and proposed a recommendation that platelet-rich plasma injections should not be compensable, at least yet, because there is inadequate published scientific studies supporting its use.

The committee, however, leaves the door open to reevaluating the policy in the future since research on the injections is continuing.

What this really means is that the financial risk of paying for a relatively innocuous medical treatment service outweighs the probability of medical efficacy. Since workers' compensation is a "first dollar" medical benefit system (i.e. the patient in the vast majority of jurisdictions doesn't have a co-pay, deductible or any other financial participatory obligation) the party that actually pays (i.e. the employer/carrier) has a say as to whether or not it is willing to assume the efficacy risk.

Whether this is right or wrong in the privatized public benefit system of work comp can be debated endlessly. It just is the way it is, and is part of the deal.

While PRP holds "great promise," says AAOS, it also notes, "Few insurance plans, including workers' compensation plans, provide even partial reimbursement."

At some point, all of the studies on professional athletes using PRP will have sufficient correlations to determine whether, in fact, it is a beneficial treatment that should be provided via workers' compensation.

Until then, the fiduciary component of workers' compensation - watching where the money goes - will remain conservatively based. There will be some cases where the therapy is approved on an industrial basis when the physicians provide sufficient evidence and argument in favor of approval, and those cases will be studied too.

It's not a perfect system. And some folks will get denied treatment that could help them move on ... or not. 

Balancing the interests of those who pay, and those who receive, is inherently vague. The fulcrum is always moving.

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.

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.

Forms Imperative: Reduce Clutter

The California Division of Workers' Compensation is finally getting around to moving forward with revising various notices that go to injured workers.

This is a project started long ago, following a 2010 report from the Commission on Health, Safety and Workers' Compensation that critiqued regulations that led to notices it said were overly wordy and sometimes redundant, as well as “complex, frightening, vague (and) confusing,” and overdue - but the DWC got side tracked by a little project called SB 863.

The division first proposed the rules in April 2013 by posting them in draft form on its online forum.

Of course with the possibility of new forms, everyone has to get their say in to make sure that their special interests are represented.

Applicant attorneys want to be sure that at every step of the way the injured worker knows that they have the right to an attorney and that there are as many forms or other communications sent to injured workers as possible every step of the way.

Employer groups want to be sure that anything concerning websites or alternative means of communication are "if available."

In the meantime the division seems focused on some potential cost savings simplifying and minimizing forms.

Clutter - I hate clutter.

DWC thinks new forms and regulations could reduce litigation and save an estimated $15 million a year, although it admits in its Statement of Reasons that this is just a WAG:

“However, the lack of empirical data on the extent of attorney involvement and litigation before benefit notices reached their current level of complexity, in the mid-1990s, in addition to the difficulty in ascertaining the current level of litigation driven by complicated benefit notices as opposed to amount of compensation paid, casts doubt on the study’s assumptions,” the division said in its Initial Statement of Reasons. “Lower savings are more probable, although there is no accurate means to forecast or identify savings directly due to the regulation’s improvements after they become effective.”

CHSWC has said that revising benefit notice regulations could reduce legal defense expenses by $43 million a year, based on estimated savings of 5% from the $867 million carriers paid in defense litigation costs in 2008.

I know everyone likes to talk about costs - whether something will reduce, increase or shift costs. But making the discussion about costs in this context interferes with the ultimate goal of revising forms that are more simple but still communicate effectively statutorily mandated language.

One of the biggest conversation problems in workers' compensation is the seemingly orchestrated concert about costs - whether this change will increase or reduce costs, etc. It seems that every little regulatory or legislative move makes the melody all about costs.

Forget about costs. Talk about value. Value is partially about costs, but also about return on investment. If X dollars are input, then we want to see Y result returned.

DWC for its part sort of does this in its most recent forms proposals by projecting that there will be less confusion which results in less litigation - though admittedly there is no empirical evidence to back this up.

Still, that the community is engaged in producing better forms to lead to better communications is encouraging.

I don't know how DWC comes up with the graphical elements of its forms, but my guess based on form layout and knowing how government operates is that someone within the Division was tasked with the job using a word processor program.

That's a tough job - because word processing programs are inherently deficient in dealing with graphical elements such as layout, borders, font changes, etc.

What about giving the task to a real artist - someone who is trained and makes a living at design graphics using modern programs such as Adobe Illustrator or InDesign; something that was made for preparing graphical layout?

I look at the current proposed Claim Form, and while it is a bit better than previous versions it still makes my head spin: too much information in too small of a space; i.e. clutter.

I hate clutter. Reminds me of hoarding which makes me uncomfortable.

My guess is that a good graphic artist can render the Claim Form into a much cleaner, more easily digested form while still meeting statutory and regulatory requirements than a DWC employee. For one, graphic artists look at a sheet of paper much differently than you or I. For another, someone thinking outside the box won't be stifled by prior versions.

The DWC will hear testimony on the proposed rules during a public hearing on Sept. 3 at 10 a.m. in the auditorium of the Elihu Harris state office building, 1515 Clay St. in Oakland.

Public comment will be accepted until 5 p.m. on Sept. 3. Comments can be mailed to Maureen Gray, regulations coordinator, Department of Industrial Relations, Division of Workers' Compensation, P.O. Box 420603, San Francisco, CA 94142.

Comments can also be sent by fax to 510-285-0687 or by email to dwcrules@dir.ca.gov.

The rulemaking notice, Initial Statement of Reasons and proposed rules and notice forms are here.

The draft rules and public comments from 2013 are here.

DWC's IMR Meetings Premature

The noise over the volume of Independent Medical Review requests and Maximus' inability to cope with that volume is at top level and the California Workers' Compensation Institute's latest research paper is certainly going to add to the fury.

The Division of Workers' Compensation has scheduled round table meetings with interested groups for Monday and Tuesday. CWCI's release couldn't be more timely.

CWCI says that basically IMR (and underlying Utilization Review) are working as intended.

The say that only 5.9% of requested medical procedures are delayed, denied or modified through utilization review, and that three out of every four medical treatment requests are approved by claims adjusters without the need for additional oversight.

Moreover, CWCI found 76.6% of the 919,370 treatment requests it evaluated that were sent out for physician review were approved, 6.6% were modified and 16.9% were denied.

One-in-four treatment requests being sent for physician review and one-in-four of those physician-reviewed requests denying or modifying the recommendation means that 94.1% of treatments are approved and 5.9% are denied.

CWCI also reviewed 1,141 independent medical-review decisions that had been issued as of Jan. 2 and found 78.9% of denials are upheld by the administrative review and 21.1% are overturned.

Of the 919,370 medical treatment requests reviewed by CWCi researchers, "pharmacy" garnered fully 43% of all events - this is an astounding number and debunks quite a bit of what I previously thought was driving UR. Out of that amount 74% were approved, and 7.2% were modified, leaving 18.7% of the pharmacy requests denied.

What this really means is that out of all of the denied requests is that 395,329 "elevated" UR requests involved only pharmaceutical issues. Of that, 73,927 were denied, which means that about 18.5% of pharmaceutical requests end up denied.

CWCI recommends looking at a closed pharmacy formulary, like other states have implemented, to close that number even further.

What isn't answered is where all of these treatment request appeals to IMR are coming from.

As Jim Butler, president of the California Applicants' Attorneys Association, noted, CWCI looked at all treatment requests coming into the system including medical only claims, not just those from litigated cases or those involving severe injuries.

“Even if the percentage of denials appears small in relation to the number of requests approved, that still represents a large number of cases in which workers are not receiving the treatment recommended by their physician,” he said. “We estimate there could be 30,000 to 40,000 UR denials every month, and that needs to be addressed.”

I don't understand why that has to be addressed. UR denials do not equate to the same number of injured worker claims. A single injured worker may be making a dozen treatment requests from a couple of pills to diagnostic to surgical, all in a single treatment plan. To me this argument is obfuscating what really needs to be addressed - where the volume is coming from.

The study does not appear to answer why there are so many denials of treatment requests on cases that involve more severe injuries, Butler told WorkCompCentral.

But the study does sort of say what is going on, albeit indirectly - the more severe cases with attorney involvement likely are associated with elevated pain relief requests; i.e. narcotics and other associated opiate derivative drugs. That would explain why pharmacy requests are the bulk of IMR review events.

CWCI's paper is a good start, but only a start. IF interested persons are honest with themselves and each other at the table on Monday and Tuesday then there should be some very solid evidence concerning the cause of the unanticipated volume of IMR requests.

But I'm not counting on that. Everyone has their position to protect, and no one is going to be willing to take the heat and look like a bad guy nor give up a potential bargaining position when it comes time to modify regulations and/or lobby Sacramento.

The next step is to figure out WHO is making the IMR requests - whether there is any correlation to attorney involvement, whether there is any correlation to geographic zones (for instance earlier this week the Workers' Compensation Insurance Rating Bureau released numbers showing the Greater Los Angeles are bucking the trend on frequency by quite a large number) and whether such requests are part of some other strategy on either side of the bargaining table.

In my opinion the meetings scheduled by the DWC on IMR issues are premature. We know how much, but we don't know from whom or where. Answer those questions and some meaningful solutions can be crafted.

Without those answers everyone is just wasting time and resources. And frankly this may be one of those situations where in a couple of years everyone has adjusted and the volume declines because folks will know where the boundaries are.

CWCI's study can be viewed here.

Dad's Lesson: Reasonable and Necessary

So what did YOU do on vacation?

I feel like a kid in grade school with that question. The two weeks I spent away from work, and away from this blog, were in the interests of getting some rest so I could return to the new year with energy, excitement and vigor in the world of workers' compensation.

But the reality of my time "off" is that I was mostly dealing with my aged parents, whom I visited every other day or so and interfaced with the various vendors rendering their care during the same time.

(Yep, I put a lot of flight time in N6641M this vacation between my home and Oceanside, CA!)

These past couple of weeks also put into sharp focus the conflict between medicine, reality and law because Dad's condition has stabilized to a poor quality of life with no good solutions, and Mom's dementia is progressing predictably but her health is better than ever at her age, which means that financial management is critical.

Dad & Mom: Holiday Spirit

Dad is bed ridden and this is probably the WORST outcome of any! Those of you who know me personally would likely testify that I have a rather high energy level. When I was a kid it was called hyper-activity (no attention deficit disorder though).

This characteristic was inherited from my dad. Folks familiar with my dad, even as he turned 91 last October before getting ill, marveled at how much he could get done, how much vitality he had, and the strength and stamina he exhibited.

Yep, Dad is hyper-active. That's DePaolo DNA.

For Dad to be confined to a bed all day, every day, is like putting a lion in a cage too small for the animal to turn around.

"Is this how life will end?" Dad asked me on one of my visits.

Hell, I don't know. No one knows. We come into this world with nothing, and we leave this world with nothing, and everything in between is what we call "life" - and because we are more humane to animals than our own species we can not undertake merciful termination without suffering significant legal consequences.

So, yep Dad, I guess this is how it all ends for some of us and it appears that way for you, unfortunately.

Dad made some poor decisions on the road to this state of being - he didn't comprehend that perhaps HE would be disabled and in need of 24 hour care for a protracted period of time. I don't think any of us did - when we decided to have him discharged from the hospital and into hospice care he and the family assumed there were maybe 2 weeks left in his life.

We were wrong.

And in fact Dad SEEMS to be more healthy now than when in the hospital, but that's not really the case. His congestive heart failure is taking longer than anticipated towards the mortality sign off, but he IS terminal - all of the medical professionals have the same conclusion.

The key is how to make this remaining time as comfortable as possible. Morphine was started early but that didn't sit will with Dad - he did not like his brain cloudy because his thoughts and ability to think were still clear and lucid. His brain functions normally and actively. Pain isn't the issue. Life is.

Dad wants to walk again so he can be productive feeling. His active brain tells him he can do that. His body has another answer.

He has atrophied terribly - he weighs a fraction of what he did when he was hospitalized in November. Now he is all skin and bones.

He is still his combative self and still believes that there is some physical ability left in him that would enable ambulation and self-care, despite what the experts all say. So he raised a fuss at 3 a.m. New Years Day, claimed his breathing was worse, got the nurse case manager from hospice over who called me at 5 a.m. to relay the news that Dad wanted to go to the hospital in the belief that after 3 days he would be discharged to a rehab facility for physical therapy.

"Dad, DON'T DO THAT ANY MORE!"  Yep, me and my siblings were a little upset with that stunt!

Because Dad didn't believe that he would ever be disabled his state of care is much more expensive than it otherwise would have been had he chosen a different living situation. After a few weeks of watching the expenses pile up and managing my folks finances it became very clear to me that they could not afford this for very long.

Something must change!

Exploring the different options, analyzing benefits, researching costs - all time consuming affairs (and the subject of another post later).

In the meantime Dad, at least psychologically, needs some physical therapy and exercise to keep his mind out of the bed.

But physical therapy isn't INDICATED for his state of being according to the medical literature and the insurance and hospice protocol!

Which brings me to workers' compensation - nearly every state follows some "guidelines" for medical treatment based on some element of professional consensus. Sometimes maligned as "cookbook medicine" the value of these guidelines is to maintain some consistency in medical treatment for a particular condition, which translates to consistency in treatment costs.
https://ww3.workcompcentral.com/news/story/id/a07c68b2c9b93e7cca1a10e060b7db69p
Consistency is what insurance companies and risk managers, and their actuaries, need - this helps them understand the financial aspects of the system to ensure that there is enough money to go around to everyone that needs it.

What happens of course is that conflicts arise between what is "reasonable and necessary" (the workers' compensation treatment standard) and what is actually good for the patient - because of course every patient, as in every case, is different, and not all benefits or risks are apparent in the guidelines (nor could they all be).

My dad is different - most people aren't hyper-active. They don't need that stimulation.

My dad does. It would be huge psychological boost and make his last days more pleasurable, and isn't that what hospice is supposed to accomplish?

Dad's personal physician made a house call the other night. He told my dad the dark, fatal, truth - "Andy, you're dying, but it's a slow death."

Dad's physician ordered up physical therapy. This isn't indicated at his level of care, is not provided for in the guidelines - who will pay for this?

The doc was confident that physical therapy would be provided and would be covered by insurance, either Medicare through hospice or my folk's secondary payer. He knows the systems, understands the protocol, speaks the language.

And isn't this the same as workers' compensation? There are limitations to what can be done in the workers' compensation treatment system, but if one knows the system, understands the law, speaks the language, exceptions can be made for the right case.

Honestly, the very, very best thing for Dad is death. That is really what he wants. But death isn't coming to him very efficiently and because our laws inhibit human euthanasia the patient becomes a victim of his own terminal illness.
https://ww3.workcompcentral.com/news/story/id/56ef678b6f8e3c33ab9818a31fe474e8m
In the meantime we are left with "cure or relieve." There's no cure for death, but there is relief and in my dad's case that relief is physical therapy, as limited as it may be. His body may have failed but his MIND is as hyper, as active, as powerful, as ever.

Physical therapy for Dad isn't about making him healthier, or bringing him back to productivity. It's about relief from the effects of his journey towards death.

I think sometimes we forget that ("relief") in the provision of workers' compensation benefits. We have tough jobs discriminating between those cases that are worthy of exceptions, but that's why we're professionals.

Sometimes the road to our final outcome isn't very clear and doesn't fit within our definitions. Sometimes we have to go outside the four corners of accepted protocol. When all this plays out on a personal level our sensibility of what is "reasonable and necessary" changes.

IMR: DWC Get Out of the Way

What is the purpose of California's Independent Medical Review?

I have to ask myself this question in light of the most recent proposed changes to Utilization Review/IMR rules published by the Division of Workers' Compensation (a whopping 75 pages long, albeit inclusive of all changes since origin).

What causes me to pause is that the new amendments would allow a medical reviewer to, “issue a determination as to whether the disputed medical treatment is medically necessary based on both a summary of medical records listed in the utilization review determination,” and additional documents submitted by the employee or requesting physician.

In addition, the latest amendments reverse the order in which documentation is mandated - prior versions of the regulations said the claims administrator shall provide the documents. This version provides that the IMR entity shall RECEIVE documents. I don't know why this was done, but to me it seems bass-ackwards.

Finally the pending amendments would allow the DWC administrative director to determine that an IMR decision is not valid because the case should not have been deemed eligible for review in the first place. The rules would say the director can vacate an IMR determination at any point unless an appeal has been filed with the Workers' Compensation Appeals Board or the time to file an appeal has expired.

IMR was statutorily authorized by Labor Code section 4610.5, added via SB 863.

LC 4610.5 provides a list of the documents that are mandatory for an IMR to occur:

......

(l) Upon notice from the administrative director that an independent review organization has been assigned, the employer shall provide to the independent medical review organization all of the following documents within 10 days of notice of assignment:

(1) A copy of all of the employee's medical records in the possession of the employer or under the control of the employer relevant to each of the following:

(A) The employee's current medical condition.

(B) The medical treatment being provided by the employer.

(C) The disputed medical treatment requested by the employee.

(2) A copy of all information provided to the employee by the employer concerning employer and provider decisions regarding the disputed treatment.

(3) A copy of any materials the employee or the employee's provider submitted to the employer in support of the employee's request for the disputed treatment.

(4) A copy of any other relevant documents or information used by the employer or its utilization review organization in determining whether the disputed treatment should have been provided, and any statements by the employer or its utilization review organization explaining the reasons for the decision to deny, modify, or delay the recommended treatment on the basis of medical necessity. The employer shall concurrently provide a copy of the documents required by this paragraph to the employee and the requesting physician, except that documents previously provided to the employee or physician need not be provided again if a list of those documents is provided.

......

That's a lot of potential records, but let me make this easy for the reader.

The first and most important word in this entire sub-section is "SHALL," as in SHALL PROVIDE.

The second most important word is "ALL," as in "ALL OF THE FOLLOWING DOCUMENTS" and "ALL OF THE EMPLOYEE'S MEDICAL RECORDS."

There is nothing in that section that authorizes an IMR decision based upon a summary of records.

Section 4610.6 governs the conduct of an IMR.

There is nothing in that section that permits any review based solely on a summary of anything. Indeed, subsection (b) of 4610.6, while allowing review of numerous "other" documents and relevant information provided presumes that there will be a complete record in that subsection (e) requires citation to "the employee's medical condition, the relevant documents in the record, and the relevant findings associated...."

Subsection (g) of 4610.6 makes the findings of the IMR the determination of the Administrative Director, so I suppose that there is a remedy for the affected injured worker to appeal when the AD summarily denies UR based on an incomplete IMR record, or an IMR request is denied due to lack of documentation since the first reason given for appeal is "The administrative director acted without or in excess of the administrative director's powers."

But why even go there? Doing so completely defeats what I understand to be the purpose of IMR - which is to expeditiously and finally make a determination of medical necessity for a proposed treatment (for a whole year by the way, so that at least the request can then be shifted over to group/general health if that's available, or maybe MediCal... but that's another post).

If the parties are going to be required to appeal a faulty decision of the AD then it serves no one any purpose. The reason for IMR is to alleviate judicial intervention and while an appeal doesn't take the matter back to the adjudication level it does unnecessarily delay the treatment decision.

The proposed rules entertain concepts that are not part of SB 863, are not necessary to IMR functionality, and do not further the concept of expeditious review of medical decisions.

Let's stop fooling around. This really isn't a difficult proposition. The code is clear - if the employee disputes a UR determination then the employee requests IMR. At that time ALL relevant records MUST be delivered to IMR by the employer/carrier within the prescribed time frame.

Any failure in that regard is simply a matter of delay and is covered by 4610.5(i):

"(i) An employer shall not engage in any conduct that has the effect of delaying the independent review process. Engaging in that conduct or failure of the plan to promptly comply with this section is a violation of this section and, in addition to any other fines, penalties, and other remedies available to the administrative director, the employer shall be subject to an administrative penalty in an amount determined pursuant to regulations to be adopted by the administrative director, not to exceed five thousand dollars ($5,000) for each day that proper notification to the employee is delayed. The administrative penalties shall be paid to the Workers' Compensation Administration Revolving Fund."

Note that the code says "has the effect of delaying." Not that there was a delay, not that there is a complaint of delay, but that the action of the claims administrator has the EFFECT of a delay.

Boom - penalty!

It really is that simple. At least the proposed regulations do recognize these penalty issues, but with pages of various complex penalty situations.

We have a great tendency in California workers' compensation to make things as unnecessarily complex as possible. 75 pages of regulations to implement the relatively simple concept of UR and IMR is just out of control.

If you can read these without getting a headache then bravo for you. I'm going back to bed though - my head hurts...

Maybe It's Not Reasonable And Necessary

One of the big debates concerning California reform is whether changes to Utilization Review process to incorporate the subsequent Independent Medial Review is working.

Skeptics have pointed out the surge in IMR requests when the law mandated that all UR denials are subject to IMR regardless of date of injury or service.

When that happened the IMR company, Maximus Federal Services, saw a huge increase in business.

And the blame game started.

Some blamed the applicant attorneys who are alleged to appeal every single UR denial, despite validity and accuracy, because there is no disincentive to do so and/or they are trying to make a statement.

Others blamed the carriers and administrators for using UR too much and forcing IMR in situation when they should just approve the procedure and payment.

Still others blamed the doctors for requesting procedures without adequate documentation or support.

But I hear from representatives of the various groups involved in the controversy that they want the system to work.

Applicant attorneys tell me that it is destructive to their clients to go through the time and effort for an IMR review, stating that they just want necessary and appropriate care for their clients.

Carriers and administrators tell me that they are just following the law, that sometimes some treatment requests have gone through UR and IMR when the economics didn't justify it but that otherwise their concern is to provide reasonable treatment that complies with the Medical Treatment Utilization Schedule.

Doctors likewise say that all they want to do is get their patients the treatment they think is reasonably necessary.

Some UR denials occur because of a lack of documentation. Some are because procedures fall outside the MTUS. Still others don't meet regulatory or legal requirements.

It seems to me, though, that all of this misses the reality that about one quarter of all UR determinations are overturned by IMR, which is a ratio consistent with what is experienced in the general health sector.

What this means is that what is occurring in workers' compensation, though of greater volume that originally predicted, is mirroring the behavior of the general health market which is mostly Medicare and Medicaid.

So I have to wonder whether IMR is really broken? Perhaps it really IS working. Perhaps all of this attention and complaining is for naught and all of us are just a little shell shocked because we're not used to what is going on.

The thought when IMR was introduced was that there in fact would be a period of high volume, and some discontent with the system, but that the noise would quiet once people adjusted and got used to the system.

I know that there is research pending on IMR utilization and results, and likely there will be more research. IMR drivers will be identified, trends will be noted, suggestions will be made - all of this will help us understand how to best utilize the process and/or navigate the process.

So, I'm wondering if there really is anything to be upset about at this point. Perhaps we really don't have enough information. Perhaps we're panicking because this is a new process to which we haven't adjusted.

When we really get down to it, the problem doesn't stem from UR, or IMR, Maximus or the Administration. The problem doesn't reside with any single, individual, or faction within the system.

The problem is that workers' compensation at the level that UR and IMR operate is an adversarial system.

This means that people fight.

When people fight it costs money.

I think that IMR can work if people will work together. We all have differences of opinion as to what is reasonable and what is necessary.

That's why there are guidelines, rules and regulations - to put some sort of framework around the nebulous terms "reasonable and necessary."

This is supposed to reduce the adversity and increase compliance.

I have a strong suspicion that if one really closely inspects what is going on with UR and IMR the underlying cause for such disputes is because someone somewhere along the path of treatment request failed to follow a guideline, rule or regulation.

When the researchers publish their works we'll find out. In the meantime I've decided I'm not going to panic. We need to make clear, precise, and well informed decisions. At this point our collective decision making capabilities are clouded by uninformed emotion.

Genetic Testing?!

The reason lawmakers and regulators create rules that seem onerous and ponderous to the vast majority of us is because there are "outliers" that ruin it for everyone else because of indescribably selfish behavior.

There's always someone taking a new angle to take advantage of the liberal rules of workers' compensation for their own profit regardless of the social consequences. This seems particularly acute in California, but nevertheless occurs in other jurisdictions too.

Recently posted in the WorkCompCentral Forums was an inquiry as to whether anyone else in the community is starting to see bills for unsolicited services related to genetic testing for drug addition predisposition.

The author of the post, an attorney for the employer/carrier, says that the case in question had been settled. In preparing the settlement documents a review of California's Electronic Adjudication Management System database was conducted to identify all parties. Nearly all lien claims had been settled, but one remained stubbornly immovable (and I'm not even clear that the parties were ever properly served and/or noticed of this particular vendor until the end of the case).

For this one particular lien the claim file notes apparently show a request for billing and report after discovery of the vendor in the EAMS search. The carrier got fax copies of a bill and report with a demand for payment.

The bill was for $3,626.00 for the genetic testing.

According to the post, the initial report, based on an exam 5 months post injury, is silent about any request. There was nothing about the injured worker previously having any problem with any type of medication which might make a doctor want to see if a predisposition existed.

The reason given in the report for the genetic testing was the patient "presenting with clinically-validated, and established risk factors."

I wonder if the injured worker actually knew that he had presented "clinically-validated, and established risk factors" of drug addiction...

The forum post further says that buried in the documents including the Explanation of Benefits is an unsigned form by the doctor, quoting ACOEM without citation stating genetic testing is supported "when it is clear that the genetic trait directly affects job performance, when the trait being screened for predisposes a worker to significant, constant adverse outcome following an otherwise acceptable workplace exposure. Clearly, opioid abuse is such a significant consistent adverse outcome following acceptable exposure to prescribed pain medication."

Apparently the lien claimant also forwarded to the defense attorney an EOB from some company in Wisconsin claiming a value of $2,352.00.

Here's the really sad part - the attorney admits that it is a real possibility that the carrier will just settle rather than take the issue to trial.

This testing in my opinion is just another new attempt to milk a comp claim by an unscrupulous provider. There is no reason, no justification whatsoever, for genetic testing to determine predisposition to addiction. Please... there is no valid medical science that can justify this.

It's a shame if the carrier settles. Doing so just provokes more of this BS, and frankly it would show that the carrier doesn't really care about the employer, or about the work comp system in general because the cost just gets passed through to the employer via x-mod. My guess is if this were a vigilant self-insured there would be no question about a challenge and putting an end to such madness before it escalates.

This is the kind of crap that absolutely should not be tolerated in work comp. I'm all for treating an injured worker with the benefit of a doubt and providing medical TREATMENT and benefits that are reasonable, necessary, and supported by valid science.

Genetic testing for pre-disposition to addiction is silly, unwarranted, with no valid basis whatsoever. If the physician is concerned about addiction then the remedies are already available: ACOEM, ODG and the others all have guidelines for the APPROPRIATE prescription of pain medication, including opioids; OR just don't make such prescriptions!

Maybe I'm wrong. Maybe there really is some valid, justifiable reason for over $3,000 of genetic testing ... beyond someone's shameless, unconscionable profiteering off the backs of injured workers and their employers.

I try to keep an open mind. But I just can't in this case.

Postscript: The case number involved is ADJ8124670, and I understand the vendor is SALUGEN MEDICAL GROUP - the case is set for a lien conference on 10/23.

New York, Guidelines and Culture

It took 3 years since New York's workers' compensation reform was signed into law mandating treatment guidelines.

It took another 3 years for the first basic set of guidelines to be issued by the state's Workers' Compensation Board.

And it took another 3 years for the first level of appellate review to tell New Yorkers that times have changed and that evidenced based medicine is the law of the land.

In The Matter of Kigin v. State of New York Workers' Compensation Board, No. 515721, is creating noise in New York workers' compensation circles as the first appellate case to consider how the guidelines should be applied.

The New York 3rd Appellate Division ruled that an insurer could deny a request by an acupuncturist to exceed the number of treatments called for by the guidelines to relieve neck and back pain suffered by injured worker Maureen Kigin.

In March 2011, Kigin's doctor, a board-certified osteopathic surgeon, requested authorization to exceed the allowance for acupuncture treatments to treat Kigin's ongoing neck and back pain from a work-related car accident some five years before.

Liability for that claim had been assigned to the Special Fund for Reopened Cases. The fund denied the doctor's request on the basis that the doctor had not demonstrated the medical necessity of the extra treatments.

A workers' compensation law judge upheld the fund's decision, as did the Workers' Compensation Board.

The Appellate Division's 3rd Department rejected Kigin's challenge to the board's pre-authorization scheme, arguing that the board had exceeded the Legislature's grant of authority in enacting the regulations, and that the regulations were in conflict with their enabling legislation.

The court said that "medical necessity has always been a prerequisite to the employer's obligation to pay for medical tests and treatment," and since the Legislature "purposefully conferred the authority on the board to predetermine medical necessity for medical care, and its scope and duration," the board "acted within its legislatively conferred authority when it devised a list of pre-approved medical care deemed in advance to be medically necessary for specified conditions."

Kigin's attorney has vowed to take the matter up to the state's highest court.

In the meantime the board continues to be burdened with requests for variances.

According to the Workers' Compensation Alliance (a statewide coalition of injured workers and other stakeholders chaired by Kigin's attorney Robert Grey of Grey & Grey) website, the board also holds about 2,000 hearings per month on variance applications and spends about $60 million annually dealing with all the work associated with the requests from doctors.

That's a big charge on the system, but points to a troubling and difficult culture in New York.

It's taking time. Lots of time. But the culture of New York's workers' compensation system is changing.

Lots of state workers' compensation systems go through this culture shock. There is denial, then resistance. Eventually there is resignation, and ultimately acceptance and adjustment.

New Yorkers are a hearty, tough bunch of people. Change doesn't come easy, but change is coming. While it's taken eight years for the state to come to grips with guideline based treatment, ultimately the population will adjust.

The stark reality is that treatment guidelines are necessary because people don't know how to behave themselves, and for the vast majority of cases they are the right thing at the right time.

General health has guidelines. The Affordable Care Act initiated guidelines on a federal level. Nearly any state of any consequence has workers' compensation guidelines. Guidelines promote efficient medical practice and efficient workers' compensation case management because of stability and predictability.

If the WCA is right, that the state is spending $60 million a year on variance requests, then there is a huge issue and one that needs to be addressed with more court opinions affirming the legislature's intent, and affirming the power of the board, to implement and enforce standards in medical treatment.

Some people aren't going to be happy with this restriction, but it is reasonable, and it is necessary.

New York may have to take a lesson out of Texas' and California's play-books and come up with an independent medical review system that follows utilization review.

Time to pick some other argument. ACOEM, ODG, Reed - there are many others. There may be some variance between the different treatment guidelines, but not much. The reason is because evidence backs these works, and doesn't back an individual physician's recommendation of acupuncture on an ongoing basis for 5 years.

That's just the way it is.

Medical Board's Review of Review Physicians

One of the big controversies that has surrounded utilization review (UR), and now independent medical review (IMR) is whether the physicians conducting these reviews were engaged in the "practice of medicine" and thus subject to review, and possible discipline, from the medical board in the state where the case originates.

At least in California, the Medical Board has recently opined that UR and by extension IMR is the practice of medicine subject to review by the board.

The California Medical Board has been under review by the legislature recently on allegations of lax enforcement against physicians.

As part of the review legislators specifically asked the board whether it felt it had powers over UR and IMR physicians.

As a consequence of a treating doctor's complaint to Assemblyman Henry Perea, D-Fresno, the legislator initiated an inquiry into the board's position on the issue.

After informal discussion failed, Perea sent a letter to Dr. Sharon Levine, president of the Medical Board at the time, asking whether the board considers UR the practice of medicine and how it arrived at its conclusion that it has no oversight of UR doctors.

The letter in addition asked whether contracts with insurance carriers, specifically in this case the State Compensation Insurance Fund's (State Fund) letter to its medical provider network physicians (MPN) requiring physicians to agree not to prescribe more than a 60-day supply of compound drugs or opioids without prior approval as a condition of enrolling in its network.

Medical board staff counsel issued an internal memo opining that historically the board did not investigate complaints that are “not based upon an attempt to leverage the outcome of a UR treatment decision or compensation claim, but rather to ascertain whether the standard of care is being followed.” The April 10 memo says the board classifies such complaints as “non-jurisdictional.”

The memo also details how the Labor Code trumps other law and that the Workers’ Compensation Appeals Board “has exclusive jurisdiction over any controversy relating to or arising out of the medical treatment of an injured employee.”

The Medical Board's response to Perea was that it considers utilization review to be practicing medicine and also states that it will “not automatically deem UR complaints non-jurisdictional” and that “a physician is not insulated from potential discipline from the board simply because he or she is under contract to a (workers’ compensation) insurer, private or otherwise.”

There is renewed interest in requiring UR and IMR physicians to be licensed in the state as a consequence because then the Medical Board would then have disciplinary jurisdiction over such physicians.

In 2011, Gov. Jerry Brown vetoed AB 584, which would have required work comp UR physicians to be licensed by the Medical Board of California.

This year, Sen. Jim Beall, D-Campbell, introduced SB 626, which included provisions requiring all doctors doing utilization review and independent medical review be licensed in California. Beall pulled his bill in April and plans to pursue it again in 2014.

But in the meantime, while the Medical Board undergoes its review, Sen. Curren D. Price, D-Los Angeles, who is chairman of the Senate Business, Professions and Economic Development Committee, has filed SB 304, a bill that would transfer medical board investigators to the state Department of Justice and give the department the authority to investigate and discipline doctors.

Price has been critical of the Medical Board's investigation, enforcement and discipline record.

The question is whether the Medical Board's current position, that it will investigate complaints that a utilization-review physician has fallen short of established standards of care, something it has previously not done, is in response only to attacks on its survival, or because the board truly feels it has a duty to the public to do so.

Either way, the board is in a tough position. It is basically admitting ipsa loquitur to a failure in the recognition of its duties in the past.

Sometimes workers' compensation drama occurs outside the direct workers' compensation world but can have far reaching impact. How the Medical Board review drama plays out will steer how the industry conducts UR and IMR going forward.

AL DRs Dodge Bullet ... This Time

In workers' compensation there's only one pot of money from which everything must get paid.

Consequently when one subject of workers' compensation is targeted to get more money, another subject is targeted to get less money.

In most attempts at "reform" the subject of more money is usually the claimant/employee, and quite often the subject targeted for reductions is the medical provider community.

That was tried in Alabama, but didn't quite make it this year.

Senate Bill 453, by Sen. Del Marsh, R-Anniston, failed to get enough votes to clear the Alabama's Senate Business and Labor Committee and is done for the year.

The bill would have increased the payment period for nonscheduled permanent partial disability awards from 300 weeks to 400 weeks, raised the maximum attorney fee from 15% to 20% and hiked burial expenses from $3,000 to $6,500. It would have also altered the formula used to calculate weekly PPD benefit rates and allowed workers with salaries above the state's average weekly wage to collect as much as $447.18 a week. Currently, the maximum weekly benefit is capped at $220 a week.

The increases would have come at the expense of medical treatment reimbursement.

Existing Alabama law caps medical reimbursements at the "prevailing rate," which requires consideration of "the most commonly occurring reimbursements for health services" procedure codes and use of assistant surgeons. SB 453 would have eliminated the "prevailing rate" language from Alabama's workers' compensation statutes and would have implemented firm caps detailed in the workers' compensation fee schedule.

It may have been that SB 453 could have survived except for the provision shifting control over the workers' compensation fee schedule from the Medical Services Review Board to the Alabama Department of Labor. Existing statutes give the Medical Services Review Board control over the fee schedule, which is comprised of five physicians.

The bill would have reduced representation on the Board from five physicians selected from a list of 15 submitted by the Medical Association of Alabama to 2 physicians, one appointed by the medical association, and another representative of hospital interests from the Alabama Hospital Association.

Al Henley, president of the Alabama AFL-CIO, told WorkCompCentral, "They omitted the medical community, who was (previously) allowed to be on the board to determine the rates. That is what had them fired up."

Alabama remains one of the few states left that pays doctors according to a prevailing rate.

I don't know if lawmakers in Alabama will revisit "reform" next year. My suspicion is that the issue is not dead.

The national trend is clearly towards fee schedules, and "guided" utilization practices (not to mention administrative adjudication of disputes). Eventually, states succumb to the prevailing trend because of the threat of competition for business, which means competition for jobs. And lawmakers need to retain and grow jobs in order to maintain the tax base.

Alabama's medical community dodged a bullet. The leaders will need to start bargaining now though, because clearly medical vendors are in the cross hairs of "reform" when it comes around in next year's session.

Revered or Reviled - TN Shifts Burdens

Tennessee is making workers' compensation history.

I'm not sure it's going to be history that will be revered, or reviled, however.

The Tennessee House of Representatives on Thursday voted 68-24 along party lines to approve Senate Bill 200 Thursday morning and sent the bill back to the Senate, which approved an earlier version of the bill 28-2 on April 1. The Senate is expected to routinely approve an amendment added in the House that will require the state Division of Workers' Compensation to submit annual reports on the impact of the reforms beginning in 2015.

I think history will revere the part of SB 200 that creates a new Court of Workers' Compensation Claims.

Tennessee and Alabama currently use their state civil trial judges as the first venue for resolving workers' claims disputes.

The governor will be able to appoint a DWC administrator for two six-year terms. The administrator, in turn, would appoint workers' compensation judges. The governor would then appoint a three-judge appeals court.

The new court would handle disputes involving job-related injuries or illnesses occurring on or after July 1, 2014. Appeals of decisions from the DWC would go to the Tennessee Supreme Court, where the chief justice could send the cases to special panels of three judges. At least one member of each panel would have to be a justice of the Supreme Court.

I think this is a tremendous improvement to the dispute resolution system for Tennessee. Like the concept of workers' compensation itself, the new work comp court will be largely administrative in processes and should result in much more expeditious processing of litigated claims. Everyone wins with this proposal in my opinion.

SB 200 also will institute medical treatment guidelines after a consortium of doctors, insurers, employers and labor groups make their recommendation prior to Jan 1, 2016.

Again, a positive development in my opinion. Most states have guidelines now, and while guidelines have been criticized as "cookbook medicine" depriving individuals of choice, the fact is that for the vast majority of claims guidelines reduce delay in authorization and expedite payment to physicians because they eliminate disputes.

Other provisions that bring Tennessee into the 21st Century include creation of an electronic medical bill submission and payment process by July 1, 2014, and an ombudsman's office for injured workers who aren't represented by attorneys.

Not all claimants who would like some legal advise can get an attorney because their case may not be perceived to have sufficient value for attorney involvement - the ombudsman program should assist these claimants and such programs in other states have proven very effective in reducing disputes simply by providing workers' compensation claimants with better information.

Now for the revilement.

The new AOE/COE standard in Tennessee will make workers' compensation largely irrelevant and will transfer much of the social burden that should be covered by work comp to other state systems and the general health scheme.

The legislation limits compensation to injuries that arise "primarily out of and in course of employment" only if a worker can show by a preponderance of the evidence that employment contributed more than 50% to the cause of the injury. 

In order to treat injured workers, doctors would have to attest to a "reasonable degree of medical certainty" that more than 50% of the need for medical treatment was caused by in injury.

These provisions should eliminate a large chunk of workers' compensation claims because there is no doctor, when utilization review appeals are going to be subject to a $250 fee, that is going to stick his financial neck out and provide treatment with these draconian standards.

The effect is to shift the burden of treatment for injuries that would otherwise be covered industrially to the general health system, which means, essentially, shifting the burden further upon all of the productive taxpaying citizens of the state.

In addition, while at first blush it would seem that SB 200 increased indemnity benefits, in fact what the bill does is reward failure in education and production by increasing permanent disability rating factors for lack of education and demonstrable unemployment where the claimant lives.

Injured workers on partial disability who've been unable to return to work or have a job earning less than their pre-injury wages could petition DWC to multiply the award by a factor of 1.35. The bill also would increase the award by 1.45 if the worker lacks a high school or general equivalency diploma, by 1.2 if the worker is older than 40 and by another 1.3 if the worker lives in a county where the unemployment rate is 2% higher than the statewide average.

Essentially, the bill says, "let's keep the poor even poorer" by making sure that those with less education are rewarded for not getting that degree and rewarding the unemployed to huddle together away from the nice, employed, productive (and wealthy) areas of the state.

Backwards thinking if I ever read it....

SB 200 is here.

The NCOIL Answer to Special Interest Profiteering

The National Conference of Insurance Legislators (NCOIL) has adopted a model repackaged drug law that would cap prices.

Physicians groups, including the Florida Medical Association, the Maryland State Medical Society and Maryland Workers' Compensation Health Care Association, are arguing that doctors will stop dispensing drugs if price caps become law in Florida and Maryland.

Florida lawmakers are scheduled to debate a proposal to cap the price for repackaged drugs at the original manufacturer's average wholesale price plus a $4.18 dispensing fee for the fourth year this session.

Maryland lawmakers are considering a bill that would limit physicians to dispensing a 30-day supply of drugs to injured workers within 72 hours of an injury or discovery of an occupational disease.

Automated Healthcare Solutions (AHS), which sells dispensing software to doctors, argues injured workers face delays from carriers and pharmacies when doctors don't dispense the drugs.

Arizona, California, Colorado, Connecticut, Georgia, Illinois, Michigan, Mississippi, South Carolina and Tennessee all have adopted rules capping the price of repackaged drugs.

Idaho just passed a law that ties payments for repackaged drugs to the original manufacturer’s wholesale price without any separate reimbursement for the doctors who dispense the medications. The rule takes effect July 1.

But Hawaii can't get a deal done. None of the four repackaged drug bills introduced in Hawaii were passed ahead of a March 7, 2013, deadline for bills to move from their house of origin.

Some states, such as Texas, prohibit physician dispensing whatsoever.

Perhaps it is coincidental, or maybe it's part of the equation, but Texas' workers' compensation costs are among the lowest.

So here we have a plethora of states, likely with good data, to either enforce or refute the arguments advanced by AHS, the Florida Medical Association, the Maryland State Medical Society, the Maryland Workers' Compensation Health Care Association, and others who are against repackaged drug price caps or physician dispensing prohibitions.

It seems to me that if these folks had a good argument they would be presenting studies based on the data from these states that have implemented different practices to determine: a) whether doctors stop dispensing drugs if there are price caps and, b) what sort of delays, if any, are faced by injured workers who can't get their drugs from their doctor directly.

Maybe they have an argument, but if they do then it should be supported by data and facts, not hyperbole. Prove it and the skeptics will shut up.

But without solid evidence behind the arguments I, and many others, am having a very tough time believing the prognostications of dooms day for injured workers or physicians.

In the meantime, the NCOIL model requires:

• Prices be based on the average wholesale price set by the original manufacturer and assigned to the National Drug Code used by the original manufacturer or on the stock packaging used by the authorized drug distributor.
• All pharmaceutical bills submitted for repackaged drug products include the NDC number of the original manufacturer registered with the U.S. Food and Drug Administration or the manufacturer's authorized distributor.
• Reimbursements to be based on the current published manufacturer's average wholesale price – calculated on a per unit basis – as of the date of dispensing.
• A repackaged national drug code shall not be used and shall not be considered the manufacturer's NDC number. When providers don't include the manufacturer's NDC number, reimbursements should be limited to the average wholesale price assigned to the lowest priced therapeutically equivalent drug.
• Dispensing fees otherwise provided in state law shall be payable when applicable.

I don't know - these model laws don't seem too terribly invasive or restrictive. It seems to me that there is still plenty of reasonable profit available when a physician dispenses drugs directly to the patient. The point is to remove the inherent conflict of interest - there's a reason why dispensation of drugs is, by law and by practice, done by a pharmacy.

So if the opponents to repackaged drug controls have good, solid, peer reviewed studies proving their anecdotal arguments, please share them with the industry.

In the meantime, states that are having a tough time regulating this practice need some legislators with some cajones, or at least a modicum of morals, to control what, to me, is nothing more than specialty interest profiteering at the expense of society. 

The Drug Debate Headed in Right Direction

The WorkCompCentral news this morning has two stories on prescription drug issues.

In one, the International Association of Industrial Accident Boards & Commissions (IAIABC) announced to the criticism of many that it was not going to publish a model law that seeks a standard for controlling narcotics.

In another a representative of the federal government's Drug Enforcement Administration (DEA) told attendees at the California Medical and Pharmacy Board's forum in San Francisco that it is working to put together a national prescription drug monitoring program.

In a press release, IAIABC said, "After thoughtful review by the Executive Committee, it was determined that adopting model legislation and regulation on opioid use could be interpreted as too narrow and restrictive for jurisdictions.

“The Executive Committee was concerned the models could unintentionally create conflict in jurisdictions that may be already taking steps to initiate regulations for appropriate guidelines.

“However, they contain valuable information, and as such the Executive Committee is asking that the issues addressed in the drafts be re-framed to offer policy considerations rather than a single policy response,” the IAIABC said.

Joseph Rannazzisi, deputy assistant administrator in the Drug Enforcement Administration's Office of Diversion of Control, told attendees at the San Francisco forum that a national prescription drug monitoring program that links together all the states is one of the things that officials in Washington, D.C., believe can help clamp down on excessive prescriptions, and that there are "a lot of proponents to get funding" for a national prescription drug database in Congress.

The IAIABC has received criticism for its position, and while perhaps disappointing the organization's announcement on the model law is consistent with its longer-term position on the topic.

In a press release in March, 2012, IAIABC said that, "This is a complex solution that will not be solved by passing a law or learning about one successful program; it can only be resolved by sustained initiatives at every level of the workers’ compensation system."

What may be more significant, in this era of the Affordable Care Act (ACA) and approaching deadlines for state compliance with its provisions, is that the federal government is taking another step towards nationalization of health care with its drug database.

It's a difficult balance between state rights and independence, and control over a national problem.

While some states have implemented successful controls over their narcotics problem (e.g. Ohio and Texas) there are other states that have not done so (e.g. Georgia) so the market shifts across borders to those states that fail to implement effective programs.

In federal terms this is called "interstate commerce" over which the federal government has some Constitutional authority.

Michael Botticelli, deputy director for the National Drug Control Policy, said at the San Francisco forum that since Florida passed legislation implementing a prescription drug monitoring program and prohibiting physicians from dispensing Schedule II and Schedule III drugs from their offices, officials have seen a spike in prescription drug shopping and overdose deaths in Georgia. A national drug monitoring program would help prevent that, he said.

Botticelli's observations are supported by federal statistics.

On Wednesday, the Centers for Disease Control and Prevention (CDC) published findings in the Journal of the American Medical Association showing drug overdose deaths increased for the 11th consecutive year in 2010.

CDC's analysis shows that 38,329 people died from a drug overdose in the United States in 2010, up from 37,004 deaths in 2009.

Overdose deaths involving opioid analgesics increased from to 15,597 in 2009 to 16,651 in 2010.

In 2010, nearly 60% of the drug overdose deaths (22,134) involved pharmaceutical drugs. Opioid analgesics, such as oxycodone, hydrocodone, and methadone, were involved “in about three of every four pharmaceutical overdose deaths (16,651), confirming the predominant role opioid analgesics play in drug overdose deaths,” the CDC said.

A federal drug control database would help to control that market in states that can't get their own issues under control. The danger of course is further independent state loss of control over the medicine that is practiced within state borders.

It's a delicate balance, but is something that is inherent in the friction between the federal and state governments. When states don't do things that the federal government sees as necessary or priority then a shift occurs in the power to govern.

IAIABC said that it will still issue some recommendations for states to be published, it hopes, as policy recommendations rather than a single model law at the IAIABC Forum in Des Moines, Iowa, April 29 to May 3. So I don't really see IAIABC's decision not to publish a model law as necessarily withdrawing from the debate, only that they are stepping back in recognition that there are several different paths to the same outcome.

Maybe there isn't any disconnect between state action and federal initiatives - maybe they go hand in hand so that states which do have effective drug policies can participate in large scale data systems that will assist in controlling drug abuse and, presumably, provide economic benefits within state borders.

And the states that don't have a policy will be able to see through IAIABC's efforts what works, what doesn't, or come up with some other novel solution.

One thing is certain - there is quite a bit of interest and activity in both state and federal governments to come to terms with effective, responsible, prescription drug policies.

It's all headed in the right direction.