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A storm is brewing over the State Compensation Insurance Fund’s recent correspondence that medical providers will be required to sign a new contract to remain in the SCIF MPN.

Here is the text of a letter from CAAA’s current president, Barry Hinden, addressed to Destie Overpeck, Chief Legal Counsel of the California Division of Workers Compensation and to Christine Baker, Director of the California Department of Industrial relations:

“Destie Overpeck, Chief Legal Counsel
Division of Workers’ Compensation
Department of Industrial Relations
1515 Clay Street, 17th Floor
Oakland, CA 94612-1402

Dear Ms. Overpeck,

The California Applicants’ Attorneys Association has reviewed the State Compensation Insurance Fund MPN General Provisions and Criteria recently sent to all providers in the SCIF MPN (copy attached). We believe that this document constitutes a modification to the SCIF MPN which must be filed with and approved by your Division pursuant to California Administrative Code section 9767.8. If SCIF has not filed a Notice of MPN Plan Modification, we urge the Division to immediately order SCIF to withdraw this material until such time as proper Notice is filed and approval is secured. Alternatively, if this material has been filed with your Division pursuant to section 9767.8, we believe numerous provisions of the Criteria violate California law, and we request that the Division immediately withdraw its approval and require that SCIF amend or delete the improper provisions.

Under CAC section 9767.8(a)(5), an MPN applicant must file with your Division any “change in the policy or procedure used by the MPN … to conduct ‘economic profiling of MPN providers’ pursuant to Labor Code section 4616.1.” In CAC section 9767.1, “economic profiling” is defined as “any evaluation of a particular physician, provider, medical group, or individual practice association based in whole or in part on the economic costs or utilization of services associated with medical care provided or authorized by the physician, provider, medical group, or individual practice association.” Because a number of items in the General Provisions and Criteria deal with the “utilization of services associated with medical care …” this document falls under the mandate of section 9767.8(a)(5) and must be filed with your Division before adoption and use.

In addition, the DWC should consider issuance of this material as a modification of at least 10% of the providers participating in the MPN, which is also subject to approval pursuant to CAC section 9767.8(a)(1). The cover letter sent out with this material informs physicians that the contract must be returned by June 30, 2011, and that absent return of a signed and notarized contract by that date the physician’s membership in the MPN will cease. This means that if even a relatively small number of physicians either refuse to sign this contract or neglect to return the contract in a timely manner, there could be more than a 10% change in the composition of SCIF’s MPN effective July 1, 2011 that would trigger the mandate of section 9767.8(a)(1).

In fact, as of July 1, 2011, SCIF will effectively have an entirely new MPN, and not even SCIF now knows who will be members of that MPN whether the new MPN will include sufficient numbers to comply with the access requirements set forth in CAC section 9767.5. Should SCIF’s actions result in a change of more than 10% in the membership of the MPN, or should the loss of some physicians result in a violation of the access standards, we believe the failure of SCIF to comply with the notice and approval requirements of CAC section 9767.8, as well as underlying the statutory requirement in Labor Code section 4616(b) that plans for an MPN must be submitted to the Administrative Director “for approval,” renders the SCIF MPN invalid effective July 1, 2011.

The failure to withdraw this document will place workers in an impossible situation. As of July 1st and for some undetermined period thereafter, injured workers will have no way to identify which physicians remain in the SCIF MPN. Workers will not be informed whether their treating physician has met the June 30th deadline, or whether other treating physicians or specialists in the MPN have complied with SCIF’s requirements. This uncertainty may cause disruptions in treatment, if SCIF now considers the treater a non-MPN physician, will delay the worker’s ability to change physicians or select a specialist, and may raise questions regarding the admissibility of reports and evaluations from the now non-MPN physician (see Valdez v. Warehouse Demo Services, WCAB En Banc decision, April 20, 2011).

For the above reasons, we respectfully urge that the Division immediately order SCIF to withdraw the MPN General Provisions and Criteria until such time as a proper Notice of MPN Plan Modification is filed and approved.

Should this material have already been filed with and approved by your Division, we strongly urge that the Division withdraw that approval and immediately notify SCIF of that action. There are numerous provisions in that document that violate California law. For example, Criteria #17 violates numerous mandates of Labor Code section 4610, including the time deadlines and the critical mandate that only a licensed physician may modify, delay, or deny a request for authorization for treatment. Criteria #20 prohibits even the prescribing of compound drugs, which not only violates the mandate of Labor Code section 4600 to provide “medical … treatment … that is reasonably required to cure or relieve the injured worker,” but also improperly sidesteps the entire utilization review process in violation of section 4610.

Most alarmingly, Criteria #21 limits certain treatment “not withstanding MTUS ….” This provision violates Labor Code section 4616(e), which provides that “all treatment shall be provided in accordance with the medical treatment utilization schedule established pursuant to Section 5307.27 . . . .” In addition, this violates section 4600(b) which states that “notwithstanding any other provision of law, medical treatment that is reasonably required to cure or relieve the injured worker from the effects of his or her injury means treatment that is based upon the guidelines adopted by the administrative director pursuant to Section 5307.27 ….”

Although SCIF has the right to establish contracts governing its MPN, it cannot adopt contractual provisions that restrict the injured worker’s right to treatment that is reasonably required to cure or relieve from the effects of the injury. Any provisions in this material that improperly restrict treatment must be deleted or amended to correct this violation, and any approval that may have been given to this document should be immediately withdrawn.

In summary, if the State Compensation Insurance Fund has not filed a Notice of MPN Plan Modification prior to distribution of the MPN General Provisions and Criteria to member physicians, CAAA urges the Division to immediately order SCIF to withdraw this material until such time as proper Notice is filed and approval is secured. Alternatively, if this material has been filed with your Division pursuant to section 9767.8, we request that the Division immediately withdraw its approval and require that SCIF amend or delete the improper materials.

Sincerely,

Barry Harris Hinden, President
California Applicants’ Attorneys Association

cc: Christine Baker, Acting Director, Department of Industrial Relations
Julie Jenkinson, Executive Vice President, State Compensation Insurance Fund
Bernyce Peplowski, D. O., Medical Director, State Compensation Insurance Fund”

For readers of the blog, a bit of background is in order. In early June SCIF sent a letter to its network docs. The letter notes that to be in SCIF’s network doctors must agree not to prescribe compounded medicines.
Doctors must also agree that they will not prescribe opioid medications for more than 60 days without prior approval.

Obviously, SCIF is seeking to exercise control over two increasingly costly and controversial prescribing practices. SCIF has greatly shrunk from its days as the Goliath of the California workers’ comp insurance industry.
But its strategy, if implemented, could have a wide impact on who remains in the MPN and how medicine is practiced within the MPN.

CSIMS, representing doctors who practice and evaluate in the comp system, has charged that these restrictions are an “improper restraint on provider’s obligations to provide care by defining medical necessity, not on the basis of evidence based guidelines, but rather as a matter of contractual obligation”.

Simply stated, can a carrier seek to bar certain types of care if those types of care are not barred by evidence-based guidelines? Can contractual obligations trump the UR process?

Instead of engaging in this substantive issue, CAAA’s letter focuses on the mechanics of how SCIF has essentially modified its MPN by a process with procedural defects.

We’ll be hearing lots more about this struggle. Meanwhile, I suspect there are a number of doctors who are debating whether they want to enroll.

But perhaps that is the point?

Julius Young
www.workerscompzone.com
www.boxerlaw.com

Category: Political developments

Julius Young

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