(510) 286-2932        jyoung@boxerlaw.com

Our Blog

Interest in the difference between California workers’ comp as practiced in Northern vs. Southern California continues to build.

This was the topic at the 2016 WCIRB Annual Workers’ Compensation Conference in San Francisco, framed as “The California Conundrum. One System. Many Outcomes”.

I missed that meeting, but David DePaolo has done three thoughtful blog posts on “The California Conundrum” (see links at bottom of this post), which well summarize issues raised at that conference.

The concerns about the Northern vs. Southern California practice are not just academic.

They are at the heart of issues that are being tackled by a stakeholder group assembled in response to requests by several legislators and David Lanier, California’s Labor and Workforce Development Secretary.

The principal focus of those stakeholder meetings, which occurred last week, seems to be fraud by providers and their enablers.

Granted, in the last week there has been ample evidence that there are multiple other kinds of fraud or abuse in the system. For example, Insurance Commissioner Dave Jones came down hard on Berkshire Hathaway:

https://www.insurance.ca.gov/0400-news/0100-press-releases/2016/release066-16.cfm

And the Association of California Insurance Companies is pushing a bill, AB 2883, that would tighten some loopholes that some employers have used to wrongfully avoid paying workers’ comp premiums.

But the stakeholder group discussion I attended (which I understand was one of six or seven such meetings) principally focused on provider abuse.

Introducing the meeting, Christine Baker referenced in passing the concept of “gangrene” in the system. The dictionary defines that as “necrosis or death of soft tissue due to obstructed circulation, usually followed by decomposition and putrefaction” or “moral or spiritual corruption and decadence that pervades an individual or group”.

In Southern California there appears to be a plague of providers who have a web of referral relationships with cappers, other providers, and attorneys. In some instances this may extend to interpreters, durable equipment providers and various non-medical providers.

This is driving increasing lien numbers,claims frequency, c/t claim numbers, and various bad behavior practices.

I suspect we’ll see a mixture of statutory and regulatory reforms recommended by the DWC (and/or CHSWC, whose staff is participating but whose commissioners would need to vote on any report). And the ideas of some stakeholders may well find their way into various bills this legislative session or some sort of omnibus bill at the end of the session.

The relationship between the stakeholder meetings, a report proposing “a set of comprehensive and strategic policy considerations”, and a bill isn’t clear at this point.

It’s not fair to other attendees to try to summarize the discussion in the session I joined, nor was I trying to wear my journalist hat there.

From using data mining to pinpoint abusers to strengthening anti-fraud declarations, a range of issues were discussed.

What I can tell you, however, is that I argued for tightening rules about MPN use. 

While this is but one piece of a large problem, it is an important piece.

Here are some further thoughts on that subject.

The best way to deal with provider abuse is to limit their ability to treat on and file liens.

If a claim has not been filed and/or actual notice not provided to the employer, treatment provided on a lien should be conclusively disallowed. There could be exceptions for treatment provided by a county hospital/clinic, an ER, or group health plan. But no more phantom treatment and tests where an employer has not received actual notice of the claim. No more liens on delayed notice claims. The burden should be on the lien provider.

Once a claim has been filed but before the delay notice and or before the 90 days to accept/deny, the worker should be required to treat within the MPN. This requirement would kick in as soon as the employer or insurer sends the worker notice of the MPN. Yes, there could be disputes about whether and when this MPN notice was sent to the worker. But the law and regs could be written in such a way as to require a provider treating on a lien to do the following: (a) serve the report promptly  on the employer (no more phantom reports); (b) serve along with the report a certification signed by the worker certifying that the worker had received no MPN notice (require the worker and doctor to go on record on this issue); (c) a certification by the provider detailing any other providers to whom they referred the worker for tests, evaluation or treatment (no more phantom referrals); (d) a certification by the provider as to when the worker was first seen and by whom the worker was referred; (e) service on the employer of any reports from other providers that were addressed to the provider filing the lien.

The statute and regs should explicitly provide that a delay of the MPN notice can be cured.

For the most part, then, workers would thus be required to spend the $10,000 available under Labor Code 5402(c) before a claim is denied within the MPN (thus preventing use of the $10,000 pre-denial monies as fodder for provider abuse). Again, to avoid hardship, exceptions could be made where treatment is provided by a county hospital/clinic, ER or a group health plan where a worker seeing MPN treatment could not get a response or an appointment. I & A officers could be tasked to deal with situations where there is an unresponsive MPN.

Increased enforcement of MPN rules by the DWC would be the other side of the coin.

What about treatment on a lien after a claim is denied? There is concern that some claims (and especially some c/t claims) are “designed  for denial” and filed to trigger escaping the MPNs and going off-network.

But legitimate claims are often denied only to later be determined industrial. One meeting attendee correctly pointed out that few MPN doctors will be willing to treat on a lien if they know the claim is denied.

This is a difficult problem, particularly if the worker has no health insurance and for some reason can not access treatment at a county hospital/clinic. So altogether prohibiting off-network treatment for denied injuries does not appear to be an option.

What could be done is to create hard roadblocks to denied claims that become skin and contents affairs where a gatekeeper doctor is ordering massive amounts of tests and making referrals to multiple specialties. Regs could absolutely prohibit lien recoveries on treatments and consults that did not go through the UR process. Provider liens could be barred where a worker has refused without good cause to attend an employer Labor Code Section 4050 evaluation.

And the provider certification requirements suggested above for delayed claims could also be used for denied claims. Perhaps in a denied claim situation a lien provider should be barred from recovery if it can be shown that the worker was covered by health insurance, or alternatively, the lien provider be paid only to the extent that the worker had a deductible not covered by group care.

The point here is that there are a number of practical steps that could be instituted to make life harder and riskier for the cappers and groups that work with them.

These steps can be taken in conjunction with regulation of signing services , a hard look at whether workers’ comp advertising can be further regulated, and stepped up enforcement of lien assignment rules under Labor Code Sec. 4903.8.

Here are are links to the DePaolo blog posts on “The California Conundrum”:

The California Conundrum Part 1:

http://daviddepaolo.blogspot.com/2016/06/california-conundrum-part-1.html

The California Conundrum Part 2:

http://daviddepaolo.blogspot.com/2016/06/california-conundrum-part-2.html

The California Conundrum Part 3:

http://daviddepaolo.blogspot.com/2016/06/california-conundrum-part-3.htm

Stay tuned.

Julius Young

www.workerscompzone.com

www.boxerlaw.com

 

Julius Young

Comments are closed.