http://www.workerscompzone.com/index.php Copyright 2012, julius@workerscompzone.com julius@workerscompzone.com en-US SPHPBLOG 0.4.8 http://www.workerscompzone.com/index.php?entry=entry120515-085156
THe insurance market is not required to follow WCIRB recommendations or the rate finding of CDI. Rates continue to be far, far below the levels that were reached in before the 2003/2004 reforms.

Still, with the economy in a slow-mo recovery phase, Insurance Commissioner Jones is likely to look carefully at the request for any hike in the advisory rate. Prior Insurance Commissioner Poizner repeatedly swatted down requests for hikes in the "pure premium" rate.

What do the applicant attorneys think about the request?

Here is a statement addressed to Chris Citko of CDI from Brad Chalk, CAAA President (prepared with the help of Mark Gerlach, an insurance expert who consults for CAAA):

"Dear Mr. Citko,

The California Applicants’ Attorneys Association recommends disapproval of the pure premium rate filing submitted by the Workers’ Compensation Insurance Rating Bureau on April 12, 2012. The filing not only ignores the decision made by the Bureau’s Governing Committee just 6 months ago to refrain from filing mid-year rate changes absent "extraordinary circumstances," but it also fails to comply with the directive from Commissioner Jones to include disaggregated medical cost containment data.

With regard to the justification for a mid-year filing, we see no conditions that could be considered "extraordinary circumstances." Nor does the filing identify any "extraordinary circumstances" that would justify this proposal. The Executive Summary of the filing does state that the "system’s underlying costs have continued to deteriorate," but that hardly qualifies as an "extraordinary circumstance." And in any case, several charts in the Executive Summary show just the opposite – that cost pressures are abating.

For example, Chart 1 displays the estimated ultimate indemnity + medical + ALAE cost per claim over the period 2005 through 2013. This graph shows increases between 2005 and 2009, but little or no change from 2009 through 2011 (2012 and 2013 are disregarded as these figures are only projections based on the WCIRB’s inaccurate trend estimates). Charts displaying medical costs per indemnity claim, Chart 8, and indemnity costs per indemnity claim, Chart 9, show the same pattern – increases between 2005 and 2009, then leveling off between 2009 to 2011.

The projected ultimate on-level severity trends for both medical and indemnity benefits also follow this pattern (pages A:B-25 and A:B-26). The projected on-level severity for both medical and indemnity increased between 2005 and 2009, decreased in 2010, and then increased a minuscule 0.3% in 2011. In view of the sharp decrease in the on-level severity trend over the past two years, we recommend that the selected severity trends of 3% for indemnity and 7% for medical be rejected. These selected trends are not based on any actuarial computation, but were arbitrarily selected without any statistical justification. Reducing these trend factors to reflect the current experience will eliminate most or all of the indicated change in the pure premium advisory rates..

With regard to cost containment data, Commissioner Jones’ Decision and Order for the January 1, 2012 Pure Premium Rates included the following directive to the WCIRB – "With this order I am directing the WCIRB to include disaggregated medical cost containment expenses of insurers and an analysis of that data in its next filing."

The WCIRB may contend that this directive was intended to apply to the next "annual" filing, and not to a mid-year filing. That argument misses the point. As explained by Commissioner Jones, reviewing this cost containment data is one part of analyzing the efficiency of insurers. Calendar year data from the WCIRB and limited transactional data from the CWCI both show that cost containment expenses are the fastest growing "medical" cost. In order to accurately identify the real cost drivers in the system, it is important that the WCIRB comply with the Commissioner’s directive.

In analyzing the efficiency of insurers, it is also important to look at the sharp growth in allocated loss adjustment expenses. Chart 10 shows that the average allocated loss adjustment expense per indemnity claim has nearly doubled since 2005. As we said in our comments regarding the January 1, 2012 Pure Premium Rate filing, the causes of this increase may be beyond the scope of this pure premium rate hearing. However, loss adjustment expenses have become a major cost driver in the system, and we recommend that the Commissioner direct the WCIRB to provide more detailed data on these expenses, as well as an analysis of that data, in its next filing.

Thank you for the opportunity to comment on this rate proposal.

Sincerely,

S. Bradley Chalk, President

California Applicants’ Attorneys Association"

The hearing will be held at the CDI at 45 Fremont Street, 22nd Floor, starting at 1 p.m. today.

Stay tuned.

Julius Young
www.workerscompzone.com
www.boxerlaw.com]]> Political developments http://www.workerscompzone.com/index.php?entry=entry120515-085156 julius@workerscompzone.com Tue, 15 May 2012 15:51:56 GMT http://www.workerscompzone.com/index.php?entry=entry120513-153912
What are the implications for workers' comp?

On an anecdotal level, I recently had minor hand surgery at an ASC. The facility was incredibly efficient, with far less bureaucracy than I had experienced with even more minor procedures in a hospital setting.

In looking at the list of the doctors who own the facility and who practice there, I noted that many of the top orthopedic surgeons in the area were participants. Many of these are docs whose integrity and clinical judgment I greatly respect.

But a recently released study by the Workers' Compensation Research Institute of Cambridge, Mass. attempts to document a pattern of increased surgical utilization by owners of the centers.

Time will tell whether the statistical research done by WCRI on these issues holds up. The data studied was from Florida during 1997 to 2004, focusing on arthroscopies and carpal tunnel surgeries.

The study begins by noting that:
"Some studies have found that surgeon owners of ASCs perform more surgeries than surgeons who are not owners (e.g., Mitchell, 2010; Hollingsworth et al., 2010; Gabel et al., 2008; Lynk and Longley, 2002). These studies raise a concern about potential conflicts of interest that may influence treatment decisions and be inconsistent with high priority national goals of containing the rising costs of medical care while maintaining quality care."

The study, by Christine A. Yee points out that:
"In 2011, legislation was passed in California prohibiting doctors who own many kinds of medical businesses from referring their workers’ compensation patients to those businesses, or from using products from those businesses in their practices.2 This law, effective January 1, 2012, requires physicians who own these types of businesses, including ASCs, to inform insurers of their ownership. However, the law allows physician owners of ASCs to send patients to their own ASC for surgery, with payor preauthorization. Previously, California allowed self-referrals to ASCs, yet prohibited self-referrals to other types of entities."

Why do owned of ASCs do more surgery? There appears to be a recruitment effect, so that doctors who do lots of surgeries tend to buy into ASCs. Also, the study finds that surgeons can do more surgeries in ASCs, which are more efficient. Another reason claimed by the study are financial incentives. Yee claims that:
"They increased their surgery volumes by 14 to 22 percent due to the financial incentives, or 15 to 25 surgeries per year for the average surgeon who became an owner—compared with the number of surgeries that each of these surgeons performed prior to becoming an owner. This effect explained 14 to 21 surgeries in the difference in surgeries performed per year between owners and non-owners, or 18 to 33 percent."

Another factor was improvement in medical technology.

The WCRI charges that ASCs have tended to increase workers' comp volume:
"Relative to the types of patients they would have treated had they not been owners, ASCs provided more surgeries to patients covered by workers’ compensation, commercial indemnity insurance, and Medicare. These payors were higher-paying insurers at the time of the data. Due to owner financial incentives, the average surgeon increased the number of workers’ compensation patients by 17 to 23 percent and the number of patients with commercial indemnity insurance by 20 to 51 percent. Surgeons did not increase the number of patients covered by Medicaid and certain health maintenance organization (HMO) plans."

It is important to note that the WCRI study does not claim that the surgeries that were done were not necessary or that the surgeries had bad outcomes.
Specifically, the study says"
"This study did not address whether any of the additional surgeries (due to financial incentives, increased capacity from expanding one’s network, or ASC efficiency gains) were necessary or not. We also did not address whether they were cost-effective or not. If medically necessary and cost-effective, then increasing surgeon ownership would have improved access to surgical care for those who previously did not have access, in particular, those covered by workers’ compensation, commercial indemnity insurance, and Medicare. If the surgeries were not all necessary, then increasing surgeon ownership would be a cost driver and merit increased regulatory attention. This question deserves additional research using data on patient outcomes."

The WCRI study makes various general recommendations for payers and policymakers but notes that ASCs have many advantages, including costs.

Concluding, the WCRI study notes that:
"We speculate that physician ownership and the role of ASCs will become a bigger issue for injured workers and workers’ compensation payors in the next decade. The use of ASCs for orthopedic services and pain management services is growing rapidly (Koenig et al., 2009). ASCs may become as dominant a setting for services treating musculoskeletal and nervous system conditions as they are for eye surgery and gastroenterology today. Management companies of ASCs indicate orthopedics as the most desirable medical specialty in which to do business (Fields, 2011). Since many injured workers today are treated with these types of services, we may expect the issue regarding physician ownership of ASCs to receive more attention by regulators that oversee workers’ compensation systems in the future.
The efficacy of current policies intended to counteract adverse effects of physician ownership has not been determined. The optimal policy would curtail any adverse effects, while encouraging medical innovation focused on producing high quality and cost-effective care."

Wonks out there may want to download the study, which is chock full of data and graphs. (available for a fee) off of the WCRI website:
http://www.wcrinet.org/studies/public/b ... urgery.pdf

Stay tuned.

Julius Young
www.workerscompzone.com
www.boxerlaw.com]]> Medical treatment under WC http://www.workerscompzone.com/index.php?entry=entry120513-153912 julius@workerscompzone.com Sun, 13 May 2012 22:39:12 GMT http://www.workerscompzone.com/index.php?entry=entry120513-150922
Shakespeare's Hamlet had its Elsinore Castle in Denmark. South Pacific had its Bali Ha'i.

So it will be this year with California workers' comp, which will be on the table as the legislature struggles with deficits spinning out of control.

By the time you read this there will be few who haven't heard about California's $16 billion deficit .

A sour economy continues to result in poor revenue collection, pushing some hard choices to the fore.

How workers' comp will fare in budget revisions isn't yet known. Despite the fact that the system is supposedly user funded, that has not always spared the system from cuts. Under Schwarzenegger, judges and staff were furloughed, cutting hours and pay.

The choices ahead are grim, even if one of the proposed tax initiatives
(Munger or Brown) passes.

Civil courts are likely to see more cuts, putting the civil justice system in danger.

The pressure on workers' comp funding is likely to be extreme.

For a good assessment of some of the tough choices facing the Governor and legislature, I recommend this piece by John Myers, "Bigger deficit, bigger budget fight ahead":
http://www.news10.net/capitol/article/1 ... on-deficit

Stay tuned.

Julius Young
www.workerscompzone.com
www.boxerlaw.com
]]> Political developments http://www.workerscompzone.com/index.php?entry=entry120513-150922 julius@workerscompzone.com Sun, 13 May 2012 22:09:22 GMT http://www.workerscompzone.com/index.php?entry=entry120508-212905
That's according to data compiled by the National Association of Insurance Commissioners and the California Department of Insurance.

According to a bulletin from the California Workers' Comp Institute, workers' comp premiums have grown to $7.8 billion after reaching a nadir of $6.9 billion in 2009.

CWCI attributes the reductions from a 2004 high of $16.1 billion in written premium (net of deductible credits) to "high unemployment, payroll reductions and job shifts during the recession, legislative reforms, falling claim frequency, and a soft market that kept premium rates low despite rising claim severity".

SCIF continues to have the highest premium volume, though its market share continues to be far less than it was 10 years ago. SCIF actually continued to lose market share in 2011, down to 12.9% in 2011 from 16% in 2010.

SCIF's shrinking role has been a painful experience from much of its longterm workforce, including its legal staff.

Market share gains were posted in 2011 by Hartford, Travelers, Fairfax (which acquired Zenith), Berkshire Hathaway, Liberty Mutual, Employers Holdings Groups, Zurich and Everest.

AIG (now Chartis) was an exception, shrinking a small amount.

Still, with so many carriers in the California workers' comp market, even substantial increases in premium (comparing 2011 to 2010) written by these carriers did not translate into large market share increases. For example, Hartford premium jumped 38% but its market share only inched up from 6.4% in 2010 to 8% of the 2011 California market.

Overall, this appears to be good news. A wide number of companies appear to continue to be interested in participating in the California workers' comp market.

We're not seeing an exodus of carriers. And the top 10 carriers are mostly national insurance companies (except SCIF).

Stay tuned.

Julius Young
www.boxerlaw.com
www.workerscompzone.com]]> Understanding the CA WC system http://www.workerscompzone.com/index.php?entry=entry120508-212905 julius@workerscompzone.com Wed, 09 May 2012 04:29:05 GMT http://www.workerscompzone.com/index.php?entry=entry120506-222155
In an era when so much personal information may be found on the internet, is it appropriate for judges to do internet research about the parties appearing in their courtrooms?

I'm not aware of any instances in which this issue has arisen in California's workers' comp system, but it is likely to be coming.

Some claims adjusters and defense attorneys now check social media sites to see if they can uncover applicant activities that are inconsistent with what is reported by doctors or the claimant.

Last year a prominent defense attorney wrote a piece entitled "I Spy for Free". He noted that much can be gleaned now from Facebook and other sites.

Stuff that in the past investigators would have had to dig up now appears "in plain view" in some cases.

But is it appropriate for judges to go outside the scope of the evidence presented in the case?

This is an issue which has been raised now in connection with Social Security hearings held by federal administrative law judges who hear Social Security Disability and SSI cases for the Office of Disability Adjudication and Review.

An article in The Washington Times by Stephen Dinan notes that:
"The Social Security Administration last month told its disability-claims judges they are no longer to seek out information from websites when deciding cases — taking away a tool some of those judges say would help in uncovering fraud."

"Agency officials said reviewers can’t trust information posted online, and also said the mere act of typing in queries could compromise protected private information, so they shouldn’t try to access anything."

"Social Security’s ban covers all Internet sites, including social media such as Facebook."

"But Sen. Tom Coburn, Oklahoma Republican and a top taxpayer watchdog, said avoiding the Internet means giving up a valuable anti-fraud weapon — one that he said even federal courts have relied upon in some disability cases."

Apparently Social Security is taking the position that use of internet "information" is better left to fraud investigations of the Inspector General.

Efforts by ALJs to do investigations outside the courtroom can become a slippery slope. Perhaps judges should be allowed to look at internet material that is brought to their attention by a source.

Note that's different than the judge initiating his or her own searches.

Of course, Social Security is not adversarial, and there is no defense attorney at SSD/SSI hearings to represent the government's interest.

But to give the trier of fact wide-ranging investigatory license may start to confuse the role of the judge.

That's especially true in workers' comp, where employers and carriers are represented by attorneys who are capable of pointing out damning evidence.

The comp system should follow Social Security on this one.

Julius Young
www.workerscompzone.com
www.boxerlaw.com]]> Understanding the CA WC system http://www.workerscompzone.com/index.php?entry=entry120506-222155 julius@workerscompzone.com Mon, 07 May 2012 05:21:55 GMT http://www.workerscompzone.com/index.php?entry=entry120506-220701
Both easily won confirmation to their posts as head of the DIR and the DWC.

By all accounts, Moran and Baker work well together.

With reform efforts on the horizon, the political pressures on both will be substantial.

Each brings a unique background to the job of managing California's workers' comp programs. Baker has years of experience navigating workers' comp politics, dealing with stakeholder groups and policy wonks. Moran has extensive experience in the system from representing injured workers and serving as a workers' comp judge.

Congratulations to both.

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

]]> Political developments http://www.workerscompzone.com/index.php?entry=entry120506-220701 julius@workerscompzone.com Mon, 07 May 2012 05:07:01 GMT http://www.workerscompzone.com/index.php?entry=entry120501-222625
Yesterday I had a chance to catch one of the final sessions in Oakland.

It was interesting that the only specific mention of monetary savings I heard yesterday came from comments by SCIF's representative. SCIF claims that they project over a billion in achievable savings if certain changes are adopted.

By now it's clear that influential employer spokespeople are seeking to remove judges from making decisions about medical treatment. Apparently those stakeholders are unhappy with the current dispute resolution process.

But I'm not aware of any studies that show how this would generate savings.

And from the level of a practitioner, most treatment decisions are either dictated by UR physicians or by tie-breaker QMEs.

If numbers have been crunched on the savings that could be generated by other dispute resolution methods, I'm not aware of that. I don't believe that CHSWC has data on that issue at this time.

So this push may be philosophy driven rather than data driven.

Whatever. The push is on.

I'm told it is for some sort of IMR system. That's Independent Medical Review.

You'll likely be hearing a lot more about this. So to help you get up to speed, here is a link to a RAND report that analyzes different IMR models that could be used in California workers' comp (the HMO model, the Medicare model and the Texas workers' comp system model):
http://www.rand.org/content/dam/rand/pu ... ndixes.pdf

And here is a link to a study by the California Healthcare Foundation of the IMR program used with California healthcare plans:
http://www.chcf.org/~/media/MEDIA%20LIB ... istory.pdf

Stay tuned.

Julius Young
www.boxerlaw.com
www.workerscompzone.com]]> Political developments http://www.workerscompzone.com/index.php?entry=entry120501-222625 julius@workerscompzone.com Wed, 02 May 2012 05:26:25 GMT http://www.workerscompzone.com/index.php?entry=entry120429-174926
The baby boomer generation in particular has nurtured the notion that "seventy is the new sixty". Living longer, getting cosmetic surgery, bringing our pop culture along with us as we age.

Mick Jagger and Neil Young are still rockin'.

But there is rising angst as Americans recognize that retirement security is, well...not so secure.

This is highlighted in the results of a March 2012 study by the Employee Benefits Research Institute, written by Ruth Helman, Craig Copeland and Jack VanDerhai, titled "The 2012 Retirement Confidence Survey: Job Insecurity, Debt Weigh on Retirement Confidence, Savings".

Here are the key finding of the EBRI paper:
-"Americans’ confidence in their ability to retire comfortably is stagnant at historically low levels. Just 14 percent are very confident they will have enough money to live comfortably in retirement (statistically equivalent to the low of 13 percent measured in 2011 and 2009)."
-"Employment insecurity looms large: Forty-two percent identify job uncertainty as the most pressing financial issue facing most Americans today."
- "Worker confidence about having enough money to pay for medical expenses and long-term care expenses in retirement remains well below their confidence levels for paying basic expenses."
-" Many workers report they have virtually no savings and investments. In total, 60 percent of workers report that the total value of their household’s savings and investments, excluding the value of their primary home and any defined benefit plans, is less than $25,000."
-"Twenty-five percent of workers in the 2012 Retirement Confidence Survey say the age at which they expect to retire has changed in the past year. In 1991, 11 percent of workers said they expected to retire after age 65, and by 2012 that has grown to 37 percent."
-"Regardless of those retirement age expectations, and consistent with prior RCS findings, half of current retirees surveyed say they left the work force unexpectedly due to health problems, disability, or changes at their employer, such as downsizing or closure."
-"Those already in retirement tend to express higher levels of confidence than current workers about several key financial aspects of retirement."
-"Retirees report they are significantly more reliant on Social Security as a major source of their retirement income than current workers expect to be.
 Although 56 percent of workers expect to receive benefits from a defined benefit plan in retirement, only 33 percent report that they and/or their spouse currently have such a benefit with a current or previous employer."
-" More than half of workers (56 percent) report they and/or their spouse have not tried to calculate how much money they will need to have saved by the time they retire so that they can live comfortably in retirement."
-"Only a minority of workers and retirees feel very comfortable using online technologies to perform various tasks related to financial management. Relatively few use mobile devices such as a smart phone or tablet to manage their finances, and just 10 percent say they are comfortable obtaining advice from financial professionals online."

The study noted that:
"One reason for the difference between workers’ expectations and retirees’ experience of retirement age is that many Americans find themselves retiring unexpectedly. The RCS has consistently found that a large percentage of retirees leave the work force earlier than planned (50 percent in 2012) (Figure 33). Many retirees who retired earlier than planned cite negative reasons for leaving the work force, including health problems or disability (51 percent); changes at their company, such as downsizing or closure (21 percent); and having to care for a spouse or another family member (19 percent). Others say changes in the skills required for their job (11 percent) or other work-related reasons (23 percent) played a role. Some retirees mention positive reasons for retiring early, such as being able to afford an earlier retirement (33 percent) or wanting to do something else (28 percent), but just 8 percent offer only positive reasons."

Many injured workers find themselves in the big group that retires dearly due to health problems or disability.

This is one reason why any changes to California's workers' comp system need to be crafted very carefully.

With credible studies showing a huge drop in permanent disability indemnity benefits paid to disabled workers since 2004, there are many California workers who are even less prepared for retirement than they would have otherwise been.

That's why it is important to carefully consider how a benefit increase is done. How will a benefit increase be distributed between lower end disabilities and disabilities of workers who cannot return to work?

If procedural hurdles are placed in front of workers, and impairment rating standards further tightened, will an "increase" be illusory? If disability percentages are assigned increased monetary amounts on a chart but percentages of disability awarded are compressed, how will this actually play out?

If the Almaraz-Guzman and Ogilvie cases were to be deep-sixed, how do we know that workers would not be that much further in the hole?

I have yet to see any reliable studies on these questions.

Legislators and the workers' compensation press are going to want to know more as further discussions between stakeholders proceed.

The statewide DWC listening tour has been great. Let's hope that some of the ideas that have emerged can be used in systemic changes.

But pretty soon the DWC leadership and stakeholder leaders need to start floating some of their ideas.

It's too important to emerge from a back room as a done deal at the end of the legislative session.

Here is a link to the employee benefits study. The study is replete with interesting charts and tables:
http://www.ebri.org/pdf/briefspdf/EBRI_ ... 9_RCS2.pdf

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



]]> Political developments http://www.workerscompzone.com/index.php?entry=entry120429-174926 julius@workerscompzone.com Mon, 30 Apr 2012 00:49:26 GMT http://www.workerscompzone.com/index.php?entry=entry120425-223131
As I wrapped up some loose ends on the file, I printed out a log of "case activity".

The log was 33 pages long. There were about 800 activity entries. From the first meeting, filing the opening papers, to scanning in the settlement documents.

Entries of hundreds and hundreds of phone calls. Hundreds and hundreds of letters. Hundreds and hundreds of documents logged in or scanned.

And those are just the noteworthy calls, letters and documents. We wouldn't log or scan many of the random activities undertaken in the file.

I suspect the actual activity total was at least double if not triple.

Like a symphony played by an orchestra, there it was, laid out in the log. Notes from a receptionist, my secretary, my paralegal, our scheduler, and myself.

Responding to late checks, requests for advances, scheduling doctor appointments and depositions. Status discussions. Hand holding the applicant. Trying to explain why things happen. Explaining what may happen next. Taking information. Putting pieces of a puzzle together.
Putting out the "fires" which inevitably happen in cases.

In the workers' comp system, lawyers and judges get plenty of attention.

But in truth in many offices it is the staff that keeps the system running.

We're in the middle of what used to be "Secretaries Week", now commonly referred to as "Administrative Professionals Week".

Any office representing injured workers has a dedicated staff doing the sorts of things outlined above.

These are the workers who speak with the injured worker claimants, who hear the frustration and angst those workers voice. They are the folks who make many of the followup calls while the attorneys are in court and deposition.

It's not an easy job, but many of them do it year in and year out with aplomb. Many of them are incredibly dedicated.

They deserve our recognition and thanks. We couldn't do it without them.

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

]]> Understanding the CA WC system http://www.workerscompzone.com/index.php?entry=entry120425-223131 julius@workerscompzone.com Thu, 26 Apr 2012 05:31:31 GMT http://www.workerscompzone.com/index.php?entry=entry120423-205644
Operating multiple California hospitals (all but one in Southern California), Prime was founded in 2001 by a cardiologist, Dr. Prem Reddy. According to Prime's website, among the facilities Prime Healthcare Services currently owns and operates are Desert Valley Hospital in Victorville, Chino Valley Medical Center in Chino, Montclair Hospital Medical Center in Montclair, Sherman Oaks Hospital and the Grossman Burn Center in Sherman oaks, West Anaheim Medical Center in Anaheim, Huntington Beach Hospital in Huntington Beach and La Palma Intercommunity Hospital in La Palma, California.

Several of these hospitals have been under attack in the press and by regulatory authorities for some time.

A 2007 Los Angeles Times article referenced allegations that the hospital pursued profits by cutting unprofitable patient care offerings and canceling insurance contracts.

Later there were allegations that the hospitals were upcoding billings and doing a lot of treatment for conditions such as septicemia that were claimed much more often at the chain's hospitals.

In late 2011 the FBI was said to be investigating Prime's billing practices for patient care of the elderly.

And more recently the chain has been accused of "trapping".

It appears that the "trapping" claims refer to an alleged policy of hanging on to patients who would otherwise be transferred to the hospital serving the patient's insurer network.

How is this said to work?

Here are a few paragraphs from a piece done by a reporter for California Watch, Christina Jewett:

"If a Kaiser Permanente customer ends up in the emergency room of another hospital, Dr. John Shohfi and his team of Kaiser doctors and nurses expect to be informed.

They're on call 24 hours a day, coordinating care when Kaiser patients are treated elsewhere.

But when Prime Healthcare Services took over a chain of Southern California hospitals, Shohfi testified today, there was a noticeable change in his relationship with Prime and its doctors.

“No calls,” said Shohfi, an emergency room physician. “They just stopped calling.”

Two health care providers, Kaiser and Heritage Provider Network, have accused Prime of "trapping" or "capturing" their patients in Prime emergency rooms and hospitals in order to charge more for treating patients from outside their medical networks."

Prime's policies were the subject of a February 24, 2012 legislative hearing.
As with many of the varied allegations about Prime's policies, the chain disputes any claims of wrongdoing and cites various awards the chain has received and the positive role of the hospitals in their communities.

But concern over these policies has led to a bill, SB 1285, carried by Ed Hernandez (D-West Covina). Hernandez is chair of the California Senate Health Committee.

It's easy to see how "capturing" could be a problem in workers' comp, if out-of-network hospitals hang on to patients, driving up billings.

Although I'm not aware of any studies that have been done on a workers' comp component to these alleged practices, focus on the issue may cause some workers' comp payers to look at how this affects them.

This controversy comes in the wake of concern about the role economic incentives may be distorting the provision of care in California, particularly in the Los Angeles area.

Here is a link to today's article in California Watch by Ms. Jewett that explores the background on SB 1285.
http://californiawatch.org/dailyreport/ ... ents-15818

It's pretty dry stuff, but for wonks out there, the current version of SB 1285 contains this description:
"Existing law provides for the licensure and regulation of health facilities by the State Department of Public Health and requires a licensed facility that maintains and operates an emergency department to provide emergency services and care to any person requesting the services or care for any condition in which the person is in danger of loss of life or serious injury or illness, as specified. Existing law requires hospitals to maintain a written policy regarding discount payments for financially qualified patients as well as a written charity care policy. Existing law requires a hospital to limit the expected payment for services it provides to certain low-income patients to the highest amount the hospital would expect to receive for providing services from a government-sponsored program of health benefits in which the hospital participates. Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the act a crime. Existing law requires health care service plans, or their contracting medical providers, to reimburse providers for emergency services and care provided to its enrollees until the care results in stabilization of the enrollee.
This bill would require a hospital with an out-of-network emergency utilization rate of 50% or more to adjust its total billed charges for emergency services and care provided to a patient prior to stabilization to an amount no greater than the amount the hospital could expect to receive from Medicare for the services and care or, if there is no established payment amount by Medicare or if that amount is not sufficient to cover the actual cost to the hospital, an amount no greater than a good faith and reasonable estimate of the actual cost of providing the necessary services and care, as specified. The bill would specify that this provision does not apply to charges billed by emergency physicians, as defined, or to charges provided as treatment for an injury that is compensable for purposes of workers’ compensation. The bill would also specify that its provisions do not apply if any other law requires the hospital to limit expected payment for the emergency services and care to a lesser amount, if a contract governs the total billed charges for the emergency services and care, or if a government program of health benefits is the primary payer for the emergency services and care. The bill would require health care service plans or their contracting medical providers to reimburse hospitals in accordance with these provisions. Because a willful violation of that reimbursement requirement by a health care service plan or its contracting medical providers would be a crime, the bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason."

Stay tuned.

Julius Young
www.workerscompzone.com
www.boxerlaw.com]]> Political developments http://www.workerscompzone.com/index.php?entry=entry120423-205644 julius@workerscompzone.com Tue, 24 Apr 2012 03:56:44 GMT