WCDefenseCA

It is no secret that I’m a fan of Medical Provider Networks.  A useful tool in California’s Workers’ Compensation defense practice, MPNs save the employer money in medical treatment, filter out junk-science reports, and protect the injured worker from being tricked into adopting a cash-cow posture for less-than-ethical medical practitioners.

Although an employer/insurer can set up an MPN fairly easily, and impose upon the injured worker the duty of using it (if the employee expects the employer to pay for the treatment), there are a few small cracks in the wall.

One such crack can be found in Labor Code § 4616.2, subsection (d)(3)(B).  This exception to the general rules of MPNs allows the current non-MPN treating physician to continue treating the employee for up to 12 months for a “serious chronic condition.”  The determination is initially made by the employer/insurer, and the employee can dispute the determination, first by requesting a report from the treating physician and then by getting a panel QME.

According to section 9767.9(e) of the California Code of Regulations, a chronic condition is one “that persists without full cure or worsens over 90 days and requires ongoing treatment to maintain remission or prevent deterioration.”

In other words, the employer must approve the continuation of treatment for the serious chronic condition, for up to one year, starting on the day that notification is received by the employee.

[Note, as per § 9767.9(f), notice must be sent to the employee and the employee’s treating physician, in English and Spanish, that the employer/insurer has determined that there is not a serious chronic condition and that the employee will be transferred into the MPN.  The regulation also provides that “to the maximum extent possible” layperson’s terms must be used in this notice.]

In other words, dear readers, if you are thinking of adopting an MPN, this is one of the delay tricks doctors and employees will use to stay out of it as long as possible.  This provides them with an additional year to rack up the bill on treatment and produce one report after another.  [Note – under subsection (h), the employer, insurer and employee all have the right to have this matter resolved by going to a panel qualified medical evaluator.]

By no means does this take away from the great value of MPNs – but it is something to be aware of before refusing to pay for an extra year of non-MPN treatment.

From time to time, your humble author mentions the wonderful defensive maneuver of establishing a Medical Provider Network.  Therefore, instead of recapping the many benefits of the MPN, I will modestly allow my dear readers to click the link and review my old posts on the subject.  But, as beneficial as it, applicant’s attorneys, lien claimants, and applicant-friendly Workers’ Compensation Judges try regularly to chip away at the MPN’s effectiveness.  With that preface, I mention the recent writ denied case of Charter Oak Unified School District v. Workers’ Compensation Appeals Board (Salvador Cerda).

Applicant sought treatment from a doctor within the MPN, but the treatment was administered at a different address, for a different entity, and under a different tax ID number than what was listed in the MPN.  While the case-in-chief settled, the lien claim of the treating physician proceeded on the question of whether membership in the MPN is specific to the treator or to the location/entity.

The Workers’ Compensation Appeals Board found that the membership in the MPN pertains to the individual physician, and a different address/ entity name/ tax ID number does not negate membership.  That decision being made, the lien claimant’s other argument of an invalidly noticed MPN was rendered moot.

In reading this case, it is important to note that the prospect of contracting around the effect of this decision is a promising one.  In establishing the MPN, a contract clause could be inserted to the effect that the treating physicians will only treat at their registered facilities, and not at other offices.

By no means does this negate the benefits of the MPN, but it important to keep our eyes open for further encroachment on the few effective cost-control measures available to defendants.

In previous posts we discussed the case of Valdez v. Warehouse Demo Services, how it provided force for the medical provider networks, then vanished in a puff of smoke as the commissioners of the Workers’ Compensation Appeals Board needed to think more about their various positions on the issue.

Your humble blogger expressed concern that the WCAB would attempt to fix something that had not yet been broken,  by rendering the MPN system useless and without force.  It appears that those concerns were much like the mythical city of Gregtopia– unfounded.

The original Valdez decision proclaimed that the reports of treating physicians outside a validly established MPN are inadmissible and the defendant is not liable for the costs incurred of treatment or drafting the report.

The WCAB then took time to consider the issue further, reasoning that there might be instances in which non-MPN treator reports are admissible.  The verdict is now in – there aren’t.

Over the concurring in part/dissenting in part opinions of two of the five commissioners, the WCAB finally concluded that the MPN provides a shield against increasing litigation and questionable medical opinions.

In what is no doubt an overstatement of the gravity of this decision…

As you might recall, the Valdez case, which is presently awaiting a new decision from the en banc Workers’ Compensation Appeals Board, was discussed here and here.

The original Valdez decision held that medical reports from doctors outside of defendant’s Medical Provider Network are inadmissible, and the defendant is not required to pay the bills for these reports.

Recently, the Court of Appeals issued a writ denied opinion for a WCAB decision with a similar holding – non-MPN doctors’ reports are inadmissible.  (Scudder v. Verizon California (2011Cal. Wrk. Comp. P.D. Lexis 138)).

The order denying applicant’s petition for writ of review can be found under the citation 2011 Cal. Wrk. Comp Lexis 126.

Had the Court of Appeal granted the petition for writ of review (and, ideally, affirmed the Scudder WCAB panel opinion) the Valdez case may have very well been moot.

Two of the commissioners on the Scudder panel are on the Valdez en banc panel as well.  Hopefully that is grounds for some optimism as to how the en banc decision in Valdez will ultimately empower or cripple Medical Provider Networks in California Workers’ Compensation practice.

As always, brave readers, when I know more, so will you.

In an earlier post, I mentioned the Valdez v. Warehouse Demo Services (en banc) case, in which the Workers’ Compensation Appeals Board first ruled that defendants are not responsible for treatment bills originating outside of a validly established Medical Provider Network, before deciding to take more time to consider the issue.

While we are in limbo, waiting to see who foots the bill for extra-MPN charges, a thought comes to mind about the companion arena to the MPN: what about the Pharmacy Benefit Networks established pursuant to Labor Code § 4600.2?

In the case of Brambila v. Vons, Inc. (2010), the WCAB denied a lien-claimants petition for reconsideration of the Workers’ Compensation Judge’s ruling that liens asserted by extra-PBN suppliers of drugs are not valid or enforceable.  The WCAB denied reconsideration, relying on § 4600.2.

(As an aside, I have had lien-claimant argue that because the injured worker didn’t understand the PBN network notices, the PBN does not apply to the worker and he or she can obtain drugs wherever he or she wants.  But even if the worker doesn’t understand the plain meaning of the notice, the pharmacist does, and the meaning of the objection letters that followed the first filled prescription as well.)

Since the WCAB now needs more time to consider whether or not insurance companies and self-insured employers are liable for extra-MPN treatment, is it possible that the same reasoning applies to extra-PBN dosages.  The Valdez case is newer and en banc, giving it controlling power over Brambila.

Until the Valdez decision comes out, Brambila is still good law.  If lien-claimants demand payment of extra-PBN liens, settle for token amounts or rush to trial before the WCAB changes its mind in Valdez!

In April of 2011, the Workers’ Compensation Appeals Board issued a firm rebuke to applicants’ attorneys and lien claimants all over the state:  “where unauthorized treatment is obtained outside a validly established and properly noticed MPN, reports from the non-MPN doctors are inadmissible, and therefore may not be relied upon, and … defendant is not liable for the cost of the non-MPN reports.”  (Valdez v. Warehouse Demo Services).

The advantages of setting up a Medical Provider Network are many, some of which are discussed here.  In particular, under Labor Code § 4616 insurers and self-insured employers can set up networks of medical providers, and all treatment must be received from one of the providers in the network.

In Valdez, applicant was provided treatment within the insurer’s MPN for an admitted injury.  After a month of such treatment, applicant began receiving treatment from a doctor outside of the insurer’s MPN at the behest of her attorney.  Apparently this was because the MPN doctor’s treatments were not helping her, yet she never contacted the insurer to find a different doctor within the MPN.

The WCJ awarded additional temporary disability, relying on the report of the non-MPN doctor.  The WCJ further allowed a lien from the Employment Development Department for the TD period.

In response to defendant’s petition for reconsideration, the WCAB held that the law was the law, and absent a situation in which defendant refuses to provide medical treatment “that is reasonably required to cure or relieve the injured worker from the effects of his or her injury”, the MPN stands.

But then the WCAB blinked, and now we have the NEW Valdez opinion.  On July 14, the WCAB issued a new en banc opinion, calling for more time to study the issues of the Valdez case.  Hopefully the new opinion will not “fix” what isn’t broken.

As soon as your humble blogger knows more, so shall you.  In the meantime, I would hope for the best.

Let’s say applicant has managed to wring an award of permanent total disability out of the defendant-employer.  Future medical treatment is, of course, included.  The defendant wisely established a Medical Provider Network under California Labor Code § 4616, and the applicant’s treating physician is within this network.  What’s the problem?  Glad you (mentally) asked…

Applicant, after a few years of treatment, receives a phone call from her primary treating physician’s assistant.  The assistant explains that the PTP is no longer taking workers’ compensation cases.

The applicant calls her lawyer who calls the defendant who gets to work finding a new PTP for applicant.  Why is the defendant heading up the search?  Because Labor Code § 4600 says that “[m]edical … services … shall be provided by the employer.”

After several months of phone calls and searching, it appears that applicant’s (former) PTP was not the only one – none of the physicians in defendant’s otherwise valid MPN are taking workers’ compensation patients.

Before too long, defendant’s adjuster is staring at applicant’s declaration of readiness to proceed and the “present issues” field has the box “other: penalties” clearly checked.

These are the essential facts of Rodriguez v. Pea Soup Andersen’s Best Western (2011), a recent Workers’ Compensation Appeals Board case addressing the issue of who bears the burden of finding a physician for applicant.

The WCAB ultimately found that defendant’s MPN was defective in that there was no physician within applicant’s geographic area willing to treat her.  As such, defendant was obligated to pay for a PTP of applicant’s choice outside of its MPN.

Regarding penalties, the WCAB held that defendant had made reasonable efforts to find a physician for applicant, and that no unreasonable delay had occurred.

Ultimately, this case stands for the point that an MPN is, unfortunately, not a static thing but a creature that changes and grows this the seasons.  In order to retain the protections of the MPN, much like retaining the protection of a camp-fire in the outdoors, the MPN must be fed and tended to with regular maintenance.

If State Compensation Insurance Fund can restrict its doctors’ abilities to prescribe compound drugs, perhaps a contract clause regarding notification should be included as well?

When an MPN doctor stops accepting workers’ compensation patients, that doctor should notify the insurer so that a replacement doctor could be found while other doctors are still accepting workers’ compensation patients.

Even with this limitation, MPNs remain a great tool for protecting the applicant from unnecessary treatment and overmedication while also protecting the insurer’s reserves from being sucked dry.  But, as with all great things in life, their continued benefits require continued vigilance.

A story making the rounds recently is the announcement that State Compensation Insurance Fund (State Fund) has implemented a new contract within its medical provider network.  Labor Code § 4616 allows self-insured employers and insurance companies to create Medical Provider Networks (MPN) which limit the list of treaters an applicant can choose.  State Fund already had an MPN in place, but in mid-June sent out additional requirements for membership to the physicians in its MPN.

Essentially, the new terms restrict the provision of more than 60 days of supplies for opioid medications unless the prescribing doctor shows cause.   Another limit is placed on prescription of compound drugs.  The compound drugs are a money-maker for some doctors.  Because doctors make their own varieties, these drugs are not any medical schedule and have no set price – that bill goes to the self-insured employer or insurance company, of course.  The Insurance Journal has an article on it here.

Here is the take of the California Society of Industrial Medicine and Surgery on this matter.  I imagine that, even without clicking the link, you can guess how an interest group advocating for a major source of income for its members feels about the breaks being put on the proverbial gravy train.

Taking the position that these compound drugs are necessary to treat patients, the SCIMS is trying desperately to make State Fund appear the greedy villain, denying patients the medication they need.  This contention is easily addressed – if doctors would lower the prices of these compound drugs to reflect a reasonable profit over the cost of production, this cost-cutting restriction would probably not be necessary.  An accusation of greed serves as a sharp sword, but one that cuts both ways.

Not only will a limit on opioids serve to protect patients from over-prescription, but it will also limit the amount of drugs entering the black market.  At the California Self-Insured Association Fall Educational Program in 2010, I heard a gentleman speak about the services his company provided – drug testing of applicants to make sure they are actually taking, and not just re-selling, the drugs they are prescribed!

As an aside, your humble author can’t recommend this conference enough – the lectures are informative, and the case materials and law updates prove to be a useful resource and desk-reference for the rest of the year.  If you have the time, contact Phil Millhollon about attending, I’m sure you won’t regret it.

Basically, some of the physicians are upset that the compound and opioid prescription faucet is tightened to a trickle.  Naturally, the California Applicants’ Attorneys Association is unhappy with this as well.  Inflated future medical treatment estimates translate easily into larger Compromise and Release figures, and increased need for expensive compound drugs and opioids plays to this as well.

So far, State Fund is standing its ground, and I salute its courage and determination.

Just a word on MPNs – if properly established, they are a fantastic tool to cut costs.  The MPN can be used to filter out doctors who over-prescribe, over diagnose and/or engage in fraud.  The notice requirements of MPNs have even withstood elastic interpretation regarding notice requirements.

State Fund is setting a great example, and hopefully more insurers and self-insurers will follow suit.  With enough properly established and properly limited MPNs, we can form a phalanx against fraud and workers’ compensation abuse.

Labor Code section 4616 allows for the creation of a Medical Provider Network (MPN).   MPNs are an effective way to reduce excessive medical bills.  Although applicants and their attorneys might sometimes disagree, MPNs also serve the injured worker by preventing excessive, unnecessary and sometimes dangerous “treatments” from being administered to the unknowing applicant.  The MPN is one of the gems that came out of SB-899 and California Workers’ Compensation reform.

When an applicant demands treatment or a treator, the MPN is a great defense against overpriced and over prescribing samples of both, but it also comes with technical requirements that must be met for it to be valid.  Among these requirements is the necessity of providing the worker with written notice of the existence of the MPN.

That’s all well and good, but what if the applicant can’t read?  The Workers’ Compensation Appeals Board recently addressed this issue in the case of Rodriguez v. Grimmway Enterprises, Inc.  (As an aside, it appears that Grimmway Enterprises, Inc., is self-insured.  For some of the benefits of self-insurance, see here.)

There, the applicant was illiterate, and the employer’s notices regarding its MPN went unanswered.  Oddly enough, applicant’s attorney, who in all likelihood is literate, was copied on these notices as well, yet did not respond to them.

The WCAB held that applicant is not entitled to self-procure medical treatment because “[t]here is nothing in the rules requiring defendant to determine applicant’s literacy and there is no evidence that defendant knew or should have known of applicant’s illiteracy.”

Reading this case, a few questions seem to come forward:

(1)   What if the applicant is literate, but only in a language other than English?

(2)   What if the defendant had known that the applicant was illiterate?

One is easily answered – 8 CCR § 9767.12 specifically state that the notices regarding an employer’s/insurer’s MPN are to be made in English and Spanish.  If your applicant is only literate in Russian, Portugese, Gaelic or any language other than English or Spanish, then it appears he or she is out of luck.

Regarding the second question, there is no way to know for certain.  The language used by the WCAB appears to leave open the question of what would have happened had the employer known that applicant was illiterate.  In any case, whatever heightened duty the WCAB might find owed by the employer to its illiterate employees, your humble author would argue that this duty is discharged by serving a copy to applicant’s attorney.  Ideally, the attorney would be (1) literate; and (2) familiar enough with his or her client to know that he or she is NOT literate.

Another point that is so obvious that it might go unnoticed is the following:  since reconsideration was granted, the Workers’ Compensation Judge agreed with applicant’s position.  This is another example of the discouragement defendants can often experience, but it is also an example of why decisions absolutely must be appealed and fought, especially when they are in clear conflict with the law.

In either case, Grimmway made the smart move by (1) setting up an MPN; and (2) sending written notices in English and Spanish.  Are you doing the same?