Since 1993, legislators have been trying to develop ways to make delivery of medical benefits under California’s workers’ comp system function more like benefits under group health coverage. While not going as far as suggesting workers contribute to the cost of their care when injured on the job, use of provider networks and utilization review come straight from health insurance concepts.
Both reforms in 1993 (which created the health care organizations) and reforms in 2003-04 (utilization review and medical provider networks or MPNs) tried to create efficiencies by embracing health care insurance procedures for workers’ comp.
The timeframes in which payers must respond to billing requests also track language in the Health and Safety Code. Initial efforts at introducing independent medical review (IMR) have not met with success largely because of the Legislature’s refusal to divest the Workers’ Compensation Appeals Board (WCAB) of jurisdiction over medical treatment disputes.
Predesignation of treating physicians now has been strictly limited to use of providers within employers’ health plans, and disputes over treatment are now excised from WCAB — a model more employers should consider for their own workforce. Carve-outs now allow for negotiation of single panels of providers to deliver occupational and non-occupational medical benefits.
So it should come as something of a surprise that one of the more important obligations put on health plans is nowhere to be seen in the Labor Code — having an internal dispute process to resolve issues of medical provider billing. With employers standing at the precipice considering hundreds of millions of dollars in added permanent disability benefits as a cost to pay for bringing liens under control, it is something of a mystery to consider why this hasn’t been thought of before. But it does demonstrate once again that the gulf between human resources and risk management in even very large employers is at least as deep and as treacherous as the Ohain road.
For all those who feel compelled to do something this year in the Legislature, here is a modest proposal: Require MPNs to have a fast, fair and cost-effective dispute resolution mechanism under which providers may submit disputes to the MPN, and requiring the plan to inform its providers upon contracting with the MPN, or upon change to these provisions, of the procedures for processing and resolving disputes, including the location and telephone number where information on disputes may be submitted.
And make sure that an MPN ensures a dispute resolution mechanism is accessible to noncontracting providers for the purpose of resolving billing and claims disputes. (This arcane language is not from the author but from California’s Health and Safety Code.) Furthermore, if the provider is still not satisfied, it can go to the Department of Managed Healthcare (or the Division of Workers’ Compensation) and have a third-party review of the decision; in both cases the process is binding on the payer. DWC, like DMHC, can contract with third parties to conduct the review.
What would be the cost of all this? No more provider liens, period. To be clear, there still would have to be a mechanism before the Appeals Board to address compensation for providers of services, pending a determination of compensability. That doesn’t have to be adjudication but simply a referral to the existing DWC/DMHC process. Since WCAB doesn’t like enforcing contracts, at least we could have a mechanism where it doesn’t abrogate contracts, either.
Existing MPN provider contracts could require a waiver of lien rights and force billing disputes into a contract process. Unfortunately, without legislative intervention, there is no certainty that such agreements would be enforced by WCAB. Recent success by one self-insured enforcing its pharmacy benefit management contracts is encouraging, but it took far too much effort to secure and as yet is not binding on the judges. Rather than create a new bureaucracy within DWC, or establish an even more litigious structure for resolving liens before WCAB, employer negotiators would be well served to keep it simple, and away from the whole mess that has become the Workers’ Comp Appeals Board.
Will providers agree to this? Well, the promise of prompt pay has its appeal. If employers and insurers are willing to agree to have utilization review done only by California-licensed providers, there is no telling what may happen. If, on the other hand, employers continue to consider providers the enemy, then no relief is likely in sight.