SB 899 - A Detailed Review, Part 5: Medical Treatment

Saturday, June 19, 2004 | 0

This is the fifth in a series of articles extracted and edited from a new booklet attorney Michael Sullivan has prepared on the substantial changes to California workers' compensation laws instituted by SB 899. The earlier articles are available for reading by clicking on the links to the right.

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12. Employer Controlled Medical Treatment

Employer control of medical treatment was one of the most hotly contested and most dramatic changes of this reform legislation. To put it simply, as of January 1, 2005, if the defense has a network of physicians in place, it retains complete medical control throughout the lifetime of any claim for injury on any date.

As noted herein, Labor Code section 4600 commences the discussion of an employer network. Labor Code section 4600 used to provide for the applicant's ability to select a physician of his or her own choice at a facility of his or her own choice, 30 days after the date the injury was reported. This is now conditioned on the factor of whether the "employer or the employer's insurer" has established a medical provider network as provided for in Labor Code section 4616. Where such a network is established, the choice is limited to those physicians that exist inside the network.

It appears, then, that the defense industry has some work to do before the end of the year.

A. Establishment of a Medical Network.

Labor Code section 4616 indicates that on or after January 1, 2005, a medical provider network may be set up by an "insurer or employer." There is a considerable amount of speculation at this writing regarding the constitution of such networks. Will the industrial networks be reinvented? Will existing HCOs or PPOs be utilized? Naturally this means a big shift away from many doctors who have set up their businesses based on the concept of treating applicants. Naturally those who represent applicants are especially concerned regarding the orientation of network physicians.

However, the legislature has provided quite a bit of guidance on the establishment and makeup of these networks. Not only must any proposed network be approved by the Administrative Director, but there are specific conditions that must be met. On or before November 1, 2004, the Administrative Director is to adopt regulations interpreting the process of establishing a network. Hopefully, this will provide more specificity to these requirements.

Here are the factors involved as presented by the statutes.

1. The network is to include "physicians primarily engaged in the treatment of occupational injuries and physicians primarily engaged in the treatment of non-occupational injuries. The goal shall be at least 25% of physicians primarily engaged in the treatment of non-occupational injuries." The Administrative Director is to encourage the integration of occupational and non-occupational providers in the process of creation of these networks. This seems like fairly loose language.

2. It is important that the network be able to provide whatever treatment is necessary. Labor Code section 4616(a) indicates that the number of physicians in the medical provider network shall be sufficient to enable treatment for injuries or conditions to be provided in a timely manner. There is also to be an adequate number and types of physicians "to treat common injuries experienced by injured employees based on the type of occupation or industry in which the employee is engaged and the geographic area where the employees are employed."

3. Section 4616(a)(2) indicates that medical treatment for injuries is to be readily available for reasonable times to all employees. The Administrative Director in approving any medical network and is to consider the availability and accessibility of treatment. Rural areas are specified, and, even more specifically, those in which health care facilities are located at least 30 miles apart.

4. In order to establish a network, the employer or insurer is to submit a plan to the Administrative Director for approval. The Administrative Director is to approve it if he or she determines that the plan meets the requirements of the section. If he or she does not act on the plan within sixty days of its submission, it is deemed approved.

5. The Administrative Director is not allowed to withhold approval based solely on the selection of providers. It is specified that the employer or insurer has the exclusive right to determine the members of the network.

6. On the other hand, physician compensation may not be structured in order to achieve the goal of reducing, delaying or denying medical treatment or restricting access to medical treatment.

7. Treatment is to be provided only in accordance with medical utilization guidelines.

8. Only licensed physicians and those competent to evaluate the specific clinical issues involved in the treatment services are allowed to practice.

9. Labor Code section 4616.1 talks about the use of "economic profiling." This is the process of evaluating a particular physician or provider medical group or individual practice association, based on whole or in part on the economic cost of utilization and services associated with the medical care provided. If such profiling is utilized, the Administrative Director must be provided with a copy of the filing, and it must be available for public view as well.

10. Health care organizations and health care service plans, and even a group disability insurance policies under some conditions are deemed approved provided certain conditions are met as determined by the Administrative Director. This may allow them to circumvent the approval process to some extent. The specifics of this are outlined by Labor Code Section 4616.7.

B. Continuity of Care

The establishment of a treating network will enable the employer or insurer to control medical care for all dates of injury, whether before or after the establishment of the network. Therefore following the timely establishment of such a network, those injuries in the process of treatment will be transferred to within the network. Special provisions have been made for continuity of care that is in process from pre-existing claims by Labor Code section 4616.2.

When a network plan is approved by the Administrative Director, the written Continuity of Care policy is to be filed and considered. The insurer or employer is to provide all employees entering the workers' compensation system notice of its written Continuity of Care policy and information regarding the process for an employee to request a review under the policy. Upon request, the defense has to provide a written policy to the public.

This statute makes reference to a terminated relationship with a prior medical care provider. Under certain circumstances, that prior provider is allowed to continue treatment. If the applicant is receiving care from that provider at the time of the implementation of the employer network, he or she will be allowed to continue treatment for some period of time under the following conditions:

1. He or she has an "acute condition". This is defined as a medical condition that involves a sudden onset of symptoms due to an illness or injury "or other medical problem that requires prompt medical attention and that has a limited duration." This is obviously an extremely broad definition. It can mean a lot of things. However, it just as obviously contemplates a short-term condition. The Statute concludes that "completion of treatment shall be provided for the duration of the acute condition."

2. A serious chronic condition will merit continual care of the original treating physician as well. This is defined as "a medical condition due to a disease, illness or other medical problem or mental disorder that is serious in nature, and that persists without full cure or worsens over an extended period of time or requires ongoing treatment to maintain remission or prevent deterioration." Once again, this is an extremely broad definition. Completion of treatment under this standard is not to exceed 12 months from the commencement of the employer network.

This statute says that completion of treatment is to be provided for a period of time necessary to complete a course of treatment, and to arrange for a safe transfer to another provider. Consultation is to take place between the insurer or employer and the injured employee and the former treating physician, and is to be consistent with good professional practice. All these general terms do not really give us much. The bottom line is that care is to continue unbroken to the extent possible, and not a year is to go by before transfer is complete.

3. A terminal illness. Completion of the treatment is to be provided throughout the illness until the point of death. Terminal illness is defined as an "incurable or irreversible condition that has a high probability of causing death within one year or less."

4. Performance of a surgery or other procedure that is authorized by insurer or employer. This surgery is to occur within 180 days of the establishment of the network.

Conditions of continuing medical care are also laid out. The defense can require the former treater to agree in writing to be subject to the same contractual terms and conditions that were imposed upon the provider prior to termination. This of course assumes a specific contract. If the former provider does not agree, the care does not have to continue. That seems problematic if an injured worker is caught in the middle.

The defense can agree to provide continuity of care beyond these requirements. It is not obligated to continue treatment with a provider whose contract has been terminated or not reviewed for reasons relating to medical disciplinary cause or reason. Rates and methods of payment are to be continued as per the original contract, or as what would be applicable in a similar geographic area.

C. Treatment and Dispute Resolution.

Labor Code section 4616.3 provides that when first notified, the employer is to arrange an initial medical evaluation and begin treatment. The employee is to be notified of his or her choice to choose a physician within the provider network.

If an applicant disputes either the diagnosis or the treatment prescribed by the treating physician, he or she may seek an opinion with another physician within the same network. A third opinion may also be sought.

The employee is supposed to choose the physician with the appropriate specialty or expertise in treating the particular condition. If there is no specialist in the network who can handle the particular problem, a specialist outside the network may be permitted on a case by case basis to the extent necessary to provide reasonable treatment to the applicant.

The next step of review in the event of a dispute over medical treatment is the newly established independent medical reviewers. These must be licensed physicians, but are not necessarily QMEs. The Administrative Director is to contract with individual physicians or an independent medical review organization to perform these reviews. The Administrative Director is responsible to make sure that these doctors are credentialed and privileged and that the reviews provided by the medical professionals are timely, clear and credible. He or she is to be sure that medical professionals who provide a fair and impartial panel are selected, that confidentiality of medical records is respected, and that there is no conflict of interest. All individuals selected must be licensed physicians, and in a particular case, the medical professional is to be knowledgeable in the treatment of the employee's medical condition, knowledgeable about the proposed treatment, and familiar with the guidelines and protocols in the area of treatment under review. The physicians are also to hold a current certification by a recognized American specialty board. Their license does not have to be in California. Each medical professional is to have no history of disciplinary action or sanctions.

If there is still a dispute over treatment or diagnostic service after the third physician's opinion, the employee can request an independent medical review. The standard to be used is that of the Utilization Schedule. The Administrative Director is to create a one-page form that can be submitted to him or her, called an Independent Medical Review Application. It is to contain a signed release from the applicant, authorizing the release of medical and treatment information.

The applicant can provide any relevant material or documentation with the application. The defendant can provide the reviewer with information "that was considered in relation to the disputed treatment or diagnostic service." This can include:

"1. A copy of all correspondence from and received by any treating physician who provided a treatment or diagnostic service to the injured employee in connection with the injury.

2. A complete and legible copy of all medical records and other information used by the physicians in making a decision regarding the disputed treatment or diagnostic service."

The medical reviewer then conducts the examination. He or she is to do a physical examination. He can order any diagnostic tests necessary. He or she is to utilize the Utilization Schedule and make a decision about the proposed diagnostic or treatment. The reviewer issues a report to the Administrative Director within 30 days of examination, unless there is a serious threat to the health of the applicant, when the report is to be expedited and rendered within three days of the examination. A serious threat to the applicant's health is loosely defined as "including but not limited to serious pain, the potential loss of life, limb or major bodily function, or the immediate and serious deterioration of the injured employee." The Administrator can add on up to three days to the three-day period in extraordinary circumstances for good cause.

Whether or not there are special considerations, the Administrative Director upon receipt of the reporting is to "immediately" adopt the determination of the reviewer and issue a written decision to the parties. This does seem like a burden on the office.

If the applicant wins, and the disputed treatment or diagnostic service is awarded, he or she can get it from an outside physician, and the defense is liable for the cost.

That will be the end of the line for the parties. Labor Code section 4616.6 says that "No additional examination shall be ordered by the Appeals Board, and no other report shall be admissible to resolve any controversy arising out of this article." It would seem that doctor's depositions would be allowed. It would seem also that if the reasonableness of the reviewer's opinion were challenged, a request for expedited hearing could be filed. Nevertheless, this structure remains designed to tightly control any disputes over medical treatment.

Article by attorney Michael Sullivan. Mr. Sullivan can be reached by e-mail at mike@mikeslaw.com, or by phone at (310) 337-4480.

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