Preparing for Treating Doctor Network Fights

Saturday, July 17, 2004 | 0

TREATING DOCTOR NETWORKS: HOW THE DEFENSE MUST PREPARE FOR THE FIGHT

By Michael Sullivan, Esq.

Ed. Note: This is the first in a series of three articles.

The process of setting up treating doctor networks, and establishing their relationships to self insured entities and carriers, is ill defined at this point. The Rules will not be coming out until November 1 of this year, and the new statutes we have are severely ambiguous.

Nevertheless, it is network time in our industry right now, and with good reason. Billions of dollars in care are set to change hands in relatively short order as of the beginning of the year. The consequences are certain to be far-reaching. Medical organizations are scrambling to package and sometimes redefine themselves. Carriers and self-insured entities are sitting down to figure out just how they can put this together - and make it work. For a network to serve its purpose, setting it up right is critical. We must anticipate now what the applicant attorneys plan to do to avoid the networks.

This is a defense oriented article describing my opinions as to what the applicant attorneys are going to try to do, and what I think we should do to anticipate their plans. This is our time now. We should not spoil it by failing to think it through.

In general, applicant attorneys are going to take to employer controlled medical treatment like a cat takes to a bath. They are going to want to avoid being put in the network, and when they do get put there, they are going to want to get out. I have compiled a list of several ways they will try to do one or the other, and my recommendations on some ways to cut them off at the pass.

1. Applicant attorneys will argue that employer medical control only applies to dates of injury on or after January 1, 2005.

This is a natural argument. After all, the new law does not allow for the existence of employer control through medical networks until the end of 2004. However, it is my opinion that this contention is wrong. SB 899 was passed as an emergency measure. Section 47 of this statute states that it applies ". . . prospectively from the date of enactment of this act, regardless of the date of injury, unless otherwise specified, but shall not constitute good cause to reopen or rescind, alter, amend any existing order, decision, or award . . ." Thus it is clear that the law applies as of April 19, 2004, and going forward, for all cases.

And the law does grant us control. Labor Code section 4600 is modified to grant the applicant control of medical care "Unless the employer or the employer's insurer has established a medical provider network . . ." Labor Code section 4616 allows us to set up a network, under the specified conditions, "On or after January 1, 2005". Therefore as of January 1, 2005 the defense has control of medical care in every case where a network is properly set up.

Many applicant attorneys do not agree with this interpretation. These are the same folks who now contend that the new apportionment rules do not apply except for dates of injury on or after April 19, or even later. The argument runs that the new law is to apply prospectively, which means only going forward; applicant attorneys will argue that this could by definition only apply to those injuries yet to be. I have a hard time thinking that they will really believe their own argument. Such an interpretation ignores the remaining language of section 47 that requires the changes to apply "regardless of the date of injury".

Furthermore, such an interpretation may be incongruous with Labor Code section 4616.2, which takes great pains to require a "continuity of care" standard. The defense is only allowed to force applicant into the network after consideration is given to continuity of care. That is, the applicant generally can remain outside of the network for up to twelve months under certain conditions - impending surgery, a terminal condition, a "serious chronic condition" or an "acute condition". On the one hand the statute is confusing as it makes reference to former treating physicians who are under a contract. Arguably it is created to handle situations where, after the initial establishment of a network, a new network is put into place. However it cannot be denied that this section seems tailor made for the anticipated situation coming up on the first of the year.

Alternatively, the argument could run that applying this rule to all dates of injury is unfair to the applicant, in that it deprives him or her of a substantive right or benefit as opposed to a procedural one. This is the distinction made in constitutional arguments. Certainly it is an important setback for applicant attorneys to lose medical control. They will argue that the applicant's loss of control is a substantive deprivation, especially in light of their view of industrial physicians. One has to wonder if this argument will succeed. This is, at least on the face of it, a procedural issue. I will also note that in the 1970s, medical control was moved from employer to employee, and the change was found to be procedural and applied retroactively. (The case was SCIF v. WCAB (Silva), 42 CCC 493.) It should also be noted that the California Constitution grants plenary power to the legislature on the issue of workers' compensation. It is my opinion that a constitutional challenge to retroactive application of medical control will not be sustained.

Nevertheless, the argument will be made. The unprepared may be rattled into concessions or unfavorable settlement. My first recommendation on this point is this: be strong. We should on the first of the year be ready to force use of the network where we feel it is worthwhile to do so, regardless of the date of injury.

Not to put too fine a point on it; this leads to my second recommendation: get a network. Make it mandatory for all new injuries, with rare exception. This is one of the most powerful tools the legislature has ever given the defense. My third recommendation is to consider carefully which cases with dates of injury before January 1, 2005 you wish to move into the network. Indeed, sometimes it may not make sense. A good example may be an in pro per applicant with a lifetime care award who has been with a personal doctor for years, and uses his treatment rights sparingly.

And this leads into my fourth recommendation: approach the first of the year with a logistical plan. Activity at that time will be tremendous and will deeply tax defense resources. We will have Rules by then to help us with the form of the approach. But there are going to be a lot of unhappy people, and a lot of them will be on the phone, and in court. Plan ahead for where the lines will be drawn and how to handle the load.

2. Applicant attorneys will argue that the failure to tender medical care permanently ends employer controlled care.

Who among us on the defense side has not run into this situation? We are notified of a claim by a letter from the applicant's attorney. We get in touch with an employer - or the employer gets in touch with the local supervisor - and we learn that the claim was reported long ago. At the time it was thought to be "no big deal". Perhaps a small employer asks the worker to get treatment on his own, and thus avoid a claim. Perhaps promises are made to reimburse medical costs, or money changes hands. Or perhaps the "no big deal" becomes a big deal six months later after a layoff.

Or perhaps there is just an ignorance as to what constitutes knowledge of an injury. In any case, applicant attorneys will point to a failure to timely offer medical care as a justification for leaving cases out of the network indefinitely. New Labor Code section 4616.3 does not leave a lot of room for imagination: "(a) When the injured employee notifies the employer of the injury or files a claim for workers' compensation with the employer, the employer shall arrange an initial medical evaluation and begin treatment as required by Labor Code section 4600."

Does failure to tender care mean that the defense loses control? Almost certainly. Labor Code section 4600(a) states that the defense is liable for the expense of medical care if it is not provided due to "neglect or refusal". Also, it is important to note that the new 5402(c) now mandates medical care in every case where injury is reported, including delayed cases, up until the time of denial or $10,000. Therefore it can be fairly said that SB 899 emphasizes the defense's obligation to properly provide care promptly. It would seem to follow that a failure to tender care would result in the applicant's right to select his or her own treating doctor.

This conclusion would be in line with case law as it considers the current thirty day control rule. It is clear that not only is the defense liable for the cost of medical care if it is refused, but also loses medical control. The cases on this are Zeeb v. WCAB (1967), 32 CCC 441, and SCIF v. WCAB (Silva) (1977) 42 CCC 493.

A more important question may be this: can we get medical control back? Or does failure to tender medical care cause the defense to permanently lose medical control? Under the current law, where medical care lasted only thirty days, it really never became an issue. But under SB 899, it is not hard to envision a larger struggle. A profile fact pattern emerges. An applicant mentions an injury, and is not offered medical care. The applicant is then laid off. She seeks an attorney, who dispatches her to a well known applicant physician, who undertakes care. When the claims adjuster sees what has happened, she tenders care, and demands that the applicant treat within the network. Will this be a legitimate demand?

No one knows for sure. Such a result would seem to circumvent the purpose of the statute; that is, to give the employers medical control. However, the interest of getting the applicant in a solid treatment program, including an unbroken relationship with a particular physician, will no doubt be viewed as vital. We as the defense need to be aware of case law that goes far back to the time in the 1970s when employers still had control of medical care. In Zeeb v. WCAB (1967) 32 CCC 441, the employer had medical control. The employee got care, but later was refused in a dispute over whether a flare up was industrial. The employee obtained his own doctor and refused to switch back to the employer's physician. In considering the matter the Supreme Court referred to a case called O'Neill v. IAC, 91 Cal.App. 121. That case held that the employer could only regain medical control in limited situations. The Zeeb Court concluded that the primary purpose of the system was to bring about the recovery of the worker, and to bring him back to the work force. The Court found it important for the employer to have control, both for the provision of effective treatment and minimization of expense, but found effective care paramount. It was held that the "doctor-patient relationship which will inspire confidence in the patient is an ingredient aiding in the success of treatment, and that, once established, treatment should continue with the same doctor in the absence of a change of condition or evidence that the treatment is defective or additional treatment is necessary." Id. at 445.

By analogy then it appears we may face difficulties in regaining medical control once it has been lost. Certainly this will be a fertile area for dispute. However, we should be prepared for the worst. How can we do this? My fifth recommendation is to ensure that the employer knows the rules about provision of medical care. It would not necessarily be a bad idea for an insurance carrier to have conversations with its clients, or at least explain in writing the importance of this issue. For larger employers, reeducation of management staff on the point would likely be very helpful. My sixth recommendation is that treatment disputes be handled with this in mind. I discuss this idea further later on in this article. It is no good getting in a dispute over medical care that is relatively minor. We could win the battle and lose the war.



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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The next article in this series will review predesignation attempts.

The views and opinions expressed by the author are not necessarily those of workcompcentral.com, its editors or management.