With the recent introduction of SB863, the state of California has significantly changed the workers’ comp process. This article presents a high level view of the major changes brought about by SB863 and shares some personal insights and opinions from my own practice.
The most significant change SB863 implements is Independent Medical Review (IMR). The IMR process – which replaces the old Agreed Medical Examiner (AME) and Qualified Medical Examiner (QME) processes – is still young. We probably won’t be able to fully evaluate the new system until we’ve had time to see it operate for a year or more, which could be well into 2015.
Below are five major ways SB863 will improve workers’ comp in California:
1. Doctors – Not Judges – Are Making Medical Determinations
Under the old system, workers’ comp cases were heard by workers’ comp administrative law judges who had very limited medical knowledge. Workers, doctors, lawyers, and insurance companies worked hard to prepare reports and make arguments to influence the judge’s ruling. In many cases, participants had little confidence in the quality of the decision: the judge, lacking any real medical training, could not bring the same level of medical insight to the case that a doctor could.
Thanks to IMR, judges are no longer making medical decisions – doctors are. An independent doctor, currently retained by Maximus Federal Services, simply looks at the medical records and makes a decision according to medicine, not law. This doctor, by contract, does not know the injured worker and is only interested in providing the most accurate medical opinion possible.
By separating the medical process from the legal process, IMR not only ensures more accurate judgments but also makes the whole process quicker. While the early IMR process has been slower than anticipated, it has the potential to move a case through IMR in as little as 30 days. Prior to IMR, it often took six months to a year to fully prepare a case for a workers’ compensation judge.
2. SB863 Eliminates Add-Ons To Workers’ Comp Claims
It has been common practice for applicant attorneys to build up claims by adding “sleep, psych, and sex” disorders to them. That is, applicant attorneys often argued that a worker’s injury on the job was affecting sleep, psychology, or sex life. This created larger claims, and cost a lot of money. For example, a worker claiming a psychological disorder needs to be evaluated. Workers are most often evaluated multiple times, and each evaluation can cost the insurance company $2,500 to $3,500.
This money did not compensate the worker; it was just medical costs. Often, because these disorders were tacked on simply to make bigger claims, the evaluations were useless, and the money was wasted.
SB863 eliminates these common add-ons, saving a significant amount of money. Eliminating add-ons also makes the claim move through the system faster by reducing time spent visiting multiple doctors for unnecessary evaluations. An exception is when an injured worker was a victim of a violent act, or witnessed a violent act.
3. SB863 Cuts Down On Frivolous Liens
Another common practice that SB863 streamlines is the filing of liens. In the old system, even after the medical and indemnity claims were settled, claims would stay open in an attempt to resolve the liens. For example, interpreters, dissatisfied with the settlements, would file liens for more money. I personally had a case that settled in 2004, yet did not see the lien issue resolved until 2007. This is a very common scenario. Noted workers’ compensation attorney Michael Sullivan has been quoted as saying that in Northern California they don’t have much of a lien problem, but in Southern California “we have Lienageddon.” From the insurance company’s perspective, the claim would stay open as long as doctors, interpreters, copy services, etc., were filing liens. This gummed up the system and cost insurance companies a lot of money.
To combat “Lienageddon”, SB863 implements a filing fee of $150. An interpreter, for example, must now pay $150 per lien. This is a non-refundable fee, which means interpreters may lose money when they file a lien. This fee acts as a deterrent: doctors, interpreters, copy services, etc. will only file liens if they are necessary, rather than wasting money on frivolous liens.
4. SB863 Provides More Money and More Protection For Injured Workers
SB863 mandates higher payments for injured workers for permanent disability. For many years, California’s administrative costs were high, but its payouts to injured workers were some of the lowest in the United States. Thanks to SB863, workers will be more fairly compensated.
Because IMR separates the medical process from the legal process, injured workers can get justice faster. They do not need lawyers as often as they used to because the new system has built-in protections for workers, making it safer and easier to navigate. Workers, for example, can demand IMR on their own if they believe an insurance company is acting unreasonably in Utilization Review. When injured workers receive an adverse determination from Utilization Review, the determination, by law, must contain the IMR form. The worker may simply fill out the form and forward it to the Administrative Director. They will then be offered Independent Medical Review.
5. SB863 Has Strengthened Medical Provider Networks
Historically, a common maneuver by applicant attorneys was to claim that an insurance company’s Medical Provider Network (MPN) was defective. For example, an expedited hearing would be scheduled before the WCAB where the applicant attorney would argue that his client was not able to get proper medical care inside the network. The applicant attorney would argue (often successfully) that his client should be allowed to treat with a doctor outside the network. From the insurance carrier’s view, this would usually result in a much higher medical payment on the claim. SB863 now allows approved MPNs to get an MPN number. This certification essentially means that the MPN has been approved by the Administrative Director, and cannot be challenged before the WCAB. There are other protections for injured workers as well, such as the requirement that each MPN have a care coordinator who will ensure that the injured worker is able to find a doctor in the network.
In these five ways, SB863 and the new IMR process has the power to change California’s workers’ comp system for the better.