Ruling complicates injury disputes

A California appellate court dealt a significant blow last week to a practice employers have come to rely on to control rising workers compensation medical expenses.

The court ordered the publication of its May 29 decision allowing reports from doctors who are not part of an employer's work comp medical network to be admissible evidence for determining benefits.

The ruling in Elayne Valdez vs. Workers Compensation Appeals Board was seen by some observers as a victory for injured workers and claimant attorneys.

It comes as insurers and employers are already experiencing increased workers compensation cost pressures.

Recall that California Insurance Commissioner Dave Jones recently approved an 8.25% advisory pure premium rate hike for policies renewing on or after July 1. He cited rising medical utilization as a main driver of workers comp costs.

He also said that while system costs were increasing, there has been little change in the premiums insurers are charging for workers comp policies because of underwriter competition.

But it's well known that work comp insurers are experiencing lousy combined ratios, exerting pressure on them to raise their pricing, which appears to be occurring nationwide.

Against that backdrop, last week's ruling by California's 2nd District Court of Appeal is particularly unwelcome news and will add to calls that it is once again time for California to implement work comp reforms.

Due to 2004 reforms, California employers and insurers that established medical provider networks, known as MPNs, gained the right to select doctors to treat their injured workers.

That gave them a significant measure of cost control, and last year the California Workers' Compensation Institute reported that use of the MPNs had become widespread since 2005, with workers typically channeled to network providers at the outset of their claims.

Meanwhile, claimant attorneys reportedly looked for technicalities that would allow their clients to go outside of the network in hopes of obtaining greater benefits.

That is why last week's ruling, which annulled a Workers' Compensation Appeals Board en bank decision favoring employers and insurers, is a substantial blow for payers.

The appellate court essentially said in May that injured workers have a right to present evidence from their treating physicians, whether or not those physicians are in an employer's network.

But that decision was not published, meaning its application was of limited or no use in other cases.

That changed last week when the court ordered its ruling published. Now it can be cited in other worker injury disputes.