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WORKERS COMP

Medical reviews survive California challenge

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California Supreme Court action that effectively upholds independent medical reviews of workers compensation claims may help reduce unnecessary treatments and claim costs.

While two other legal challenges to the process implemented as part of California's 2013 workers comp reforms remain pending, experts say they're optimistic the reviews of treatment plans conducted by anonymous physicians working for Reston, Virginia-based contractor Maximus Federal Services Inc. ultimately will be upheld.

Though experts and officials say definitive data is not yet available, they believe independent medical reviews have helped affirm employer and insurer utilization reviews that denied medications, such as opioids, and medical care deemed unnecessary.

“While we don't have a precise estimate of the isolated impact of IMR, our sense is that it has been very significant in driving down some of the medical cost levels we've seen,” said Dave Bellusci, executive vice president and chief actuary of the Oakland-based California Workers' Compensation Insurance Rating Bureau.

In the case this month, the California Supreme Court rejected a petition to consider Frances Stevens v. Workers' Compensation Appeals Board et al. It also declined to “depublish” the California 1st District Court of Appeal's October ruling that independent medical reviews are constitutional, “fundamentally fair and (afford) workers sufficient opportunities to present evidence and be heard.”

Ms. Stevens had contended her due process rights were violated when an independent medical review in 2013 denied her a home health aide and prescription painkillers for a broken foot she suffered in 1997, according to the ruling.

Under the California reforms, injured workers can request independent medical reviews to dispute treatment that was modified or denied under utilization reviews, which employers request. Such disputes previously were adjudicated in court. Insurers and employers pay for independent medical reviews.

“The good thing about the decision is it settles the question of whether we will or will not have an IMR system,” said Mark Sektnan, president of the Sacramento-based Association of California Insurance Cos.

The ruling in Stevens “constitutes a win for workers compensation payers,” the California Workers' Compensation Institute said in a statement.

Separately, the Oakland-based institute said in a report this month that independent medical reviews last year upheld 88.6% of treatment decisions made in utilization reviews.

CWCI President Alex Swedlow said in an interview that the high rate of independent review decisions backing claim payers shows the review system is helping to mitigate medical costs while monitoring care for injured workers.

The high rate of upheld treatment decisions “is a strong indication that both payers and reviewers have been consistent in applying the medical treatment schedule and the other evidenced-based medical guidelines and studies when determining the medical necessity of requested services,” he said in a statement.

Others agree.

WCIRB reported in November that several provisions of California's comp reforms, including independent medical reviews, have produced $770 million in annual savings for the state's workers comp system.

“The timing of when we started to see drops in levels of medical treatment ... is tied to when IMR started to be implemented in a significant way,” Mr. Bellusci said.

Marc Leibowitz, a workers comp defense attorney at Laughlin, Falbo, Levy & Moresi L.L.P. in San Diego, said independent medical reviews have allowed his clients to manage medical treatment disputes out of court, thereby reducing their legal costs.

“I was having trial after trial on denied medical treatments,” Mr. Leibowitz said of utilization review disputes before independent medical reviews.

“This is improving medical care that's delivered to injured workers, and that's a really good thing,” Joseph Paduda, principal of Madison, Connecticut-based Health Strategy Associates L.L.C.

In its report this month, the CWCI said that “the data is still too green” to tell whether independent medical reviews will reverse California's rising medical-legal claim costs and that 10% of the physicians named in last year's nearly 164,000 independent medical review determinations accounted for 85% of the disputes.

“It indicates that a small subset of the provider community is either incapable of learning or, perhaps more likely, unwilling to learn, and is completely fine with providing inappropriate medical care to their patients and trying to get paid to do so,” Mr. Paduda said.

While CWCI said at least two other lawsuits questioning the constitutionality of independent medical reviews are being considered by California appellate courts, experts say they're optimistic they'll withstand the challenges, which would pave the way to optimize the review process.

“Once that question (of constitutionality) has been settled, then insurers and other players in the system can learn how to make it work,” said the California insurance association's Mr. Sektnan.

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