MPN’s, Medical Liens, and the WCAB
There has been a huge upturn in the number of litigated claims over the past 2 years in California Workers’ Compensation. Now approximately 40-50% of claims are becoming litigated and virtually 100% of claims older than 2 years are in litigation.
When I was told this, my initial question was: Why? The reform of 2005 was supposed to basically eliminate the need for litigation within the system — I don’t get it? In reality, as with most good things, SB 899 has been torn apart by applicant attorneys, the WCAB, and its own lack of foresight in its wording.
More and more often, employers are failing to properly execute control of the medical treatment of an injured worker by failing to post and inform their employees of the existence and selection of primary care physicians from the carrier’s MPN. Not doing this allows injured workers to be seen by the doctor of their choice, whom are probably not on the MPN, which allows them to immediately seek legal representation concerning their claim. They no longer have to then adhere to the rules of engagement laid down by SB 899. Claimants lawyer up, convinced that they will receive a big settlement, when in fact, only the lawyer and the doctor have anything to gain from this practice. Litigation basically doubles the cost of your average claim. These claims usually include many, many, repeated trips to the doctor or chiropractor, and are pushing loss costs through the roof.
Another problem causing rising experience modifications and rates for January 2011, is the use of a Medical Lien as a weapon. When an injured worker is allowed to pursue his or her own treatment, whether represented or not, the non-MPN physician is not obligated to provide services at a set rate agreed upon by MPN doctors and the carrier. Therefore, they charge whatever they want for the care provided. Obviously, in cases where the injured worker is outside the system, this cost will be fought by the carrier in the form of “this is ridiculously expensive for that level of care and we are not going to pay this”, or “we did not approve any of this treatment and are not going to pay this”. This will generate a lien from the physician against the claim. Liens are the #1 reason why claims do not close in a timely manner. Even if the injured party is unrepresented, the lien itself will hold open a claim until they are negotiated to a settlement, or when both parties go before the WCAB (Workers’ Comp Appeals Board).
Unfortunately for the carrier and the insured, the WCAB has repeatedly ruled in favor of the plaintiff and the plaintiff’s physicians in these cases, handing out judgments for fees for service that are well above industry standard, and in some cases, just plain ridiculous. It is rumored that the WCAB administrative law justices are upset about recent furlough issues in the state and basically rubber stamp payment of liens to the physician citing crowded dockets as an excuse to give these awards (in one case, awarding more than the actual lien amount).
If you do not adhere to the regulations, you can throw all the savings originally found in SB899 out the window. It is more important than ever that employers keep control of medical care and adequately follow the MPN posting and employee notification rules (which have just changed, click here to see Erik Van Beurden’s article on this issue).
It is also wise to have a Professional Workers’ Comp Advisor as your broker, who will keep these issues under control for your firm, and manage your experience modification within the guidelines of the original SB899, so that you get the cost savings you deserve.
Give me a call or email me to discuss this.