Friday, December 14, 2012



It doesn't appear that DWC will have time to consider the comments submitted on DWC Forums and to that extent the request for comments seems to have been a charade. The idea now is to put the newly proposed regulations into effect on an emergency basis and then to consider comments later, weeks or months from now. Our information is that many current liens that are awaiting payment will be held until the Spring of 2013. In the meantime, the $150 IMR lien filing fee will go into effect for the Independent Medical Review system and so will the $325 IBR fee for the Independent Billing Review system.

The presumption is that these onerous requirements will drive many providers out of the system altogether. In due course DWC will adopt the requirements that it wants if the insurance companies don't object too strenuously. Insurance companies will be conveniently enabled to pay providers at 65 to 70% of the fee schedule. Then they'll dare the  provoked providers to try to collect the rest.  The requirement to pay as much as $475 for the right to challenge a wrongful denial of care and a rejected bill is expected to encourage providers to drop out of the workers' comp system.

In other states where similar reductions took place, so many doctors dropped out that the theorized dearth of physicians became real enough so that fees were restored and even raised (Hawaii is an example). The trouble is that the perpetrators of these adverse changes managed to destroy faith in the system so that many of the doctors didn't return. That created a permanent deficit of access to care. So far that looks to be where SB 863 is going.

Early lien filing may be the PTP's only option. It looks as though injured workers lose again even though Permanent Disability was given an infusion by SB 863. The trouble is that the infusion has been diluted. Our injured workers have been left worse off and now need a transfusion.

Sunday, December 9, 2012

SB 863: A Political Tsunami in California

When Governor Brown declined to accept legislation that would have been a partial fix for workers' compensation at the end of 2011, he said he wanted an overall solution, not a piecemeal adjustment.

Among the politically savvy persons who heeded this admonition was Angie Wei, indefatigable chief lobbyist and legislative director for the California Labor Federation. Wei deftly developed her version of a comprehensive fix. What labor wanted most was an increase in permanent disability. Wei got that, or so it seemed, in the form of $740 million added to permanent disability. Speaking early on about SB 863, Wei said "there is no other path to getting $740 million back in benefits to injured workers. The legislature must pass SB 863." Wei, not exactly a friend of specialty medical  doctors, also protested against them when she complained that previous legislation caused medical treatment to be delayed because of "opposition from vendors who profit from the status quo."

SB 863 doesn't appear so far to be as good as its promise. Wei quickly understood that Governor Brown wanted a bipartisan bill, not one crafted only by the labor federation, and not one crafted entirely by insurance companies. Score one for Brown: he forced the two extremes to work together.

Grimmway Farms, Sean McNally, Vice President for corporate and Government Affairs,  soon became the chief player for business. No way Big Biz was going to let $740 million slip into Permanent Disability (PD) funding without getting something in return. Pouncing on some of the more abused parts of PD funding, Grimmway et al focussed on out-patient surgery centers, sleep impairments (dyssomnia), and sexual dysfunction (impaired sexual ability even when secondary to spinal injury). The open sesame to the assault on sex-and-sleep was the frequent inclusion of these complaints by applicants' attorneys into their legal pleadings. Deductions emerged:

*  Sleep impairment remains open for treatment but not for inclusion in permanent disability claims: this exclusion alone takes $40 million away from the PD pot.

*  Sexual impairment remains open for treatment but not for inclusion in permanent disability claims: this exclusion takes $10 million from the PD pot.

*  The big slam is the removal of $110 million for out-patient surgery centers.

*  All in all, current estimates are that of the $740 million Wei originally sought, about $200 million has already been lost thanks to the maneuvering of Grimmway which in this matter out-maneuvered Wei and Cal Fed.

* Two pro-injured workers bills bit the dust as SB 863 paddled furiously to victory: AB 369 (Huffman) and AB 1867 (Fong).  The fun-filled irony in the case of these two bills was that their authors voted in favor of SB 863 the passage of which was then used to tell authors Huffman and Fong that their bills were no longer needed.  Huffman's bill was designed to put a stop to step-therapy and was supported by Big Pharmacy, Pfizer, among others. Fong's bill would have required 12-point bold type on the first page of treatment authorization denial letters "so as to be prominently visible to the employee."
So step-therapy which prevents doctors from prescribing medications of choice is still the rule and so is keeping injured workers in the dark. The insurance companies wanted both bills defeated: they got their wish because Brown obliged and used SB 863 as the cudgel to do it. Score another for Brown, in fact, a double-score since he nailed both bills. The workers, ostensibly the constituents that Wei and Cal Fed wanted to serve, lost.

A big time score goes to Governor Brown because one day before passage of SB 863 when it looked as though the bill was going down to defeat Brown went to work in high gear and took up his own lobbying cudgel.  Effective lobbying from the California Society of Industrial Medicine and Surgery (CSIMS), directed by Carl Brakensiek and Steve Cattolica of AdvoCal, assisted by the California Society of Physical Medicine and Rehabilitation (CSPMR), the California Neurology Society (CNS), The California Chapter of the International Association of Rehabilitation Professionals, VQ OrthoCare, and the Californa Workers Compensation Services Association, almost defeated the bill despite abandonment of the California Medical Association (CMA) and the American Federation of State, County and Municipal Employees (AFSCME) both of whom voted for passage of SB 863. CMA and AFSCME knuckled under to Brown.

The CMA is credited with getting the Medicare RBRVS modified and once that was done agreed to support the bill.  Consultations in workers' comp will be allowed although they're no longer allowed in standard Medicare. AFSCME which represents a few thousand doctors in California wanted to befriend Brown more than it wanted to support its dues-paying doctors and assumed that its doctor members wouldn't  protest with too much vigor.   AFSCME's political judgment so far has turned out to be correct.

When Brown saw that SB 863 was in trouble, he went to work. He lobbied and asserted the bill would "reduce litigation, claims administration costs, and other frictional costs." He personally lobbied for the bill,  actually, furiously in the last two days. His hard work paid off. Score a personal hard-earned political triumph for Governor Brown and chalk up a loss for a medical community that knows how to provide services but not how to persuade anybody that what we do is as worthwhile as we say.

Our opposing position was, and still is, that the bill strips injured workers of their ability to appeal wrongful decisions while also cutting the $740 million for PD by at least $200 million. What Brown calls "frictional costs" are actually the lifeblood costs that injured workers incur in appeals. Appeals for wrongful decisions to the WCAB are eliminated by SB 863 which creates an Independent Medical Review (IMR) process that'll rely on anonymous doctors whose decisions are nearly appeal-proof.

In fact, what Brown was really after all along was Proposition 30 to allow increased taxes. To get it he needed to take down the heat from Big Business. Brown  worked to get SB 863 passed to reduce the level of interest against Proposition 30. The strategy worked. The trouble now is the fiscal cliff which, if the country falls off it, will result in widespread financial hardship and will nullify much of what Proposition 30 just won.

Our focus now is on the Independent Medical Review system that has been designed to replace the current Utilization Review system. The IMR system retains the worst aspects of UR, i.e., no need to be licensed to practice medicine in California and no need to interview or examine the patients from  whom treatment opportunities may be withdrawn. The IMR method gets an additional advantage, namely, the promise of anonymity so that appeals against even the stupidest of judgments resulting in harmful denial of care will be turned away and will not be eligible for appeal to the WCAB.

Statewide implications

The move is on to  restrict access to medical care and shift the blame to doctors, particularly the conveniently convened IMR doctors. The name of the game is cost-reduction while touting improved quality of care. In California, access to the WCAB is being restricted; however, similar wrongful uses of denial-of-care are used by HMOs and in Knox-Keene plans. This accelerating trend deserves to be derailed.

Federal implications

The current IPAB derived from the ACA (Obamacare) also promotes cost conservation at the risk of harming patients. These techniques are being adopted by the ACOs even faster than they were by the HMOs. This trend also begs to be derailed.

Sunday, November 25, 2012

Accountable Care Organizations: Gag clauses, firing doctors, liability, and profits

Accountable Care Organizations (ACOs), encouraged by the Affordable Care Act (ACA), aka Obamacare, brace for trouble while preparing for profits.

One of the questions we're being asked is whether or not ACOs may impose gag clauses, e.g., if a treating physician wants to prescribe a diagnostic test or treatment, and said diagnostic test or treatment is not authorized or is denied by the ACO, may the treating physician tell that to the patient who has been denied a diagnostic test or treatment? May the cost of the procedure to the ACO be discussed with the employee or patient?

Our initial reaction to reply affirmatively is tempered by our understanding that a recommended study or treatment would have been discussed first with the patient who would presumably already have agreed to it and would know about any non-authorization or denial. But we also observe contract language that physicians are precluded from discussing disagreements about compensation "and other matters" with patients. The treating physician is told in contractual language that where "disagreement cannot be resolved ... under no circumstances shall such disagreement be expressed to the Enrollee."

Contractual language tells the doctors that they may not discuss what the ACO has determined is protected information "to any person ... until such person agrees in writing to be bound by the provisions of this Agreement ..." We take this preclusion to mean that doctors cannot discuss ACO disagreements even with their own lawyers unless the lawyers agree to be gagged!

What lawyer would agree to being gagged before having heard the case?

These gag clauses are reminiscent of the 1990s when HMOs sought to muzzle doctors (see references below).  Both the HMOs at that time and the ACOs as currently construed have contract language that allows them to fire doctors at will. Such power is essential to keeping the doctors in their place, compliant, subservient, and dependent.

The ACO agreements we've seen so far carry both "termination without cause" as well as "termination with cause" clauses.  The latter are often subsequent to what the ACO may have called a "material breach" which is defined by the ACO itself and generally refers to what the ACO calls information that "that compromises the security or privacy" of information considered proprietary or confidential.  Disclosure of this information to patients could be considered a "material breach." That the patient has "right to know" might be a legal defense but it would not preclude ACO management from firing the doctor.

Potential participants, physicians and patients alike, need to understand that ACOs are business organizations selling and dispensing health care services. They are entitled to make profits which they can then distribute to their own business associates as a second source of income in addition to whatever fees have already been paid. One selling point is that ACOs will cut down on unneeded tests and treatment but a countervailing point is that along the way the ACO may deny access to diagnostic tests and treatments with harm coming to patients while participating physicians are not allowed to speak out under penalty of being fired from the ACO.

Questions of medical-legal liability are already being asked: who gets blamed for what if an indicated study or treatment is denied and the patient suffers or dies as a result? Is there liability to physicians who've kept this    information under wraps in compliance with ACO non-disclosure policy?

How will profits and payment to providers, including physicians, be determined? One contract we've  examined says straight out that the ACO will make that determination, e.g., "Physician agrees that decisions (by the ACO, actual name deleted) ... management and other administrative policies and procedures may be used by (ACO) to deny or reduce payment ..."

In essence this language means that whatever fee schedule the physicians signed may be abrogated, changed, or set aside at the will of the ACO. No bargaining or negotiating is  required or encouraged.

All the same "bonus payments" or the prospect thereof will remain in effect. This section of the ACO agreement means that ACOs that actually achieve what they call "savings" will be allowed to allocate a portion of the "savings" to providers as "bonus payments" or additional income, essentially a second source of income, to participating providers. That helps to explain why ACOs will favor primary care physicians as opposed to specialists since it is the latter that usually prescribe expensive tests and the most up-to-date and often most expensive treatment protocols. The "gag clause" will stop timorous physicians from explaining too much to patients about how ACOs work their magic.

ACOs need primary treating physicians to ensure "savings." While specialists with their expensive procedures may be necessary to ensure quality of care, they'll be carefully scrutinized -- call it "economic credentials" (see references below) -- to make sure that they don't have too much impact on profits which the ACOs refer to as "savings." Finally, expect that bonus payments to treating doctors will be limited with the bulk of savings going to the ACO itself and to additional executive compensation.

While the ACO mechanism is more sophisticated than the old HMO methods,  they have in common that the goal is financial gain with as much devotion to patient care as can be accommodated.

HMO References

"Why HMOs want to muzzle doctors," San Francisco Examiner, 4 April 96, by Robert L. Weinmann

"Medical Red-Lining, Economic Credentials for Physicians, 12 January 96, by Robert L. Weinmann

The Congressional Record, Vol. 144, # 118, commentary by Hon. Tom Campbell, R-California, 9 September 98

ACO References

 "A Hospital War Reflects a Bind for Doctors in the U.S.," New York Times, 11/30/12, by Julie Creswell and Reed Abelson

"Covered California's Plans to Become Self-Sufficient," California Healthline, 11/19/12, by David Gorn

"California's Role In Ensuring That the Potential of Health Reform Becomes Reality," Health Affairs, 30, no. 1 (2011): 71-75



Tuesday, November 20, 2012


The latest hot ticket item in healthcare now that the presidential election is over is the implementation of the most controversial aspects of the Affordable Care Act (ACA), namely, the individual mandate to buy health insurance, or else. Health insurance exchanges are ready to make their move as are specific Accountable Care Organizations (ACOs).

ACOs will be comprised of hospitals,  primary care physicians, and specialists who are supposed to accept being held accountable for the cost and quality of the healthcare they provide. Fiscal carrots is the name of the game because providers will continue to be paid on a fee-for-service basis and will share in whatever revenue is brought about by whatever cost-savings techniques the ACOs use, e.g., not accepting doctors who have too many elderly patients  or patients with expensive chronic diseases. The days of searching out rare and unusual diseases to care for are over: these unfortunates will be obliged to find  whatever comfort is available under the nearest bus. If the ACO is well managed from a fiscal perspective, providing participants will share in  the savings  as a second source of income. Quietly, with as little fanfare as possible, physicians and hospitals will be encouraged to avoid the sickest, oldest, and most complicated patients. Meanwhile, the ACA calls for expanding Medicaid despite a looming shortage of doctors.

Medicaid is supposedly administered on a state-by-state level. In June of  2012 the Supreme Court (SCOTUS) gave states an option to keep their Medicaid programs as is or expand them. So far, however, only 17 states and the District of Columbia have said they'll develop their own exchanges. Increasingly, therefore, it appears as though the federal government will pick up the exchanges by default and with it increased control of medical care.

Medicare cuts in the amount ot $716 billion are ready.  President Obama said he wouldn't cut Medicare itself, just the fees paid to all of the providers. Physicians, already getting only 18 cents on the dollar, will not be overjoyed and many are likely to stop accepting new Medicare patients.

Here's a comment from HHS: "The Department and its partners should be vigilant in identifying ... emerging fraud, waste, and abuse risk areas across all ACA-related programs ... this will require a comprehensive approach to program integrity that integrates effective front-end program gatekeeping (itlaics added)."

In 1998 this writer spoke at the White House in a press conference with then President Clinton. "Gatekeeping" was exposed as a mechanism to reduce patients' access to care. HMOs, seeing the handwriting on the wall, reformed their "gatekeeping" methods. Now, under the ACA, we're seeing new scribbling on the wall that'll enable return of the "gatekeepers."

Beware, patients: your illness may be your ticket to the hoosegow. Not to worry, though, your doctor will be in a near-by cell. The accusations will be "fraud" and "waste."

When your ACO contract arrives, you will need advice about what to do. Your first problem will be where to get that advice. Not to worry. In due course a new legal specialty will emerge.

Monday, October 29, 2012

The Affordable Care Act (Obamacare) with emphasis on the Independent Payment Advisory Board (IPAB):  Memo to Subscribers & Followers of   The hot-button issue in healthcare this week is the Affordable Care Act (ACA), known as Obamacare to some.  Within the text of the ACA is an item known as the Independent Payment Advisory Board (IPAB). The IPAB is the section of the law that will allow unelected appointees to overrule treatment decisions made by our personal physicians. The IPAB is empowered by Sections 3403 and 10320 of the ACA. This writer has found large enough fault with the IPAB to have called for its repeal regardless of whatever fate befalls the rest of the ACA. The fate of the ACA is likely to be decided on November 6th -- President Obama wants to keep the ACA as is, Governor Romney wants to repeal the whole thing. Check out our posts on this topic, e.g., January 18, 2011; June 29, 2012; October 4, 2012; and October 20, 2012 (this last one updated on October 29, 2012). When you check out the posts of 1/18/11, 6/29/12, and 10/20/12 you'll see reprints of my comments in POLITICO. Click on the box to enlarge the print to read the comments. Let me know what you think by commenting directly on-line at (we do not sell, rent, or share your e-mail addresses with others.  Your comment will be considered for publication unless you ask us not to publish). -- RLW, Ed.

Saturday, October 20, 2012



October 29th Update to Politico comment of October 22nd. The above comment is in reference to "Presidential debate: 5 things to watch Monday" by MAGGIE HABERMAN and GLENN THRUSH | 10/22/12 4:23 AM EDT.
Read more:

The highwater mark of Obamacare is carried in the bowels of the Independent Payment Advisory Board (IPAB), a level that hasn't yet been reached because the Affordable Care Act (ACA) is still in its infancy. It is the IPAB that will have the authority to declare entire diagnostic and treatment protocols too extravagant not only for Medicare but also for the general public and therefore not covered or payable by the ACA -- that's when Obamacare will become known for its bite.

But that bite won't chomp on President Obama or Congress because both of them are exempt from the ACA. Did you know that? Congress has its own health care plan. The Congressional plan does not include an IPAB to water  down care by restricting access to diagnostic testing and treatment. The current ACA does just that. The IPAB portion of the ACA should be repealed even if we continue to debate the rest of it.

Keep in mind that Congress keeps special healthcare benefits handy for itself including access to treatment at military hospitals.

In the autumn of 2009 President Obama stated "I will ensure that no government bureaucrat gets between you and the care you need." It's probably safe to say he wasn't thinking of the IPAB at the time. President Obama has now promised a minimum of 15 brand new bureaucrats.

In the first debate, President Obama said the IPAB would consist of "doctors et cetera." The fact is that there'll be plenty of "et cetera" but there's no obligation under the ACA that any of the 15 appointees to the IPAB must be a physician.

Governor Romney did no better than the president because he didn't seem to realize that President Obama was winging it when he said "doctors et cetera." What else does Governor Romney not know about the ACA except that he prefers his pals in the insurance industry, the blokes who rescind health care contracts once the subscriber has the temerity to get sick?

For a guy known for his financial expertise, we're surprised that the Governor failed to mention that each one of the 15 appointees to the IPAB will be paid $165,000 annually for a total annual budget of $2,475,000 just for the 15 appointees -- staff and resource time will get counted later, right?

The IPAB can be repealed without repealing the entire bill. The mechanism would be to rescind Sections 3403 and 10320. The current stand-off means that one side won't improve what's wrong with the ACA and the other side would repeal all of it to bring back the greed-soaked insurance companies.

See also our October 4th blog; use the glossary to find more articles about the IPAB, the ACA, and related topics.

Thursday, October 4, 2012


OBAMA and ROMNEY Debate each other but the loser is The Affordable Care Act.

It appears as though President Obama likes the name, Obamacare, for the Affordable Care Act (ACA). It wouldn't hurt if he understood his own legislation better. On other hand, why should he? He and Congress are exempt from it. Romney simply doesn't need it.

Romney said during the debate of 3 October 2012 that Obamacare "puts in place an unelected board that's going to tell people ultimately what kind of treatments they can have." Romney doesn't like that idea. Except he has incorrectly, some would say on purpose, misconstrued the unelected board,  named  the Independent Payment Advisory Board (IPAB). It will consist of political appointees none of whom need be a physician. Its purpose will be to oversee Medicare costs. The IPAB will have the power to shut down certain costs incurred by Medicare if costs soar out of control and Congress fails to intervene. The IPAB will not be enabled to tell individual physicians what tests to order or what treatment should be used. It will not be allowed to ration care on a patient-by-patient basis. It will not be empowered to raise the Medicare eligibility age or shift costs to retireds. What the IPAB will have will be the power to determine which diagnostic and treatment protocols aren't worth  funding anymore and will in that way ration care for the entire Medicare population, the same as when private insurance companies tell hapless patients that they're seeking what they determined in cloaked boardrooms were actually "non-covered benefits," i.e., you pay for it yourself because this or that benefit is not included in your private health care plan. The IPAB method constitutes a form of sophisticated rationing, but it's not on an individual patient-by-patient basis.

Obama said that the IPAB would be composed of "doctors et cetera." Not necessarily. There's no provision in the ACA that requires doctors to be appointed to the IPAB. Obama himself evidently didn't know that when he made his comment, either that or he sought to hoodwink the audience. The 15 or so appointees to the IPAB will be political appointees who will not need to report directly  to Congress. They will not be elected so they won't represent the public or an electorate. Their job will be to make economic judgments when they decide which diagnostic and treatment protocols will be covered by Medicare and which won't be covered. In short, your doctor can prescribe whatever he wants. But your doctor can't make Medicare pay for it. And neither can you.

The IPAB is empowered by Sections 3403 and 10320 of the ACA.  These sections of the ACA should be repealed. We'll have more to say in due course. So should Obama and Romney. The October 3rd debate showed that both candidates have lots more to learn about the ACA. For instance, they can tell us if it's correct that the members of this board are to be paid $165,000 per year at a total public cost of $2,475,000. Repealing these two sections of the ACA will save taxpayers nearly $2.5 million.

Tuesday, October 2, 2012


ASSEMBLYMAN JARED HUFFMAN found out too late that his vote in favor of SB 863 helped seal the doom of his own bill, AB 369, which was intended to put an end to the merciless use of "step therapy," the method favored by insurance companies to restrict access of patients to  medications prescribed by their personal physicians. 

When Governor Brown signed SB 863 into law, the light went out not only for AB 1687 (Fong) but also for AB 369 (Huffman).  Governor Brown's veto message of AB 1687 said that the bill wasn't necessary because SB 863 was now the law. Both bills passed the legislature on a bipartisan basis, but both bills were vetoed by Gov. Brown. In this piece, we'll discuss AB 369 which this writer supported (see June 2011 issue of

"Step therapy" is the process by which patients are required by insurance companies, HMOs, PPOs, or others to try specified generic medications before they're allowed to try better, newer, or more expensive medications that may have actually been prescribed by their treating doctors.  The purpose is cost control even if patients are harmed in the process.

 In his veto message for AB 369 Brown acknowledged that "this bill would prohibit a health plan or insurer from requiring a patient to try and 'fail' more than two medications before allowing a patient to have the pain medication prescribed by his or her doctor." In fact, the part about "two medications" was already a compromise, but that wasn't enough for the insurance companies, health plans, or Governor Brown who is seeking their support for other issues.

In the veto message, the Governor used one of the worst aspects of SB 863 to justify his veto decision against AB 369. Here's what he said: "Independent medical reviews are available to resolve differences in clinical judgment when they occur, even on an expedited basis."

Keep in mind that in workers comp the names of the independent medical reviewers are supposed to be kept secret. Keep in mind that in the private plans the decision means that patients will be obliged to rely on medications that their personal physicians had purposefully not prescribed.

Brown said that "any limitations on the practice of  'step-therapy' should better reflect a health plan or insurer's legitimate role in determining the allowable steps." In other words, we're told that the health plan's cost-control panel has a "legitimate role" in overruling the strictly medical decisions of our personal physicians. That's the law that Governor Brown favors. Moreover, had AB 369 become law, it would have run counter to the aims and objectives of SB 863 which puts anonymous and often non-California licensed doctors who have not interviewed or examined the patients in control of properly licensed treating physicians who've actually interviewed and examined the patients.

Starting 1 January 2013, an Independent Medical Review system will replace the current Utilization Review (UR) system. The chief differences are that the IMR doctors will have their names protected and will only be able to be challenged for bias, fraud, or conflict of interest, a challenge that may be difficult to undertake if the the doctors' names are protected. The current system of UR is subject to challenge in court.

Governor Brown's veto of AB 369 is harmful to patients and is favorable to the financial interests of the insurance companies and health plans. IMR doctors and their employers should be subject to challenge in court.  Governor Brown's veto prevents lawyers from using AB 369 to litigate against the restrictive treatment provisions incorporated into SB 863. 

Huffman joins Fong in that both legislators cast incompatible votes and helped in the downfall of their own respective bills. The master legislator in this case turns out to be Brown. Wie Schade (too bad).

Saturday, September 29, 2012


In a master stroke of double-edged legislative slight of hand, Governor Brown vetoed a bill that would've given injured workers a fighting chance when faced with wrongful denial of treatment.

In his veto message, the Governor said "The recently enacted landmark comprehensive workers' compensation reform legislation makes this measure unnecessary. These reforms -- backed by both Democrats and Republicans -- reduce costs to businesses and protect workers. Further, they will help to avert an imminent crisis of skyrocketing rates that would have hurt both injured workers and businesses."

Yeah, right! There's a line about this kind of reasoning in The King and I when the beleagured king says he doesn't know whether or not to make an alliance with a stronger country. The weaker countries, he says, can't really help him. By contrast the larger and stronger countries may protect him out of everything he has.  That's the situation injured workers will face when SB 863 becomes effective on 1 Jan 2013. They'll be "protected" out of some benefits they currently have in return for some benefits many will never get.

The recently enacted reform legislation to which the Governor refers is SB 863 which creates a secret panel of Independent Medical Review (IMR) doctors  who will replace the current Utilization Review system (UR). Currently, utilization review doctors can be challenged in court for incorrect decisions. Under the new system the IMR doctors can only be challenged for bias, fraud, or conflict of interest. Trouble is that SB 863 also contains a provision which protects and conceals the names of the IMR doctors. 

SB 863 increases permanent disability (PD) in one section of the legislation while another part of the bill disqualifies conditions that currently qualify for PD such as dyssomnia from chronic pain and sexual dysfunction from spinal injuries.

On the other hand, Paul Fong's legislation, AB 1687, would have required denials of care to be made in plain language so that obfuscations and wrongful denials of treatment dished out to injured workers could be stopped dead in their perfidious tracks. Now that that bill has been vetoed, injured workers have lost their last chance at fair play.

We have witnessed a sleek lesson in political maneuvering. First, the Governor personally worked for passage of SB 863 with its provision for Alternative Dispute Resolution (ADR) and keeping secret the names of Independent Medical Review (IMR) doctors. One would think the unions would have opposed the bill because of the ADR provision alone.  One might even have expected principled opposition from the California Medical Association (CMA) because of the secrecy provisions that would be bestowed on an entire cadre of doctor-judges including doctors unlicensed to practice in California. In fact, the International Longshore and Warehouse Union, Southern California District Council, California Teamsters Public Affairs Council, SEIU 121, and  the United Firefighters of Los Angeles did oppose SB 863. But the California Labor Federation which helped create the bill with the assistance of big business including Grimmway Farms got support from other unions including the American Federation of State, County and Municipal Employees (AFSCME) and from the California Medical Association (CMA).

One of the same unions that supported AB 1687, the California Labor Federation,  was simultaneously involved in writing SB 863 with provisions that would eventually doom AB 1687, e.g., the secrecy provisions protecting the non-California licensed doctors.  It's logical that if  the Governor supported SB 863 he would veto AB 1687 since enforcement of AB 1687 would put a legal crimp into the secrecy provisions of SB 863. The California Labor Federation's support for AB 1687 came before SB 863 was completely written. In short, CLF was engaged in the composition of SB 863 even while CLF was ostensibly supporting AB 1687. AB 1687 passed the legislature before SB 863 was finalized. Fong's bill turned out to be an inconvenience to Gov. Brown and to the California Labor Federation and was doomed for failure once SB 863 passed. When SB 863 got signed by the Governor, the fate of AB 1687 was sealed. 

The Open Government website reports that Assemblyman Fong voted for SB 863 which turns out to have been equivalent to voting against his own bill. The irony is that Paul Fong was obliged to stand by while SB 863 got signed into law and his own bill got vetoed.

Score: Governor Brown goes 2 for 2, Fong is 1 for 2,  while the  injured worker community goes scoreless, again. 

Tuesday, September 25, 2012

SB 863 is the medical-legal equivalent of last night's officiating blunder at the Seahawks-Packers fiasco

Once in a while we get to review medical-legal blunders with the same gusto  ordinarily reserved for football blunders like the Packers-Seahawks officiating error of Monday night, 9/24/12

We'll spare readers the details of the officiating blunder that led to the Seahawks 14-12 declared win last night.  We're confident that it'll be subject to review for years to come. We're also confident that SB 863 will be reviewed as the fiasco that it is, i.e., a method that conceals the names of  Independent Medical Review (IMR) doctors while at the same time rendering them practically immune from legal appeals from even the most egregiously wrong decisions, much akin to the NFL standing by the blunders of its replacement referees.

As matters stand now, the IMR doctors who'll replace the current Utilization Review system can only be challenged based on bias, fraud, or conflict of interest. That's the genius of the California Labor Federation, Grimmway, and Governor Brown, all of whom must have skimmed this part of the bill with about as much insight as the NFL replacement referees used last night.  They seem to have overlooked how difficult it is to accuse someone of bias, fraud, or conflict of interest without knowing the name of the alleged perpetrator.

If a spirited appeal is to be mounted against SB 863, it should start with repeal of the IMR section of SB 863 or with a restraining order against it.

Then we can test other sections of SB 863, for instance, to what extent were the new lien processes or the Medicare RBRVS improperly composed as intentional  encumbrances to the legitimate rights of injured workers.

Thursday, September 20, 2012


SB 863 provides for an Independent Medical Review system to replace the current Utilization Review (UR) system. Under the current system, wrong and harmful decisions can be appealed in court. Under the new system, the IMR doctors will have their names protected so that attorneys won't know the names of the doctors who will now enjoy even more power than their UR predecessors. The IMR doctors will only be able to be challenged based on allegations of bias, fraud, or conflict of interest. Trouble is that it's nearly impossible to assert bias, fraud, or conflict of interest without a name. It appears that the new law will enable IMR doctors to participate in bias, fraud, and conflict of interest. Was this legislative slight-of-hand an accident of sloppy bill-writing or something worse?

In France, prior to the Revolution in 1789, the nobility had the power to issue "lettres de cachet" which enabled accused persons to be tossed into The Bastille without a trial and without knowing the names of their accusers. We should not accept a system in California that relies on ghost-doctors whose names are kept secret from applicant and defense attorneys.

Keep in mind that UR  doctors are not required to be licensed in California. Neither will IMR doctors be required to be licensed in California. Non-California licensed doctors who render IMR decisions that control the treating  doctors will not be responsible to the Medical Board of California whereas the actual treating doctors will be. Is that equitable?

Although the UR and IMR doctors are responsible to their own state boards, those boards don't have jurisdiction in California. A similar issue arose in Texas and was cured when Texas passed legislation to require Texas medical licensure of doctors doing utilization review in Texas. As matters stand now, Texas doctors without California licenses can practice utilization review in California even though the Medical Board of California has stated that doing utilization review constitutes the practice of medicine. But if California doctors want to do utilization review in Texas they're obliged to be licensed in Texas.

If SB 863 looks like a stacked deck, that may be because it is. 

Wednesday, September 19, 2012


SB 863 provided one of the most drama-laden lobbying and advocacy campaigns in years and ended in a personal victory for Governor Edmund G. Brown, Jr. Because of intense work chiefly by the California Society of Industrial Medicine and Surgery (CSIMS), the bill was nearly defeated. On the Thursday before the end-of-session Friday, the Senate Democratic caucus opted for putting the vote off until next year's legislative session. That's when Governor Brown, backed into a corner, showed his teeth and claws. He got out of his comfortable gubernatorial chair and visited the senators in their own offices. He personally worked the bill. He didn't leave it to aides. The technique worked. We don't know about  all the promises he issued, but we do know that his persuasion was powerful and successful. Various organizations were allowed to visit the Governor's office and discuss the bill. A report from The Union of American Physicians and Dentists said that the Governor's spokespersons refuted all points presented in opposition to the bill. At showdown time on Friday, the American Federation of State, County and Municipal Employees (AFSCME) supported the bill despite a provision to allow "carve outs" or "alternative dispute resolution" techniques that could have adverse impact on state and county employees and despite the fact that the bill continues a practice that AFSCME itself voted against at its 37th International Convention (see last two paragraphs below).

The handwriting was on the wall when the California Medical Association, having helped get some small but positive amendments, joined in support of the bill. The California Orthopedic Association, previously opposed to the bill, went neutral at the last minute. Major support all along came from the California Labor Federation which teamed up with big business organizations such as Grimmway Farms to write the bill. Eventually, the California Chamber of Commerce announced support which allowed reluctant Republicans to vote for it. With Governor Brown's supreme effort, this coalition prevailed. It was a superb job of rescue-lobbying, pulling a burnt bill outa' the fire and getting it signed into law. The proponents deserve credit for doing their job well.

Strong opposition came from CSIMS which provided repeated technical analyses of the bill, not that rhyme or reason had all that much to do with the final vote. Opposition came from The International Longshore & Warehouse Union, Southern California District Council, Voters Injured at Work, California Teamsters Public Affairs Council, SEIU Local 121, LatinoComp, The California Neurology Society, California Applicants Attorneys Association, California Hospital Association, and the United Firefighters of Los Angeles. Some of the opponents provided testimony at hearings, others wrote letters, most did what they felt they could.  In the end, their combined opposition was overwhelmed when on the last day the Governor personally intervened. The opponent group still earns credit for their stalwart and principled fight on behalf of injured workers.


SB 863 replaces the current Utilization Review system with an Independent Medical Review (IMR) system where only the Medical Director will be required to be licensed in California. IMR companies, just as did the UR companies, will be free to retain non-California licensed doctors who will not be responsible to the Medical Board of California (MBC) or even to their own state medical boards since the latter don't have jurisdiction in California. This lapse wasn't an oversight. It is one of the ploys desired by big business and perhaps unwittingly supported by the California Labor Federation.

The ability to appeal even egregiously wrong decisions by Utilization Review doctors, now to be known as IMR doctors, has been severely curtailed. That a medical review decision may be wrong will not suffice to file an appeal in court. An example of what will be required will be accusations of fraud or bias. As long as there's no fraud or bias, an incorrect decision, even a harmful one, may stand. This oversight, if that is what it was, will discourage many potential treating doctors from becoming involved with difficult cases. The Brown administration, in its press release of 9/18/12, boasted that SB 863 would "reduce litigation, claims adjustment costs, and other frictional costs." In short, it'll reduce the ability of injured workers who've been denied access to treatment and other benefits from filing legal appeals. An Associated Press story from 9/19/12 bought the Governor's facile interpretation hook, line, and sinker.  The AP story stated that "the measure also aims to prevent lawsuits by establishing a binding independent review system to resolve medical disputes and shortens the timeline for approval of treatment from two years to three months." In a nutshell, this provision cuts the legs out from under injured workers who're denied access to the treatment recommended by their doctors.

Rules and Regulations are the next step. So is clean-up legislation and involvement of the OAL (Office of Administrative Law). The first step should be to require that all doctors who do IMR work in California be licensed in California. We should put a stop to carpet-bagger medical reviews. The IMR doctors should shoulder the same public policy responsibilities as the treating doctors they're judging. That means licensure in the state in which they work especially since the MBC has already stated that utilization review constitutes the practice of medicine. Two governors, Schwarzenegger and Brown, have ignored this advice. Nonetheless, this requirement was adopted in Chicago in 2006 by AFSCME at the 37th International Convention.  Here's the resolve:

"Therefore be it resolved that this convention declare that physicians working for utilization review companies reviewing the claims of injured workers be licensed in the states in which their decisions are used and where their decisions may influence the provision or denial of medical care to injured workers."


"Unions Fight to Protect Injured Workers," Resolution # 30, 37th International Convention, August 7 - 11, 2006, Chicago, submitted by Robert L. Weinmann, MD, President & Delegate, and by Stuart A. Bussey, MD, JD, Vice President & Delegate, UAPD/AFSCME, L 206

Note: Doctor Bussey is currently President of UAPD/AFSCME L 206

"How to Practice Medicine Without a License," by Robert L. Weinmann, San Franciso Chronicle, 8/29/08

"Doctors Who Do Utilization Review Should be Licensed in California," Robert L. Weinmann, MD, California Progress Report, 4/27/09

Thursday, August 30, 2012


SB 863 has a built-in surprise for labor unions: it has a provision that will enable "carve outs. " A "carve out" is known technically as  an Alternative Dispute Resolution (ADR).  The assertion by LatinoComp and others is that Labor Code Section 3201.7(c)(4) is being expanded by SB 863 to include all employees of the State of California.

The claim is that pages 39 to 41 of SB 863  expand this little discussed legal provision so that it may now be applied to all state employees.  Legal history and precedent is Miller v. Cupertino Electric, Zenith Ins., 2012, Cal. Wrk. Comp. P.D.  Lexus 90. 

Take a look. What's your opinion? Have compliant unions given away too much in the effort to reform workers' compensation?

Tuesday, August 28, 2012


$300 million -- that's what the Insurance Journal says will be the increased costs if SB 863 passes into law. That was the IJ headline on 8/27/12.

But in an article that was originally published in Labor's Edge and that got reprinted on 8/28/12 in California Progress Report,  Author Angie Wei, Legislative Director of the California Labor Federation, concluded that "there is no other path to getting $740 million back in benefits to injured workers. The Legislature must pass SB 863." But Angie isn't the only person who has fought for increased benefits to injured workers. Stan, who replied to her CPR piece, disagreed vehemently. I also disagree. Here's why:

1) The proposed legislation cuts costs by $1.4 billion, but only about 50% of that goes into Permanent Disability (PD). Who gets the rest?

2) The proposed legislation actually cuts several benefits that injured workers currently receive. For instance, we all know that Utilization Review (UR) as it's currently conducted is unfair to injured workers; however, UR decisions can be challenged under the current system. Under SB 863 the current UR system will be replaced by an Independent Medical Review (IMR) system which will be even more protected from challenges by injured workers who feel they were wrongly treated. This change will save $90 million in costs, costs that previously benefitted injured workers.

3) Outpatient surgery centers will have their reimbursement rate reduced to 80% of the hospital rate even when their services are superior. That'll save another $110 million. How does that benefit injured workers? The point is that the change to an IMR system when combined with the reduced reimbursement to outpatient surgery centers will cut costs by $200 million taken right out of the hearts and souls -- and bones -- of injured workers.

4) SB 863 will replace the antiquated but already low paying Official Medical Fee Schedule with an even lower paying Medicare RBRVS schedule which will apply mostly to specialists. Reducing access to specialty care does not help injured workers regain their ability to compete in the open market place.

5) SB 863 will eliminate sleep impairments (dyssomnia) caused by injuries that have caused chronic pain. The claim is that this change will save $40 million in benefits that won't be paid to injured workers.

6) SB 863 will eliminate sexual dysfunction even when caused by spinal injuries, a change that reportedly might save another $10 million. The savings for this category is lower because many injured workers are too embarrassed to assert this claim. These changes alone amount to $250 million in savings that'll be ripped from the guts of injured workers.  There are also other reductions.

7) LatinoComp stated the following in its own statement on SB 863: "All Injury Claims by State Employees Will Be Removed From The Workers Compensation System." This change amounts to a slap in the face with a simultaneous kick in the butt to injured workers.  The California Labor Federation and affiliated unions such as the American Federation of State, County and Municipal Employees (AFSCME) should be in staunch opposition to this plank.

So what's behind this  bill that Angie Wei reports "is not perfect?" We agree only that "the Schwarzenegger 'reform' has failed both employers and workers." Her piece says that one of the faults of SB 899 is that "medical treatment is delayed." That's true. But SB 863 makes sure that medical treatment will be delayed even more and more often denied than currently. Angie Wei's real beef appears to be "opposition from vendors (italics added) who profit from the status quo."  Vendors? Does that remark include the lawyers who represent injured workers and the doctors who care for them? If it does, we need to renegotiate. Come to think of it, comprehensive negotiations  including small employers and other stakeholders have been absent from the negotiating table from the beginning.  The answer is a special session after this legislative year. The special session should include all stakeholders, not just a selected few.

Saturday, August 25, 2012


An amended version to reform California's workers comp system has managed to irritate the Big Business proponents of the bill and the California Labor Federation at the same time. Here's how:  the proposed amendments leave matters regarding utilization review, independent medical review, medical provider networks, and lowered fee schedules for specialists nearly unscathed. The proposed new amendments make small adjustments for age and would now allow workers to factor age into permanent disability awards. Treatment options would be slightly increased because psychological claims would be considered and independent medical review decisions might in a few instances be able to be overturned. These miniscule changes are enough to send Big Business into a dither and to expose the involvement of the California Labor Federation in the now scorned, but not necessarily rejected, original super-unfair draft.

In fact, WorkCompCentral reported on 8/24/12 that the California Coalition on Workers Comp and the State Compensation Insurance Fund still support the original super-unfair version of the bill. Mirabile dictu (miracle to say), the Department of Industrial Relations was also reported to have endorsed the original super-unfair draft. Doctors' groups are divided between a position and no-position, e.g., the California Society of Industrial Medicine and Surgery (CSIMS) issued a powerful protest ("Oppose the Last Minute Backroom Deal on Workers' Compensation").

Efforts to get clear position statements one way or the other from other stakeholders such as the California Medical Association (CMA), the Union of American Physicians and Dentists (UAPD), and the American Federation of State, County and Municipal Employees (AFSCME) have so far not been productive. WorkCompCentral stated in its 8/24/12 statement that "Labor unions have not publicly expressed a position on the bill, but Angie Wie, legislative director for the California Labor Federation, was a key negotiator." 

Meanwhile, LatinoComp, unafraid and stalwart, has issued its own statement in opposition to the current omnibus workers comp draft: LatinoComp points out that the current draft indicates how "all injury claims by state employees will be removed from the workers compensation system." Our question is why would labor unions that represent state workers allow this travesty to occur unopposed?

Mark Priven, a public member of the Workers' Compensation Insurance Rating Bureau's Governing Committee, called these early assertions "sparse data or anecdotal information." The current draft is co-authored by Kevin de Leon which augurs ill for injured workers who need specialized care (compare SB 923 from 2011) and for the specialists trained to provide it. The other co-author is Jose Solorio. The current bill is numbered SB 863 and does not correct a myriad of inequities from the original draft. This bill has earned the right to be withdrawn and submitted for a special session after the  regular legislative session ends.

It appears that the Insurance Journal agrees. The IJ headline for 8/27/12 is "Workers' Comp Reform Bill Increases Costs $300M."

Friday, August 17, 2012



SB 863 was originally chosen to be the gut-and-amend vehicle for this proposed workers' comp travesty.  We have revised our own original text. Where it previously said SB 863 for a few hours, it now only says "the proposed workers' comp reform measure" albeit with a hiss and a spit every now and then.

We previously opposed SB 923 because it would shove the Medicare RBRVS down the throats of injured workers and their treating doctors. The idea of this bill was to replace the low pay Official Medical Fee Schedule (OMFS) with the still lower paying Medicare RBRVS.  The upshot would be loss of access to specialty care.  It would foist on Primary Treating Physicians (PTPs) a level of care requirement beyond their training. 

We now find that the provisions of SB 923 are hidden within 279 pages of proposed legislative language. When 279 pages of a legislative proposal are sprung at the end of session we suspect that somebody is getting ambushed. In this case it's the injured workers and their access to specialty care.

We have supported AB 1687 which would open up the Utilization Review (UR)  process a little and give injured workers a chance. The proposed workers' comp reform measure wipes that opportunity out because it proposes an Independent Medical Review (IMR) process that will protect the worst aspects of the current UR process, namely, the allowed process of letting doctors who don't interview or examine specific injured workers to overrule the decisions of the doctors who have interviewed and examined them.

The 279 pages referenced above arrogantly protect this unfair system by establishing an IMR process that will be even harder to appeal against than the current already obtuse UR system. 

One is obliged to ask how a system that alleges it'll put an additional $700 million into Permanent Disability (PD) could be bad for injured workers. The answer lies in the claim that it'll also reduce costs by $1.4 billion. We are not told who will get the left over $700 million.  We are not told that management groups of non-physicians who charge groups of treating doctors for administrative services will be allowed to raise their management fees. While they may pay the PTPs a little more, they're not obliged to do so.

Here's what else the 279 pages tell us, well, some of it, anyway:

The proposed workers' comp reform measure currently plans to impose $150 mandatory filing fees for liens. Once the doctors are then short-changed and obliged to file fees for liens anyway, they'll reconsider if they should stay in the system.

The proposed workers' comp reform language  currently plans to impose a copy service fee that will further slow down injured workers' ability to prove their workers' comp cases.

The proposed workers' comp reform measure will curtail some of the features currently allowed by the otherwise already restrictive AMA Guides to Impairment currently used to establish reimbursable impairments re Activities of Daily Living (ADLs).

Sadly, the newly proposed workers' comp reform measure  has earned the right to be disgraced before it is defeated. It also exposes how the gut-and-amend process may be abused and misused.

Friday, August 10, 2012


WORKERS COMP AMBUSH sprung, well, almost!

Secretly, furtively, behind the proverbial closed doors that skilled political operatives deny exist, a carefully crafted bill has been sewn together by masters, namely, Angie Wei, legislative director of the California Labor Federation (CLF) and Sean McNally, vice president for corporate and government affairs at Grimmway Farms. The proposed legislation will boost profits for management groups while reducing access to specialty care for injured workers. CLF will justify the slashed medical benefit to injured workers by pointing out that the legislation will increase permanent disability benefits to injured workers by $700 million. CLF may not want to admit that the proposed legislation will also cut about $1.4 billion in costs in part by reducing access to specialty care. CLF may not disclose that many injured workers who need advanced or specialized medical care cease to become dues-paying union members. So what they think won't matter.

Voters Injured at Work (VIAW) takes particular offense at having the Official Medical Fee Schedule (OMFS) supplanted by the Medicare RBRVS. SB 923 (Deleon) failed last year but is still on the current agenda as a two-year bill. Its provisions are included in the current concoction that CLF and Grimmway have grimly crafted.  This column has already exposed who stands to benefit from SB 923 (see our glossary). This provision as either an independent bill or as part of a so-called reform package is designed to reduce payments to specialists, particulary focussing on procedures. Its design supposedly  increases payments to primary care physicans (PTPs) -- but neither SB 923 nor the so-called reform package tell you which management groups supporting these bills derive their income by charging management fees to PTP groups such as US Health Works. Hence, one of the beneficiaries is the management entities that deploy salaried physicians.

VIAW puts it this way: "Injured workers need both primary care physicians and specialists, but VIAW cannot support any proposal that funds an increase for one class of physicians at the expense of another."

The California Society of Industrial Medicine and Surgery (CSIMS) pointed out that "Unfortunately, the unions didn't ask any injured workers to help with the legislation and the large employers didn't ask small employers."

The Senate Republican Caucus stated that "the fact that insurers and non-unionized, non-self-insured/smaller employers are not at the negotiating table should be cause for some concern."

Not all stakeholders have fully displayed their own hands so far. We await up to date comment from the California Medical Association (CMA), the California Applicants Attorneys Association (CAAA), the Union of American Physicians and Dentists (UAPD), and the American Federation of State, County and Municipal Employees (AFSCME, AFL-CIO). We await action from physicians' specialty organizations such as the California Neurology Society (CNS filed a  letter against SB 923), and the professional groups that claim to represent other specialties such as the orthopedists, the physical medicine and rehab doctors, and specialists in pain management.

CMA's position on SB 923 is "oppose unless amended" while the UAPD's position is "watch." Watch what, we wonder?  Will CMA expand its "unless amended" statement and lobby legislative offices?

Next in line for concern and comment is Utilization Review. This column has already  discussed AB 1687 (Fong), supported by the UAPD and CSIMS (see our glossary again).  The reform package adds a new level of bureaucracy. The Labor Code would be altered such that treatment or medication disputes, including surgical options, would go to an Independent Medical Review (IMR). Like the current Utilization Review (UR) process, the IMR assignee would not interview or examine the patient, thereby preserving the worst part of the current UR process. The only grounds for appeal would be fraud, bias, or conflict of interest. We await commentary and action from CAAA on this method of protecting wrongul UR.

The outlook is for the complete ambush to be sprung at the end of the current legislative session. Will a hasty vote by many legislators who haven't been adequately briefed come down to a last minute trade-a-vote exchange?

References for further study

"Medical Development Trends in California Workers' Compensation, Accident Years, 2002-2010, California Workers Compensation Institute

"Medical Benefit Delivery in California Workers' Compensation, changes in Network Utilization and Reimbursement, 2004-2010, CWCI

"California Workers Compensation, 2012," prepared by Mark Gerlach, California Applicants' Attorneys Association, January, 2012

"Workers' Compensation Reform: Undoing the Damage of Schwarzenegger's Rules," March, 2012, California Labor Federation

"How to take away even more Care from Injured workers," Robert L. Weinmann, MD,  California Progress Report, 5 July 2011

"How to practice medicine without a license," Robert L. Weinmann, MD, San Francisco Chronicle, 8/29/08

"Utilization Review as a gift to insurance companies,", Bob Weinmann, 3/11/12

"UR a battleground in Comp Reform, Greg Jones, Western Bureau Chief,, 5/25/12

"Reforms would cut $1.4B to fund $700M benefits increase,"  Greg Jones, Western Bureau Chief, 8/10/2012

"Deal on California workers' comp likely," Mark Lifsher, Los Angeles Times, 8/09/12

"Reform appears to be on its way to California's workers' compensation system once more," California Society of Industrial Medicine and Surgery, 8/09/12

Saturday, July 21, 2012

MONEY AND MEDICINE:  a new series in keeping financial score.  

Assets of boards that are members of the American Board of Medical Specialties (ABMS) according to IRS Form 990 for 2009.

Total assets of the American Board of Internal Medicine were $57,586,843. Total assets for the American Board of Pediatrics were $41,759,971.  It is reasonable to ask how this money was earned.

The Chairman of the American Board of Medical Specialties was paid about  $800,000 (OK, maybe a little over that) whereas the Chairman of the American Board of Allergy and Immunology was paid $98,000 (OK, OK, he reportedly worked about two hours per week).  The Chairman of the holding board, the ABMS, received salary of $492,517. It is also reasonable to ask what tasks these chairholders undertook for this level of payment.

As to how the money was earned, our information is that recertification for an allergist in 2011 cost $2,700 while maintenance of certification cost $2,850. These costs don't include costs of courses to prepare for the exams. The boards have found it even more profitable when they oblige their members to take recertifcation exams on a periodic basis with new fees each time.

Reference: Dubravic, Martin, MD: J of American Physicians and Surgeons, V. 16, # 2, Summer  2011, "Board Certification ... A Malignant Growth," 

How about Hospital Administrators?

Hospital adminstrators and CEOs basically command a force of state-licensed professionals including nurses, physicians, and technologists. Yet there is no requirement that the CEO be board-certified or state-licensed. This discrepancy came to light recently at Washington Hospital in Fremont, California where the hospital non-physician CEO was recommended for a salary increase from $614,000 per year to $632,000 with total compensation set at about $857,000 with $245,502 in performance bonuses.

Reference: Artz, Matthew: San Jose Mercury News, 12/27/12

Several years ago State Senator Dan McCorquodale authored legislation to require licensure of hospital administrators. The hospitals squawked loudly and poured money into defeat of the bill. All the same, there were unexpected supporters who also poured in money, e.g., universities  that taught courses in hospital administration and that suddenly saw their walls papered with greenbacks. In the end, the issue became a "juice" bill with each side contributing money hand over fist.

How about the American Board of Medical Specialties?

The Federation of State Medical Boards (FSMB) and the American Board of Medical Specialties (ABMS), non-profit private business entities, reported annual gross receipts in excess of $350,000,000 (see annual IRS Forms 990).

The FSMB reported a corporate lobbying budget of $221,222 although it provides no continuing medical education (CME) to physicians and no direct patient care.

How about the Joint Commission on the Accreditation of Healthcare Organizations (JCAHO)?

Gross receipts for JCAHO were reported at $148,737,915 according to its 2009 IRS Form 990.

References: Orient, Jane, MD: "White paper in opposition to Federation of State Medical Boards," J Am Phys Surg 2008: 13: 23-26.

Kempen, Paul Martin, MD, PhD: "Wrong methodologies to improve medical care."

Conclusions: financial incentives in medicine are now tied to factors other than clinical excellence. Caring for corporate health in medicine is the goal to which many otherwise superb clinicians are redirecting their efforts. Academic associations in addition to boards, seeking profitable affiliations  and courting political influence, are pointing the way. These organizations have become profit centers. National organizations seek clones at the state and county levels. It is not unusual to find that a national academic organization seeks state and regional affiliates so that members pay dues at both national and state or regional levels.

Meanwhile, hospital CEOs eschew demands for licensure even though their responsibility is as much to the public as nurses, physicians, and technologists. In a state of flux such as this one, opportunities are abundant, but not in the care of patients. In due course specialty boards may seek empowerment to license clinical practitioners and in so doing reduce the authority of state boards or even render them obsolete. 

Individual physicians may want to ask their specialty boards and national academies for copies of their IRS Forms 990, then learn how to interpret and  use the knowledge for individual assertiveness.

Our intent is to update this piece from time to time and to include as many readers' comments as possible.  


Friday, June 29, 2012

Users Guide to Affordable Care Act (Obamacare and IPAB)

Transcript of above:

Jun. 26, 2012 - 3:00 PM EST
The Independent Payment Advisory Board (IPAB) provision of the Affordable Care Act (ACA), Section 10320, deserves special scrutiny. This provision is the one that opens the door to rationing. It does so by appointing a board that does not report either to Congress or to the public. The IPAB is essentially a protected bureaucracy that will have the power to rule that selected diagnostic tests and treatments do not qualify for coverage under the ACA. It amounts to a covert rationing scheme that will hogtie the hands of treating physicians while also tying the hands of sick and injured patients. In California we see an equivalent in the use of so-called Utilization Review (UR) by doctors retained by insurance companies or their surrogates. These doctors do not speak to or examine the patients for whom they issue denials of care. The IPAB is the ACA equivalent of California's UR. The difference is that the UR people are doctors: the onerous requirement to be a  bona fide physician will not be imposed on the IPAB's unelected elite. Doctors should be worried. Patients should be worried. Insurance companies should be grateful. The increased number of patients the ACA creates will be offset somewhat by allowing denials of selected diagnostic tests and treatment. Congress shouldn't be worried. Congress was smart enough to exempt itself from the ACA from the very start. Watch for this item when SCOTUS rules on the ACA.

Robert L. Weinmann, MD, Editor,

The point is we're being distracted with dissertations on The Commerce Clause, issues of penalty versus taxation, even some psychoanalysis of Chief Justice Roberts, everything but how access to health care is being reconstructed and even restricted.  Here are some of the issues:

1) ACA makes no restriction on how high insurance premiums can be raised,

2) The IPAB provision derived from Section 10320 of the ACA allows entire treatment protocols to  be disqualified from coverage to maximize cost savings. Physicians and their patients will need to fight if they want to have anything significant to say about this process.

3) Doctors will be advised to see more patients faster to make up in volume for reduced remuneration to accommodate the  huge anticipated increases in eligible recipients. Physicians will have to learn to stand their ground when it comes to deciding length of hospital stays and time allotted to patients.

4) Patients who can afford it may use the coverage that's allowed under ACA and step outside the system for whatever ACA doesn't cover,

5) The IPAB will become the Controller of health care because it will make the rules and regulations that decide what qualifies as allowable care under the ACA.  The IPAB is a federalized version of California's Utilization Review in Workers' Compensation. Decision-making authority will be in the hands of unelected politicians appointed to the IPAB by other politicians. As the Romans used to say, Cave Canem (Beware of the Dog).

Sunday, June 24, 2012


AFFORDABLE HEALTHCARE OR OBAMACARE, officially known as the Affordable Care Act (ACA) of 2010, is about to be ruled on by SCOTUS.
One item that physicians with difficult, challenging, and unusual patients need to worry about is how the ruling will challenge their ability to take care of complicated patients who have proved refractory to standard therapies, or who have failed conventional treatment protocols. These physicians and their patients could well have their hands tied unless Section 10320 is modified or eliminated. Section 10320 allows for the appointment of an Independent Payment Advisory Board (IPAB), a tribunal of persons who need not necessarily be physicians. This panel will determine what the ACA will cover. The IPAB will not report to the people or to Congress. Ensconced in legislative fiat, it is poised to ration care by finding various procedures and protocols outside the mandate of coverage. In California where we watch the misuse of Utilization Review in Workers Compensation, we see how it works: treatments with lower success rates or that aren't buttressed by what authorities consider sufficient Evidence Based Medicine are disallowed no matter how carefully a specific treatment or study may be indicated on an indivdual basis and even though the patient may have failed everything else. Injured workers in California are deprived of indicated care by this method on a daily basis. So may it be with other patients covered by the ACA unless Section 10320 is altered or repealed. Watch for our follow-up on this issue.

Monday, June 18, 2012



UTILIZATION REVIEW particularly by companies owned, controlled, or supported by insurance companies has been recognized for escalations of cost associated with wrongful denials of treatment. Here's how it works:
1) Josephine Sheetrock gets injured on the job and receives authorized initial treatment from a Primary Treating Physician (PTP) who in turn belongs to a Medical Provider Network (MPN) with which her employer and insurance company have a contract to provide care for injured workers (IWs);
2) Josephine Sheetrock's treatment does not resolve the clinical problem so the PTP seeks authorization for specialty consultation;
3) The PTP's request for authorization for specialty consultation and/or diagnostic tests is denied;
4) An authorization denial letter couched in the language of formal Utilization Review is sent to the PTP (it tells the doc to peddle his papers elsewhere);
5) The formal language is derived from the American Medical Association's Guides to the Evaluation of Permanent Impairment, from the American College of Occupational and  Environmental Medicine (ACOEM), and from the current Medical Treatment Utilization Schedule (MTUS), all usually correctly quoted while being wrongly applied;
6) The PTP can file an appeal. It the PTP files appeals too often or too successfully, the PTP risks being dropped from the MPN;
7) The consequence is that formal appeals are often perfunctory, not made at all, and are often unsuccessful (Josephine Sheetrock goes without treatment and is obliged to "go legal," i.e., to retain an attorney who specializes in workers compensation).

*** HMOs, other managed care organizations, and Knox-Keene Plans use similar mechanisms to delay or deny care. Money that should be allocated to patient care is retained by insurance companies, cooperative Utilization Review companies, and for enhanced executive compensation. 

*** AB 1687 (Fong) which applies to workers comp should be passed into law. It will help level the playing field by requiring full disclosure for denied care and by increasing access by injured workers  to lawyers who specialize in workers compensation;

*** SB 923 (Deleon) which also applies to workers comp should be defeated because it will deprive PTPs and their patients from access to specialty care. 


See our postings for 1 June 2012, 21 May 2012, and previous postings re workers compensation in

California Progress Report

San Francisco Chronicle, 8/29/08 ("How to practice medicine without a license")

These articles include reviews of previous attempts to require California state licensure for UR doctors and are available on line, e.g., concerning AB 2968 (Lieber),  AB 933 (Fong), and AB 584 (Fong).

Friday, June 1, 2012

AB 1687 (Fong) cleared the California legislature 47 to 24. This bill takes aim at the so-called "authorization" process that insurance companies use to chew up, spit out, and ultimately deny care to injured workers.  Our previous blogs explain the bill in greater detail. Suffice to say at this point that proponents assert that injured workers who've been denied care by this arcane method which is allowed to use out-of-state doctors who are not licensed to practice medicine in California should be entitled to retain lawyers to review wrongful denials of care (see references, below). Opponents say that the bill carries an incentive to appeal even properly denied treatment requests. This author regards this assertion as an admssion that opponents already know that some denials are improper.

Supporters of the bill include the California Society of Industrial Medicine and Surgery (CSIMS), California Labor Federation (CLF), California Applicants' Attorneys Association (CAAA), and the Union of American Physicians and Dentists (UAPD). Pro-insurance interests that oppose the bill include the California Association of Joint Powers Authorities, the California Coalition on Workers' Compensation, and the Association of California Insurance Companies (ACIC).

Previously, this column has criticized AB 1687 on the grounds that it's not strong enough and will still allow non-California licensed doctors to do utilization review for workers injured in California and to overrule treatment decisions by fully licensed doctors who've also completed a state mandated pain management course (the non-licensed out-of-state doctors are exempt from this requirement). All the same, AB 1687 is a step in the right direction and could conceivably deliver a kick into the gnashing teeth of insurance companies whose mantra seems to be "profits before patients."

Other references by this author

"Wrongful utilization review perpetrated by inappropriate use of the ACOEM Guidelines," California Society of Industrial Medicine Bulletin, #4, Fall, 2006.

"How to practice medicine without a license," San Francisco Chronicle, 8/29/08.

"Utilization Review as a gift to insurance companies,", 3/11/12.

Monday, May 21, 2012

EVIDENCE BASED MEDICINE (EBM) is the new mantra in health care. In its own way, AB 1687 (Fong) is a call for application of  EBM which is supposed to be the basis for Utilization Review (UR) in workers' compensation in California, for management-based authorizations in the nation's HMOs and PPOs, in Medicare, in Medicaid, and for managed care decisions everywhere and anywhere. All the same, proponents of EBM are aware of  high levels of sophisticated hypocrisy that engulf the EBM concept and that may ultimately contribute to its demise.

In California the most recent example revolves about AB 1687 (Fong) which would authorize attorney fees when injured workers who have been awarded future medical care successfully appeal UR decisions that deny prescribed care. AB 1687 has recently been studied in Assembly Appropriations.

Julie Salley-Gray, consultant to the committee, said, according to workcompcentral (WCC, see references below), that the bill will have minimal fiscal impact because challenges to UR denials are relatively infrequent. She is on record as having said that only 6% to 20% of UR requests are denied -- we are advised that her figures come from the California Professional Firefighters  (CPF) who are the sponsors of AB 1687 and who, in turn, got the information from the Division of Workers Compensation (DWC).

Workcompcentral stated in its release of 5/21/12 that the lobbyist for CPF did not return calls asking who in DWC provided this information. Previously, when sought information from this source, we also found that CPF did not return calls or e-mail.  However, workcompcentral also said that Carroll Wills, Communication Director for CPF, attributed the information to Rosa Moran, Administrative Director for DWC. The quote from Moran, however, was not exactly one that imbued readers with confidence, e.g., "I can't speak to when the data was generated, we got the figure from the AD (administative director) this spring and understand it to be current."

This level of response appears casual and not consistent with the high levels of data that insurance companies and their utilization review cohorts exert on doctors to support the medications they prescribe, the diagnostic tests they ask for, and the treatments and surgeries they recommend.

Workcompcentral also queried DWC spokesman Peter Melton whose reply by e-mail to WCC said that DWC does not keep track of UR statistics. Now we appear to gone from debatable EBM statistics to none at all. How is that possible? Reference is then made to a CHSWC lien report that said that treatment authorizations were "in dispute in 70% of liens surveyed." We are also told that the reasons for treatment denials were unknown in 20% of cases. We are then informed that Erika Monterozza, spokeswoman for the Department of Industrial Relations (DIR), stated that she couldn't confirm or deny whether DWC provided the information or not. We do not know if anybody asked whether or not any of the data reported turned out to be incorrect or distorted.

Mark Rakich, consultant to the Assembly Insurance Committee, was reported to have stated that the fiscal effects of the bill would include "potentially minor increases of workers' compensation insurance due to the added costs  associated with the relatively few challenges to the relatively few denials."  The trouble is we no longer can tell whether or not the number of challenges is "relatively few" or not.

What we do know is that Gov. Schwarzenegger squandered some of his panache with the new PDRS in 2005 which slashed PD benefits. Treating doctors also know that injured workers are often left stranded and that their PTPs (primary treating physicians) are left holding the malpractice bag when recommened and prescribed procedures and treatments are denied by UR companies which claim to rely on ACOEM or MTUS protocols which in turn claim to be based on EBM.

At this point Mark Gerlach, consultant to the California Applicants' Attorneys Association, hit the nail on the head when he stated that it is important to know the sources for the data in support of the 6% to 20% denial rate that was included in the Appropriations Committee Bill analysis.


Stakeholders, patients most of all, need to know in clear and concise language how EBM is used to authorize, delay, or deny treatment. Stakeholders also need to know if and how DIR and DWC use this information and to what extent its use has become an industry tool that insurance companies and their compliant utilization review companies wield to reduce healthcare expenditures at the expense of injured workers.

In response to queries about how EBM and AB 1687 intertwine, here's our answer: AB 1687 is a step in the right direction because its implementation will enhance impartial application of EBM.

Sunday, May 13, 2012

YES, re AB 1687 (Fong): it gives injured workers a fair chance!

According to the California Professional Firefighters (CPF) website this bill to make limited reforms in workers' compensation utilization review (UR) procedures will require that "communications about a delay, modification or denial of workers comp treatment would be required to include prominently displayed alternatives for the injured worker's next steps. In addition, if a related medical treatment dispute arises, and enforcement of a future medical award is required for continuing an injured worker's medical treatment, this bill allows the Workers Compensation Appeals Board to award reasonably-incurred attorney's fees in instances where an injured worker prevails in validating the medical award." We feel this bill is a step in the right direction so we recommend a yes vote.

Previously, we've crticized the bill because we felt it didn't go far enough since it doesn't require that doctors who do UR in California be licensed in California. As matters stand now, doctors with only Texas licenses may do UR in California whereas doctors with only California licenses cannot do UR in Texas. The California policy caters to insurance companies that use non-California doctors to issue UR denials -- that saves money for the insurance companies since they don't pay for treatment that has been denied by UR.

The overall loss to California in terms of fees and taxes is about $10,000,000 per year, a total of $30,000,000 when we take into account that Schwarzenegger vetoed this legislation twice and Brown, once. Protection of the insurance industry seems to be an area where Schwarzenegger and Brown agree.

Now comes Paul Fong with AB 1687 which would not require licensure in California but which would call for reasonable explanations of denial of care and that these denials of care be in clear and concise language.

Existing law requires that workers injured in the course of employment get indicated medical treatment and that they get compensated. Unreasonable denials of care are supposed to be subject to penalties and attorney fees. The trouble is that this requirement is commonly pushed aside while the two-year disability limit runs out. The current review process is not equitable because the degree to which UR doctors especially unlicensed ones are independent is questionable. In our view, the current system has already run roughshod over the workers' comp reforms embodied in SB 899, which many now feel was a shoddily written and hastily approved backroom agreement.

It's time to try again: it's time to give AB 1687 (Fong) a chance. If that doesn't work, we'll see about running a new licensure bill unless Fong and CPF decide to include such an amendment in AB 1687.


"How to practice medicine without a license," Robert L. Weinmann, San Francisco Chronicle, 8/29/08

"Utilization Review as a gift to insurance companies,", posted by Bob Weinmann, 3/11/12

"Committee Passes Bill Authorizing Attorney Fees in UR Disputes," by Greg Jones, Western Bureau Chief, workcompcentral, 4/19/12

"Bills Target UR Denial," by Greg Jones, Western Bureau Chief, 3/20/12, workcompcentral, 3/20/12

"UR Data in Bill Analysis Highlights Need for Good Data," by Greg Jones, Western Bureau Chief, workcompcentral, 5/21/2012

Thursday, May 3, 2012


THE INJURED WORKERS WHO WILL BE HARMED MOST IF SB 923 (De Leon) becomes law are those whose jobs predispose them to serious injuries, e.g., construction workers and farmers, telephone repair workers, restaurant workers, freight handlers, even health care personnel (one health care worker was killed on the job in 2011) and other maintenance workers. SB 923 should bite the dust this year just as it did last year.

Ostensibly, the reason for SB 923 is to enable use of the Medicare RBRVS to pay for physicians' services to injured workers. The idea is to reduce payment to specialists so that payment to primary treating physicians (PTPs) can be increased. The proposed mechanism is to replace the current Office Medical Fee Schedule (OMFS) with the Medicare RBRVS.

But there's a catch. While SB 923 will reduce payment to specialists, it will not necessarily increase pay to the PTPs. In fact, the bill as currently written does not guarantee this outcome. In a personal letter by this writer to Daniel Crowley, Chairman and CEO of US HealthWorks, 6/24/2011, it was pointed out that SB 923 will cause specialists to withdraw from providing services to injured workers. Speaking to one of the committees that heard the bill last year, Stuart Bussey, MD, JD, president of the Union of American Physicians and Dentists, Local 206 of the American Federation of State, County and Municipal Employees (AFSCME, AFL-CIO) acknowledged that SB 923 might give PTPs a temporary "boost." Bussey also said that it would leave him, as a PTP, "holding the bag" for malpractice when he couldn't get specialists in timely fashion for seriously injured workers. Eventually, the UAPD went "neutral" or "watch" on the bill. The bill failed when a consortium of opponents teamed up to oppose it, an unlikely coalition led by the California Society of Industrial Medicine and Surgery (CSIMS).

Opposition to SB 923 also included the California Medical Association,  the California Orthopedic Association, the California Chiropractic Association, the California Neurology Society, the Interfaith Community of Los Angeles, the League of United Latin American Citizens, Voters Injured at Work, Latino Comp, La Raza Roundtable, and numerous individuals including injured workers who understood that the bill would protect them out of the healthcare protection they already had.

The Other Catch is how SB 923 is sponsored and how US Health Works gets paid. When USHW gets paid for providing care to injured workers, a portion of the money goes to the non-physician management company and to the investors who own the USHW clinics. Not all the money that the Medicare RBRVS conversion raises would go to the PTPs. Payment for management services is paid by the physicians, the PTPs. SB 923 as written doesn't preclude USHW from increasing its management fees to the PTPs. Once the doctors' group has received this  pay increase thanks to passage of SB 923 the next step will be to share it with the management group. Some pundits think that this factor is the real reason USHW executives are pushing for passage of SB 923.

Does the OMFS pay too much? The OMFS was set up in  1975 as a market-based mechanism (the Medicare RBRVS is not). Specialists are paid 5% less for specialty procedures now than they were in 1986. By contrast, the Evaluation and Management codes (E & M codes) for PTPs have been increased three times since 1986.

Unpredicted consequences of SB 923 are likely to include loss of Medical Provider Networks (MPNs) when the MPNs lose enough specialists such that they no longer meet the standards of the Labor Code pursuant to the reforms implemented during the Schwarzenegger years since 2004 and passage into law of SB 899. Some states such as Hawaii and Texas had to revise their Medicare-based fee schedules to bring the specialists back in -- thereby defeating the very purpose of having voted in the Medicare RBRVS. The anticipated reductions in pay to the specialists would be from 20 to 48% under SB 923 -- at that rate many specialists would be obliged to quit the program. Robbing Peter to pay Paul is not sound economic policy.

Conclusion: SB 923 qualifies for our "bite the dust" recommendation. The OMFS is already low cost. Updating it is recommended. Getting rid of it would endanger the provision of care to injured workers.