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