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.

SB 863: CREDITS AND KUDOS

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.

ISSUES NOT RESOLVED THAT MAY REQUIRE CLEAN-UP LEGISLATION OR RULINGS FROM THE OFFICE OF ADMINISTRATIVE LAW

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."

References

"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

INDUSTRY JOURNAL PREDICTS $300 MILLION INCREASE IN WORKERS' COMP COSTS

$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.

MINISCULE AMENDMENTS TO UNBALANCED WORKERS REFORM DRAFT IRRITATE BIG BUSINESS AND ITS BIGGEST LABOR ALLY 

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."

WORKERS COMP AMBUSH IN PROGRESS

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," Totalcapitol.com, Bob Weinmann, 3/11/12

"UR a battleground in Comp Reform, Greg Jones, Western Bureau Chief, workcompcentral.com, 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

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," Totalcapitol.com, 3/11/12.

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.

References

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

"Utilization Review as a gift to insurance companies," TotalCapitol.com, 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

AB 655 (Hayashi) versus Osamah A. El-Attar v. Hollywood Presbyterian Med Ctr

"Allowing the Governing Board to select the hearing officer and JRC panel is not an inconsequential violation of the Bylaws. Rather, it undermines the purpose of the peer review mechansim ... Peer review that is not conducted fairly and results in the unwarranted loss of a qualified physician's right or privilege to use a hospital's facilities deprives the physician of a property interest directly connected to the physician's livelihood."

AB 655 (Hayashi) flies in the face of this case and needs corrective language in the form of amendments. Better still would be to hold the bill over until next year (making it a two-year bill) so it can be re-worked and re-submitted with language that'll protect against sham peer review.

The California Society of Industrial Medicine and Surgery (CSIMS) filed a letter of "Concern" on August 24th. To the best of this writer's knowledge, the Union of American Physicians and Dentists (UAPD) remains "watch" while the California Medical Association (CMA) remains the sponsor for a bill that looks as though it were written by the California Hospital Association (CHA). In the Osamah A. El-Attar case, 2nd Appellate District, Division 4, B209056, the CMA provided Amicus Curiae on behalf of Defendant and Respondent (Hollywood Presbyterian Medical Center).

Source: Court document "Certified for Paritial Publication," Court of Appeal of the State of California, Second Appellate District, Division Four, filed 8/19/11 (Los Angeles County Super. Ct. No. BS105623).

However, from the CMA website, "Peer Review: El-Attar, MD, v. Hollywood Presbyterian Medical Center," we learn that "Dr. El-Attar's medical staff privileges were not renewed by the hospital's governing Board. Following a finding by the Medical Executive Committee (MEC) that there was no basis for the hospital to deny Dr. El-Attar's reappointment to the medical staff, the hospital bypassed the MEC and picked its own panel and hearing officer over Dr. El-Attar's objections. CMA filed an amicus brief in support of Dr. El-Attar (italics added).

The El-Attar court case and AB 655 (Hayahsi) have in common that they both reflect increasing tension over control of the medical staff. Hospitals want control of physicians. It's an end-run around the bar on corporate practice because it's a way for hospitals to become de facto bosses over physicians' practices. Physicians are supposed to work in the interest of patients, not corporate entities.

AB 655 (Hayashi) as currently written tilts too far in favor of hospital administrations. Unamended, the bill pours physicians' rights and privileges down the proverbial drain. Language recently offered by the California Society of Industrial Medicine and Surgery (CSIMS) could cure this defect. We urge its incorporation into the bill. Absent that, we recommend converting AB 655 into a two-year bill.