If you ever wondered about why Medicare has had an increasing interest in workers' comp settlements, wonder no more.

Medicare is going broke. 2017 is the projected demise of Medicare unless adjustments are made. Painful adjustments will have to be made, probably including some means-testing and higher co-payments for Medicare users.

Look at this analysis by Robert Pear in the New York Times:
http://www.nytimes.com/2009/05/13/us/po ... nted=print

It isn't surprising that workers' comp settlements with Medicare Set-Asides are coming under increasing scrutiny.

Stay tuned.

Julius Young
www.boxerlaw.com

Long awaited, the California Supreme Court decision in Smith v. WCAB and Amar v. WCAB has been rendered. A link to the decision is included at the bottom of this post.

Though not a surprise to most observers, the decision will have negative ramifications for many workers. More on that in a minute. First, a recap of the facts of the cases.

Both Mr. Smith and Mr. Amar had "future medical" awards.

To enforce his medical treatment award, Smith went back for re-exam to the AME who had previously been used to resolve the case. The AME indicated that the medical treatment (epidural injections) sought was related to the injury on which treatment had been awarded. Smith's attorney claimed an attorney fee against the insurer, arguing that the denial of treatment was a constructive termination of treatment. Labor Code 4607 provides for attorney fees against defendants if "reasonably incurred by the applicant in resisting the proceeding to terminate the medical treatment". Overturning trial-level and WCAB panel decisions that refused to award attorney fees, the 2nd District Court of Appeal agreed to allow fees.

In Amar's case, Mr. Amar had been awarded medical treatment for a foot injury. There was a later dispute whether as a result the defendant was required to cover treatment for weight loss and diabetes as a consequence of the foot injury. Amar's attorney prevailed at the board over utilization review on the weight loss issue and sought attorney fees under Labor Code 4607. Rejecting trial-level and WCAB panel rulings denying the fees, the 2nd District Court of Appeal ruled that fees could be awarded under 4607.

According to the Court of Appeal, Labor Code 4607 authorizes an award of attorney fees to an employee who successfully challenges an employer or insurer's denial of a specific request for medical treatment.

The California Supreme Court disagreed, finding that in neither case was there a petition to terminate treatment. The Court was unwilling to extend 4607 attorney fees to medical treatment denials where the defendant wasn't trying to extinguish the award altogether. The Supreme Court saw the insurers as denying specific treatment requests rather than attacking the treatment award altogether.

In the Supreme Court's view, a worker could pursue a penalty in the event of unreasonable delay and seek attorney fees under Labor Code 5814.5.

Moreover, the Supreme Court had concerns that awarding attorney fees under 4607 would undermine the utilization review process.

The employer and insurance community is undoubtedly breathing a sigh of relief. That's particularly so at a time when there are widespread concerns that medical cost inflation and increased treatment usage is driving higher costs. Insurance Commissioner Poizner has scheduled an early June hearing on this issue.

But in the real world, the decision will negatively impact the disabled.

It's true that there are some situations where carriers simply ignore treatment requests, refusing to authorize the treatment or failing put the requests into the time-sensitive utilization review process. Attorneys will still pursue those situations, and fees will be awarded.

But penalties were eviscerated by the 2004 reforms. Formerly based on 10% of the entire medical treatment in the case, penalties can now be awarded only up to 25% of the cost of the item delayed. A penalty on delay of (or non-UR based denial of) a $1,000 MRI would be $250.
This has discouraged use of penalties as an enforcement tool where the underlaying treatment is inexpensive. In many situations the attorney fees under Labor Code 5814.5 might far exceed the amount of the penalty or the cost of the disputed item.

The reality is that most treatment denials these days are utilization review based. UR has become a potent tool for carriers can use to manage medical treatment.

The big question: who is going to help workers with further medical awards navigate the UR process.

Clearly, the California Supreme Court assumes a UR process which is "expeditious, inexpensive, and driven by uniform standards and the
recommendations of treating physicians".

Tell that to many a disabled worker who was awarded medical treatment years ago but who now has trouble getting medication refills each month at the pharmacy or an epidural when his pain flares beyond its baseline.

Many of these workers-and their doctors-are having great difficulty navigating the UR process. Often there's much to be done... legal counsel makes calls, coordinates with the treating doctor, solicits reports appealing the UR, agreed with the carrier on a suitable QME
or panel QME...

Who's to pay the attorney for these services?

I'll be offering more reflections in my next post.

Meanwhile, here's the link to the Smith case:
http://www.courtinfo.ca.gov/opinions/do ... 150528.PDF

Stay tuned.

Julius Young
www.boxerlaw.com

"Mother needs something today to calm her down
And though she's not really ill
There's a little yellow pill
She goes running for the shelter of a little mother's helper
And it helps her on her way, gets her through her busy day...."
-The Rolling Stones

Americans use a lot of pills.

I'm all for helping clients get what they need for pain control as long as it helps them become more functional. In my experience, in the comp world it's easier to get prescriptions covered under ACOEM and UR than it is to get approval for biofeedback, counseling, and other types of pain management.

It turns out that many doctors get a dose of Big Pharma indoctrination in medical school.

At many of the nation's top medical schools, there is increasing concern about conflicts of interest between med school professors who have monetary relationships with the big drug companies. Do med school profs who have a financial stake in drug companies as consultants influence med students in an unsavory way? As one student noted, does this violate the "protected space" of academia?

Today's med students are the doctors who will be treating workers' comp patients in occ med clinics and MPNs of the future.

Take a look at this piece by Duff Wilson which just ran in the New York Times, analyzing the flap at Harvard's Medical School over this issue:
http://www.nytimes.com/2009/03/03/busin ... nted=print

Stay tuned.

Julius Young
www.boxerlaw.com
(hey, you folks out there with iPhones! It's easy to add a button for workerscompzone so you can click directly to the blog!)

Here in California we have some experience with "evidence based medicine".

After all, that was the premise for adoption of medical treatment standards in the California workers' comp system. The initial standards adopted were the "ACOEM guidelines". Those are still in effect, although the state has moved to adopt "evidence based guidelines" from other sources as well, including some from the Work Loss Data Institute's ODG treatment guidelines.

A recent sideline to the debate over the $787 billion federal stimulus package has been a debate over evidence based medicine and "comparative effectiveness research". The debate is a precursor to likely struggles over national healthcare reform.

Included in the stimulus is $1.1 billion for research to compare effectiveness of treatments. The bill provides for a 15 person committee to co-ordinate and advise on effectiveness research.

This is already being done, though to a lesser extent. Some efforts are now provided by the National Institutes of Health and the Agency for Healthcare Research and Quality (see link at the bottom of this post).

In California, ACOEM is all too frequently used to deny the small stuff.
A back brace, pool therapy, a home traction device. Some of the treatment modalities run through utilization review under ACOEM guidelines cost less than the cost of the review. That's stupid.

But there are bigger questions on a national scale. Do Americans receive too much surgery? Some advanced European countries do far less surgery for some common orthopaedic conditions.

Is that a good thing or a bad thing?

If your loved one has prostate cancer, it's hard to feel comfortable with a strategy of "watchful waiting". But as a rule, is that best?

The pendulum has swung in the last several decades towards much more aggressive "pain management". But how effective are some of the pain management devices? And how cost-effective?

Effective and cost-effective may not always be the same thing.

Are there instances in which older medications in the pharmaceutical armamentarium are just as effective as newer, costly medications?

Our medical system currently is consuming about 16% of GDP. And that's before most of the baby boomers have retired and start breaking down. Can we get more bang for the buck?

Our biggest auto company, General Motors, is said to be a healthcare company (for retirees) that just happens to make autos. How to deal with this burden?

These are not idle questions to be asking.

Yet, there was great concern in many quarters over the research provisions in the stimulus. Rush Limbaugh and a number of talk radio commentators charged that cost-effectiveness research was a Trojan Horse for healthcare rationing that will come with any Obama comprehensive health reform plan.

Centrist Democrats such as Rep. Susan Davis (from San Diego) and Rep. Ellen Taucher (from Walnut Creek) wrote to Speaker Pelosi, expressing concern that the research not be focused on denying critical care just because of cost.

Here's the website of the Galen Institute, a "free-market" healthcare advocacy group:
http://www.galen.org/

As Steve Pearlstein notes in this piece in the Washington Post, this dustup over healthcare planning is the opening salvo over the battle for comprehensive healthcare reform:
http://www.washingtonpost.com/wp-dyn/co ... 27_pf.html

The site of the U.S. Agency for Healthcare Research and Quality is here:
http://www.ahrq.gov/clinic/epcix.htm

Stay tuned.

Julius Young
www.boxerlaw.com
(you can subscribe to the blog by clicking on the RSS reader button on the lower right corner under "Most Recent Entries")

As we head toward the end of the year, Sacramento appears stuck in gridlock over the state's deepening fiscal crisis.

Many state workers are facing forced furloughs which could amount to a 10% pay cut. With California unemployment at 8.4%, hundreds of infrastructure projects are being halted due to the state's cash position.

Building trades, operating engineers, SEIU workers, state professionals....all find themselves being thrown under the bus as these events unfold.

Unfortunately, the magnitude of the problem is such that it's unlikely that the legislative solution will be to tax our way out of these cuts.

This is the backdrop for California's workers as we head into the holiday season.

In the next couple of days I'll be posting my take on the Top 10 developments in California workers' comp this year and doing a post on the recent Aguilar case (regular blog readers may have noticed a glitch over the last couple of days when drafts of several unfinished posts found their way to the net).

Meanwhile, the California Workers Compensation Institute has unveiled its study on medical provider network usage. No big surprises there.
CWCI documents the growing usage of MPNs in California workers' comp. That has been crystal clear to those in the comp community for several years.

Here's a link to the study:
http://www.cwci.org/research.html

Stay tuned and check back for the Top 10 events piece.

Julius Young
www.boxerlaw.com
(you can subscribe to the blog by clicking on the RSS reader button on the lower right corner below "Most Recent Entries")