State’s Doctors Fight Rule on Workers’ Comp Review

In the latest tussle involving California’s workers’ compensation system, doctors, insurers and regulators are battling over who should make the call on how to treat those hurt on the job.

Last year’s landmark overhaul of the state’s troubled workers’ comp system gave insurance companies the right to ask outside medical experts for a second opinion if an insurer disagreed with a course of treatment prescribed for an injured worker.

State regulators are proposing rules that would allow insurers to contract with out-of-state doctors not licensed to practice medicine in California to render these judgments -- which could result in the disapproval, modification or delay of treatment regimens ordered by the physician who is actually caring for the injured worker.

The California Medical Assn., which represents about 30,000 California doctors, as well as professional groups representing California podiatrists and chiropractors, complain that insurance companies already are hiring out-of-state doctors to evaluate treatment plans. The doctors contend that state law allows only physicians licensed by the state to make those decisions.

And advocates for injured workers say the practice of allowing out-of-state doctors, working under contract with insurers, to pass judgment on expensive treatments is depriving Californians of needed medical care.

The developing conflict is the latest in a series of increasingly bitter disagreements among businesses, insurers, labor unions and doctors about how best to turn last year’s legislative overhaul of the $24-billion-a-year workers’ compensation insurance system into detailed rules about benefits and patient care. All sides claim they want to cut costs to employers without sacrificing health protections and benefits for workers.

The regulations proposed by the state Division of Workers’ Compensation would put the state’s stamp of approval on the practice, which Andrea Hoch, the state’s top workers’ comp administrator, says is consistent with review procedures used by health maintenance organizations for non-work-related care.

But California doctors say that out-of-state physicians often lack specific expertise in California’s workers’ comp law and medical protocols designed to get those injured back on the job.

“We can’t talk to [reviewing doctors] when they are far away; we have no way of evaluating whether they are competent or not, and we can’t complain” to state regulators, said Jack Lewin, the medical association’s chief executive.

The Medical Board of California, a government panel that licenses and disciplines physicians and surgeons, has raised similar alarms. In several letters to fellow regulators at the Division of Workers’ Compensation, the board said the proposed regulations were illegal because they would allow out-of-state physicians to practice medicine in California without a license.

Linda K. Whitney, the medical board’s chief of legislation, said state law specifically required that anyone who evaluates a California patient’s case and makes a decision on treatment, even someone thousands of miles away, must be licensed here.

In Hoch’s view, however, “the fact that [the reviewing doctors] are not licensed in California does not mean they are not capable of reviewing treatment requests and applying guidelines that are national. A broken bone is a broken bone.”

Hoch said workers’ compensation medical directors, who are licensed in California, would remain responsible for all treatment decisions made by reviewers in their networks. The doctors’ complaints, she suggested, have more to do with protecting turf and making money than with ensuring top-notch treatment for patients.

Insurers contend that keeping all medical review work in the state could substantially raise claims costs and lead to higher premiums for employers.

Advocates for injured workers counter that insurance companies’ concerns for their bottom lines put strong pressure on contracted doctors, who are beyond the reach of California regulators, to reject treatment plans.

“The economic incentive for the [reviewing physicians] is to deny more often than they approve -- or they won’t be used again,” said Peggy Sugarman, executive director of Voters InjuredatWork.org, a Sacramento-based organization of workers’ compensation claimants.

Routine denials and modifications of treatment requests already are taking a toll on patients, said Franklin Case, a Burbank podiatrist and past president of the California Podiatric Medical Assn. Case said he recently prescribed custom shoe inserts for a laborer suffering from work-related heel and ankle pain in his right foot.

“The request was sent to Texas, and they said that if the patient only had pain in one foot, they could only authorize an insert for one foot,” Case said, noting that using an insert in only one shoe could cause instability and create back problems. “Someone out of state was making a ridiculous adjudication, and I don’t think he was a podiatrist.”