EDITOR’S UPDATE 4/29/2021: The day after Bradford & Barthel published this blog, it was revealed that state lawmakers had amended Assembly Bill 1465 to remove the requirement to create a statewide MPN by 6/30/2022.
Instead, the new amendments scrapped that requirement and now call for a study from the Commission on Health and Safety and Workers’ Compensation to submit a study to the state Legislature about delays and access to care issues in MPNs. The study would be due by 1/1/2023.
The study would examine the:
- Length of delays and reasons for the delays,
- Frequency of such delays after a worker receives their first treatment,
- Distances between injured workers and their treating physicians.
The takeaway from this is that state lawmakers could revive the calls for a statewide MPN during the 2023 legislative session, which is only two years from today. On the other hand, if the study shows that such delays are not as common as some claim they are, then maybe the proposal would be scrapped altogether.
California lawmakers’ proposal to create a statewide medical provider network is quickly proving to be the most controversial bill of 2021.
The bill, Assembly Bill 1465, was introduced by Assemblywoman Eloise Reyes (D-San Bernardino) and is currently making its way through various Assembly committees, including the Assembly Insurance Committee on April 29, 2021. To be clear, the bill is far from becoming law at this point in time, as it would have to be approved by the Assembly and the state Senate.
The proposal would mandate the creation of a California MPN, which would create an alternative MPN to employers’ and carriers’ MPNs. Injured workers could select a provider from either the California MPN or their employers’ MPN. The legislation would also require the Division of Workers’ Compensation to create new statewide MPN rules by April 30, 2022, and implement the California MPN no later than June 30, 2022.
CONCERNS: COSTS, STANDARDS, AND MORE
Employers, administrators, and insurance carriers are worried about the bill being costly and unnecessary. For instance, The California Workers’ Compensation Institute determined that the bill would create up to $314 million in annual costs for defendants by eliminating many of the contractual discounts that exist in current medical provider networks. Those contractual discounts would be eliminated by allowing workers to treat outside defendants’ MPNs.
Defendants are also concerned about the statewide MPN having a lower standard of care than existing employer MPNs. Current MPNs call for their own specific standards of care, and when providers violate those standards they can be kicked out of a defendants’ MPN.
For instance, one way a provider could violate a MPN’s standard of care is by repeatedly prescribing or recommending medical treatment that is not deemed reasonable and necessary in any medical guidelines. Another way a provider could violate the standard of care is by billing for services that it did not perform, or did not perform adequately.
This raises the question – if the state of California is administering the MPN, and every physician without criminal convictions is allowed into that MPN – does the statewide MPN even have a standard of care? Even if the DWC is willing to strictly enforce similar standards of care and kick out any violators, the DWC opens itself to being sued by providers who are angry about being terminated from the statewide MPN.
Back when State Compensation Insurance Fund had a majority of the state’s market share, it found itself being sued by providers when it kicked them out of its MPN program. These lawsuits aren’t simple, and can often require costly expert witnesses.
The DWC would also incur costs by having to create a department to monitor and administer the statewide MPN. While that may not be the most expensive expenditure, the state would need to create a staff to manage and curate the MPN on the heels of a global pandemic which has depleted government coffers. The size of that staff could increase significantly if a number of MPN-related lawsuits or other complex problems and issues arise.
Additionally, continuity of care issues present a legitimate concern for both sides of the aisle. These could arise if applicant’s attorneys urge longtime applicants to leave their primary treating physicians in employer MPNs for more liberal doctors in the statewide MPN to help drive up the value of a case.
This takes us to the old joke that you’ll hear cynical defendants say every now and then, especially in reference to denied cases with lien treaters – did you ever notice that nobody ever seems to get better with all this medical treatment?
The gist of this one-liner is not to say that medical treatment is unnecessary – it usually is necessary – but rather to point out that workers’ compensation patients with liberal lien doctors seem to have far greater difficulty reaching maximum medical improvement than patients in the group health system.
So what’s going to happen if liberal lien treaters are allowed into the MPN? Lower efficacy rates and higher costs? What does that solve? It arguably creates more problems.
WILL THEY APPROVE IT?
Let’s not lose sight of the most important question right now – what are the odds of this bill passing? “Higher than usual” is the short answer. Why? Well, the fact that this bill has been introduced by Assemblywoman Eloise Reyes, who does carry plenty of clout as majority leader of the Assembly.
Reyes has gotten other bills approved in the past such as AB 685, which requires employers to notify workers when they’ve been exposed to COVID-19 in the workplace.
Fortunately, employer and carrier lobbyists have been opposing the bill, and it does have a long way to go, so it is possible that the bill will lose steam along the way. The bill could attract additional scrutiny as it enters the suspense committee, which is the committee that analyzes any bill that will have a major fiscal impact on the state budget.
Another unknown is how Gov. Gavin Newsom feels about the bill, as he picks his battles carefully while facing a recall election on the heels of a pandemic. (If anyone thinks being governor is simple or easy, I invite you to put yourself in Gov. Newsom’s shoes for the last few years.)
So if I were an oddsmaker, I would handicap this bill’s odds of approval at about 60%. This is slightly better than the “coin flip” range of 50%. In other words, this bill does have some traction and is backed by important people, but it is not a slam dunk either. We’ll have to continue to monitor this bill for the next few months during the current legislative session, which adjourns on September 10, 2021.
Got a question about workers’ compensation defense issues involving the coronavirus? Feel free to contact John P. Kamin. Mr. Kamin is a workers’ compensation defense attorney and partner at Bradford & Barthel’s Woodland Hills location, where he monitors the recent legislative affairs as the firm’s Director of the Editorial Board. Mr. Kamin previously worked as a journalist for WorkCompCentral, where he reported on work-related injuries in all 50 states. Please feel free to contact John at jkamin@bradfordbarthel.com or at (818) 654-0411.
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