Work Comp News

CANS Newsletter articles related to Workers’ Compensation

(each newsletter in its entirety can be found in the section “newsletters”)

January 2007 – CORRECTION: In the DWC article in the December 2006 issue of the newsletter (see paragraph below), E&M codes were incorrectly identified. The increased codes are the 99201-99205 and 99211-99215 codes (not the 90201-90205 and 90211-90215 codes as reported.) We regret the error.

December 2006
DWC Plans E&M Codes Increase—Surgery Fees Changes Coming Later

The Division of Workers’ Compensation (DWC) has dropped the first shoe and proposed increases for Evaluation and Management codes to take effect as of 2/15/2007 . The increases were felt to be necessary because present fees are less than Medicare rates (and they didn’t suffer the 5% decrease in 2004 because of that) and because the DWC feels the added burdens of dealing with the AMA Guides to impairment and the Utilization Review police justify more money for the 90201-90205 and 90211-90215 codes. The changes reflect about a 20% to 35% increase for the new patient evaluation codes and roughly a 20% increase for the established patient management codes except for the brief 90201 and 90211 codes which are pretty much unchanged. These increases will bring Comp E&M reimbursement up to a blended California Medicare rate. Although these changes are certainly welcome and overdue, the basic premise that Medicare rates are adequate compensation for dealing with the Comp patient is flawed. The ease with which one can submit a bill and get promptly paid by Medicare pales before the thrash involved with billing a Comp carrier and, after a billing review attempt at downgrading, finally getting paid in a month or two or three. The Comp patient report requires facility in the use of Comp syntax not necessary for Medicare patients and when the report involved does force one to use the AMA guides or the ACOEM guides or argue with a UR reviewer located in Ohio , then Medicare rates for the reports are woefully inadequate. The occupational medicine crowd, who makes a living using these codes, will see a nice and warranted pay increase. Those of us who do a specialist consultation and recommend involved treatment including surgery will still be underpaid. Hold your breath for the anticipated procedural fee schedule changes due out later in 2007 wherein decreases are anticipated. The second shoe dropping will likely be a clunker for neurosurgeons.

November 2006 – Utilization Review Fightback
For those of you who have to deal with seemingly endless utilization reviews of proposed treatment of work comp patients now have an avenue to register complaints. The Division of Workers’ Compensation (DWC) now has a complaint form that is available online at Once to the site, do about a 2 page scroll down to find the form. If you open the Word version of the form, you can complete it using your computer and E-mail it in as well as save it on your computer. The DWC says they are committed to enforcing UR rules but need info to spark enforcement. Apparently, treatment cannot be denied solely upon the grounds that it is not blessed by the ACOEM guidelines. Just how to deal with reviewers who selectively quote the literature to support their personal or corporate bias against a particular treatment remains an obstacle requiring a time consuming appeal process. One wonders if a reviewer’s compensation is partly based on how many denials are generated. Where are those investigative reporters when you need them?

October 2006 – Work Comp Fee Schedule
The California Division of Workers’ Compensation (DWC) says it will begin working in about two months on an update to the Official Medical Fee Schedule that would tie physician’s fees to Medicare’s Resource Based Relative Value System. This has long been anticipated and we have hung some black crepe on this in the past as RBRVS systems tend to downgrade surgeon’s fees. The acting Administrative Director (AD) of the DWC, Carrie Nevans, added a little kicker to the announcement when she indicated that “It is not necessarily going to be a zero-sum game,” which could be interpreted as possibly maintaining the present surgery fee schedule or at least dropping it less than a strict RBRVS system might require. Nevans clearly indicated that E&M payments should be increased but left some hope that fees for specialists may not have to be cut in order to boost payments to primary treating physicians. Since the last fee adjustment was an across the board 5% decrease in 2003, her statements could be construed as hope for a surgical fee increase but that is probably wishful thinking. It must be recalled that a real world RBRVS system is about relative work values or RVUs plus a monetary conversion factor. Nevans shouldn’t be able to manipulate the RVUs but she may be able to select different conversion factors for E&M and surgical codes which could bolster or hold surgical fees at the present level while boosting evaluation and management fees. Since this DWC project probably won’t start until early 2007, any new fee schedule may be more than a year away.

Nevans also has indicated the DWC has received 60 nominations of physicians for a committee that will evaluate medical treatment guidelines. CANS has submitted the names of two neurosurgeons for her to consider for the neurosurgical slot presumed to exist on this committee. We can only hope said committee will bring some present day light to the ACOEM treatment guidelines which are narrow, now dated and written with little surgical input.

Nevans has also said the DWC is revamping proposed regulations that will impose penalties for abuses of the utilization-review process. The new draft of the rules, to be released before the end of the month, will include a new version of the PR-2 form that physicians use to request treatment. Nevans said claims administrators must now often decipher lengthy and sometimes unclear narratives to find out what is being requested. The new form will have a box to check and a space to fill out the exact procedure being asked for. That may well help but it is my opinion it will take solid penalties to deter some insurance companies’ from employing UR hit men who engage in a selective and frequently irrelevant literature review so as to deny, by the gross amount of ink used, a pretty reasonably stated treatment request.

September 2006 – Work Comp Meds
The Division of Workers’ Compensation will as of 12/1/06 install lower limits on what you can charge for drugs dispensed by your office to Comp patients. This practice has been a real moneymaker for some practitioners. The amendment to the regulation would close a loop hole created from legislation passed in 2003. Currently, Labor Code section 5307.1 requires that reimbursement rates for medical services, except physician fees, be in accordance with the relevant Medicare and Medi-Cal payment systems. However, those systems do not allow drugs to be dispensed by doctors in their offices. This exception allows doctors to be reimbursed for drugs dispensed during office visits at much higher rates than those paid to pharmacies for the same drugs, thereby creating a loophole in the reimbursement structure. The DWC regulation closes that loophole.

August 2006 – WC Survey
The results of the survey compiled by the California Orthopaedic Association (COA) to determine if there were access problems in the Workers’ Comp system have been summarized by the COA and an extensive report has been prepared. This report focuses on the availability of medical treatment to injured workers throughout California following the 2004/2005 Work Comp reforms. It is intended to assess whether injured workers’ access to orthopaedic surgeons/neurosurgeons has been adversely impacted as a result of the reforms. 244 surveys were completed (231 surveys from orthopaedic surgeons and 14 surveys from neurosurgeons).

COA has concluded that the 2004/2005 Work Comp reforms have had an impact on the number of injured workers treated by orthopaedic surgeons and neurosurgeons. There is a statewide trend of orthopaedic surgeons and neurosurgeons reducing the number of injured workers they treat or dropping completely out of the system as they become frustrated with the utilization review system, reimbursement levels, or their inability to obtain authorization for medical services that they believe are medically necessary for their patients. If this trend continues, it is expected that access to quality care musculoskeletal care will continue to worsen, treatment will be delayed, temporary disability benefits will unnecessarily increase, and optimal recoveries will be jeopardized. There could be a resurgence of Workers’ Compensation “mills” if these problems are not corrected as the mainstream physicians will be driven out of the system. COA will present results of this survey to the Division of Worker’s Compensation; contact the CANS office for a copy of the complete report.

July 2006- Work Comp Treatment Guidelines
The Administrative Director (AD) of the Division of Worker’s Compensation (DWC) has determined that the American College of Occupational and Environmental Medicine (ACOEM) treatment guidelines will continue to be used to determine appropriate treatment for injured workers. She rejected other guidelines, particularly those promulgated by orthopedic organizations. There will be a committee created to evaluate additional guidelines. The makeup of that committee includes the usual suspects such as chiropractors and acupuncturists along with an orthopedic surgeon but presently does not include a neurosurgeon. CANS has requested that a neurosurgeon be put on that committee which hopefully will bring some increased surgical sense to the ACOEM guidelines. These guidelines are used by utilization review organizations and their physicians to approve or deny treatment recommendations made by consulting surgeons. One would hope that the guidelines for lumbar fusion published in the Journal of Neurosurgery: Spine, in its June 2005 issue, (Volume 2, No. 6) might get a fair hearing.

June 2006 – The Doc at risk—be careful out there.
The rather disturbing news that a disgruntled injured worker shot and killed his comp attorney in his Santa Cruz office brings to mind that we docs who make determinations about ultimate impairment/disability (which equals money) have some exposure to this kind of risk as well. I well recall being threatened by a non-comp patient many years ago which resulted in some bullet proof office glass and some handgun purchases. The latter were never really needed but it was a time of some anxiety and learning about calibers and hollow-points, subjects a bit foreign to most of us. As we lament the nature of the AMA Guidelines which now have to be used to determine final impairment, it might not be unwise to make sure every patient we rate is made aware that docs no longer have anything more than very minor leeway in determining impairment—it is all a cookbook by the chefs at AMA wherein even maximum pain frosting is limited to 3%. By the way, I can’t quite get my mind around the involved pain section in the AMA Guides so have no compunction about recommending an additional consultation with a “pain specialist” if the parties involved don’t want to accept my 3% pain recommendation based upon clinical impression rather than jumping through the arcane hoops of the Guides pain chapter.

May 2006 – Work Comp Update
A number of issues surfaced this last month in the Workers’ Compensation arena.
We tend to report these issues with some frequency in this newsletter because a considerable majority of CANS members treat Work Comp patients and this treatment system at present pays about the best in California but has the most potentially confusing array of rules and regulations.
Although we have reported that you can’t be forced to care for Comp patients at commercial insurance rates (which generally approximate Medicare rates while the Comp fee schedule is about 200% of Medicare), the recent sale of State Compensation Insurance Fund’s responsibility of having a provider network to the Blue Cross Prudent Buyer provider list apparently has been interpreted by Blue Cross as forcing their Prudent Buyer providers to treat Comp patients and treat them at commercial rates. The CMA got Assemblywoman Fran Pavley to introduce AB 2585 that would allow docs to opt out of the requirement or at least force the insurance company to negotiate a separate contract for Comp care. The insurance companies raised hell about this under the disguise of being worried about patient access when of course their main goal is regimentation and subordination of docs to the success of their business model. The bill was pulled because of numerous amendments by stakeholders and some concern about the legality of the bill as it relates to contract law but Pavley plans to insert the wording in a bill that has already passed the assembly, a maneuver that purportedly buys more time for Pavley to craft wording that satisfies the concerns of docs, labor and Blue Cross. The mantra seems to be it is OK for docs to opt out so long as by doing so they don’t impair an injured worker’s access to care or cause the medical provider network/ Blue Cross to come afoul of MPN regulations regarding breadth and width. We wish the CMA and Assemblywoman Pavley good luck in getting our rights reasonably established but I will hopefully be forgiven for thinking we will come in third.
b. Utilization Review is another cross we docs have to bear when treating injured workers and the California State Senate Labor and Industrial Relations Committee held hearings recently wherein the CMA and various docs lamented how the UR process delays and circumvents treatment felt to be appropriate by specialists such as orthopedic surgeons and neurosurgeons. The Division of Workers’ Compensation (DWC) promised to fine carriers and employers who abuse the UR system. Some of the problem is the occupational medicine practice guidelines which often don’t readily apply to specialist treatment, particularly surgery. Another issue appears to be what I will call the rogue reviewer who imposes his/her biases on the treating physician. I learned of a notable example recently where a CANS member was denied authorization to do an anterior cervical discectomy and fusion to treat a disc herniation with radiculopathy because the reviewer thought a foraminotomy works as well while avoiding a fusion and should be employed. This is not UR , it is philosophy. One wonders if any DWC action will put these philosophers in their place.

c. A California WC judge has ruled that insurers are not required to pay for interpreter services for an injured worker undergoing treatment. The crux of the case was a $7K bill from a language service that was present during a course of physical therapy. I can accept the insurer’s beef about that but the judge also felt his ruling applied to doctor/injured worker interactions as well. The judge felt that the labor code does not provide for the provision of interpreters and that plenty of docs are available to the injured worker who speak the worker’s language so if the worker chooses a treating physician who is not fluent in the worker’s language, it is not the insurer’s responsibility to pay for interpreters. I guess that leaves us to bear this cost. I am happy to know we have lots of Spanish, Korean and Vietnamese speaking neurosurgeons and/or orthopedic surgeons widely dispersed through California so that injured workers can just zip down the street to see a native speaking consultant. I don’t know much about the judge other than he needs glasses to correct his myopia.

d. The DWC also noted that fewer doctors are taking the QME exam and that the number of qualified QMEs is dwindling. A proposed 25% increase in the Medical-Legal fee schedule due to go into effect in July may help the problem. Dumping the AMA Guides as the instrument one has to use for determining permanent disability would help even more

March 2006 – CWCI finds no Work Comp physician exodus—yet.
It is noted that the California Workers Compensation Institute has released a study indicating there has been no exodus of providers to care for injured workers. Duh! They should have waited to conduct that study until after the new Official Medical Fee Schedule (OMFS) is in place. Since we expect a major reduction in what we are paid either due to the cuts imposed by the Medical Provider Networks for allowing us the privilege of treating these patients or by the OMFS itself, it will be interesting to see how many of us will be willing to take care of the injured worker once the pay scale approaches Medicare rates. Their report that the sky isn’t falling may not appreciate some real clouds gathering. Interestingly, California regulators on Tuesday, 3/28/06, announced minor changes to the medical equipment and laboratory portion of the Official Medical Fee Schedule, but any major changes to physician fees will likely wait until next year, so the clouds are a bit further off.

February 2006 – SCIF dumps its preferred providers; MPN now Blue Cross PPN
The State Compensation Insurance Fund has deep sixed its own Preferred Provider Network (PPN) and will, as of May 1st, force physicians presently in the PPN, if they want to stay on board, to join its new Medical Provider Network operated by Blue Cross of California. Since SCIF writes 52% of the comp insurance in California , this is no minor shift in provider affiliation. It does not take a brain surgeon to figure out that Blue Cross will want to take a cut from the Official Medical Fee Schedule (OMFS) which is what SCIF will give to Blue Cross (and which is due to be reduced some time this year to a rumored 120% of Medicare). I would guess that Blue Cross is enamored of their present fee schedule for general commercial patients which is some fraction of Medicare rates and will try to impose those rates for allowing you to care for SCIF’s insured workers, taking the difference between the OMFS and what they pay you for their trouble. This could be a first class morass for doctors.

We all know that Medicare rates are not great (and we finally got a slight increase this year instead of the satanic 4+% cut) but at least there is minimal hassle in scheduling a free roaming Medicare patient (read no HMO) for an operation. Pre-certification is not necessary and your surgery proceeds apace in the best interests of the patient. Even the commercial patient, for whom you care at something less than Medicare rates, has the advantage of probably being younger and with fewer co-morbidities to complicate an operation. Every work comp patient comes with a major co-morbidity—the work comp rules and regulations. To think we can navigate the work comp rules and paper swamp and make an honest buck for less than Medicare rates is like thinking that your stock broker works for nothing except your gratitude.

If you are already a participant in the Blue Cross Preferred Provider Network, the potential vehicle for the SCIF patients, then you should not be required by the terms of your present contract to extend those PPN rates to work comp patients. Rest assured you will be asked to do so. I suggest you use considerable caution because it may not pencil out on a sound business basis. Look at it this way—if your costs for providing care are “X” and you just make a little profit on commercial patients for which you are paid “X+Y”, the thrash of dealing with work comp rules, regulations and adjusters in a “Mother, may I” scenario may well tip you into the negative as your “X” rises to greater than “Y”. Volume, the mantra of the “pay you less but you get more because you do so much” crowd doesn’t work if each case is done at a loss. Multiply a negative by any number and you still get a negative.

If you are not already a Blue Cross PPN participant, you will need to contact them to try to get on the PPN list. If work comp is not your big income source, maybe you should get a second job rather than bed down with corporate medicine.

There is a rumored state initiative circulating that would allow comp patients to choose their own treating physicians. Where do I sign?

December 2005 – WORK COMP LEGAL FEE SCHEDULE: It’s about time
The near final iteration of a new Work Comp medical-legal fee schedule was recently circulated which includes an increase in fees for those of us doing AME and QME reports. The increase comes from using a $12.50 value for each RVU of service, up from the present $10. The RVUs assigned to each service don’t change. This is a long overdue increase and well deserved considering the involved rules now in place, particularly the requirement to use the AMA Guides to calculate impairment. There is still a comment period before the schedule is published in final form and goes into effect. The other fee shoe to drop will be the new medical treatment fee schedule due out in January. A decrease in fees is anticipated as has been previously discussed in this newsletter. Look here for more information next month.

November 2005 – Our Friends the Insurers : Medical Provider Network List
The medical provider networks (MPNs) that are being cobbled together by many Work Comp (WC) Insurers and self insured entities are not mandated by law but once formed, they keep medical care of the injured worker “in house” as it were. There is some evidence that medical costs for insurers are lower using an MPN. For those interested in joining an MPN for particular insurers or other entities, a list of all approved MPNs can be found at DWC MPN Web page: One should exercise caution when signing a contract with one of these MPN’s so as to have a good escape clause if the new Comp fee schedule, due out in January, is onerous enough to make you want to quit the WC game.

The new fee schedule is likely to be onerous because it will be promulgated by the Governor’s WC Administrative Director and it is the Governor’s goal (and only real achievement so far) to reduce WC costs. Injured workers have seen reductions in care and awards, attorneys have taken a hit and non-MD providers have had their income curtailed. To think that surgeons won’t get their share of misery is unrealistic, particularly since a recent assay of WC costs by the California Workers’ Compensation Institute showed that in the face of the new Comp law, fees paid to surgeons and medical-legal evaluators increased while other health-care specialists saw steep cuts. The report said the average payment for a medical-legal evaluation increased 43.6% from 2002 to 2004 while payments for surgical procedures (aka spine surgery) increased 13.1%. Average payments for every other physician-based medical service declined. The average payment for anesthesiology procedures dropped 57.1%; special services 33.1%, pathology and laboratory services 31.8%, medicine 25.7%, acupuncture 13.9%, chiropractic manipulation 11.4% and physical therapy 7.9%. It would appear we have a surgeon’s perfect storm brewing.

August 2005 – Medical Legal Reports for Work Comp
Two newsworthy items here.
First, the Administrative Director (AD) of the Division of Industrial Relations was considering some significant changes in the Official Medical Legal Fee Schedule (OMLFS) which would have reduced payment for those of you that do Agreed Medical Evaluations and Qualified Medical Evaluations. I have it on some authority (Phil Lippe, CANS Work Comp guru) that she was persuaded to drop the payment reduction provisions but left intact some slight increases. I wish I could report that CANS played a role in this but it appears the ball was carried by the California Medical Association without the help of our lobbyist. Oh well, it’s the outcome that counts.

Second, for those of you hoping to apply the old State of California Schedule for Permanent Disabilities, 1997 edition to those Comp cases well established prior to the new rules requiring the use of the AMA Guides that went into effect in April of 2004, a recent Appeals Court decision suggests that if the comp case was not closed prior to April, 2004, all disability ratings will have to employ the AMA Guides. The court noted that all pending workers’ compensation cases are subject to the provisions of SB 899 (which includes the AMA Guides provision) regardless of the date of injury. Based on an analysis of legislative intent by the seventh division of the Second District Court of Appeal, the court concluded that injuries occurring before the effective date of the amendments are subject to SB 899 if no final judgment has been entered in the case.

July 2005
1. Work Comp insurers use existing panels for MPN’s

It would appear that most Work Comp insurers have not had the time or inclination to create a real Medical Provider Network as required by present Comp law. Most of them have basically purchased physician PPO networks already in place. As an example, I am informed that SCIF has an arrangement with Blue Cross of California’s PPO to be their MPN that satisfies the law. Calling the BC PPO a Work Comp MPN stretches the imagination and in my mind certainly doesn’t meet the legislative goals of having a select stable of Comp savvy docs available for the benefit of the injured worker. Be that as it may, being a provider in any commercial PPO does not obligate any CANS member to see these patients and deal with their unique requirements and the rather substantial paperwork load they generate. For those of you who are interested in caring for these injured workers, you should contact all the PPOs in which you participate and request a WC addendum to your present PPO contract. You can expect said addendum to discount the Comp OMFS by 15% for the “privilege” of seeing these patients. If I were signing such an addendum, I would limit its duration to 1/1/06 because if the new OMFS due out then is some low multiple of Medicare RBRVS, you could, due to the 15% discount, be contracted to see these patients for Medicare rates or less.

Speaking of the new OMFS due 1/1/06 , our lobbyist is part of a coordinated effort to influence the Comp Administrative Director, Andrea Hoch, who will be promulgating the new fee schedule. Said AD Hoch is also on the short list for featured speaker at the next CANS meeting in San Diego in early 2006. That would at the very least be a very, very interesting encounter.

2. Supreme Court won’t toss new WC rules
The California Supreme Court refused to hear a lawsuit filed by the California Applicant’s Attorneys Association challenging the new Comp rules in effect since April 2004. This means we docs will have to continue to abide by the provision that requires us to determine impairment using the AMA guides. I continue to recommend purchase of the guides from the AMA by those who have to rate injured workers and taking a course on their use is still a good idea (we may have such an instructional course focusing on neurosurgical needs at the 2006 CANS meeting). The AMA has a number of related publications to help understand and use the guides but the one involving example case studies has little in it of use to those primarily rating spine and nervous system problems. The “Master the AMA Guides” is useful and the guide to range of motion assessment doesn’t add much to the instructions included in the AMA Guides itself.