Opinion | Concerned About a Shortage of Physicians to Treat Injured Workers? Hint: California’s Workers’ Comp Regulations Are To Blame

By: | November 29, 2021

Catherine Montgomery is a founder of DaisyBill, a dedicated workers’ comp billing software and services provider. Her crusade to improve medical billing through technology began in 2005 with the founding of Clarity Medical Billing Resources, a trusted free resource for workers’ comp stakeholders. In 2011, Catherine cofounded DaisyBill to bring greater efficiency, transparency, and fairness to workers’ compensation.

California workers’ compensation has a fundamental problem that few are willing to discuss. Namely, treating injured workers is a dubious investment for care providers.

This reality consistently escapes the notice of industry thought leaders, legislators, and the public, to the detriment of any attempt at meaningful reform.

Understandably, this problem can be hard to reckon with. There’s no excess of public sympathy regarding the financial straits of doctors and other high-paid healthcare professionals. But in order to create a system that truly — and sustainably —  works for all stakeholders, we must grapple with the basic facts of a for-profit healthcare system.

For better or worse, medicine as currently practiced is a business. And businesses can’t survive on bad investments.

That’s not to say doctors leave injured workers out in the cold for the sake of a buck. In fact, our experience suggests the opposite. In many cases, doctors still choose to treat injured workers, because no one else will — and no one else will because it’s seen as financially unstable and unsustainable.

Why This is Occurring

Perhaps most frustratingly of all, it doesn’t have to be this way. California makes workers’ comp a poor investment for providers. State workers’ comp laws (and their many subsequent regulations) are convoluted, randomly enforced, and default to the payers’ advantage. These laws and regulations impose gross levels of administrative inefficiency on the doctors attempting to treat workers.

Further, state workers’ comp fee schedule reimbursement rates are significantly undermined by barely-regulated PPO and network schemes, which drain revenue from practices. These schemes are so prolific as to make the state fee schedules all but meaningless.

Finally, appealing incorrect or improperly denied payments is a nightmare of which Kafka would be proud.

Given the above factors, the actual reimbursements paid to doctors do not truly reflect the Sisyphean efforts required to navigate the administrative rules, stay compliant, and secure accurate, timely reimbursement for restoring injured workers to health — to say nothing of making a buck. The deck in California is stacked. Once the math is done, it’s hard for a doctor to conclude that workers’ comp is worth the hassle.

Worse, the tight grip insurers and other payer-side entities have on the legislative process derails any serious attempts at reform.

A bill allowing workers to seek treatment outside the employer’s MPN was watered down to a toothless study, at the eleventh hour. Nominal laws against “silent” networks and PPOs contain loopholes roughly the size of the San Fernando Valley. Progress is always one step forward, many steps back.

The result, as in so many late capitalist structures, is a system in which the vulnerable must rely on the kindness of strangers, i.e. doctors willing to treat injured workers despite the effect on revenue. But in California, fewer and fewer are willing to continue carrying this rigged system.

Restoring the profitability of workers’ comp isn’t just an exercise in making money. It’s a necessary adjustment, for workers’ sake.

Obtaining the necessary treatment to heal and return to work is too difficult for patients, largely because providing the necessary treatment is too difficult for providers. This cannot remain the case indefinitely. &

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