Tag Archives: state compensation insurance fund

Why So Soft on Workers Comp Fraud?

Fraud, when discussed in the context of workers’ compensation, is an interesting thing that many can’t seem to agree on. Some injured workers will tell you that there is virtually no such thing as workers comp fraud (except for all the fraud committed against them by the entire world — insurers, employers, regulators, Starbucks baristas and assorted Disney characters). Workers will grudgingly admit that in the event workers comp fraud does exist at all, it is so inconsequential, so infinitesimal, that it doesn’t even deserve the time of day. Some on the professional side seem to believe that any claim is a fraudulent one and that injured workers are “guilty until proven innocent.” They view every claim through a suspicious microscope and look for any indicator that someone is trying to pull the wool over their eyes.

The reality is that workers comp fraud exists, both on the worker and employer side. Fraud represents the minority of cases, but its presence makes it ever more difficult for the legitimately injured to navigate the labyrinth of comp.

All I know is this: We are far, far too easy on fraud cases when they are caught.

Our CompNewsNetwork ran a story about a former California Department of Corrections and Rehabilitation officer who pleaded no contest to felony workers’ compensation insurance fraud. He had filed a workers’ compensation claim alleging he had injured his foot while working in the prison. It appears, however, that he failed to disclose his participation in certain events and activities. Those activities included “a 50-mile hike over rugged terrain just three weeks after he reported being injured at work.” They also included activities like rock climbing, snowshoeing and acting in two plays, with multiple performances. He also engaged in numerous extreme hikes in rugged mountainous terrain during the one year and two months he was off work collecting benefits. Not to be satisfied with just committing fraud, he apparently felt compelled to document the endeavor, making video recordings and taking photos of many of his hikes and other activities.

Now, here’s the rub: He will be placed on probation and ordered to serve 150 days in county jail, with the sheriff’s work furlough program recommended. He will also be ordered to pay to the California Department of Corrections and Rehabilitation and State Compensation Insurance Fund a stipulated restitution amount of $33,262.56, with an additional $10,453.68 in discretionary costs to be determined by the court at sentencing.

In what can be termed the “coup de grace” (or Coop Da Grass as it is pronounced in northern Florida), if he pays restitution in full, the charge will be reduced to a misdemeanor.

Really? You can steal $33,262.56 but have it classified as a misdemeanor if you give it back? Is that the way it also works for embezzlement? Armed robbery? Burglary? If you give it back, all (or most) will be forgiven? The recommended time in the sheriff’s work furlough program is a nice touch, as well. Can he work as a corrections officer while on work furlough from jail? That would be a short commute.

I suppose that means he could supervise himself.

This isn’t the only fraud story I’ve seen with what I consider ridiculously light punishment. The problem, in my humble opinion, is that workers’ comp fraud is a crime, but all too often it is treated as a minor indiscretion; they weren’t stealing, they just filed a less than truthful claim and let the system send them money while they played or worked for cash or did whatever floated their boat at the time. The fraud is almost treated as a victimless crime, as people find it difficult to view an insurance company as a victim.

Never mind that we all pay for fraud, whether it is a faking prison guard or an employer flashing a bogus certificate of insurance. There are even bigger victims of fraud. They would be the legitimately injured who endure all the extra scrutiny that the specter of fraud brings to the table. These would be the people who are questioned simply because the possibility exists, and who are often left to feel as if they somehow wronged society by getting injured in the first place.

Getting injured isn’t criminal. Faking an injury, quite frankly, is, and we should not be afraid to treat those who do so as the felonious thieves they actually are. We need to be tough on workers’ compensation fraud.

It is the only way we will eventually see less of it.

Are MPNs Hindering Quality Care?

Have medical provider networks (MPNs) lived up to expectations of improving access to quality of care while reducing medical costs? Recent accusations raised against Janak K. Mehtani, M.D. (“Mehtani”) before the Medical Board of California, Department of Consumer Affairs, would suggest not. (Specific details relating to case # 02 2012224474, effective Jan. 13, 2015, are available on the Medical Board of California website, under the option “Verify a License.” At time of writing, a hearing had not been held, and the case status description states, “The physician has not had a hearing or been found guilty of any charges.”

Following the investigation of a lodged complaint relating to this case, the executive director of the Medical Board of California raised the following accusations (1) gross negligence, (2) repeated negligent acts, (3) prescribing dangerous drugs without appropriate examination or medical indication, (4) failure to maintain adequate and accurate medical records and (5) general unprofessional conduct.

These accusations relate to three workers’ compensation claims for services provided between 2008 and 2013. Two claims were identified as belonging to State Compensation Insurance Fund (“SCIF”) (patients JC and RW) while the insurer for the third claim, involving a non-English-speaking 47-year-old female with a history of hypertension and chronic pain (patient GC), was not identified.

This article reviews the claims administrators’ implementation of MPNs with reference to patient GC in the Mehtani case.

Insurers promote their MPNs as being quality medical providers who have undergone extensive credentialing before selection, with continuing quality assurance control of their services. Yet a random sample of insurers’ MPN lookup facilities showed Mehtani — a psychiatrist with a practice Sacramento — being currently available to provide treatment, even though there are very serious accusations currently lodged against him. There is no warning, link or reference to the medical board website to alert an injured employee or the employer.

Information shown on claims administrators’ MPN websites to assist an employee in selecting a provider or medical specialty, such as a psychiatrist, is limited to basic contact details, such as address, phone number, distance from a specified location (such as city or Zip code), gender and language. In the case of Mehtani, there is inconsistency in the list of languages spoken; some MPNs list Hindi and Punjabi, while others include Spanish. Does providing only minimal information limit the opportunity for correctly “matching” the patient (i.e., injured employee) to the medical provider, potentially compromising the physician-patient relationship?

Additional information in psychiatry would provide better opportunities for matching patient with psychiatrist. Sub-specialties such as psychosomatic medicine, addiction medicine or administrative psychiatry play key roles in the selection process. So do special interests such as psychopharmacology and pain management and additional training in psychoanalysis at institutes such as the American Psychoanalytic Association (APsaA). Rapport between the psychiatrist and patient is of paramount importance and is assisted further when matching is based on race, ethnicity and cultural groups.

While a review identified 120 psychiatrists located within two miles of the central business district of Sacramento (CBD), a random selection of insurers’ MPNs identified only one psychiatrist, in this case Mehtani, as being within 200 miles of the CBD. Can this list be considered adequate for the employee to choose a psychiatrist, let alone attempt to “best match” a patient to a psychiatrist?

Some researchers suggest that, in patients with chronic pain, a psychiatrist may be the person best qualified to distinguish between medical comorbidity and concomitant somatic complaints and that the patients require careful multidisciplinary treatment, in which psychiatry can play an important role. Patient GC experienced a number of work-related injuries commencing in 2003 and was first seen by Mehtani in 2008, after experiencing depression and anxiety for two to three years. In line with a multidisciplinary treatment plan, Mehtani referred patient GC out for pain management and to a therapist for cognitive behavior management. Mehtani was to manage medications and provide supportive psychotherapy once a month for 12 months.

But who was responsible for approving and selecting the providers’ Pain management providers are generally listed on MPN lists, but a random selection of MPNs found that cognitive behavior therapists and others providing cognitive behavior therapy, such as psychologists, mental health nurses and psychiatrists, were either not listed or not identified as providing cognitive behavior therapy. This lack further demonstrates the limitations of MPNs in selecting medical providers.

In the multidisciplinary or multidimensional approach to addressing chronic pain, an interdisciplinary approach is also required to maximize a psychiatrist’s role in the treatment plan, where all parties involved work in a coordinated fashion. The overall responsibility of ensuring the multidisciplinary team adheres to a common objective rests with the claims administrator. In the case of patient GC, the claims administrator should have been responsible for all the activities performed by the psychiatrist (Mehtani), the pain management provider, the therapist providing cognitive behavior therapy, the primary treating physician and the pharmacist in cases where medications were being dispensed by an insurer’s pharmacy network or a pharmacy was linked to an insurer’s pharmacy benefit manager (PBM). Pharmacists and pharmacies can be held accountable for failing to identify and verify red flags that may appear when a prescription is presented. In the Mehtani case, the issue of prescribed medications is being raised in the accusations.

Documentation required by psychiatrists has been an issue of contention for some time, with many psychiatrists believing that they do not need to perform the same level of documentation generally required for “physiology-based medicine.” Lack of documentation has also been raised in the Mehtani case.

Quality assurance controls for providers can be accomplished in many ways, including automation. Technology is available to monitor diagnoses (DSM-5, ICD-9 and ICD-10), treatments rendered (CPT codes) and pharmaceuticals dispensed through the National Drug Code (NDC) to track treatment and recovery progress, as well as monitor each provider’s contribution to the objectives set by the claims administrator.

Patient GC had 40 visits for “medical psychoanalysis” with Mehtani between 2010 and 2013. All visits would have been invoiced by Mehtani and would have required documentation before payment was made. As lack of documentation was mentioned in the accusation document for all three patients, how was the claims administrator monitoring treatment progress and determining payment for services rendered over the period that Mehtani treated patient GC and the others?

The current health status of all three patients and whether they have returned to normality has not been stated in the accusation document. Patient GC was first injured in 2003, patient JC was injured in 1989, and no injury date was recorded for patient RW. Regardless of the outcome of the Mehtani hearing, could the injured employees file a tort claim against the insurer as to lack of quality care provided by their MPNs? Could a tort claim be filed by the employer against the insurer with regard to lack of controls to vet and verify costs associated with providing medical treatments by their MPNs? Although tort claims by the employee against the employer are not permitted under the workers’ compensation agreement, the insurer and claims administrator are not direct parties to this agreement.

The question remains unanswered, of whether current workers’ compensation medical treatment practices based on group health managed care programs, such as MPNs, are diametrically opposed to the workers’ compensation ethos of “return to work” where “utmost good faith” between interested parties is the aspiration. This article however, suggests that they most probably are diametrically opposed.

For a more detailed outline of the processes and procedures claims administrators can utilize to manage and monitor their medical providers, refer to the article titled, “Treating Pain Pharmacologically,” available from the website managingdisability.com under the Dialogue tab.

Splitting California Into 6 States? Crazy

If a million people say a foolish thing, it is still a foolish thing.

Anatole France

Maybe that quote should be, “If 1.3 million people. . . . “ That’s because Tim Draper, having spent $5 million, secured 1.3 million signatures and put a measure on the 2016 California ballot that would split the Golden State into six states.

Calling himself the “risk master,” the 56-year-old, billionaire tech investor expresses his quirky desire to “reboot and refresh our state government” by creating separate areas that would be more governable – think “Hunger Games.”

California is the largest state by population, with 38 million people (12% of the U.S.’s total of 316 million), and third largest by area behind Alaska and Texas. It is the world’s 8th-largest economy. If Draper’s measure were approved, the new state of Silicon Valley would be the wealthiest in the country. Central California would be the poorest.

No state has been created from an existing one since West Virginia split from Virginia in 1863. But California has had at least 30 serious proposals to divide it into multiple states since its statehood in 1850, including a proposal passed by the state senate in 1965 to divide California into two states with the boundary at the Tehachapi Mountains, near Bakersfield. In 1992, the state assembly passed a bill to allow a referendum to partition California into three states: North, Central and South. Pundits referred to these proposed states as Log Land, Fog Land and Smog Land.

It is said that the area of the state adjacent to Oregon, long known by the fiercely independent locals as Jefferson State, produces 60% of the U.S. marijuana crop. Three years ago, ex-Google engineer-turned-political-economist Patri Friedman came up with a goofy proposal to build his own floating libertarian nation 12 miles off the coast of California – Googleland?

Assuming the current state legislature and Congress both approve of Draper’s nonsensical measure, the area we currently call California would have 12 senators in Congress, not two. As much as Texans like their beer, I’m not sure they’d like to see California get a six-pack of senators.

Among the serious repercussions that Draper fails to address are vital state infrastructure issues. These include water distribution, transportation systems, state prisons, the University of California system of 10 campuses and two national laboratories – and the largest and most progressive workers’ compensation system in the country.

Workers’ compensation laws in the U.S. are promulgated on a state-by-state basis. Besides a myriad of workers’ compensation laws, each state’s bureaucracy must produce and enforce a plethora of complex regulations, licensing procedures, collateralization requirements and other rules. States have choices to make about self-insurance, including about workers’ comp pools of smaller employers.

Perhaps one or more of the new six California states would be monopolistic – where workers’ compensation coverage is purchased through the state (as in North Dakota, Ohio, Washington and Ohio). Another possibility is an “opt-out” program (as in Texas, Oklahoma and Tennessee) that allows employers to litigate injuries in the civil system, as an alternative to the “exclusive remedy” system.

As if this weren’t enough to be concerned about, the legacy of the current active California workers’ compensation claims would be an issue.

Three key institutions were created by the state legislature and are operated like private companies: the State Compensation Insurance Fund (SCIF); the California Insurance Guaranty Fund (CIGA); and the Self-Insurers’ Security Fund (SISF). SCIF is the state’s largest workers’ comp insurer and provides an insurance alternative to those companies doing business in California that are unable or unwilling to: (1) purchase workers’ compensation coverage from private competitive insurance carriers, or (2) self-insure. CIGA provides insolvency insurance for property casualty insurers admitted to doing business in the state. SISF provides protection to the state and taxpayers for non-public, self-insured entities by taking over workers’ compensation obligations from entities that have defaulted (79 since its formation in 1984).

These three entities combined cover billions of dollars of known and incurred but not reported (IBNR) workers’ compensation with open claims going back as far as World War II. Their combined assets total in the billions.

How would those three entities be broken up into six pieces and reestablished?