Tag Archives: utilization review

Long-Awaited Ruling in King v. CompPartners

The long-awaited decision by the California Supreme Court in King v. CompPartners (2018) S232197 is finally out. In it, the court unanimously held, through a majority and two concurring opinions, that a claim for malpractice against a utilization review (UR) physician for injuries arising from a review decision for the treatment of a compensable injury could not be maintained under the workers’ compensation system and is barred by exclusive remedy.

The case will be extensively analyzed by all participants in the workers’ compensation system. This will include parsing of various comments in the two concurring opinions regarding whether the UR process is performing up to expectations. As noted by Associate Justice Goodwin Liu in his concurring opinion, “The legislature may wish to examine whether the existing safeguards provide sufficient incentives for competent and careful utilization review.” The other concurring opinion, by Associate Justice Mariano-Florentino Cuéllar, stated, “Even now, those safeguards and remedies may not be set at optimal levels, and the legislature may find it makes sense to change them.”

It is difficult to find a point in time where a thorough analysis of the system is contemporaneous with the judicial review of it. Such is the case here. The utilization review events that caused this case to be brought occurred in 2013. Given that this case was dealing with a review of prescription drugs, it is important to note that “safeguards and remedies” now include the Medical Treatment Utilization Schedule Formulary.

As stated in the formulary, “ For injuries occurring prior to Jan. 1, 2018, the MTUS Drug Formulary should be phased in to ensure that injured workers who are receiving drug treatment are not harmed by an abrupt change to the course of treatment. The physician is responsible for requesting a medically appropriate and safe course of treatment for the injured worker in accordance with the MTUS, which may include use of a non-exempt drug or unlisted drug, where that is necessary for the injured worker’s condition or necessary for safe weaning, tapering or transition to a different drug.” [8 CCR 9792.27.3(b)(1)]

See also: Where the Oklahoma Court Went Wrong  

This particular regulation also states, “Previously approved drug treatment shall not be terminated or denied except as may be allowed by the MTUS and in accordance with applicable utilization review and independent medical review regulations.” [8 CCR 9792.27.3(b)(4)]

In addition, Senate Bill 1160 (Mendoza) requires UR processes to be accredited by July 1, 2018. The accrediting agency is URAC, although the Division of Workers’ Compensation has the authority to add requirements for certification. The purpose of accreditation is to have an independent, nonprofit entity “…certify that the utilization review process meets specified criteria, including, but not limited to, timeliness in issuing a utilization review decision, the scope of medical material used in issuing a utilization review decision, peer-to-peer consultation, internal appeal procedure and requiring a policy preventing financial incentives to doctors and other providers based on the utilization review decision.” [Labor Code Sec. 4610(g)(4)]

Much has happened to the system that was under review by the court in King. To improve on this progress, we need to understand what has been done already to provide more safeguards and remedies for injured workers while being faithful to the “grand bargain” that is workers’ compensation. This cannot be done by turning back the clock.

Appellate Court Rules on IMR Timeframes

The 2nd Appellate District has issued the first of what should prove to be several appellate decisions on the timeliness of independent medical review (IMR) decisions. The court was considering the assertion by a W.C.A.B. panel that IMR timelines are mandatory and that late IMR means the W.C.A.B. — and not doctors — will determine whether treatment is medically necessary.

In SCIF v W.C.A.B. (Margaris), the court annulled the W.C.A.B. decision and remanded with instructions to issue a new decision. The court’s reason for accepting this case was set out early in the decision:

“…We issued a writ of review because this case presents an important issue of first impression regarding the interpretation of section 4610.6, and because it relates to an issue upon which the appeals board has rendered conflicting decisions.”

In its analysis, the court provided an extensive discussion of the history of authorization for medical treatment, the implementation of utilization review (UR) for treatment requests and the enactment of the statutory scheme for IMR.  As noted by the court in SB 228 and 899, the legislature changed both the standards and process used by an employer to evaluate a request for medical treatment. The legislature adopted the medical treatment utilization schedule (MTUS). The legislature then removed the existing process for resolving medical disputes using dueling doctors and required the use of utilization review, which required review of treatment requests in light of the MTUS.

In 2012, the legislature enacted another set of reforms to address disputes over UR determinations. As noted by the court, a UR determination authorizing medical treatment was binding on the employer but became subject to further review through IMR — but only for the employee. The court further observed that even where an IMR determination is ultimately reversed by the W.C.A.B., the issue of medical appropriateness was to be returned to IMR for further review, not decided by the W.C.A.B.

See also: IMR Practices May Be Legal, Yet…  

Turning to the specific issue before it, the court determined the use of “shall” in Labor Code 4610.6 was directive, not mandatory:

“…The appeals board concluded that section 4610.6, subdivision (d), is clear and unambiguous.  According to the appeals board, “shall” is mandatory, and any IMR determination issued after the 30-day time frame is necessarily invalid. In support of this interpretation, the appeals board cited section 15, which provides “‘[s]hall’ is mandatory and ‘may’ is permissive” (§ 15.). Thus, the appeals board concluded that construing “shall” as mandatory, such that an untimely IMR determination is invalid, comports with both the ordinary meaning and the statutory definition of “shall.” As we explain, however, the issue is more nuanced than the appeals board recognized.

We note that section 15, upon which the appeals board relied in this case to support its interpretation of section 4610.6, subdivision (d), juxtaposes “mandatory” against “permissive,” which arguably suggests the legislature used “shall” in the obligatory permissive sense rather than in the mandatory-directory sense, as the appeals board concluded. (See McGee, supra, 19 Cal.3d at p. 960 [discussing section 15 and concluding that “on its face, the statutory language suggests that the legislature intended the present provision to be mandatory (i.e., obligatory), rather than permissive.”]) However, given the difference in meaning given to “shall” in the statutory context, we conclude section 4610.6, subdivision (d), is ambiguous. Accordingly, we move beyond the plain language of that section and consider its meaning with reference to the rest of the statutory scheme and the intent of the legislature.”

The court commented further on this issue:

“Generally, time limits applicable to government action are deemed to be directory, unless the legislature clearly expresses a contrary intent.  (Edwards, supra, 25 Cal.3d at p. 410.) “‘In ascertaining probable intent, California courts have expressed a variety of tests. In some cases, focus has been directed at the likely consequences of holding a particular time limitation mandatory, in an attempt to ascertain whether those consequences would defeat or promote the purpose of the enactment.  [Citations.] Other cases have suggested that a time limitation is deemed merely directory ‘unless a consequence or penalty is provided for failure to do the act within the time commanded.’”

The court also found the lack of a penalty or consequence for noncompliance to be significant. Citing similar language in actions by the state personnel board, which had been held to be directive rather than mandatory, the court suggested a failure to meet the statutory time frame did not result in a loss of jurisdiction. The court also indicates in its review of the mandatory vs. directory dichotomy that statutes that set time frames for government actions that do not include a self-executing consequence are almost universally construed as directory.

The court also noted that construing the 30-day time frame as directory furthers the legislative objective of SB 863.

“We conclude from these findings that the legislature intended to remove the authority to make decisions about medical necessity of proposed treatment for injured workers from the appeals board and place it in the hands of independent, unbiased medical professionals. Construing section 4610.6, subdivision (d), as directory best furthers the legislature’s intent in this regard. The appeals board’s conclusion in this case — that an untimely IMR determination terminates the IMR process and vests jurisdiction in the appeals board to determine medical necessity — is wholly inconsistent with the legislature’s stated goals and their evident intent.

Finally, and perhaps most tellingly, the legislature provided that, “[i]n no event shall a workers’ compensation administrative law judge, the appeals board, or any higher court make a determination of medical necessity contrary to the determination of the independent medical review organization” (Stats. 2012, ch. 363, § 45, codified at § 4610.6, subd. (i)). We find this portion of the statute — particularly the use of the phrase “in no event” — to be a frank expression of the legislature’s desire to remove the issue of medical necessity of proposed treatment from the jurisdiction of the appeals board in all cases subject to IMR. The legislature’s intent would be defeated by giving section 4610.6, subdivision (d), mandatory effect, as the appeals board did in the present case.”

See also: 20 Work Comp Issues to Watch in 2016

Additionally, the applicant attorney argued that the W.C.A.B.’s holding in the Dubon case (Dubon 2) supported the W.C.A.B’s usurpation of authority to decide medical treatment. The court noted the holding in Dubon 2 is supported by the AD’s regulations providing that IMR applies solely to timely and procedurally proper UR but that no similar regulation existed for IMR. The court declined to comment on the W.C.A.B.’s decision in Dubon 2 as the issue was not before it.

Comments and Conclusions:

There are currently two other cases pending in the appellate courts, both in the 3rd appellate district — on this same issue and, interestingly, this case was not the first grant on the issue. However, the court set a very aggressive briefing schedule and, even with multiple amicus briefs it heard, considered and decided this case in, what is by appellate standards, a very short time (less than six months). Clearly the court was very interested in this issue, which had multiple W.C.A.B. panel decisions with conflicting holdings.

The court, in its decision, also rejected arguments offered by both the applicant and the W.C.A.B. that untimely IMR resulted in unnecessary delays — a rationale offered by the majority panel in both Dubon and Margaris. The court, very astutely, noted this argument made no sense given the time frame for obtaining QME opinions or litigating medical treatment issues before the W.C.A.B.  The court pointed out that, even with the delays in completing IMR, the W.C.A.B. decision was more than 13 months after the initial decision in UR and more than 10 months after Maximus rendered its decision. The court was clearly, and properly, skeptical of the argument that letting the W.C.A.B. decide medical issues would result in a more prompt disposition.

The court did offer an option to applicants to challenge untimely UR through the ability to file a petition for writ of mandate to compel a decision. While a statutorily viable option, this is impractical, especially in light of the current timeliness of most IMR determinations. Further, the issue here has never really been the timeliness of IMR. The goal for the applicant attorney bar, and apparently some of the commissioners, has been to usurp the medical decision making process from being medically driven to being litigation-based.

The decision does not provide a lot of nourishment for those who are waiting for some sliver of light on the Dubon 2 issue. The court, in its footnote, declined to really comment on Dubon 2, but it did note there was some basis for the W.C.A.B.’s decision. However, the very strong language of the court emphasizing the public and legislative policy behind having medical decisions made by physicians, and the much greater speed and certainty of the UR/IMR process over the legislatively disfavored litigation process, may provide some hope that, given a chance, the appellate court would also reject the W.C.A.B.’s arguments in support of Dubon 2.

Legislative Preview for Work Comp in 2016

Common wisdom suggests that major workers’ compensation legislative activity won’t take place during an election year. For 2016, that would seem to hold true.

That is not to say, however, that various interested parties will be sitting idly by, waiting for the clock to turn to 2017.

CENTERS FOR DISEASE CONTROL ADD TO THE LIST OF CHRONIC PAIN GUIDELINES

On Jan. 13, the Centers for Disease Control and Prevention (CDC) closed the public comment period for its proposed Guideline for Prescribing Opioids for Chronic Pain. According to the CDC, the guideline is being proposed to offer “… clarity on recommendations based on the most recent scientific evidence, informed by expert opinion, with stakeholder and constituent input considered.”

The guideline goes to great lengths to address two important issues. The first is that current guidelines in many states – both public and private – are based on dated information. The second, which is critical, adds to the growing number of voices to say that best practices for providers include accessing physician drug monitoring programs (PDMP) to reduce the risk of doctor shopping and toxic – and sometimes fatal – mixtures of prescription drugs when the patient provides incomplete histories or none at all of their drug use (both prescription and illicit).

This need to access a PDMP before, and during, treatment with opioids is echoed by the Medical Board of California (MBC) and the DWC. Their comments also underscore a considerable problem facing California policymakers when trying to create incentives for providers to use the Controlled Substance Utilization Review and Evaluation System (CURES) without directly mandating access.

This dilemma is best summed up by the analysis of Senate Bill 482 by Sen. Ricardo Lara (D – Bell Gardens) that is at the Assembly Desk pending referral to committee. The bill, which would mandate participation in the CURES system as well as other measures to curb the abuse of opioids, has garnered opposition from medical associations and one medical malpractice insurer. The opposition, according to analyses by legislative staff, is based on two issues – the first being whether the CURES system is capable of handling the volume of inquiries a mandate would engender, and the second being concern that requiring CURES access will become a standard of care that could subject providers to malpractice liability.

As to the former, this issue arose during the campaign waged against the 2014 ballot measure Proposition 46. According to the non-partisan Legislative Analyst’s Office (LAO), “Currently, CURES does not have sufficient capacity to handle the higher level of use that is expected to occur when providers are required to register beginning in 2016.” This raises an important question – does the CURES system now have the capability to meet the demand that a mandate would create? If it doesn’t, then the legislature needs to understand why.

As to the second issue, it is difficult to comprehend the level of distrust that is subsumed in the position that opposing a mandatory review of possible prescription drug abuse by a patient would establish more potential malpractice liability than knowing that the CURES database exists and not checking it. In time, perhaps, it will be the appellate courts that resolve that issue.

There is no shortage of guidelines that address the appropriate use and cessation of use of opioids for non-cancer chronic pain. The DWC is finalizing its latest iteration on this issue as part of the MTUS. It will differ from both the CDC and the MBC guidelines to some degree, but the overall treatment of this issue is very similar. In addition, the division will be implementing a prescription drug formulary as required by Assembly Bill 1124 by former Assembly member Henry Perea (D – Fresno). That, too, will likely provide opportunities to address the proper use of opioids in the workers’ compensation context, preferably after the chronic pain guidelines are completed.

As noted by the CDC and the MBC, and implicit in the DWC’s guidelines, this is not just a question of UR. If all the work by the division is simply viewed as a more effective way of saying “no” regardless of the circumstances, then the public health issues associated with the abuses of opioids will continue.

Workers’ Compensation Insights is a bi-monthly publication of Prop 23 Advisors. Subscribers will receive in-depth analyses of pending California legislation and regulations, review of important WCAB and appellate court decisions and commentary on trends within the system in California and nationally. To read the rest of this newsletter, click here.

9 Key Factors for Drug Formularies

These remarks were prepared for testimony at a recent Assembly hearing in Sacramento on California’s consideration of a workers’ comp drug formulary.

Thank you for the opportunity to be part of this hearing on the potential development of a prescription drug formulary in California. My name is Mark Pew, senior vice president of PRIUM, a nationwide medication management company based in Duluth, GA, that has conducted business in California for more than 15 years and been a utilization review organization since 2009. I have followed the development of workers’ compensation drug formularies in other states since 2010 and, through observation and dialogue and corresponding deployment of services, have come to identify success criteria. I spoke on the subject at the National Workers’ Compensation and Disability Conference in November 2012 and at that time opined that California should consider a drug formulary. Since 2013, I have had several conversations with various California stakeholders to further that discussion, so I’m very pleased to see progress being made towardsthat goal.

Because I value the time of this committee hearing, I will be brief in what I consider to be important foundational tenets when constructing a drug formulary. I will forego any statistics or rationale for a drug formulary as that has already been well articulated in the bill’s analysis.

  1. A drug formulary should be about better patient clinical outcomes, not cost. My opinion is that if you do what’s right for the patient, all other stakeholders win by side effect. While much of the discussion leading up to this hearing has been about cost savings, it would be shortsighted to think that should be the criteria for success. In my opinion, true success from a drug formulary would be a decrease in disability, a decrease in addiction and dependence, an increase in return-to-work and an increase in the use of less dangerous treatment options. If the focus is on better patient clinical outcomes, there should be no stakeholder in California workers’ compensation that can argue that this isn’t a good thing.
  2. A drug formulary should rely on evidence-based medicine. Robust clinical studies that indicate what drugs should be used when, and what non-pharmacological treatment options should be tried in advance, should dictate which drugs require additional evaluation before prescribing. There are some very dangerous drugs that are generic and inexpensive, so the trigger should be what produces the best clinical outcomes in proper sequence. Step therapy, the idea that you start with the most effective, least dangerous option, is built into evidence-based medicine and should be the template for prescribers. The optimal approach to evidence-based medicine is the adoption of third-party, peer-reviewed standards that are regularly updated to reflect contemporary medical practice standards.
  3. A drug formulary should not handle new and legacy claims in the same manner. By “legacy claims,” I mean those claims that exist before the formulary rules come into effect. A patient taking his first opioid is different than a patient who has taken opioids for many years. While new claims require primarily process education for the stakeholders, there should be a remediation period for “legacy” claims to allow time for appropriate weaning and development of alternative treatment methods. Based on my observations, there should be a one- to two-year period between the rollout of a drug formulary for new claims vs. “legacy” claims. Both implementation dates should be unchangeably enforced to ensure action is taken. To be clear, any formulary that applies to new claims should also apply to legacy claims, albeit at a later date. Not applying the formulary to legacy claims would result in two different standards of care for injured workers in California depending on when the worker was injured. This is clinically inconsistent with the application of evidence-based medicine.
  4. A drug formulary will change prescribing behavior. The extra steps required for a drug that is not allowed by the formulary requires the prescriber to think through the best options as opposed to just maintaining past practice patterns (however they were developed). For example, if carisoprodol was excluded from the formulary, the prescriber either needs to validate the medical necessity through a preponderance of evidence or choose a muscle relaxant that is included (which likely means it has less dangerous side effects, has proven to be more effective for certain conditions and does not have dangerous drug-to-drug interactions). Given experience in other states, the prescriber will often choose the less dangerous drug included in the formulary, which should result in better clinical outcomes for the patient.
  5. A drug formulary should be enforced at the point-of-sale. Allowing drugs to be given to the patient and THEN deciding whether they are clinically appropriate allows the start of a potentially dangerous path to polypharmacy regimens that create more harm than good. A workers’ compensation drug formulary, just like those we see in group health plans, should be implemented at pharmacies within their point-of-sale system. The information provided to pharmacists will help them better communicate with the patient and prescriber as necessary for an option that is allowed by the drug formulary. One advantage for California is that pharmacy benefit managers (PBMs) and pharmacy chains already have experience with implementing a workers’ compensation formulary in other states. If California is modeled after that same process, there should be less up-front time required to develop processes for California.
  6. A drug formulary should be the result of consensus among all stakeholders. While reaching consensus takes longer, providing a seat at the table for every workers’ compensation stakeholder in a very transparent process will ensure a smoother implementation. It’s extremely important to the ultimate success of a drug formulary that everyone be part of the deliberation process. And if everyone is involved in developing the drug formulary, ultimate implementation will be more easily achieved. A point of clarification: while the process surrounding the drug formulary should be based on stakeholder consensus, the medical treatment guidelines upon which the formulary is built should NOT be based on consensus, but rather on the best contemporary medical evidence available. California stakeholders should focus negotiations on the rules governing the formulary, not on the medical principles that underpin it.
  7. A drug formulary should educate all stakeholders clearly and consistently. Clear (and free) education needs to be provided to all prescribers, all attorneys, all payers, all employers and preferably all injured workers as to how the drug formulary was constructed, how it will be implemented and how best to comply. Preferably, this would be led by the Division of Workers’ Compensation. This education should not stop in the lead-up to implementation but should continue in a feedback loop during and after to ensure that issues are identified and resolved quickly.
  8. A drug formulary should be simplified for ease of implementation. States with workers’ compensation drug formularies have made the choice of drugs relatively binary. For instance, a drug may be classified as one that is recommended for first line therapy (“Y” drug) or a drug that is not recommended as first line therapy (“N” drug) and should not be used unless it has been reviewed and approved by a second clinical opinion. The definition of what is and is not included in the formulary should not be narrative or interpretive, but something easy to read and — more importantly — to program into pharmacy benefit management (PBM), utilization review (UR), independent medical review (IMR) and bill review systems.
  9. Drug formulary rules should include a well-defined dispute resolution process and expedited appeal process. The goal of a closed formulary is to ensure that there are safeguards in place to prevent unnecessary medications from being dispensed to injured workers. The exclusion of a drug from the formulary (for example, an “N” drug) should not mean it cannot be utilized, only that the prescriber should be required to validate its medical necessity vs. drugs that are included. California obviously already has that infrastructure, which is why I felt in 2012 that California was a candidate for a workers’ compensation drug formulary. The onus should be on the prescriber to provide necessary evidence as to why this particular drug is required for this patient at this time. If that can be established, then that drug should be allowed to be given to the patient.

If the above steps are taken and appropriate time is given for their completion, a properly constructed and implemented drug formulary in California should result in cost savings to the system. The primary savings will emerge over time as fewer and fewer of California’s injured workers are lost to dependence, addiction and overdose. The ability to settle and close claims more quickly will be a positive result for both employers and employees.

A workers’ Compensation drug formulary could have a lasting and significant change in how prescription drugs are prescribed in California. I truly believe that by making everyone in the system think before prescribing, the injured workers will receive better care, and stress on the workers’ compensation system in California will be reduced.

I would enjoy being a continued resource to this committee as deliberations evolve. Thank you again for the opportunity to be part of this hearing.

Predictions for Work Comp in 2015

Once again, I’ll head out on a limb with saw firmly in hand…

1.  Aetna will NOT be able to sell the Coventry workers’ comp services (CWCS) division.  I’ll double down on last year’s prediction: Even if the giant health plan wants to dump workers’ comp, the network – which is where all the profit is – isn’t sellable. The rest of the operation isn’t worth much; the bill review business continues to deteriorate (and CWCS is looking for a replacement bill-review application), competitors are picking off key staff and customers continue to switch out services and network states.

2.  Workers’ comp premiums will grow nicely, driven by continued improvement in employment and gradually increasing wages coupled with increases in premium rates in key states (we’re talking about you, California).

3.  Additional research will be published showing just how costly, ill-advised and expensive physician dispensing of drugs to workers’ comp patients is. Following on the excellent work done by CWCI and Accident Fund/Johns Hopkins, we can expect to learn more about the damage done to patients, employers, insurers and taxpayers by docs looking to Hoover dollars out of employers’ pocketbooks.

4.  Expect more mergers and acquisitions; there will be several $250 million-plus transactions in the workers’ comp services space, with more deals won by private equity firms. Of late, most transactions have been “strategics,” where one company buys another; the financials of these have been such that private equity firms couldn’t match the prices paid. I’d expect that will change somewhat in 2015 as  “platform” companies come on the market.

5.  A bill renewing TRIA will be passed; the new GOP majorities want to show they can “govern,” and this has bipartisan support.

6.  Liberty Mutual will continue to de-emphasize workers’ comp. The company’s continued focus on personal lines and property and liability coverage stands in stark contrast to the changes in workers’ comp. The sale of Summit, management shifts and the financial structuring of legacy work comp claims portend more change to come. Recent financial results show the wisdom of this strategy.

7.  After a pretty busy 2014, regulators will be even more active on the medical management front. Workers’ comp regulators in several more states will adopt drug formularies or allow payers to more tightly restrict the use of Scheduled drugs via evidence-based medical guidelines and utilization review (UR). While the former is easy, the latter is better, as it enables payers to more precisely focus their clinical management on the individual patient. Expect more restrictions on physician dispensing and compounding, increased adoption of medical guidelines and UR, along with incremental changes in several key states (California, we hope) to “fix” past reform efforts.

8. There will be at least two new workers’ comp medical management companies with significant mindshare by the end of 2015. These firms, pretty much unknown today, are going to be broadly known among decision-makers within the year. While they will not generate much revenue this year, they will be attracting a lot of attention.

9. Outcomes-based networks will continue to produce much heat and little real activity. After predicting for years that small, expert-physician networks will gain significant share, I’m throwing in the virtual towel. There’s just too much money being made by managed care firms, insurers and third-party administrators (TPAs) on today’s percentage-of-savings, huge generalist network/bill review business model. Yes, there will be press releases and articles and speeches; no, there won’t be more than a very few real implementations.

10.  Medical marijuana will be a non-event. Amid all the discussion of medical marijuana among workers’ comp professionals, there are very few (as in no) documented instances of prescribing/dispensing of marijuana for comp claimants. Yes, there will likely be a few breathless reports about specific claims, but just a few. And, yes, there may also be a few instances of individuals under the influence of medical marijuana incurring workers’ comp claims, but these will be few indeed.

There you have it – here’s hoping I’m more prescient this year than I was last.

This article first appeared on Managed Care Matters on Jan. 5, 2014.