Tag Archives: work injury

New Laws … New Responsibilities … New Opportunities

SB 863 was signed by California’s Governor back in October but with an official start date of January 1, 2013. For that reason and just because I don’t trust either the legislature or the courts to change their minds, I thought I would wait until now to start talking about what is good, what is bad and what is downright ugly.

Let’s Start With A Good…
In 1917, the first Industrial Accident and Safety Act went into effect. There were lots of pieces, but one that has endured the test of time is the one that allows an injured employee to choose to be treated by his own consulting or attending physician, at the employee’s own expense. The current version of that section is now Labor Code Section 4605 (until 1/1/2013). In my mind, it has been used, or should I say abused, over the past years with an ongoing controversy over this section and what it really means.

There are two major issues surrounding this section of the code. The first has been the question of who is really responsible to pay the bill. The second is whether or not the non-Medical Provider Network doctors’ reports are admissible in court. Well, thanks to an energetic applicants’ attorney (A/A) named Mendoza, both of these issues became ripe for the courts with the recent 2012 Valdez case.

First, I must note that there was a viable Medical Provider Network in place at the time of the injury. The employee initially went to the carrier’s Medical Provider Network doctor, but he also self-procured his own, non-Medical Provider Network doctor.

The carrier objected on the basis that the Medical Provider Network controlled all medical treatment. However, the trial judge admitted and relied totally on the report of the self-procured, non-Medical Provider Network doctor in making his decision as to compensability and the amount that would be due the injured employee. This matter was then taken up by the Workers’ Compensation Appeals Board who reversed the trial judge not once but twice.

However, Mr. Valdez’ attorney was not letting go so easily. So the matter was then taken up by the Court of Appeals who agreed with the Workers’ Compensation Appeals Board. Mr. Mendoza was still not satisfied and took the matter to the California Supreme Court for consideration. The matter has been accepted by the Supreme Court and we await their decision which I predict will be in our favor.

However, while all of this was going on in the courts, the legislature was in the process of passing SB 863, which has some interesting changes … one of which is directly related to this issue. To put it in perspective, you must understand the current language of 4605 which reads as follows:

L/C 4605 — Consulting or attending physicians provided at employee’s expense. Nothing contained in this chapter shall limit the right of the employee to provide, at his own expense to a consulting or attending physicians whom he desires.

As noted above, one of the problems has been who has been paying the non-Medical Provider Network doctors’ fees. Up to this point in time, the applicant’s attorneys have been burying these costs when they send the injured employees to their doctors. The doctors are instructed to treat and to then file a lien for their fees which are normally dealt with at the time the claim itself is decided. I am sorry to say, that in the end, the carriers have rolled over and have been picking up these costs without a fight. This, even when there is a valid Medical Provider Network in place and all such services by the non-Medical Provider Network doctor should be objected to and paid for by either the injured employee or better yet, his attorney.

Non-Medical Provider Network Doctors’ Reports
The next issue is the admissibility of the non-Medical Provider Network doctor’s report. The argument has been that since the employee is paying for it, it should be allowed to have weight in the final determination of the claim. Needless to say, we have vigorously objected and in many cases have won. However, the issue was still there until the legislature made a significant change to L/C 4605 which clarified whether these reports could or should be admitted. L/C 4605 has been changed to read as follows effective 1/1/2013:

Nothing contained in this chapter shall limit the right of the employee to provide, at his or her own expense, a consulting physician or any attending physicians who he or she desires. Any report prepared by consulting or attending physicians pursuant to this section shall not be the sole basis for an award of compensation. A qualified medical evaluator (QME) or authorized treating physician (read MPN Primary Treating Physician — PTP) shall address any report procured pursuant to this section and shall indicate whether he or she agrees or disagrees with the findings or opinions stated in the report and shall identify the bases for this opinion.

So you can see that the legislature has spoken and the issue of the admissibility of the reports has been addressed and settled. That is why I feel we will win at the Supreme Court as the legislature has already made the necessary changes to make clear their intent with the law.

So You Ask, “How Does All This Affect Me?”
Effective January 1, 2013, when you have a strong Medical Provider Network in place, the “consulting or attending physician’s” reports will be admissible but will be sent only to the Medical Provider Network’s Primary Treating Physician. That doctor will either accept what the non-Medical Provider Network doctor has stated or reject it. If our doctor rejects it, he/she must justify why they disagree with what the report says. And of greater import is that if they reject it, there is now a dispute over the diagnosis and treatment of the injury and the matter will be sent out for a second opinion by our Medical Provider Network doctor and not the non-Medical Provider Network one chosen by the injured employee.

This approach will save both time and a great deal of money by shortening how long it takes to get an acceptable medical opinion. This will allow the claim to be moved forward and closed in a timely manner and at a much reduced cost.

What Your Injured Employee Needs To Know When Reporting An Injury
The most important thing to remember here is that when an injury occurs to one of your employees, you need to make sure that they know and understand their right to secure outside treatment but at their own expense. This has already had the affect of limiting applicant attorneys from sending their clients out to doctors who list every possible body part available and then treat and treat and treat and treat.

Internal Vs. External Benchmarking Of Insurance Claim Data

Data-driven analysis is a critical decision-making tool for Construction Financial Managers and other industry leaders.

Decision-making is arguably the most important responsibility of company leadership.

Companies that make better decisions make fewer mistakes, and achieve a distinct competitive advantage in the marketplace.

The underlying purpose of benchmarking is to continually improve the quality of organizational decision-making.

Overview
As construction risk management consultants, we help contractors prevent accidents, mitigate claims, and reduce the total cost of risk through a continuous improvement process.

We believe companies must instill management accountability for continuous improvement by linking performance measurement to both prevention activities (leading indicators) and operational results (lagging indicators). As the adage goes:

“What gets measured is what gets done.”

In our consulting roles, we frequently help companies establish realistic performance measures by conducting various types of claim and loss analysis.

This type of data analysis is usually the starting point in a performance improvement process — and a common practice among insurance agencies, brokerages, carriers, and risk management consulting firms.

In addition, we are often asked to conduct a benchmarking analysis that compares one company's claim and loss data against peer companies or to the construction industry as a whole.

Benchmarking
The term “benchmarking” refers to the comparison of a company's performance results against those of similar peer companies. Benchmarking evolved out of the quality improvement movement in the late 1980s and early 1990s.

Its initial intent was to identify leading companies regardless of industry sector, and apply their best practices to improve one's own company. Over time, benchmarking has become synonymous with process improvement.

The traditional view of benchmarking required two separate disciplines focused on performance improvement: measures and methods. Identifying and capturing performance indicators (the measures) is only the first step; developing and implementing performance improvement (the methods) is the second and most important step for the benchmarking process to be truly effective.

The Health Club Analogy
There is limited value in benchmarking without applying new methods to address continuous performance improvement. Performance improvement requires more than the measurement of performance indicators; it requires the implementation of changes in management disciplines to attain improved operational results.

Using only performance indicators without implementing new methods to improve operations is akin to joining a health club and expecting the benefits without actually using the equipment or committing to an exercise program.

Merely jumping on the scale and gauging your weight relative to others doesn't help you achieve your own weight loss goals anymore than comparing your pulse and respiration rate to others helps you attain your aerobic or cardiovascular fitness goals. What matters most is that a person embarking on a weight loss or fitness program stays committed to the process and monitors his or her own progress.

Similarly, we believe the ongoing monitoring of claim and loss data specific to an individual company is even more important than the initial measurement of insurance claim and loss data relative to other companies.

Baselining As Benchmarking
The term “baselining” refers to the internal benchmarking process that occurs when a company compares its performance against its own results year after year. Ongoing, internal monitoring allows a contractor to determine if the company's claim and loss trends are improving or deteriorating, and to make the critical performance improvement decisions necessary to facilitate a change in results.

Referring back to the health club analogy, baselining does not compare an individual's weight and aerobic fitness to that of the other health club members. Instead, individual fitness goals and measures are established, monitored, and tracked to verify continuous personal improvement.

Similarly, a construction company can develop a baseline analysis of its loss cost performance by reviewing loss and claim data for a minimum of 3-5 years. Company results are compared from year to year, and ideally are broken down by operating entity, division, project, manager, or even crew levels.

Exhibit 1 provides a sample of a baseline analysis that compares one company's relative claim and loss performance within all of its operating divisions.

2001-2006 Total Claim Cost per Man-Hours Worked by Division

 

This analysis reviews the historical loss cost data for the entire company and breaks it down into meaningful data relative to each operating division. The total workers' comp, Comprehensive General Liability, and auto liability incurred claim costs (sum of paid and reserves) for each company division over a five-year period were compared to the total man-hours for each division, producing a cost per man-hour figure.

The results illustrate dramatic differences in total claim costs per man-hour for each division. This baseline analysis was the first step in raising awareness of the predominant loss leaders within the company. This increased awareness led to a detailed analysis that established plans of action and realistic cost targets by company division for the upcoming year.

External Benchmarking
We acknowledge that there are numerous benefits to measuring the frequency, type, and cost of insurance claims compared to peer groups and/or the entire construction industry. Such analyses provide the ability to:

  • Identify leading types and sources of claims
  • Establish strategic objectives to prevent the occurrence of common industry claims
  • Increase knowledge of industry best practices
  • Determine operational performance improvement priorities
  • Create awareness among managers and employees about the costs of claims and the impact on profitability
  • Post positive results on company websites and for use in other marketing materials

The Bureau of Labor Statistics provides safety-related data so that companies can externally benchmark injury and illness data against specific industry groups. (Check out the Web Resources section at the end of this article for more information.)

In addition, Bureau of Labor Statistics data is used to calculate and compare OSHA Recordable Incident Rates and Lost Workday Incident Rates, both of which are common construction industry benchmarks. This data is useful when making high-level comparisons within construction industry segments relative to injury and illness rates.

We also use external benchmarking analyses to establish risk reduction, loss prevention, or cost containment goals. In “Risk Performance Metrics” by Calvin E. Beyer in the September/October 2007 issue of Building Profits, a sample benchmarking comparison shows a representative contractor's duration of lost workdays workers' comp cases in median number of days compared against the median duration for the industry. Results such as these can highlight the importance of an increased focus on injury management and return-to-work programs.

The benchmarking analysis in Exhibits 2A and 2B compares a contractor's workers' comp claim and loss performance to an established group of peer contractors in the same specialty trade. (These companies engaged in similar work, and performed in states with similar insurance laws and legal climates.)

WC Claims Per $1 Million WC Payroll by Company

The analysis was based on total incurred workers' comp costs and total number of workers' comp claims as compared to payroll for each entity. Overall, Company D had worse results than the other three companies.

This prompted an in-depth review of Company D's workers' comp losses by division and occupation. As shown in Exhibit 3, the company experienced significant claim frequency and severity issues within the first six months of employment.

WC Claim Count & Cost by Length of Service

These findings triggered the development and implementation of specific activities designed for Company D's new employees.

Below are some of the activities that were incorporated into the formal improvement plan:

  • hiring processes
  • new hire skills assessments
  • orientations
  • daily planning meetings
  • formal training

Other Sources Of Benchmarking Data
Professional associations and industry trade/peer groups also provide comparative data for benchmarking purposes.

The Construction Financial Management Association's Construction Industry Annual Financial Survey is an excellent source for understanding the key drivers of contractor profitability. We use the survey data to determine comparative profit margins for different types and classes of contractors when we calculate a revenue replacement analysis to show the additional sales volume needed to offset the cost of insurance claims. (This technique was highlighted in the “Risk Performance Metrics” article previously mentioned.)

Similarly, the Risk and Insurance Management Society (RIMS) conducts an annual benchmarking survey that reviews insurance rates, program coverages, and measures of total cost of risk.

An example of a peer group data source for benchmarking is the Construction Industry Institute (CII). The Construction Industry Institute is a voluntary “consortium of more than 100 leading owner, engineering-contractor, and supplier firms from both the public and private arenas” (www.construction-institute.org). It develops industry best practices and maintains a benchmarking and metrics database for its participating members.

Another peer group example involves members of captive insurance companies sharing and comparing claim and loss data for the group as a whole. There is a major advantage when a true peer group shares benchmarking data: Such data sharing often leads to peer pressure in the form of increased ownership and accountability for improvement by the companies shown to be the poorest performing members.

We continue to search for more new sources of industry best practices and comparator data. A possible emerging source for the construction industry is the National Business Group on Health. This organization has developed standardized metrics known as Employer Measures of Productivity, Absence and Quality™ (EMPAQ®).

EMPAQ® helps member companies gauge the effectiveness of their injury and absence management and return-to-work programs. The founder and principal of HDM Solutions, Maria Henderson, served as a project sponsor for EMPAQ® from 2003-2007, and co-presented with Calvin E. Beyer on “Return to Work as a Workforce Development Strategy” at CFMA's 2008 Annual Conference & Exhibition in Orlando, Florida.

Limitations Of External Benchmarking
We fear that the increasing popularity of external benchmarking analyses may indicate that it has become a “quick fix” solution or a management fad. When asked to conduct an external benchmarking analysis, we always ask the following questions:

  • What is your purpose in seeking these comparisons with other companies?
  • Who are you trying to convince and what are you trying to convince them to do?
  • What specific peer companies should be used for comparative purposes?
  • Are these companies (and their operations and exposures) truly similar enough for a fair comparison?

Beware Of Pitfalls
There are many hurdles to surmount in locating suitable companies for external benchmarking comparisons. Generally, when benchmarking comparisons can be made, more often than not the greatest value lies in the workers' comp line of insurance coverage.

Here are some key factors to consider when choosing contractors for external benchmarking comparisons:

  • Percent of self-performed work vs. subcontracted work
  • Payroll class codes and hazard groupings of selfperformed work
  • Differential geographic labor wage rates
  • Payroll rate variances between union and merit shop operations
  • Size of insurance deductibles
  • Claim reporting practices

For example, claim reporting practices must be similar in order to minimize distorting the frequency or average cost of a claim. If one or more comparison companies self-administers minor claims or does not report all claims to their carrier, using carrier loss reports for the comparison is an invalid method.

We also find that comparing the frequency of claims and total loss dollars divided by thousands or millions of dollars of payroll (exposure basis) is a helpful workers' comp benchmark between companies of similar operations in similar states.

Likewise, a suitable benchmark for auto liability performance compares the frequency of claims and total loss dollars per one hundred vehicles.

When benchmarking fleet-related claims, ensure that the number and size of fleet vehicles — as well as the type of driving (urban vs. rural) and the total number of miles driven annually — are similar among the contractors whose claims are being compared.

Benchmarking comparisons of Comprehensive General Liability insurance results are especially challenging due to delays in reporting third-party bodily injury and property damage claims, in addition to the expected long tail of loss development for these claims.

All of these factors are compounded by vastly different litigation trends and liability settlements in various states and regions of the country.

Common Limitations Of Data Sources
Whether or not you intend to develop a baseline of your company's claim data or to benchmark your company's performance against a peer company, there are several issues that must be successfully resolved regarding the data's quality and integrity.

Based on our experience, we classify the key challenges associated with exposure and claim/loss data into the categories shown in Exhibit 4: availability, accuracy, accessibility, standardization, reliability, comparability, and date-related problems.

Seven Data Challenges

Value Of Multiple Measures
Evaluating data from various sources and different angles is also valuable. Why? Because it's possible to gain a better understanding of the whole by dissecting the parts. This practice illustrates the principle of multiple measures.

This approach is substantiated by 2006 research, which concluded that the “simultaneous consideration” of frequency and severity provides a more comprehensive result than performing analysis based solely on one factor.1

This is similar to our approach when we conduct a “Claim to Exposure Analysis” and review historical frequency and severity vs. the relative bases of exposure for each line of casualty insurance coverage.

Returning to the health club analogy, when starting a formal exercise program, you often begin with such general baseline measurements as height and weight; this is usually followed by additional measurements, such as BMI, body fat content, and the girth of arms, legs, and chest (the baseline).

As we all know, weight alone is not always the best indicator of success in fitness efforts. In fact, since muscle weighs more than fat, an increase in total body weight may actually occur after beginning and maintaining a fitness program.

Although you might not experience a dramatic weight drop, you could see a reduction in waist size and BMI — positive changes that would not be evident unless multiple measures were being used and reviewed.

Benchmarking insurance claim and loss data performance is like comparing one person's height and weight against the ideal height and weight charts based on the entire population.

Wouldn't it be more effective to establish your baseline weight and other multiple measures initially so you can see the progress you are making?

This is similar to the baseline measurements that a company should take (as well as the multiple measures) that are necessary to meet your company's performance improvement goals for financial success, operational excellence, or risk reduction.

Web Resources:

  1. U.S. Department of Labor BLS Incidence Rate Calculator and Comparison Tool
  2. National Institute for Occupational Safety and Health Work-Related Injury Statistics Query System
  3. Risk and Insurance Management Society, Inc. Benchmark Survey
  4. Construction Industry Institute Benchmarking & Metrics
  5. National Council on Compensation Insurance, Inc. (NCCI Holdings, Inc.) Benchmarking Tools
  6. Employer Measures of Productivity, Absence and Quality EMPAQ
  7. CFMA's Construction Industry Annual Financial Survey with Benchmarking Builder CD

Authors
Cal Beyer collaborated with Greg Stefan in writing this article. Greg is Assistant Vice President, Construction Risk Control Solutions, at Arch Insurance Group. As a member of the Southeast Regional team in Atlanta, GA, Greg supports underwriting and claims in risk selection, claim mitigation, and risk improvement activities. He is also responsible for high-risk liability risk reduction initiatives including contractual risk transfer, construction defect prevention, and work zone liability management.

1 Baradan, Selim, and Usmen, Mumtaz A., “Comparative Injury and Fatality Risk Analysis of Building Trades,” Journal of Construction Engineering and Management, May 2006, pp. 533-539.

Are You Aware Of The Independent Employee Act Defense?

Are you aware of the Independent Employee Act Defense? If you are, then you do not need to read on. However, I am willing to bet that most of you are not so that is why I am offering this for your reading enjoyment.

The question is “What do you do if you are fined by OSHA for a serious penalty?” Among the various defenses available, there is the Independent Employee Act Defense (IEAD). It is all based on the 1980 Mercury Service, Inc., case which by the way is still cited in Cal/OSHA legal circles.

In this defense, the employer must plead that the act of the employee that caused the injury was an independent act of the employee, and the employer should not be held liable. The argument by the employer is that “I did everything the law required me to do, but the employee violated company policies and procedures and that is what caused the injury.”

Now this seems simple but it is not. In order to prevail with the affirmative defense, it must first be pled on the appeal following the citation and for the employer to prevail, he/she must prove all five of the following elements:

  1. The employee was experienced and trained on the job. Using the case noted as our base, the employee was a diagnostic specialist on automobiles. The employer presented over 70 training certificates from the manufacturer out of which over 30 were on engine diagnostic and performance checks. Also, training certification from a nationally recognized body was provided by the employer. OSHA accepted the employer’s claim on this issue. However, OSHA reviewed all of the safety training that had been completed by the tech.
  2. The employer has a well-defined safety program in place. This one is so obvious. You must prove that you have a well-defined and active safety program in place. Here, the employer provided its Injury & Illness Prevention Program Manual along with copies of the various training sessions that had been given. These were taken directly from the manufacturer’s service manual that were relevant to the tasks being performed at the time of the injury. OSHA again accepted this part of the defense as well.
  3. You must have a policy of sanctions against employees who violate your safety program. Employers must have a policy of sanctions which is enforced equally against any employee who violates your safety rules or is involved in unsafe acts. Here the employer reported that he did not have such a policy as injuries were virtually non-existent and therefore not needed. The employer lost on this one at OSHA as no policy was in place and as any earlier violations that may have occurred had not been documented.
  4. You must also have an effective enforcement program in place. The written policy noted above must be enforced equally and be well documented. Here, OSHA held that the enforcement part of the employer’s overall safety program had “no teeth” and that the program which was well written was never followed nor enforced. Here, as you can see, the employer lost.
  5. The employee caused the safety infraction which he/she knew was contrary to the employer’s safety requirements. Here, the employer must prove that the employee had the requisite knowledge of the safety requirement which he knowingly violated, whether on purpose or by his/her own negligence. The employer provided a copy of the safety rules in place at the time of the injury which had been signed and acknowledged by the injured employee. They also provided a copy of the shop manual (specific directions on the servicing of vehicles) which all technicians refer to repeatedly. This document also outlined the safety procedures for each task as well as the relevant safety issues.

So what does this say to you? It says that if you have an effective Injury & Illness Prevention Program and training program in place which is well documented and enforced you may be able to effectively defend against an OSHA serious violation. However, the important thing to remember is that proper documentation wins the day. Without it, don’t even try to defend as you will most likely lose. The watch word by most agencies is that lack of documentation means that there was no documentation and you lose.

SB 863 Valdez Revisited

As you may already know, the Second District Court of Appeal recently issued their decision on this case which involves in part, the admissibility of non-Medical Provider Network doctor’s reports. This was initially an unpublished decision. However, plaintiff’s counsel petitioned the court which did in fact publish the opinion giving it precedential status. In other words, it could be cited in other cases with the same or similar issues.

In its simplest terms, it says in part that an injured employee may be treated by his/her own non-Medical Provider Network physician pursuant to Labor Code (L/C) 4605 for diagnosis, treatment and attendant reports. The case goes on to acknowledge that the employee is responsible for the payment of these services and that any reports generated by the non-Medical Provider Network doctor are admissible. However, the case was remanded to the trial court to deal with the admissibility as well as other issues left unsettled by the Workers’ Compensation Judge at the time of trial.

However, as you will see below, I am pleased to report that the defense strategy we developed allowing employers to use the current Medical Provider Network system to its fullest advantage was adopted by the Legislature in the recently passed SB 863. This was due to the amendment to Labor Code 4605 as discussed below.

Background
The current Labor Code 4605 was first enacted in 1917 as a part of the then Insurance and Safety Act. Sec. 9(a) of that act is most interesting from a historical perspective in that it reads:

Such medical, surgical and hospital treatment, including nursing, medicines, medical and surgical supplies, crutches and apparatus, including artificial members, as may reasonably be required to cure and relieve from the effects of the injury, the same to be provided by the employer, and in case of his neglect or refusal seasonably to do so, the employer to be liable for the reasonable expense incurred by or on behalf of the employee in providing the same: provided, that if the employee so requests, the employer shall tender him one change of physicians and shall nominate at least three additional practicing physicians competent to treat the particular case, or as many as may be available if three cannot reasonably be named, from whom the employee may choose: the employee shall also be entitled, in any serious case, upon request, to the services of a consulting physician to be provided by the employer: all of said treatment to be at the expense of the employer. If the employee so requests, the employer must procure certification by the commission or the commissioner of the competency for the particular case of the consulting or additional physicians; provided, further, that the foregoing provisions regarding a change of physicians shall not apply to those cases where the employer maintains, for his own employees, a hospital and hospital staff, the adequacy and competency of which have been approved by the commission. Nothing contained in this section shall be construed to limit the right of the employee to provide, in any case, at his own expense, a consulting physician or any attending physicians whom he may desire (my emphasis). The same general language as to responsibilities is now found in L/C 4600(a); 4601 and 4605.

The reason this section is important is that Section 9(a) pre-dates Labor Code 4616, the Medical Provider Network statute. As such, any attempt prior to SB 863 to harmonize the rights of the employee to seek their own doctor at their own expense against the later-enacted Medical Provider Network statute would have to give precedent to the later-enacted labor code section (L/C 4616).

Labor Code 4605 Amended By SB 863
However, all of that was changed with SB 863 which amends Labor Code 4605 in such a way that makes clear the admissibility and subsequent value of any non-Medical Provider Network generated reports:

“Section 4605 of the Labor Code is amended to read:

4605. Nothing contained in this chapter shall limit the right of the employee to provide, at his or her own expense, a consulting physician or attending physicians whom he or she desires. Any report prepared by consulting or attending physicians pursuant to this section shall not be the sole basis of an award of compensation. A qualified medical evaluator (QME) or authorized treating physician shall address any report procured pursuant to this section and shall indicate whether he or she agrees or disagrees with the findings or opinions stated in the report, and shall identify the bases for this opinion.”

Strategy For The Use Of Labor Code 4605 And Medical Provider Networks Going Forward
Employers and their claims administrators (carrier or Third Party Administrator) must aggressively assert and maintain their medical control over any new claim reported under their Medical Provider Network to make this strategy work.

First, employers need to be sure that the required Medical Provider Network notice to each employee and the Labor Code required general postings are complete and well documented.

It is important to note that SB 863 also made significant changes to 4616, the Medical Provider Network statute. However, even with these changes, an employer’s best defense will continue to be quality documentation regarding policies and procedures on their handling of the Medical Provider Network notification and enforcement process which will block applicant attorneys’ (A/A) attempt to seize medical control for failure to comply with the statute.

Consulting And Attending Physicians
The important question raised by Valdez dealing with the use of Labor Code 4605 by applicant attorneys as a means to get their non-Medical Provider Network doctors reports admitted has been resolved. Labor Code 4605, as amended, has clarified clearly and concisely to who and how the non-Medical Provider Network doctor(s) reports are to be submitted and used.

As noted above, “A qualified medical evaluator or authorized treating physician shall address any report procured pursuant to this section and shall indicate whether he or she (my emphasis) agrees or disagrees with the findings or opinions…” You will note that only a qualified medical evaluator in a non-Medical Provider Network claims environment or the “authorized treating physician” which in the case of a Medical Provider Network is the Primary Treating Physician (PTP) have control over the use of such pro-offered reports.

Recommended Procedure Under Labor Code 4605 As Amended

  1. As a first step, I recommend that the injured employee be informed, as part of the employer’s or claims professional’s acknowledgment of the claim, that a valid Medical Provider Network is in place and that the employee’s cooperation is expected.
  2. The same initial notice should also state “that the employee is free under Labor Code 4605 to seek their own consulting or attending physician, at their own expense.” They will be told at that time that if they do avail themselves of this option under Labor Code 4605, their consulting or attending physician’s medical reports will be tendered to the Primary Treating Physician (PTP) for this injury who, under the Medical Provider Network statute, is the controlling doctor (Labor Code 4061.5). Under this scenario, the consulting or attending physician’s report will be submitted to either the qualified medical evaluator or Primary Treating Physician to be used as he/she deems appropriate.
  3. At the same time, the normal Medical Provider Network process will be enforced as is current policy. Demand will be made that the employee continues to be seen for diagnosis and treatment by a Medical Provider Network doctor. If there is a dispute as to diagnosis or treatment by either the applicant’s attorney or the L/C 4605-obtained consulting report, that dispute will be handled under the Medical Provider Network’s 2nd, 3rd and if necessary, the Independent Medical Review process and NOT through a Panel Qualified Medical Evaluator.
  4. We will also be requesting from the employee an acknowledgement, under penalty of perjury that the employee has already paid or understands that he/she is the ultimate responsible party for paying their L/C 4605-obtained physicians as well as any other related bills for treatment, testing and other costs.
  5. We will object to any liens from the consulting physician and will recommend they bill the injured employee directly.
  6. Should the employee continue to refuse to be seen by our Medical Provider Network doctors and treat with the non-Medical Provider Network physician, then a Notice of Suspension of Benefits will be sent to the injured employee, his attorney (if there is one), and the non-treating physician. The notice will inform all of the above that all benefits including both Temporary Total Disability and medical treatment are suspended under Labor Code 4053 for failure to comply with a written demand. It will go on to say that the suspension can be lifted by the injured employee simply showing up at our Medical Provider Network doctor for diagnosis and if necessary, treatment.
  7. Under this scenario, employers and their carriers or Third Party Administrators will be able to use the full weight of the Medical Provider Network process while, at the same time, dealing with non-Medical Provider Network procured medical diagnosis and treatment. This will help keep the employee within the Medical Provider Network and, if handled in a swift and judicious manner, help hasten a timely closure of the claim.