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Flaws Revealed in the System at First Workers’ Comp Forum

SACRAMENTO - Despite having a full roster of attendees, most people who showed up at the Department of Industrial Relations’ (DIR) first workers’ comp forum in Sacramento preferred to listen as attorneys, doctors, employers and especially injured workers weighed in on what ails the system. Roughly 40 speakers gave their perspectives and recommendations on everything from reforming the AME/QME process and expanding alternative dispute resolution (ADR) to improving utilization review.

Injured workers spoke of inadequate medical care, misdiagnoses, and employers who accused them of lying about their injuries. Employers complained of excessive costs, but said that benefits for injured workers should increase without increasing costs for employers.

“You’re going to hear a lot noise over the next several months. You’re going to hear a lot of people telling you it can’t be done…that you can’t cut hundreds of millions of dollars out of the system and transform it…” says Jason Schmelzer, lobbyist for the California Coalition on Workers’ Compensation.

He maintains that there is bad behavior in “every silo,” and the task of the Department of Industrial Relations is to get the bad actors out of the system. “You have inefficiencies and then you have people that are outright stealing from employers and frankly injured workers. These are dollars that should be going into the pockets of injured workers,” he says.

Schmelzer adds that the goal is to save money for employers and transfer a proportion of that money in a “data-driven, fact-based way” to injured workers in permanent disability and other areas DIR sees fit.

Julie Jenkinson, executive vice president of corporate claims at State Compensation Insurance Fund, says State Fund estimated “cost savings of $500 to $600 million if we effectively eliminate Almaraz/Guzman and Ogilvie.”

Kent Ball, litigation manager at ICW Group, notes that his insurance company’s litigation costs have nearly doubled over the last three years from $4.5 million to over $9 million. “I still blame [Almaraz/Guzman & Ogilvie] to a degree, although I think there are other factors impacting litigation across the state including MPN issues and PQME issues that constantly need to be litigated on virtually every litigated case,” Ball says.

Jordan Davis, a workers’ comp supervisor with Sutter Health, adds that litigation could be cut substantially if ADR were expanded. “The [ADR] process worked extremely smoothly because the mediation process was able to solve the vast majority of the problems without involving intense litigation,” Davis says.

Physicians are focused on the current utilization review and medical provider network systems that they say harm injured workers by not providing either adequate or timely care. Dr. Lee Snook, chair of the workers’ compensation technical advisory committee for the California Medical Association, says that the medical evidence evaluation advisory committee that studied the UR schedule should be reactivated to complete the work it started several years ago.

“The current MPN system has not realized the desired goal of timely access to treatment, efficient handling of claims or quality medical care…,” Snook says. “The current UR system has become a Frankenstein monster zapping money out of the system. This broken system costs more, does less, denies access, denies treatment and increases permanent impairment.”

David Knip, an injured worker, says it took seven months for him to receive any treatment for a low back injury. He adds that it took 23 months from when an AME report was issued to return to work and additional medical care was denied.      

“My claims adjuster is the devil,” he maintains.


(Filed by Bess Shapiro in Sacramento)

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