Control of medical costs in California’s workers’ compensation system is not a new problem. For more than a decade at least, legislators have tried to figure out how to balance the constitutional requirement to provide all medical care reasonably necessary to “cure or relieve” with trying to curb out-of-control medical costs.

Literally nothing has been enacted over the past two years that has not been thought of, hashed out and discussed with applicants’ attorneys before. In fact, in some cases, major “reform” is nothing more than a codification of regulations in place for years. Yes, Virginia, most of it has been a legislative sham worked out by a cadre of lobbyists and special interests’ representatives to keep the public and employers at bay, and all sides contributing.

In 1989, the Legislature decided to try to codify best medical practices by having them developed by an independent panel of medical professionals—the Industrial Medical Council (IMC). Well, that lollapalooza didn’t work out as expected, and by 1993 the Legislature was trying to slow down the costs of medical treatment once again. That reform was more comprehensive than in 1989. First, it required the administrative director to develop utilization guidelines; SB 228 (Alarcon), the “landmark” reforms from last year, looked remarkably like them. Oh, how quickly we forget that the legislators have no institutional memory.

Second, there was going to be a push toward managed care—a hallmark of successful reforms in other states at that time. So the health care organization (HCO) program was created. Unfortunately, that program was so beset with problems, both structurally and administratively, that it never got off the ground. This proves that it is always a good idea to pass legislation with a positive intent and turn it over to one of the state’s worst bureaucracies to totally destroy.

Finally, to curb the perceived abuses of “dueling docs,” the treating physician, the doctor who actually examined and prescribed treatment for the injured worker, was going to be given a presumption of correctness. As it turned out, that presumption attached to everything the treating physician did—attached like a leech, and sucked blood from the cost driver directly into the bellies and bowels of applicants’ attorneys.

By the time SB 899 (Poochigian) was signed into law, the IMC already had been disbanded. HCOs will be eclipsed by medical provider networks that give the employer virtually total control over medical treatment, and the treating physician presumption was laid to rest. In addition, AB 749 (Calderon) set up a fee schedule for outpatient surgery centers, sort of. Did we remind you at the time that Calderon went to work for the surgery centers? SB 228 began the process of applying a Medicare-based fee schedule to some industrial medicine procedures, cleared up the outpatient surgery center fee schedule mess and subjected pharmacy benefits to a MediCal-based fee schedule.

Disbanding of IMC also brought with it authority for the Administrative Director to enact presumptively correct treatment guidelines, currently those established by the American College of Occupational and Environmental Medicine (ACOEM).

For those investing heavily in ACOEM training programs, you may want to hold off a bit, because the AD is going to have new treatment guidelines in place by Dec. 1. The guideline issue has generated controversy within the system, as providers, lawyers and judges seek to understand how the guidelines work, what procedures are they applicable to, and to what degree their application effectively overrides what an individual doctor determines is best for an individual injured worker. These questions will take time and, of course, much litigation to answer.

Finally, in an apparent nod to Florida, SB 228 proposed, and SB 899 clarified, that there should be a limit to the number of procedures a chiropractor, physical therapist or occupational therapist should be allowed to administer before getting further approval from the employer or insurer. Not that anyone will actually invoke the limits, because if they’re later proven wrong, the fines are larger than the costs would have been. In the end, this became a feculent section.

Many of these changes were made during the Davis administration. Most of those were significantly improved in SB 899, and the creation of medical provider networks, which is very significant, should be viewed in light of organized labor’s and Insurance Commissioner John Garamendi’s broader objective of universal health care and so-called 24-hour coverage.

In fact, SB 899 is laced with opportunities to link occupational and nonoccupational health care. This is most apparent in the predesignation provisions that are Byzantine even by California workers’ compensation standards. It is illuminating, however, that RAND, the apparent contract cortex for the workers’ compensation system, recently published a report identifying all the many impediments to 24-hour coverage and stating that it simply will not work. Some ideas, even bad ones, won’t go away, and we can promise even more legislative inquiries on, and forays into, this issue next year.

The advances in SB 899, which should improve the delivery of quality medical services to injured workers, also came with a potentially hefty price tag—immediate authorization of medical treatment regardless of whether the claim has been determined to be compensable. Large self-insured employers felt this was a small price to pay because they are living with it in other jurisdictions and felt the network program was worth the concession. Whether the experience will be the same for employers that do not offer health care benefits, and whether employers will continue to report injuries promptly to their insurers, remains to be seen, but there is much anxiety over how this new benefit will affect small- and medium-size insured employers.

It is, therefore, somewhat ironic that critics of SB 899, most notably the California Applicant Attorneys Association (CAAA), agreed to legislate how the medical community should practice occupational medicine and how much they should be paid for it but became morally outraged only when the Legislature enacted laws that effectively took applicants’ attorneys out of the business of deciding what physician an injured worker should see.

Could it be that applicants’ attorneys don’t want to lose those illegal kickbacks from the doctors, whether or not they come in the form of cash or “report and testimony” types of favors? Of course not. Applicants’ attorneys’ are there only to protect the rights of injured workers. We wouldn’t want to deprive an injured worker of an extra treatment, or even many extra treatments and prescriptions, just to run up the bills, would we? Of course not. And what’s an extra back surgery—or spinal fusion—going to hurt, especially when it can be corrected with another one? Not to mention the longer they’re kept off work, the more cash we can promise them.

But we can’t replace the lost integrity, the lost self-image, the lost time and real income, with a settlement, can we?

In the short term, the battleground will be over employers and insurers trying to place existing claims within the network—something the proposed DWC regulations clearly contemplate. In the long term, the battle will be over what standard of proof will be viewed as sufficient to overcome the treatment guidelines. Given the appeals process within the networks, this will be a very tall order.

We advocate for the examination of a special medical board, based approximately upon the HMO medical challenge systemm which does not require lawyers or others. And one made up of doctors, which hears cases on a timely basis to prevent damage or pain to the patient.

As the Legislature looked for people to blame for this edition of the workers’ compensation crisis, medical providers took their share of stinging criticism, and certainly much of it proved justified.

The difference between doctors and lawyers when it comes to workers’ compensation, however, is that you have to have doctors in the system. If SB 899 accomplishes what it is intended to do for medical treatment, we should find out whether separating doctors from lawyers actually can happen. If it does, then the reforms that eluded policymakers for the past 15 years actually may take place. That is something we’ve advocated for many years.