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SB 863: The Start of the Single Payer System
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SB 863: The Start of the Single Payer System
Defense Perspective on Reform: by Michael McDonald, Esq.

Defense attorney Michael G. McDonald, Esq. of the McDonald Law Corporation comments on the aftermath of reform


SB 863 will bring major changes to the way we practice in the workers’ compensation system. If the changes survive challenges and politics, we are seeing the future form of medical treatment.

Let’s jump into some of the basic changes which will affect injured workers and employers.

We are seeing the future form of medical treatment.

Changes to permanent disability advances

First, we are seeing the end of permanent disability advances if an offer of work is made or the injured worker obtains employment at the same wage and compensation rate with another employer. See Labor Code §4650(b)(2).

Or are we? How does one know what the wage and compensation package is with another employer? How does the defendant obtain discovery to verify the package? Will the injured worker voluntarily give up private information? If the worker is employed by a competitor, could the new employer threaten to fire the injured worker if details of the compensation package are revealed?

What were the drafters thinking? Will withholding PDAs result in more settlements? If the worker returns to work for the same employer, in many instances the case results in a stipulated settlement, not a Compromise and Release. How does that really help either party?

Ghost clients

Will there be more “ghost” clients for applicant attorneys as a result of Labor Code §139.2(h)(1)? If a panel Qualified Medical Evaluator (QME) is not assigned within 20 working days, the unrepresented injured worker has the right to choose any QME of his/her choice within a reasonable geographic region. Will the “ghost” clients return to the attorney, assuming the attorney helped the person choose the free choice QME?

What is a “factual error” which allows either party to seek one supplemental report on an unrepresented worker? Will Information and Assistance (I&A) officers need to get a license to practice law? It seems that the current system is pushing them that way.

Labor Code §139.2(h)(1)

(h) (1) When requested by an employee or employer pursuant to Section 4062.1, the medical director...shall assign three-member panels of qualified medical evaluators within five working days after receiving a request for a panel. Preference in assigning panels shall be given to cases in which the employee is not represented. If a panel is not assigned within 20 working days, the employee shall have the right to obtain a medical evaluation from any qualified medical evaluator of his or her choice within a reasonable geographic area...

Communication conflicts?

Under Labor Code §4062.3(f), communications with an Agreed Medical Evaluator (AME) shall be in writing and shall be served on opposing counsel when sent to the AME. Yet, under subsection (c), the parties shall agree on what information is to be provided to the AME. So, does this mean that the parties need to agree on the evidence provided to the AME, but the communication/cover letter may be an analysis of how the party views the evidence?

Labor Code §4062.3:

(c) If an agreed medical evaluator is selected, as part of their agreement on an evaluator, the parties shall agree on what information is to be provided to the agreed medical evaluator.

(f) Communications with an agreed medical evaluator shall be in writing, and shall be served on the opposing party when sent to the agreed medical evaluator.

WCAB and Medical Provider Network (MPN) Issues

Under Labor Code §4616(b)(1), “Commencing January 1, 2014....Upon a showing that the medical provider network was approved or deemed approved by the administrative director, there shall be a conclusive presumption on the part of the appeals board that the medical provider network was validly formed.”

Under Labor Code §4616.3(b), failure to provide proper notice of the MPN does not permit the worker to escape it unless the worker can prove the lack of notice resulted in denial of medical care. Any escape is to another MPN doc, but subsection (d)(2) provides that treatment by an non-MPN specialist “may be permitted on a case-by-case basis if the medical provider network does not contain a physician who can provide the approved
treatment and the treatment is approved by the employer or the insurer.”

Under Labor Code §5502(b), medical provider network issues are to be adjudicated at an expedited hearing, “provided that when an expedited hearing is requested pursuant to paragraph (2), no other issue may be heard until the medical provider network dispute is resolved.” There is no paragraph (2), leaving us mystified.

Mystified by missing paragraphs?

IMR, a puzzling bureaucratic creation

The Independent Medical Review (IMR) created by SB 863 is an interesting concept to say the least. The new Labor Code §4610.5 provides the exclusive option for an employee to dispute Utilization Review determinations. UR is used in most instances to determine treatment for accepted body parts. So, what happens when treatment to a body part is requested but not accepted? UR typically will not review the determination. See Labor Code §4610(g)(7). Where does that leave the injured worker? It seems that body parts will need to be litigated at an earlier date at the WCAB. Will this raise litigation costs? Will employers roll over and just pay for treatment of the disputed body part? If so, does such an act result in treatment for non-industrial injuries or diseases? Why keep a system which pays only for work-related injuries when non-industrial injuries are billed to the employer?

Why keep a system which pays only for work-related injuries when non-industrial injuries are billed to the employer?
IBR and new lien laws

How do doctors get paid for treating disputed body parts under the new lien regulations and Independent Bill Review (IBR) under Labor Code§ 4603.2? This section requires, among other things, evidence of authorization for treatment. If the treatment is not authorized, it seems more hearings will be held before the WCAB to resolve the dispute. Will there be physicians who will treat industrially-injured workers if there are payment issues? What will happen to workers who require the treatment and have to wait? Seems this is again leading us to a single-payer system.

Editor's note: Single-payer health care is a system in which the government pays for all health care costs, rather than private insurers.... The term "single-payer" thus only describes the funding mechanism—referring to health care financed by a single public body from a single fund—and does not specify the type of delivery, or for whom doctors work. Although the fund holder is usually the state, some forms of single-payer use a mixed public-private system. Wikipedia
The end of freedom of choice for medical care

Socialized medicine, MPNs, Obamacare, Single-Payer Medicine: these labels denote the end of freedom of choice for medical care. While applicant attorneys fight for the freedom of choice for their clients, defense attorneys fight to maintain the MPN status quo for their clients.

No input from the users of the system

Years ago, the system was much more simple, had many fewer laws and regulations, and people were able to get through the system. Now, with the huge increase in the number of “players,” we have a huge bureaucracy, millions of dollars spent on computer systems, support staff, legislative agendas, etc. Yet, only a small group of individuals crafted the new system. No input from CAAA, CWCDAA, CSIMS, or other organizations. The users were left out because we are viewed as abusers. Yet, we are the ones who have the ability to improve the system. Hopefully, the AD will listen to us when the regulations are promulgated.

While the system meanders its way through the WCAB and courts, let’s try to make common sense of this system.

No input from CAAA, CWCDAA, CSIMS, or other organizations. The users were left out because we are viewed as abusers.

Michael G. McDonald is the founder of McDonald Law Corporation in Concord, California and a Certified Specialist in Workers' Compensation Law, State Bar of California. He is a Director for the California Workers’ Compensation Defense Attorneys Association. For more information click here.

Michael G. McDonald, Esq.
McDonald Law Corporation
1800 Sutter Street, Suite 430
Concord, CA 94520-2563
Voice: (925) 363-4380
Fax: (925) 363-4352
Other locations: Sacramento, San Jose and Fresno

Mike McDonald is a regular guest at the Roundtable or the Magazine

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