QME Fee Schedule Proposal Prompts Call for Reassessment of Med-Legal System

Published by WorkCompCentral as authored by Greg Jones

Rather than trying to clarify the Medical-Legal Fee Schedule, some observers are suggesting that the California Division of Workers’ Compensation undertake more of a soup-to-nuts review of the billing rules, or a broader reassessment of the nearly 14-year-old qualified medical evaluator process.

The DWC in May posted to its online forum proposed rules that it says are intended to identify objective standards for the appropriate use of complexity factors used to determine how much a QME will be paid for an exam.

Complexity factors take into account how much time a QME spends with an injured worker, the amount of time reviewing medical records and whether the final report addressed issues such as causation of the injury and apportionment to non-industrial factors.

One proposed rule would prohibit QMEs from citing medical causation as a complexity factor without prior approval from the parties to a case. Another proposal would limit when doctors can use the complexity factor for apportionment to claims in which an injured worker had three or more employers, three or more dates of injury or two or more injured body parts, or if the worker has reached maximum medical improvement.

The rules would prohibit QMEs from using the factor for medical research when using sources that were cited in an earlier report the doctor wrote within the prior 12 months. And the division’s proposal would say QMEs can bill for no more than three hours of time spent writing reports.

System users submitted 520 pages of written comments during a two-week comment period that closed Friday, with most people saying the proposed rules would not fairly compensate doctors for the time spent conducting exams and writing reports.

Scott Thompson, chief executive officer of Arrowhead Evaluation Services in Redlands, said the “drama” that started with the DWC not recertifying QMEs in 2016 over allegations of billing violations is a result of the confusing nature of the fee schedule itself. The division agreed to enforce the fee schedule rules “as written” to settle a lawsuit that accused the agency of adopting underground regulations.

The three types of medical-legal evaluations described in the fee schedule are “basic comprehensive,” “complex comprehensive” and comprehensive involving extraordinary circumstances.

Thompson said what one doctor might consider a complex evaluation, another might think of as basic. A QME might try to bill at $250 an hour using the ML 104 billing code, or use the ML 103 code which pays $938, but in so doing that doctor risks landing in hot water with the DWC, he said.

Alternatively, the doctor can go the safer route and bill using ML 102 for a basic evaluation, but that pays only a flat fee of $625.

Thompson also said the fee schedule can be used to victimize payers as well, by allowing doctors to exaggerate the amount of time they spent reviewing records, for example.

“If I was a self-insured employer seeing some of these bills, I would call the DWC to ask what the heck is going on with this,” he said Wednesday.

Though Thompson said he understands why the division is proposing to tweak the fee schedule, he said the rules it released for review might be an "overreaction" that will limit the ability of doctors to receive adequate compensation for what are complicated and time-consuming cases.

Rather than working within the confines of the fee schedule, Thompson said, he thinks the division would be better served by trying to simplify it.

His proposal would be to set a flat fee for evaluations based on the specialty of the reviewer. Thompson suggested a payment of $3,500 for psychology and psychiatric evaluations; $1,750 for internal medicine, neurology and pain medicine; and $1,100 for all other specialties.

The proposed payment would cover the first 100 pages of records the doctor has to review, after which the division should consider an additional payment based on the number of extra pages a doctor has to analyze, Thompson said.

He said the numbers are just starting points, but they’re based on what the California Public Employees’ Retirement System pays doctors to decide whether a person qualifies for disability retirement.

CalPERS essentially pays a flat fee of $1,000 for each disability evaluation, Thompson said, but will increase the reimbursement if the doctor has to review a large pile of records.

Evaluations for CalPERS are much less complicated than they are in the workers’ compensation system, Thompson said. Doctors doing evaluations for CalPERS don’t get deposed and don’t have to address complicated issues such as apportionment or causation, or attempt to rebut the Permanent Disability Rating Schedule.

Thompson said the simplified fee schedule he proposed would ensure that doctors are adequately reimbursed for their time while also building some consistency and predictability into the payment model.

“The insurance carriers know what they’re paying upfront,” he said. “They’re sending the records. Often times they scan them and send them over, so they would know the price of an evaluation before a patient is even seen. There wouldn’t be any anxiety about ML 104.”

Thompson said he would like to see the DWC bring all system users to the table to discuss ways to improve the medical-legal fee schedule in a way that works for everyone. He said the large number of comments, many of which were submitted by QMEs, suggests that doctors are excited to have the opportunity to provide some input.

“My thought on the stack of comments is the DWC is finally getting some communication between QMEs and its office,” Thompson said. “I think a lot of animosity built up over the past couple years with the recertification issues, and I think doctors feel like the DWC is coming at them.”

Dr. Steve Ounjian also recommended a similar flat-rate fee schedule to cover the exam and the report, with additional payment based on the number of pages of medical records a doctor has to review. He said in written comments that this would eliminate any “unreasonable upcoding" while also assuring doctors that they will be paid for their time.

Applicants’ attorney Gilbert Stein, a partner with Rucka, O’Boyle, Lombardo & McKenna in Santa Cruz, on Wednesday said he would support bringing system users together to discuss how the QME process could be improved.

Stein said he doesn’t have any solutions in mind, but in his opinion, the medical-legal system is “broken.”

One problem is that there aren’t enough QMEs in some specialties, he said.

The DWC’s QME database lists only 14 people certified in urology, most of whom have offices in Southern California. Two of the urology QMEs have offices in Oakland and Sacramento, and two have an office in Oakland.

QMEs certified to address pulmonary conditions are in shorter supply, with just nine listed in the DWC’s database. There is one QME certified in pulmonology in San Francisco, one in Salinas and one in Fresno, and the rest are in Southern California.

With a limited number of QMEs in some areas, injured workers face delays in getting appointments, or they might have to travel long distances to see a QME, Stein said. The division in 2014 fixed the backlog in issuing QME panels that at one point saw injured workers waiting 10 months just to get a panel, but the shortage of QMEs in some areas created a new backlog, he said.

Delays in scheduling an appointment with a QME can also lead to gamesmanship with the panel selection process, Stein said.

Parties can request a new list of QMEs if the provider selected from the first panel is not able to schedule an appointment with the injured worker within 60 days.

If one party doesn’t like QME or just wants to stall the case, they can request a replacement panel, Stein said. He said he had one case with four replacement panels that would have been resolved more quickly if they stuck with the original QME.

Stein said those are real problems with the QME system that don’t help injured workers or employers. He said the system can be fixed, “but it will take an effort from all sides.”

Applicants’ attorney Alan Gurvey, a partner at Rowen, Gurvey and Win in Sherman Oaks, on Wednesday said he thinks the QME system in its present form is workable, and that’s about the most that system users can expect. He said he no longer expects the medical-legal process to be perfect or even really good.

“If it is workable, then that is about all we can ask for,” he said. “The QME system has been workable, with some specific glitches, which exist in any complex system. There have been some minor modifications that have addressed the glitches. We are getting panels more quickly now, and there are less dramatic problems.”

Gurvey said the system will “implode” if the Medical-Legal Fee Schedule interferes with the ability of QMEs to write reports that constitute substantial medical evidence. If doctors aren’t getting paid for the work they do, especially when it comes to complex cases, they might not write the kind of quality reports that are admissible as evidence, he said.

“Unfortunately, there is no trust that the doctors will do an honest job,” Gurvey said. “That is partially due to the bad apples in the system who have abused their powers. However, that should not be the rule of the day. The majority of the cases are reviewed and evaluated by honest professionals who need to get paid appropriately in order to do a good job of providing substantial medical evidence for the parties to review, and ultimately for the judges and commissioners to evaluate.”

Gurvey said it’s unrealistic to expect doctors to prepare quality reports when they’re faced with regulations and rules that prevent them from being paid for the time it takes to provide evidence that a judge needs or that parties need to resolve disputed issues in a case.

“Therefore, is the panel qualified medical evaluator system broken? I would say no,” Gurvey said. “Will it be broken and will that consequently cause the whole workers’ compensation system to break even more if the powers that be mess with the fee schedules? The answer is an unadulterated yes.”