NBC Bay Area 3-part Investigation into the California’s Workers’ Compensation System
Injured workers across California say the workers’ compensation system is dragging out or denying the medical care needed to get them back to work. Those workers say they feel trapped in the sprawling labyrinth of a system, battling insurance companies and navigating through red tape instead of getting well.
Anecdotally, injured workers and their doctors say denials of medical treatment are at an all-time high. But the fact is there is no way to evaluate how well the system is actually working. The Department of Industrial Relations, the state agency tasked with administering workers’ comp, doesn’t publish data on the number of treatment requests that get approved or denied.
Instead, state agencies most often point to data and reports published by the California Workers’ Compensation Institute (CWCI), a private organization comprised of insurance companies. Reports published by the organization say the system is working well and the vast majority of medical requests submitted by injured workers get approved. But that data is voluntarily submitted by its members and critics say it’s impossible to know how representative that sample is of the entire system.
“I feel really frustrated,” said Ryan Snider, a California Highway Patrol officer. “I feel like I’ve been abandoned by the workers’ comp system. I had a clear on the job injury and I don’t feel like I had sufficient medical treatment that would give me a fighting chance at recovering from those injuries.” “It just burns and aches,” Snider said. “You squirm and sweat. You twist and move and there’s no getting away from it.”
By most accounts, the system works fine for workers who suffer a straightforward workplace injury. But for those suffering from complicated or prolonged injuries, like Snider, the system can feel like a morass of delays and denials. Many of those workers say their health has deteriorated after being strung along for months or years, leaving them hurting and depressed. Even people with the best private insurance can get stuck in the system -- those plans don’t cover work-related injuries.
Reforms made in 2013 under Senate Bill 863 to contain costs and improve service for injured workers have been a boon for insurance companies and employers, saving $800 million across the system, according to a recent study by the Workers’ Compensation Insurance Rating Bureau. But some say those savings have come at the expense of injured workers and the doctors trying to get them well.
Snider’s doctors have requested more than 300 requests for treatment and medication since the crash, hoping he can get back to the job he loves fulltime. Some requests have taken months to get approved – many were denied outright. Even a $30 heating pad, one of the few things that give Snider any relief, was denied by his employer’s insurance company. Snider, who spends so much time on the heating pad he has burn marks across his lower back, had to buy the item himself.
The 13-year veteran patrolled the Napa area on his motorcycle until he was involved in an accident with a drunk driver one night in 2013. The driver made a sudden left turn directly in front of Snider, who slammed his motorcycle into the side of the car. He hit the pavement chin first, although he doesn’t remember it. Snider has dealt which chronic pain in his back and neck ever since.Snider and his doctors believe he could have returned to work fulltime by now had the appropriate medical treatment been approved right away. Instead, he faces the looming possibility of a medical retirement. “I can’t afford to live in our current situation if I medically retire,” the husband and father of three kids said. “We’ve considered moving out of state. We’re talking about a career that’s been a dream since I was a teenager and walking away from a career that I love.”
NBC Bay Area submitted multiple requests to interview Christine Baker, the director of the Department of Industrial Relations, but those requests were turned down. The CWCI, which has published multiple reports stating the system is working as intended, also declined an interview request.
For most injured workers, the crux of the issue centers around a process called utilization review (UR). Doctors working on behalf of insurance companies and employers review requests for medical treatment made by an injured worker’s treating physician. They approve or deny treatment based on a standard set of guidelines. All employers or their workers’ compensation claims administrators are required to have a utilization review program. Utilization review is used to determine if treatments are medically necessary for the injured worker, and is designed to contain costs and combat medical fraud. Nobody, including staunch critics of the system, denies fraud has plagued the workers’ comp system for years. The California Department of Insurance estimates fraud costs the state between $1 billion and $3 billion each year.
But frustrated workers and their physicians say reviewing doctors often work to advance the interests of the insurance company that’s employing them, not the patient. Those doctors never actually examine the patient. They make their decision based on a partial review of the injured worker’s medical history. The reviewing doctor may even be in another state altogether, as there’s no law requiring them to have a license to practice medicine in California.
Snider’s primary care physician, Jeffrey Stevenson, said utilization review is too often a barrier between an injured worker and recovery. “We tell [patients] we can get them better,” Stevenson said. “We give them hope and utilization review takes it away from them. That’s the worst thing we can do.” Part of the problem, Stevenson said, is the insurance industry has painted injured workers with a broad brush. They’re mischaracterized as scammers trying to make an easy buck off the system. “I think to a substantial extent, it’s a culture problem,” Stevenson said. “There is a sense that someone on workers’ comp or with a work-related injury automatically is a malingerer.” Stevenson said many doctors have stopped taking workers’ comp patients altogether, citing the constant struggle with insurance companies and reviewing doctors to get treatment approved. He thinks about getting out of workers’ comp all the time, but never actually goes through with it. “The reason I don’t is these are good, hardworking people,” Stevenson said.
The California Medical Association surveyed doctors in 2014. Sixty-seven percent, of physicians reported difficulties obtaining authorization for treatment through the utilization review process since the 2013 reforms. More than half said the greatest problem was the inappropriate denial of “medically necessary tests, procedures or services.”
“There is definitely a conflict of interest for these doctors who are working for these companies,” said Ruben Kalra, Snider’s pain management doctor. “[They’re] able to deny care without examining these patients and are not being held accountable.” The Harvard-trained physician runs one of the busiest pain management practices in the Bay Area. About 25 percent of his patients are injured workers, many of them first responders like Snider. The physical nature of the job means public safety personnel often suffer work-related injuries, and those injuries are often more complicated than the typical worker’s. “We take care of hundreds of fire and police and CHP,” Kalra said. “These are the people that take care of us and protect us in the community, yet we have this system that’s not protecting them.” Kalra uses a procedure called “radio frequency ablation” as an example. It’s a treatment that had been approved in the past for Snider, who said it dramatically reduced his pain. The short procedure reduces nerve pain, and Kalra says it’s an effective alternative to powerful opioid pain medication. But after a while, the nerves grow back, so Kalra requested the treatment again in October of last year. This time the treatment was denied by the utilization review doctor. It took a total of four requests and eight months of delays to get the procedure approved. Kalra said it would have been cheaper and more efficient to approve the procedure outright.
Records obtained by NBC Bay Area from the Department of Industrial Relations show Snider isn’t the only injured worker frustrated by the system. The records show in 2013 alone there were nearly 1,100 complaints about utilization review, filed by more than 400 injured workers, their attorneys and their doctors. One injured worker complained that “delay and denial tactics” caused deterioration of body parts.” Another said, “I have suffered needlessly for too long.” NBC Bay Area requested the same records for subsequent years, but those records have not yet been provided.
Research by the California Workers’ Compensation Institute, however, paints a different picture of the system. The organization said data provided by its members -- insurance providers and some self-insured employers -- shows that 96 percent of workers’ compensation treatment requests are ultimately approved. That data, considered proprietary information by insurance carriers, is not public. Since state agencies don’t collect data on claims going through utilization review, it’s impossible to independently substantiate those numbers.
Steve Cattolica, director of government relations for the California Society of Industrial Medicine and Surgery, says that’s a problem. “That really should be general knowledge,” Cattolica said. “If CWCI has a corner on that data, it would be useful to put it in the public domain for everybody to take a look at it.” Cattolica estimates 85 percent of workers’ comp cases involve minor injuries, where workers are off the job for just a few days. “The experience of the injured workers who are being denied care,” he said, “speak a much louder and more difficult story.”
The Department of Industrial Relations released a report in July assessing the 2013 reforms made under SB 863. The study touted the effectiveness of evidence-based medicine, which required the use of medical guidelines to determine if a treatment request is medically necessary. “By encouraging practices that have been proven to work and discouraging those that are ineffective or harmful, evidence-based medicine results in better care, which translates to better health outcomes and fewer wasted resources,” the report stated. But the report also acknowledged the need to improve the utilization review process. The agency elaborated on that point in a written response to questions from NBC Bay Area. “The timely delivery of compensation to injured workers, including the provisions of medically necessary treatment, is always a high priority for DIR and DWC [Division of Workers’ Compensation],” spokesperson Peter Melton wrote in an email. “Regarding utilization review, DIR would like to reduce delays and unnecessary costs to the system.”
Melton provided the following bullet points:
• Updating the Medical Treatment Utilization Schedule (MTUS) to ensure that the treatment guidelines reflect current evidence-based medicine. As a corresponding measure, DWC will conduct outreach to providers to increase their understanding of the guidelines.
• Reducing UR within the first 30 days after the date of injury, when most conservative treatment is approved.
• Requiring the electronic transmission of treatment requests and medical records.
Yet not everyone is satisfied with how evidence-based medicine is being applied. Cattolica said the concept has been skewed by the insurance industry to reduce costs and deny care. Cattolica said a reviewing doctor using evidence-based medicine to review a claim should weigh three factors equally: Medical treatment guidelines based on established research and science, the expertise of the treating doctor, and the expectations of the injured worker. But Cattolica says the treatment guidelines, most notably the medical treatment utilization schedule (MTUS), is often the only factor considered by UR doctors. “The sweet spot is where those all mesh,” Cattolica said. “But unfortunately the three circles I just described are never the same size.” Cattolica said denying care based on the guidelines alone, without factoring the unique needs of each patient and the recommendations of their physician, amounts to a cookie cutter approach to medicine. He said evidence-based medicine sounds good in theory, but lawmakers in California don’t have a good understanding of how it’s actually being applied. “We believe it’s the lack of that understanding that has hamstrung reforms from the beginning,” Cattolica said. “Life is not getting easier for anyone involved in workers’ comp. The reformers who create policy should have a burning desire to make sure policies can be implemented at the desk level, where the rubber meets the road, and work.”
Several pieces of legislation are currently being debated in Sacramento. One bill would limit certain treatment requests from having to go through the often cumbersome utilization review process within 30 days of the initial injury. In a written statement, Department of Industrial Relations Director Christine Baker said the bill will expedite care for injured workers. “We all agree that the sooner an injured worker is treated in the critical first month of injury and the sooner the worker returns to work is the best outcome for the worker and the employer,” Baker wrote. “In reducing and eliminating most utilization review in the first 30 days following an injury, medical care consistent with medical treatment guidelines can be delivered to an injured worker without delay.”
Another bill would prohibit an employer or a utilization review company from providing financial incentives to a reviewing doctor based on the number of treatment delays or denials he makes.
Snider and his doctors say they're now trying to reform the system. Snider, Kalra and Stevenson have spent months meeting with lawmakers in hopes their concerns gain traction in Sacramento. If the system can fail a CHP officer injured by a drunk driver, they say it can fail anyone. “Changes are direly needed,” Snider said. “We have to do something to fix this. This is a system that is broken right now and the people that are reaping the benefits are the workers’ compensation companies. That is completely, morally wrong in my opinion.”
Injured workers face an uphill, long-odds battle if they want to appeal the denial of medical care through California’s workers’ compensation system, state data shows. Since reforms made in 2013 under Senate Bill 863, injured workers can no longer appeal treatment denials in front of a judge. Now, the state contracts with a private, for-profit corporation that reviews appeals under a process called “Independent Medical Review.” The company pays anonymous doctors, who have never examined the patient in person, to make those decisions based on a standard set of guidelines.
Patients don’t stand much of a chance under the new system, the data shows. Between 2013 and 2015, injured workers contested almost 600,000 denials of medical treatment. Those denials were upheld nearly 90 percent of the time when reviewed on appeal by independent medical review doctors. What that number means, though, depends on who you ask.Critics of the system point to that figure as evidence the appeals process is one sided -- simply rubberstamping the denial of treatment for injured workers. But those who say the system is working as intended have a different take. The fact that only one in every ten cases is overturned under appeal, they say, proves that correct treatment decisions are being made at each previous step in the process.
For Joan Dismuke, though, the debate is far more personal. A workplace injury in 2003 would mark the beginning of a long descent into chronic pain and depression for her daughter Lorrie Mays. Mays would end up taking her own life in February, the same week Independent Medical Review upheld the denial of the only treatment Dismuke said brought her daughter any relief. “I think everybody has a limit to what they can take,” Dismuke said. “[Workers’ comp] provided a lot of care for Lorrie. She just needed more.”
Mays was working as a nurse for the Fresno County Health Department helping women with at-risk pregnancies when she slipped on a flight of stairs during a house call. She went through surgery, but continued to have chronic pain in her legs and lower back. “Chronic pain is day in and day out,” Dismuke said. “And at some point, someone who develops chronic pain, which is unrelenting, develops depression.”
Workers’ compensation medical guidelines do in fact acknowledge a link between depression and chronic pain resulting from a work-related injury. It’s why anti-depressants can be prescribed by workers’ comp doctors. But for Mays, whose fun-loving personality would disappear after the injury, anti-depressants were ineffective. So in 2014, her doctor turned to a treatment called Transcranial Magnetic Stimulation (TMS), a procedure used to treat depression in patients resistant to medication. Mays’ medical records show the treatment seemed to be effective. But when her doctor requested another round of treatment in September, it was denied.
The denial stated the following: “The new criteria for proceeding with this treatment includes failure of multiple medications and failure of a trial of electroconvulsive therapy. The records do not clearly establish that the patient has recently failed a trial of electroconvulsive therapy. Further, the guidelines advise that a standard course of treatment includes 30 treatments. The patient has far exceeded this quantity.” Mays appealed the denial, asking the state for an Independent Medical Review. In February, the doctor reviewing her appeal upheld the denial. Lorrie’s family was at the beach when she received the decision letter.
When Dismuke returned home, she found a note on the front door written by her daughter. It said to call the police – and not to go in the backyard. “I knew instantly what it meant,” Dismuke said.Dismuke would find other letters written by her daughter that spoke to the pain and frustration she endured trying to get the medical care she hoped would make her better. “It’s been 12-plus years of hell,” Mays wrote. “The past several days have been so exhausting. I’m worn out, drained, depleted, gone.” “We treat our employees while injured worse than we treat our veterans,” Mays wrote in another letter. Mays’ case is extreme. But critics of the workers’ comp system say the implementation of independent medical review stacked the deck against injured workers.
A company called Maximus Federal Holdings won the contract to provide independent medical review for the state in 2013. The corporation is paid anywhere between $345 and $515 to review a case. It’s paid for by the injured worker’s employer or their employer’s insurance company. The contract has been lucrative for Maximus. A study by the Workers’ Compensation Insurance Ratings Bureau found treatment denials are being appealed far more than expected. “The number of IMRs filed in 2014 and 2015 was three times higher than initial WCIRB projections,” the report states. Although Maximus received nearly 500,000 appeal requests over that time period, doctors employed by the company determined 90 percent of those requests were not medically necessary and upheld the original denials. But who those doctors are is a controversy in itself. Their names are confidential and there is currently no requirement they have to be licensed to practice medicine in California. An analysis of state data found 39 percent of IMR doctors who reviewed cases in 2014 were licensed out of state. In 2015, 29 percent were out of state. IMR doctors never actually examine the patient, either. Instead, they’re provided a slice of that worker’s medical history and make a determination using a standard set of guidelines.
“To have some anonymous person review your need for medical care and say you don’t need it – there’s zero transparency in that,” said Diane Worley, policy director for the California Applicants’ Attorneys Association. Worley, whose organization advocates for injured workers, says the move to IMR was made to help contain costs, but the pendulum has swung too far. “If the treatment the doctor is requesting isn’t the right treatment, the goal should be, ‘well, what is the right treatment?’” Worley said. All that money going to Maximus, Worley said, means less money being spent on medical care for workers. “The money that was going to treatment is now going to this bureaucratic nightmare of paper and review,” she said.
Maximus declined interview requests for this story, as did officials with the Department of Industrial Relations, the state agency that oversees workers’ comp. But reports published by the insurance industry show the 2013 reforms have resulted in significant savings of nearly $800 million across the system. The WCIRB says those savings are beginning to translate into lower premiums for employers, which had been rising steadily for years. And in July, a state report emphasized the continued need to make medical decisions based on evidence-based guidelines. By encouraging treatment that’s proven to work and discouraging treatment that’s ineffective, the report states fewer resources are wasted and injured workers get better care.
Dismuke, though, says those guidelines don’t fit every patient. They didn’t fit her daughter Lorrie, she said, and the consequences were devastating. “It’s always bad to be the atypical patient,” Dismuke said. “I don’t care what field you’re in. If you present differently than the norm, you are liable to not get the treatment you need. I think here, she didn’t fit the profile of what they expected treatment to have to be.”