The costs of reform

Employers are happy with the new workers’ compensation system, but doctors and injured workers say it’s a disaster

LET DOWN BY THE SYSTEM <br>Larry Brown, shown here with his wife, Karen, can get no care for his injured back.

Larry Brown, shown here with his wife, Karen, can get no care for his injured back.

Photo By Joe Krulder

Read the fine print:
Doctors used to be able to file liens to guarantee payment from insurance companies for services rendered. Under workers’ comp reform, however, they have to pay a $100 fee to file a lien. As a result, some doctors are now requiring patients to hire attorneys to do the money collecting for them.

Larry Brown walks with the slow, stiff gait of someone who’s in pain. You can see the agony in his creased eyes and worn, sinewy arms: Brown’s not the man he used to be.

But the Paradise resident says he is as much a victim of the workers’ compensation system as he is of the workplace accident six years ago that has kept him jobless since. Gov. Arnold Schwarzenegger’s much-touted “reform” of the system has been a disaster in his case, he charges.

In April 2004, Schwarzenegger signed Senate Bill 899, a workers’ compensation (WC) reform bill. Local Assemblyman Rick Keene, a practicing attorney defending employees in the workers’ compensation process, had a role in creating the final legislation.

Now, Butte County physicians and injured workers are looking for the name and number of the truck that hit them.

Indeed, throughout the state doctors are raising red flags on a reform package they say has gone awry. Last year, the California Medical Association (CMA)—the same CMA that pushed for WC reforms—conducted a poll of its members and found startling discontent. Now it wants a do-over.

The CMA charges that insurance companies under the WC system are delaying required surgeries that would put injured workers back to work. Doctors gave reports of waiting not for days or weeks, but for months for authorizations for something as simple as an MRI.

Take Pam Delangre, a 51-year-old Magalia resident who injured her back in 2004. It took an attorney and two years of fighting the system to gain approval for back surgery, a complicated procedure Delangre hopes will end more than 24 months of pain.

“It took three months for my doctor to get the OK for an MRI,” stated Delangre. “For something as simple as that, my doctor and I had to literally beg. It wasn’t until we threatened a lawsuit that they moved.”

Although Delangre won her two-year struggle to get approved for surgery, her operation this month was performed in San Francisco, not Chico. A Chico surgeon was willing to do it, but not until March of next year. For the Delangre family, that was six months more of pain that they were not willing to put Pam through.

The primary goal of workers’comp reform was to reduce costs to employers. Costs to insurers had jumped from $6.8 billion in 1997 to $21.8 billion in 2003, and employers were howling about rates that had doubled and even tripled. Schwarzenegger campaigned in 2003 on a promise to reform the system by reducing the costs to businesses, and SB 899 was the result.

And it worked. Rates came down and employers across California were ecstatic. Schwarzenegger’s reform was hailed as a huge success.

SB 899 was also touted as a boon for injured workers. It was supposed to guarantee that “they would never have to wait for help,” as the governor’s Web site notes, and restore “accountability to the evaluation and treatment of injured workers….”

But now, two years into the new system, injured workers, especially those needing long-term care, are complaining loudly that the reform is not working well for them. Doctors, too, are complaining of significant problems with the new system.

At the April 19, 2006, celebration and press conference marking the second anniversary of the signing of SB 899, Schwarzenegger boasted about how the reform has benefited the economic health of California. “Because of [workers’ compensation reform] we have seen businesses … wanting to do business here again, we have created a positive business environment,” he said. But neither the governor nor the several other speakers at the event mentioned injured workers.

The substantial cost savings had to come from somewhere, and California physicians and injured workers say they’re the product of a slippage in quality of care.

The July 2005 CMA poll found such discontent with the system among physicians that only 38 percent intended to continue in the program. The doctors complained of “excessive delays to authorization requests, the hassles of denials, underpayments, slow payment, and the high cost of collections….”

"[Workers’ compensation] used to be workable,” said Dr. Robert Egert, a physical medicine and rehabilitation specialist in Chico. “Now it’s almost impossible to provide quality medical care for my patients under workers’ comp.”

“Before the changes to workers’ compensation,” explained Chico workers’ comp attorney Steve Foster, “there was a presumption that a doctor was correct. If an MRI was asked for, it was up to the insurance company to prove the doctor wrong. But under this latest reform, that presumption was taken away. The presumption is now in the ACOEM [American College of Occupational and Environmental Medicine] manual guidelines, and it’s up to the doctor to prove this book wrong. It’s cookbook medicine.”

According to the CMA poll, 40 percent of physicians indicated that at least half of their requests for authorization were denied based on ACOEM guidelines, while 43 percent indicated at least one in four denials had been overturned on appeal.

Physicians complained of major delays in the approval/denial process. And written, detailed explanations of why doctors’ requests were denied, something the reform package mandates, were rarely forthcoming. “Only 8 percent of the physicians reported that insurance carriers/employers consistently provided this information,” stated the CMA.

Just getting hold of a reviewer is problematic. According to the CMA poll, “99 percent of physicians reported having at least occasional difficulty in reaching a reviewer during normal business hours.”

The doctors are convinced the reforms cut costs at the expense of workers. “Physicians find the implementation of these reforms so unilaterally focused on immediate cost avoidance that basic principles of appropriate care for injured workers are severely compromised,” stated the CMA.

The CN&R tried all day Tuesday (Sept. 21) to contact Assemblyman Keene to ask him about these apparent shortcomings of the system, but neither he nor his press secretary was available.

The greatest impact on workers has been in the area of long-term health care, Foster said. “From where I sit, the state’s long-term workers’ compensation health-care system is failing Butte County residents. To get long-term care, residents will either have to move or be willing to travel great distances.”

For his part, Brown—after six years of continued pain, two surgeries and the removal of three discs from his neck—is receiving zero medical care from workers’ comp, even though a state appeals court ordered ICW Group, the San Diego-based private carrier that covered Brown’s employer, to provide it.

According to court documents, Brown won his case against ICW Group in June 2004. The judge in the case ordered ICW Group to provide “further medical treatment reasonably required to cure or relieve from the effects of this injury….”

“Nothing happened,” Brown said. “ICW has dragged it out to the point that Medicare is now paying for my prescriptions.”

Foster explained how ICW Group can get away with what appears to be a violation of an appeals court order. “ICW Group cannot provide Larry Brown with the mandated court-ordered medical care because there isn’t any physician in Butte County willing to take Larry Brown on as a patient. In this case there is no malicious intent by ICW Group to bail.”

Butte County is just an extreme example of a statewide trend. According to the CMA poll, 63 percent of physicians “indicated they intend to leave or reduce participation in the WC.”

“This six-year struggle has devastated me financially, emotionally,” said Larry Brown. “It’s just drained me. I literally live off of pain medication.

“My 13-year-old son wants to wrestle, my 11-year-old daughter wants to shoot hoops, but I can’t even spend 15-minutes mowing the lawn without being on my back for the rest of the day. My family is taking the brunt of this thing; there are domino effects right down the line.”

“I’ve been so frustrated with the workers’ comp system,” said Pam Delangre, “that I just wanted to die. At times, because of the pain, the depression, it just seemed a better alternative. If it were not for my husband and my faith in God, I wouldn’t be here.”