California Bill Would Bar Insurers from Withdrawing Injured Workers’ Care

by Michael Grabell ProPublica, April 29, 2015, 5:13 p.m.

A bill that would prevent insurance companies from using routine doctor requests to reopen the cases of injured workers and deny previously approved care passed a key California senate committee Wednesday.

The legislation addresses a concern that a workers’ compensation law passed in 2012 was being used to cut off expensive but vital medical care2014a problem highlighted in an investigation by ProPublica and NPR last month.

The 2012 law instituted a new medical review process that was intended to streamline disputes over care by having them be decided by independent doctors, not judges. But the change has also resulted in tens of thousands of injured workers being denied treatments their physicians recommended, according to data from the state and research groups. Attorneys and doctors for injured workers say the law has also made insurers more aggressive in seeking second opinions for care that had already been approved, resulting in denials ranging from routine prescription refills to ongoing home health care.

In one case featured by ProPublica and NPR, Travelers Insurance withdrew the home health aide provided to Joel Ramirez, a paralyzed warehouse worker, leaving him with no one to help him transfer out of his wheelchair or clean up after soiling himself.

In response to our story, the state workers’ comp agency launched an audit of Travelers and warned insurance companies not to use the new law to deny approved home health care.

The bill, authored by Sen. Richard Pan, D-Sacramento, would prohibit insurance companies from reviewing  medical treatments that have already been agreed upon or approved by a judge unless there has been a change in the workers’ condition or the treatment is deemed unsafe.

The legislation “ensures that these injured workers cannot be abruptly and harmfully cut off from care,” Pan said at the hearing before the labor and industrial relations committee. Under the bill, an employer or insurer can have a doctor review a case if it believes a treatment is no longer appropriate based on medical evidence and treatment guidelines. But it cannot withdraw care until an independent medical review is completed and an alternative treatment is provided2014unlike what happened to Ramirez.

The new bill faces opposition from a number of industry and insurance groups. The California Chamber of Commerce labeled the bill a “job killer” and said it would increase costs on employers and subvert the reforms put in place in 2012. In addition, the chamber said, the bill could lead to inappropriate medical care by removing an important check on the long-term use of addictive painkillers.

Jason Schmelzer of the California Coalition on Workers’ Compensation, which represents business and insurance interests, said the issue needs to be studied more “so the injured worker receives treatment quickly, but is still protected from unnecessary and potentially harmful treatment.”

The bill is sponsored by the California Medical Association, which represents physicians and surgeons. The group cited ProPublica and NPR’s reporting as well as a survey it conducted last year showing increased frustration with medical reviews following the 2012 reforms.

Two-thirds of physicians who responded to the survey reported difficulties in getting authorization for medical treatments and more than half said the greatest problem was inappropriate denials of medically necessary care.

The survey results contrast starkly with research by the California Workers’ Compensation Institute, an insurance research group. The institute found that nearly all injured workers in California receive the treatment their doctors recommend and only 25 percent of treatment requests face reviews by insurance company doctors.  But about 90 percent of the requests that reach the final stage of the new medical review process are denied, the institute found.

Worker advocates argue that the insurance institute’s study distorts the picture because the vast majority of claims are for minor injuries, requiring basic medical care such as stitches or bandages. By grouping all claims together, they say, the institute is hiding that the denied care often involves the more expensive, complicated cases of severely injured workers.

Related coverage: Read about the demolition of workers’ compensation and how what your limbs are worth depends on where you work. For more, see the full investigation.

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