Workers Comp Zone


A lawsuit has been filed in Los Angeles challenging the Division of Workers’ Compensation policies and procedures for re-certifying QMEs (see link to the actual pleadings at the end of this post).

What’s the beef?

In the summer of 2016 I began to hear anecdotes that quite a few workers’ comp QMEs had received notices that their QME status was not being renewed.

Later I learned that many of those QMEs had apparently run afoul of a DWC Medical Unit interpretation regarding QME billing rules.

According to allegations in the lawsuit filed by Attorney Nicholas Roxborough on behalf of several QMEs,  approximately 400 QMEs have been denied reappointment, out of a total of around 3,000 QMEs in California.

Roxborough’s complaint alleges violation of the California Administrative Procedures Act as well as due process allegations. Declaratory and injunctive relief are sought.

A key aspect the dispute appears to be over the Medical Unit’s interpretation of allowable billing codes under ML 104. In adopting a seemingly new and more stringent interpretation of what qualifies for ML 104 billing, the Medical Unit is alleged to have instituted new “underground regulations”.

The lawsuit cites presentations by DWC Medical Unit attorney Winslow West which allegedly outline a “new and different” criteria for billing medical complexity.

In any event, the suit alleges that “None of the subsections (1)-(7) of Labor Code 139.2(b) states that an alleged misapplication of billing codes by QMEs is a ground for denial of reappointment as a QME.”

Another issue is what due process right QMEs have when the DWC serves notice that reappointment is denied. Labor Code § 139.2 (k) provides for a hearing prior to the suspension or termination of the privilege of a physician to serve as a QME. Yet, according to the lawsuit, the DWC has been issuing reappointment denial letters before a due process hearing is held. Further, the DWC is alleged to have delayed holding hearings, thus “illegally imposing de facto permanent denials of reappointment licenses, in violation of Petitioners’ rights to due process.” 

As the DWC files its response I will cover that, but it is likely that the DWC will cite Title 8 California Code of Regs. § 63, “Denial of Appointment of Reappointment”. § 63 was adopted in 2009 and does not on its face reference the right to a hearing to contest QME reappointment.

On that issue, the lawsuit alleges as follows:

“However, 8 CCR § 63, which derives its authority from Labor Code 139.2(f), does not permit Respondents to actually deny reappointment of a QME until after a hearing. Instead, 8 CCR § 63 only permits Respondents to notify a QME of their initial determination of their intent to seek to deny reappointment, and then, of their final determination to seek to deny reappointment.”

These issues should be of more than academic interest to anyone interested in the health and stability of the California workers’ compensation system.

On the one hand there has been some concern about increasing medical legal costs and whether there is upcoding of QME med-legal billing. According to the CHSWC annual report for 2016, the average costs of a med-legal on PD claims increased by 11% from 2013 to 2015, though comparing 2015 with 2014 stats did not seem to show a increased use of ML 104 code.

According to the WCIRB 2017 State of the System report, in 2016, medical legal evals were 7% of paid medical expenses versus 6% in 2013. That is an increase, but would seem within a margin of error.

But on the other hand, the number of active and experienced QMEs is quite modest, and drastically low in some medical specialties and geographic regions. As  I noted while speaking in front of a graying audience at a QME conference several years ago, most of the QMEs seemed to be older gentlemen. Attracting new QMEs into the system does not appear to be going all that well.

An ill-defined war on QMEs seems poorly conceived.

It’s no secret that the DWC plans to retool QME regulations in the next year so so.

If there are legitimate problems, those should be documented in studies and subjected to the rule making process so that stakeholders can comment.

Meanwhile, this dispute is one that probably needs to be resolved in court.

Here is the lawsuit, known as Howard V. California DIR:


Stay tuned.

Julius Young