Workers Comp Zone


The California State Auditor’s report on the QME process is now out, and it does not make the California Department of Industrial Relations look good.

The November 2019 report finds that the DIR/DWC has failed to adequately address the decline in QMEs and finds problems in its administration of the system. The report, widely anticipated by stakeholders, can be found at the bottom of this post. It contains a response by George Parisotto, Administrative Director of the California Division of Workers’ Compensation as well as a point-by-point rebuttal from the State Auditor to a number of points raised by Parisotto.

The key findings by the State Auditor are as follows:

• “The department has not ensured that it has enough QMEs to keep up with the demand for their services, which results in injured workers experiencing delays in resolution of their disputes, and thus possible delays in benefits for workers and increased cost for employers.

» The number of QMEs has declined steadily since fiscal year 2013–14, while requests for services have risen significantly.

» The availability of some specialty QMEs dropped even more than the average QME decline.

 • Despite the shortage of QMEs, the department has not conducted any studies or analysis to determine if accessing QMEs is a problem and has not taken steps to address the shortage.

    It has not updated the rates of its medical-legal fee schedule that QMEs use to charge for their services since 2006—the rates are 30 percent lower than what the rates would be if adjusted for inflation.

    »  It has not established a process for recruiting QMEs and has not used data it collects to better manage the QME supply and recruit more QMEs.

• The department inappropriately used the reappointment process to discipline QMEs—it denied some reappointments based on alleged overbilling violations making the QMEs unavailable until allegations were resolved. Further, the department was slow to schedule hearings QMEs requested after it denied their reappointment appeals, or did not schedule them at all.

•Although required to do so, the department has not ensured that QMEs produce high-quality reports that provide medical evidence to help judges and others to resolve disputes timely—it has not tracked when judges rejected reports that failed to meet standards such as accuracy or completeness.”

I’ve been writing about many of these issues since I began doing the blog. Things really heated up in the past few years, as there has been criticism of the DWC’s administration of QME discipline and as the DWC has struggled to put together a revision of the QME payment system. Meanwhile, there has been significant attrition in the number of QMEs and many litigants find major delays in getting to QMEs.

The report makes the following key recommendations:

      The Legislature should amend state law to do the following:

  • Require the department to review and update, when needed, the fee schedule for compensating QMEs at least every two years.
  • Increase the number of QMEs on the panels the department provides.
  • The department should develop and implement the following:
  • A plan for increasing the number of QMEs that prioritizes the specialties with greatest shortages;
  • Written policies and processes for disciplining and reappointing QMEs; and
  • A plan to continuously review QME reports for quality and report findings annually.

Stakeholders will want to carefully review the DWC response to the report, and then the State Auditor’s point by point rebuttal to the DWC response.

While I agree that there are headwinds in attracting new QMEs, clearly the DIR/DWC has for years not been acting as if this is a priority.

And the DWC reponse to the Auditor’s report is disturbing insofar as it seems to downplay the impact of declining QME numbers on workers receiving treatment and benefits and on timely case resolution.

Interestingly, comments by the State Auditor seem to document that the DIR was not forthcoming in providing requested information to the State Auditor on a timely basis.

Also of interest is the recommendation that for represented workers, the panels be expanded to five names. Here is the section making that recommendation:

“Because QMEs have become more frequently unavailable, we believe changes to the panel selection process are also warranted. DWC previously had a process of “dueling QMEs” if the injured worker was represented by an attorney, in which each party obtained its own QME and generated separate medical-legal reports. However, this process made the system even more adversarial by producing potentially contradictory QME reports. The State abandoned this approach in 2004. Our proposal is to increase the size of certain panels. Data show that the rate of replacement panel requests for represented cases is three times higher than the rate of requests for unrepresented cases, partly because unrepresented workers generally can select from among a panel of three QMEs while represented workers generally have to use the remaining QME after each party strikes one from a panel of three. For represented workers, we believe that expanding the panel size to five QMEs, allowing each party to strike one, and then allowing the party that did not request the panel to select from the remaining three would better ensure availability and reduce the number of replacement panels needed. If the selected QME is unavailable, the parties would then select from among the remaining two QMEs until they find one that is available.”

Why the pick from the remaining three would be made by the “party that did not request the panel” is not clear, but in any event, this would require legislative action.

Here is the full report by the California State Auditor:


And here is the summary of the report:


Stay tuned. In coming posts I will be commenting on the recent CDI determination on workers’ comp rates and discussing several recent studies of the California system.

Julius Young