Workers Comp Zone


An August 2019 California DWC proposal for a revised payment system for QMEs has again caused an uproar among doctors who perform evaluations in California workers’ comp cases.

The proposed regulations (see link at the bottom of this post) are the subject of a DWC comment forum which closes on August 23, 2019. The proposal jettisons complexity factors for a flat fee system with some variables for medical record review.

A brief history recap is in order.

In 2018 the DWC unveiled proposed changes. The response from the QME community to a May 2018 forum on a revised payment scheme was overwhelming. Hundreds of QMEs expressed dissatisfaction with the direction proposed by the DWC. Many QMEs indicated that the 2018 proposal would reduce the quality of reports and scores indicated they might leave the system if the regs were adopted.

The DWC thereafter held an October 2018 public meeting and indicated that they would hold stakeholder meetings.

Meanwhile, four interesting things happened.

First, RAND unveiled its study of the QME system, which can be found here:

Second, the State Auditor agreed to do an audit of the DIR/DWC’s oversight of the California QME system. Here is my blog on that audit request:

Third, a bill AB 1832 (D-Salas and D-Reyes)) was introduced in July 2019 to address the need for a raise in QME pay. AB 1832 has not yet been scheduled for a hearing as of the time of this post.

AB 1832 can be found here:

Fourth, a large number of QMEs signed on to support a QME payment proposal drafted by former DWC official Sue Honor.

Since mid-2018 it has not been clear what approach the DWC intended to take. As with many issues in the comp system, stakeholders have been looking for clues in 2019 as to who is really in charge at DIR/DWC and whether the change from Brown to Newsom administration might bring a different approach.

I’ve spoken with several stakeholder representatives who attended a May 2019 meeting at the DWC in Oakland. From their perspective, the meeting did not go well. I’ve learned that the DWC AD Parisotto attended the meeting only briefly and the DWC Medical Director Meister appeared largely disengaged. I’m told that the tone of the meeting between DWC staffers Winslow West and Nicole Richardson and the stakeholders was strained at best.

Various attendees indicate Winslow West was dismissive of concerns that an inadequate payment system would result in further QME attrition in a system where the QME pool is aging and shrinking.

While adequate payment may not be the only factor in attracting new QMEs to the system, it is certainly one of the significant factors. The QME system is currently not working well as the limited number of QMEs is causing many practical problems for claim resolution.

It appears that the DWC has fostered little if any direct dialogue between the payor community and representatives of the doctors who do the evaluations or the attorneys who represent workers.

As of the date of this post, there are 110 pages of comments on the DWC forum and many more are likely to be lodged by the close date.

Not all QMEs agree on all deficiencies of the proposed regs, but a read of the current forum comments shows that most QME dissatisfaction with the revised payment scheme seems to center around these issues:

• many doctors note that the payments would be substantially less than Nevada pays under a similar system

•separate reimbursement for medical record review begins only after 400 pages are reviewed

•no payment is specified for missed appointments or the time to organize disorganized medical records

•the schedule does not adequately compensate for evaluations where there are multiple body parts or where there is a legitimate need to do medical research

•there is no mechanism for cost of living increases in payments

•there is lack of a mechanism to incentivize payor to send records to the QMR in a timely and organized fashion

•supplemental reports are not adequately compensated

I would offer a word of caution to the employer/insurer coalition that is so prominent in California workers’ comp policy.

Employers and insurers need a healthy and robust QME pool to be able to resolve claims. If it takes longer to arrange evaluations and if the quality of evaluations suffers, cases will tend to drag on longer than they already do. Less quality reports, more supplementals, more depositions, more QME panel selection battles, more delays. These are some of the “unintended consequences” that can be costly if the QME pool is not healthy.

So at the end of the day, if QMEs find the proposal unacceptable, that will be a major problem.

According to the 2019  State of the System report from the WCARB, Medical-Legal costs were 8% of paid frictional costs in 2018 (by comparison, defense attorney costs were 24% of frictional costs). As a percentage of paid medical costs, the 2019 SOS report notes that in 2018 Medical-Legal evaluations were 6% of paid medical benefits, which is the same as it was in 2013.

A better approach may be to delay any regs til the California Auditor issues a report. I’m told that will be dropping sometime in September.

Stay tuned.

The current forum can be found here:

Here are the proposed regs:

Julius Young