Some California Doctors Leaving Workers’ Comp System

February 8, 2005 by Steve Lawrence

Francis Pecoraro is trading a San Francisco Bay area medical practice that mainly serves injured workers for one in Wilmington, N.C., that he believes will be friendlier to doctors and doctors’ families.

Pecoraro, who specializes in chronic pain cases, is among a number of California doctors who say they are fighting time-consuming, uphill battles to get necessary care for workers’ compensation patients. As a result, some are limiting their workers’ comp practices or dropping them altogether.

Pecoraro said he decided to move to a state with a “less cumbersome” workers’ comp system rather than spend “more time in the office generating reports and begging for medical care for my patients and less time with my family.”

Such complaints are coming “a lot more often these days” from doctors since the state imposed a system of treatment guidelines and utilization review in an attempt to hold down skyrocketing workers’ comp costs, said Nileen Verbeten, a vice president with the 34,000-physician California Medical Association. She calls it the “hassle factor.”

Those changes, part of a two-year effort to overhaul the system that treats job-related injuries, made guidelines developed by the American College of Occupational and Environmental Medicine “presumptively correct” in treatment decisions until the state develops its own standards of care. The state’s standards are two months late and officials said they don’t know when they will be finished.

Since the guidelines took effect last March, Pecoraro and a number of other physicians say they’ve been swamped by paperwork and denials of care.

They say the guidelines don’t cover all situations and are frequently misused by workers’ comp insurers to deny care or medical equipment physicians consider necessary and even cost-cutting.

“I can hardly practice medicine anymore,” said Dr. James Sylvain, a Watsonville specialist in physical medicine and rehabilitation. “I’m practicing politics and writing angry letters to adjusters and alerting (workers’) attorneys about what’s going on here so patients eventually get treatment.”

Sylvain says he’s “declining all sorts of patients” now unless there’s a nurse case manager involved to act as a liaison between the insurance company, patient and physician. That’s cut his workers’ compensation business 40 percent to 50 percent.

Dr. Janine Talty, a Watsonville osteopath, has stopped seeing workers’ comp patients entirely, saying she was being forced to “treat them with both hands and feet tied behind my back.”

Nicole Mahrt, a spokeswoman for the American Insurance Association, said guidelines were needed to stop over treatment and ineffective care that was helping drive up the cost of employers’ workers’ comp insurance.

“Change is hard; that doesn’t mean it’s wrong,” Mahrt said. “It was certainly no one’s intention to drive doctors out of the business. At the same time abuse was going on in the system and we needed to bring in new rules.”

Some medical services were overused, said Dr. Jeffrey Coe, a Los Gatos spine surgeon, but the “pendulum has swung too far” toward too much review of treatments and that also has costs.

“Instead of providing care you’re paying people to deny care,” Coe said.

Coe says he’s reduced his number of workers’ comp patients and has seriously considered dropping them from his practice altogether. “I have nine employees. If I didn’t do workers’ compensation I probably wouldn’t need two of them.”

David Corum, assistant vice president for policy development and research for the AIA, said the guidelines provide a range of treatment options. “It’s not cookbook medicine by any means,” he said. “Generally you have to fall well outside the norm before a denial would be made.”

Dr. Constantine Gean, chairman of the Western Occupational and Environmental Medicine Association, a division of ACOEM, said guidelines call for a more methodical approach to medicine than some physicians prefer.

“A lot of treatment practice, good or bad, is sort of do everything at once,” Gean said. “Many of the cases resolve in a few weeks and all of that is unnecessary.”

Most treatment requests, particularly expensive ones, go to a screening physician for approval. Often, however, that physician is hundreds of miles away and knows nothing about the patient besides what’s listed in medical records or learned during telephone calls, said Mark Gerlach, a consultant for the California Applicants’ Attorneys Association, a group of lawyers who represent injured workers.

Sometimes, the reviewing physicians may not know of a particular procedure the treating doctor has used successfully or they may fear losing insurers’ business by authorizing too much treatment, said Dr. Jacob Rosenberg, one of Pecoraro’s partners.

Rosenberg said he understands insurers’ positions, but called the new situation “reprehensible” and “out of control.”

Other states, Gerlach said, use treatment guidelines in workers’ comp cases but not as rigidly as California uses the ACOEM guidelines. Verbeten of the California Medical Association said insurers “have gone from doing no utilization review to doing utilization review with a document (the ACOEM guidelines) for which it was not designed.”

Denials of care can be appealed to a workers’ compensation judge, and expedited hearings before those judges increased nearly 3 per cent in the last nine months of 2004, compared to the same period in 2003. But Susan Gard, a spokeswoman for the state Division of Workers Compensation, said it’s not clear how many of those cases involved ACOEM disputes.

A study done for the state last year by the Rand Corp. used a panel of 11 experts in work-related injuries to evaluate five sets of treatment guidelines, including those issued by ACOEM, which represents more than 6,000 doctors and other professionals in occupational and environmental medicine.

The panel rated the ACOEM guidelines the best but said all five were “far less than ideal.” A majority of panel members recommended the state start from scratch with a new set of guidelines, rather adopting an existing set as its own.

Dr. Lee Glass, who led the drafting of the latest ACOEM guidelines, said they were the result of extensive consultations and several drafts to make them “as refined as we could get them.” But they were written to help physicians, not for reviewing treatment decisions, he added.

Despite the current problems, Glass said, “I suspect that if everyone works together … it’s going to work out all right in the end.”

Some of the controversy might have been avoided if the state had adopted its own treatment guidelines by Dec. 1, the deadline set by the Legislature.

Andrea Hoch, the director of the Division of Workers’ Compensation, said she hoped to have the new guidelines in place by March but didn’t want to rush them through without adequate input.

Gard said the guidelines are a top priority but there is no firm deadline for issuing them.

Division officials are considering either keeping the ACOEM guidelines and adding new details on orthopedic care or developing a new set entirely, she added.

So far, the way the ACOEM guidelines have been used has troubled Sen. Richard Alarcon, the lead author of the legislation that imposed them. He’s hoping Hoch’s guidelines will be an improvement. But he’s also criticized regulations from Hoch’s office that workers’ attorneys say will result in big cuts in benefits for disabled employees.

“If her regulations to date are any indication, it’s not a good sign for doctors or their patients,” he said.

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