Managed Care Comes To Workers’ Compensation

New Law Places Greater Controls On How Workers’ Compensation Injuries Will Be Treated

By Vincent Gannuscio

The well-publicized workers’ compensation reform bill enacted by the Legislature earlier this year will fundamentally alter the manner in which workers’ compensation injuries are treated. Among other changes to the workers’ compensation system, SB 899 allows workers’ compensation insurers and self-insured employers to establish a managed care system, known as a “Medical Provider Network” (MPN), for treating industrial injuries. Proponents of the legislation hope that the establishment of managed care will reduce the costs of treating workplace injuries.

At the time of writing this article, regulations implementing the MPN were awaiting finalization from the Department of Industrial Relations. However, the broad outlines of the new system are already known.

If an insurer or self-insured employer chooses to establish an MPN, they will designate a primary care physician and a hospital for emergency health services. All injuries will initially be referred to these facilities for treatment and evaluation. At any point after that initial evaluation by the primary care provider, the injured worker may seek treatment from another physician, but that physician must be a member of the MPN. If an injured worker disagrees with a diagnosis or treatment prescribed by the treating physician, the employee is entitled to seek a second or third opinion, but again from physicians within the MPN.

Under the current system, employers control where the injured worker receives treatment for the first 30 days, after which the employee can seek treatment from the provider of his or her choice. The current system will be retained where an insurer or self-insured employer chooses not to implement an MPN. Under the new system, a limited number of employees (not more than seven percent statewide) will be permitted to pre-designate a non-network provider, but only where the employer provides its employees with non-occupational group health insurance and other requirements are met.

While establishment of an MPN will completely change the manner in which industrial injuries are treated under the law, for some employers the changes will not be as substantial. The state’s largest workers’ compensation insurer, State Compensation Insurance Fund, already has in place a “Preferred Provider Network” (PPN), in which it requires participating employers to send injured workers to PPN-member physicians for the first 30 days.

SB 899 also made other changes to the workers’ compensation system which are designed to benefit employers. Among those changes, the Legislature eliminated the legal presumption that the treating physicians’ diagnosis and treatment plan were correct. This presumption made it difficult for employers to challenge the nature and extent of injuries claimed by injured workers. The Legislature also eliminated the rule that workers’ compensation laws be liberally construed in favor of injured workers, meaning that workers’ compensation claimants are required to establish their claims by the same standard of proof as litigants in other types of cases.

Employers with questions about participating in an MPN or recent changes to the workers’ compensation laws are encouraged to contact us with questions.

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