The California Division of Workers’ Compensation is set to waste $1.25 million in taxpayer dollars on a faulty “study” of nonexistent data.

Catherine Montgomery

The Department of Insurance, under which the DWC operates, issued a request for proposal calling on research firms to submit bids to contract with DWC to conduct a “medical access study” and produce four yearly reports on injured workers’ access to medical care. 

Since 2009, California law has required the DWC to contract with an independent firm to perform an “annual study of access to medical treatment for injured workers” and increase state fee schedule rates if the studies indicate insufficient access to care.

Unfortunately, there’s one major obstacle to completing these studies: a glaring lack of verifiable data. 

The RFP instructs bidders to inform the study with surveys and “administrative data” from the DWC. But as daisyNews has repeatedly reported, the DWC has failed to collect administrative data from claims administrators for years, in direct violation of state law.

Without data, this study cannot offer helpful insight into the crumbling, dysfunctional California workers’ comp system. More likely, the RFP will be another payday for frequent contract recipient Rand Corporation.

Big taxpayer money for comp research

The RFP gives bidders until Nov. 18 to submit proposals to “conduct comprehensive medical access reviews over 48 months,” pursuant to Labor Code Section 5307.2, which requires the DWC to contract with a firm to: “perform an annual study of access to medical treatment for injured workers. The study shall analyze whether there is adequate access to quality health care and products … and make recommendations to ensure continued access.”

The RFP references a smattering of other studies on access to care, including Rand’s most recent “Access to Medical Treatment for Injured Workers in California” from 2019, in which Rand analyzed data from 2016 and 2017. 

DaisyNews is unaware of any significant improvements to the workers’ comp system resulting from that (presumably expensive) study. 

According to the current RFP, the new study should offer insight into:

• How MPNs impact access to and quality of care (spoiler alert: MPNs impede care).
• How MPNs represent a “helpful role or barrier to care” by promoting “discounting of fees for the physician" (definitely a barrier).
• How utilization review impacts care (hint: negatively). 
• How independent medical review impacts care (injured workers rarely receive the care they seek through IMR).
• Why California “ranks third from the bottom” in provider reimbursement but “near the top for the amount paid on WC cost containment” compared to other states (we have some theories).

The winning bidder will receive $1,250,000 directly from the pockets of California taxpayers. 

In related news, daisyBill has shared extensive reports and verifiable data on the issues above for several years at zero cost to the state. 

Another data-free study?

Most laughably, the RFP instructs bidders to get their data from “legislative history, surveys of injured workers, surveys of providers, administrative data available from the DIR DWC, including the Workers’ Compensation Information System (WCIS), or other data sources (including MPN provider listings).”

As regular daisyNews readers know, the DWC considers submitting data to the WCIS “voluntary” for payers, despite state law mandating (since 2017) that the DWC require payers to submit data to WCIS on pain of monetary penalties.

Previous (presumably expensive) Rand studies on access to care relied primarily on WCIS data, even as the Rand reports noted limitations related to “WCIS data completeness.”

As for MPN provider listings, the DWC maintains an intermittently nonfunctional online list of MPNs, most of which are terminated or otherwise inactive. The list includes links to MPN webpages where, in theory, researchers can find provider listings. However, those webpages are often missing or irrelevant. 

The DWC has also declined to collect the data most relevant to injured workers’ access to care: UR data, again in violation of state law (in effect since 2016).

California comp’s research gravy train

Of course, a dearth of data hasn’t stopped California from awarding high-ticket research contracts with questionable returns on investment in the past. 

In April, the Commission on Health and Safety and Workers’ Compensation voiced concerns about Rand receiving contracts with little challenge despite repeated questions about the scope, methodology and utility of Rand studies. 

Already this year, the DIR awarded Rand $300,000 to study California’s (nonexistent) UR data.

The DWC may continue failing to manage or improve the workers’ comp system meaningfully, but at least the agency spares no expense in maintaining the appearance of effort.

Catherine Montgomery is the co-founder and CEO of daisyBill, a provider of workers' comp end-to-end revenue cycle management software. This post appears with permission.