On June 2, the California Assembly unanimously passed Assembly Bill 1293, which aims to improve the state’s medical-legal process for resolving disputes between injured workers and claims administrators.

Catherine Montgomery

If signed into law, AB 1293 would require the California Division of Workers’ Compensation to (among other things) publish the agency’s annual report on the quality of medical-legal evaluations and create a template for a qualified medical evaluator report "that constitutes substantial evidence.”

The DWC would have until Jan. 1, 2027, to institute the changes.

This isn’t the first time California law has tried to increase transparency and oversight in workers' comp. Unfortunately, the DWC has a long history of ignoring such legislative efforts.

For years, the DWC has blatantly failed to follow state laws requiring data collection and publication — particularly regarding utilization review — and has refused to enforce payment laws and regulations in the face of repeated violations by payers.

With the DWC in charge of implementing this proposed law, passing AB 1293 is likely to yield absolutely nothing.

California employers: Ultimately, you pay for the DWC’s consistent failure to comply with or enforce the state’s workers' compensation laws. Under the DWC, rampant non-compliance means the premiums you pay to ensure your employees’ care are often misused, wasted or funneled into the bank accounts of private equity firms.

A proud tradition: ignoring state law

The California Labor Code already requires the DWC to collect and publish a vast range of system-critical data. These are some of the tasks that state law requires the DWC to undertake:

• Collect UR data on every single workers’ comp claim.
• Publish UR approval and denial data for every physician who treats injured workers.
• Enforce mandatory claims administrator data reporting to the Workers’ Compensation Information System.

Instead, the DWC:

• Ignores the UR data collection mandate.
• Fails to publish physician-specific UR data.
• Declared WCIS reporting “voluntary.”

In addition to ignoring the law itself, the DWC tacitly allows claims administrators to do the same.

The agency routinely fails to enforce payment laws and regulations, appeal procedures and UR requirements. Laws don’t matter to the lawless, so any law that depends on DWC enforcement effectively doesn’t exist.

The results are predictable. Providers flee the system, injured workers struggle to access timely, quality care, and employers continue shoveling premium payments into a barely regulated system that fails to heal injured employees and return them to work efficiently.

Med-legal: A priority, but not the priority

If it becomes law, AB 1293 will:

• Amend California Labor Code Section 139.2 to require the DWC to publish its annual report “summarizing the results of the continuous review of medical evaluations and reports” for quality and timeliness.
• Add Section 4062.4 to the Labor Code requiring the DWC to create a template medical-legal report form that includes “all necessary statutory and regulatory requirements for a complete report that constitutes substantial evidence.”

Theoretically, the above sounds reasonable. Realistically, though, should this be the agency’s priority as it continuously fails to do other, arguably more important work?

Yes, medical-legal disputes matter. They’re costly, frictious and indicative of what makes California workers’ compensation so broken and inefficient. However, many of these disputes could potentially be avoided if the DWC adhered to the mandate to make UR more transparent and provided actual regulatory oversight of injured workers’ treatment.

Treatment is the first priority of a health care system. Ensuring care requires answers to key questions like:

• What percentage of treatment requests do UR reviewers deny?
• For which conditions do UR reviewers deny treatment most often?
• For which physicians do UR reviewers deny treatment most often?
• On behalf of which payers do UR reviewers deny treatment most often?

California employers and other stakeholders don’t have these answers, and the DWC inexplicably keeps it that way.

Laws are meaningless if DWC won’t enforce them

The DWC has a well-established pattern, and it bodes ill for AB 1293 and any other legislation California passes.

The DWC doesn’t merely struggle with enforcement; it flatly refuses to uphold California law. Even the Legislature’s best attempts at reform will fail if those attempts depend on DWC follow-through.

A news report said the Department of Industrial Relations — the agency under which the DWC operates — has been in disarray. With Katrina Hagen reportedly exiting as DIR director, there’s a narrow window for change.

Will Gov. Gavin Newsom appoint someone willing to make major changes at the DWC?

Unless Sacramento gets serious about improving the quality of agency leadership, no amount of legislative good intentions will fix what’s wrong with workers’ comp. Employers and their injured employees deserve better.

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.