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Posted on 23 August 2012 by admin

Medical Provider Network (MPN) is the establishment by the employer or insurance carrier of a “closed network” or list of doctors who will exclusively provide medical treatment to injured workers for all injuries regardless of the date of injury. (LC 4616, et seq.) For doctors to become members of the MPN, they typically sign contracts forcing them to agree to charge fees at a discount below the Official Medical Fee Schedule (OMFS). Doctors may be removed from the MPN by the employer/carrier at any time for any reason including “economic profiling,” which means providing MORE treatment to the injured worker than the employer/carrier likes or keeping a patient off of work for longer than the employer/carrier wants.

There are no public studies that show that implementation of a MPN system has resulted in any savings of medical costs or improvement in delivery of medical care. In fact, since the implementation of MPNs beginning in 2005, the cost of claims administration has increased 400%, while the actual number of claims has actually decreased significantly. Issues related to existing MPN abuses and denials of treatment are already headed to the California Supreme Court in the Valdez case.

Under the proposed reform legislation not only employers, insurance carriers but also third party vendors may create MPN’s for the delivery of medical treatment. The MPNs will also become immune from judicial, WCAB, court or Supreme Court review regarding their validity, access to care, provision of care, medical treatment policies/procedures or abuses. Thus, if a MPN on paper has a valid MPN with appropriate doctors, but in fact fails to provide sufficient or any medical treatment to the injured workers, that MPN cannot be invalidated by judicial oversight. The offending MPN will be allowed to continue to operate without remediation. The only “threat” to a rogue MPN is a potential audit by the DIR/DWC and eventual small audit penalties many years down the line. There is no immediate remedy for the suffering injured worker who has been denied treatment and cannot get treatment elsewhere or even through any health insurance provided by the employer for non-occupational injuries (a provision in the bill precludes reimbursement to health insurance carriers when they knowingly treat a workers’ compensation patient.) Further, allowing third party vendors to form their own MPNs will insulate and remove the employer/carrier from liability for medical treatment denial abuses. Third party vendors will add another layer of administration, paperwork and profits all of which reduces the actual premium dollars to be spent on medical care for injured workers and at the same time, lower the employers’ threshold of responsibility.

Finally, the cost savings analysis prepared for the DIR by an outside consultant, fails to explain any concrete basis for any claimed MPN savings. They simply reference CWCI medical costs, many of which were due to prior reforms from AB 227/SB228 (ACOEM, therapy limits) and non-MPN SB 899 changes (evidence-based medicine, AMA Guides, QME changes). Further, part of the savings attributed to MPN’s seems to rely upon changes in TTD payments from SB 899 (i.e. 104 week cap on TTD) which has nothing to do with MPN’s and was not changed by the Valdez decision.

VIAW proposes the REPEAL of Labor Code Sections 4616-4616.7.

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