Applicants' Attorneys Alarmed by Incentive Program for MPNs

"Although he said he would like to believe most doctors would not allow their medical opinion on the extent of a worker's disability to be influenced by Harbor's performance evaluation, he said the plan was basically 'dangling a carrot' to tempt doctors to do just that."   Alan Gurvey

California applicants' attorneys say they are outraged with the news that some medical provider networks are using economic profiling to determine the top-performing doctors within their networks, and at least one is promising to reward the best performers with extra compensation.

The Labor Code expressly allows MPNs to do economic profiling and to offer incentive programs based on doctor performance as long as the plan administrator files a description of the program policies and procedures with the Division of Workers' Compensation.

The Harbor Health Systems network and MPNs for ZenithLiberty Mutual and the State Compensation Insurance Fund have all instituted profiling programs in California, and Coventry Workers' Compensation Services.

State Fund transitioned to an outcomes-based MPN administered by Harbor Health in February. Communications Director Gina Simmons said the carrier aims "to ensure injured workers we serve are treated by physicians with solid track records of providing medical treatments that are scientifically proven to be most beneficial to a patient’s recovery and return to work."

State Fund has a separate MPN provided by Harbor that does not offer financial incentives. But another Harbor plan offers financial rewards to doctors with the best track records for "efficiency."

Zenith's plan says incentives "may be provided," and Coventry says it hasn't determined what incentives, if any, will be part of its program.

Doctors in the Harbor network are being told that they will be compensated at 100% of the Official Medical Fee Schedule if they score in the top 33rd percentile under the evaluation metrics for their speciality in their geographic area. The Harbor plan says the rest of the doctors will be "compensated at a lower level of reimbursement."

Diane Worley, the director of policy implementation for the California Applicants' Attorneys Association, said the group opposes the idea of "bonuses being paid to MPN doctors to deny care to injured workers."

She said such incentive programs create a situation where "the less care you prescribe, the more money you make."

Worley contended that "by anyone's measure of fair and unencumbered access to medical care in the work comp system, this is wrong."

Applicants' attorney Alan Gurvey of Rowen, Gurvey & Win said he found the Harbor program "extremely offensive." He said he had just learned about it last week, as economic profiling in MPNs has been "a very quiet thing."

Although the MPN administrators must have plan descriptions on file with the state, Gurvey said, "we're not finding out about it."

The DWC provides an online database of all the approved MPNs within the state – there were 2,242 as of the start of this year – but the plan descriptions are not readily available. Peter Melton, a spokesman for the Department of Industrial Relations, said 1,241 of the networks use some form of economic profiling.

Gurvey said he also thought litigants have the right to know which doctors within the Harbor MPN are participating in the incentive program. He said he plans to start asking doctors "are you making money by giving my client a lower disability rating?"

The Harbor plan says that the disability rating at case closure is one of the factors that will affect a doctor's efficiency rating under the incentive programs. The duration of the claim, the duration of the medical treatment and the costs of the claim are also factors.

Although Gurvey said he would like to believe most doctors would not allow their medical opinion on the extent of a worker's disability to be influenced by Harbor's performance evaluation, he said the plan was basically "dangling a carrot" to tempt doctors to do just that.

Gurvey contended that "it's inherently unfair" for a worker's medical treatment to be affected by the doctor's personal interests this way.

"They're supposed to be paid to practice medicine, not to improve the numbers of an insurance company's bottom line," he said.

Ken Martinson, an applicants' attorney in San Bruno, said he thought incentive programs for MPN doctors were setting the comp system on "a slippery slope" that "leads to total employer dominance." The problem, as he sees it, is that the "measure of a positive outcome" is being "decided by the person holding the purse strings."

"It's the shareholders of the insurance company" who really benefit when doctors achieve "efficiency" under the metrics set by Harbor, he said.

But defense attorney Richard " Jake"  Jacobsmeyer of Shaw, Jacobsmeyer, Crain & Claffey said he thinks evaluating a doctor based on the average amount of time it takes to get an applicant back to work is "perfectly legitimate."

He said he also thought tracking the doctor's compliance with the Medical Treatment Utilization Schedule was also a valid, objective and reasonable means for an MPN to assess performance, and that he has encouraged clients to do that.

Jacobsmeyer opined that the cost of claims handled by a doctor is perhaps not quite as telling as these other two factors, because the whole point of an MPN "is to lower claim costs" and "that's what you're supposed to be seeing."

While he said he was sure MPNs "want doctors to perform in a manner that will have the best result for lowering overall costs," he said he didn't see that interest as an incentive to deny treatment.

"It's the right treatment makes the difference," Jacobsmeyer contended.

Costs go down when workers go back to work faster, Jacobsmeyer said. When claims aren't litigated, Jacobsmeyer suggested that an MPN's interest isn't just "spending less treatment dollars" as the applicants' attorneys seem to assume.

Indeed, he said, he'd be "shocked" if any MPN operated that way.

Harbor Health Systems launched its MPN in 2014. The Newport Beach-based company is a subsidiary of One Call Care Management and has repeatedly marketed its "outcomes-based" MPN as providing "early proactive care from high-performing physicians."

Based on the data it has complied from its economic profiling program, the company has reported that sending workers to "physicians who have high scores in producing superior outcomes" will reduce medical costs for carriers by an average of 20%.

Treatment by these physicians also shortens the duration of the claim and reduces indemnity costs, Harbor claims.

Harbor says it has the technology to "accurately and effectively measure claims outcomes by physician, to get injured workers to see these physicians quickly, to link rapidly with best-in-class ancillary providers and to power the systems to keep the care plan on track for a fast, safe recovery."

It says cost containment is not enough, and the new goal for workers' compensation needs to be better outcomes for injured workers.

Harbor also says it recognizes "the value of integrating care with high-performing physicians and linking services through technology and care coordination to achieve a more efficient and effective treatment plan, and a faster return to work," and that's what its MPN is all about.

CORRECTION: The name of Coventry's medical provider network was misidentified in an earlier version of this story. The article also attributed statements to Coventry that were from a 2008 document that has since been removed from the company's website.

Published on 03/28/2016 by WorkCompCentral, authored by Sherri Okamoto