New Workers’ Compensation Rules Will Hurt Doctors and Workers

Brian Jencunas is State Affairs Associate at the R Street Institute.

When the world’s first system of workers’ compensation was established aboard pirate ships prowling the Caribbean during the 18th century, it was designed to simplify life and keep bearded killers motivated. Back then, this straightforward scheme rewarded physical sacrifices with booty. It was simple: If a scurvy buccaneer had his finger chopped off in a swordfight, he’d get some gold; if he lost an arm, he’d get more gold.

Today’s system continues to strive to provide injured workers with redress but relies on medical professionals, not ship captains, to judge whether someone is truly injured and to what extent that injury will affect his ability to work. Independent medical assessments by doctors ensure that injured workers get the assistance they deserve and that grifters don’t defraud honest employers.

Yet the California Division of Workers’ Compensation (DWC), which oversees the administration of workers’ compensation claims, has begun a rushed rulemaking process that could radically alter how these exams are conducted. Billed as a money-saving measure, these changes will deliver worse outcomes for injured workers.

The DWC wants to save money by limiting how these doctors can bill. The new rules will cut doctors’ pay while requiring them to do more work. Because of these changes, many doctors will simply stop performing workers’ compensation examinations, making it harder for injured workers to get the judgments they deserve.

The first of the proposed changes will prevent doctors from billing the DWC for more than three hours spent writing a report. This means that, in complex cases, doctors will have to either work without pay or rush their work, likely producing an inadequate document that might very well be challenged in an expensive legal proceeding. The three-hour pay limit will also curtail the amount of research doctors can conduct on any given case. As any physician will tell you, locating relevant, authoritative medical research is time-consuming, but it is also essential to appropriately diagnosing a patient.

Second, and perhaps worst of all, the new proposal will require doctors to get both the injured worker and his or her employer to agree in writing that “medical causation is a disputed medical fact” in the case. Only after each party agrees can the doctor conduct an examination. Expecting medical professionals to seek out and cajole an employer to sign a form is not only absurd, it gives employers de facto veto power over an injured worker’s ability to access a medical examination.

These changes will make life miserable for doctors involved in the workers’ compensation system. Even though DWC only allowed two weeks for public comment on these proposed measures, hundreds of doctors submitted comments opposing the changes. Medical professionals are already leaving California’s workers’ compensation system in droves, largely because of convoluted rules and low pay. Even more will leave if these changes are implemented.

There are better ways to improve the system than by making doctors do more work for less money. It’s past time that lawmakers revisit the authority they’ve given over to DWC and change outdated elements of law that put onerous processes before patients.

For instance, current law contains inefficient mandates that waste doctors’ precious time. In an injury report, all of the medical records must be summarized even though the records are already attached to the report. This means that memos explaining why an injury is work-related and prevents someone from working, which would otherwise consist of three pages, could end up being over 80 pages long. If the workers’ compensation system were to be streamlined, doctors could focus on important tasks instead of complying with pointless red tape.

The DWC’s ill-conceived rulemaking should cease. But, to the extent that it has a silver-lining, there is no doubt that it has played an important role in re-emphasizing the need for lawmakers to streamline the system in a way that would save taxpayers money without harming injured Californians.

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