Florida Tax Watch recently issued a report Keeping Workers' Compensation Premiums Low Through Independent Medical Review. It noted that in terms of workers' compensation insurance premiums, Florida is currently "33rd among the 50 states and District of Columbia," and notes the impact that recent court decisions could have on those premiums. It suggests that "the success of the IMR program in California" suggests that the program should be considered in Florida.
The report notes that California has the highest premium in the country, at "$3.24 for every $100 of payroll," compared to Florida's rate of just over half that: "$1.66 for every $100 of payroll." It notes that "soaring drug prices are driving up health care costs," and cites specific examples of rising prices in recent years. And, overall, the report notes that costs are projected to continue to rise for all of "national health spending" over the near term.
Last April WorkCompCentral published The Conundrum of Medical Inflation, which further supports that medical costs are increasing at rates well over inflation generally. Tax Watch reports that medical costs are significant in Florida, noting "only Louisiana, North Carolina, and Alaska have higher healthcare costs." There is also a reference to the "legal fees associated with workers' compensation claims," and to the 2017 OJCC Annual Report. For those who wish to review the latest, the 2018 OJCC Annual Report has also now been published.
Tax Watch explains that the California Legislature sought to control system costs, and enacted Independent Medical Review (IMR) in 2012. This is a "non-judicial process" that resolves "disputes about the medical treatment of injured workers." It is tied to a separate but "related process" called Independent Bill Review (IBR).
In the IMR process, a worker dissatisfied with care, or seeking different or more care, makes a request. That request is subjected to Utilization Review (UR). That process could result in the provision of the requested care, or the care could be denied. If denied, then the worker can request IMR. In that process, "professionals use principles of 'evidence-based' medicine to determine whether the requested care is medically necessary." The IMR process costs "are paid by employers."
Tax Watch notes that the organization performing the IMRs, the "IMRO" "decided that the disputed service was medically necessary and appropriate 91.6 percent of the time" in 2016. It also notes that a significant majority of Reviews upheld the determination of the UR process (denial). Those two statements are difficult to reconcile. Notably, the California "Division of Workers' Compensation has also adopted an evidence-based drug formulary." That has been discussed in Florida, but no formulary has been adopted.
Similarly, California has adopted, and recently updated, its Medical Treatment Utilization Schedule (MTUS). These are codified "treatment guidelines and rules for determining what is reasonable and necessary medical care." These determinations are "based on principles of evidence-based medicine." The California guidelines were developed by the American College of Occupational and Environmental Medicine (ACOEM). Thus, the UR process compares what is requested to the MTUS then, if a review is sought, the IMR compares the request to the MTUS. Both processes have objective criteria against which to measure a request.
Tax Watch says that there would be considerable financial savings if Florida adopted IMR. It notes that IMR costs $345 to $390 to $515 each (depending on the claimed issues). It notes that the IMR resolution takes no more than 30 days, compared to the potential of 210 days afforded for OJCC trial in the Florida statutes. In 2018, the actual OJCC average time was 211 days to trial and an additional 15 days from trial to final order.
Tax Watch says that at the $390.00 rate for IMR, the petitions litigated before the OJCC in 2016 would have cost $22.6 million. In 2016-17, however, the overall cost per petition in Florida was not $390, but $244 (2017-18 FLJCC Annual Report, P. 20). However, it emphasizes the savings in time (30 days to resolution), "PFB processing costs," and "a sizable reduction in attorney fees." It also sees the potential of "reducing or eliminating the Office (of Judges of Compensation Claims) or reassigning some or all of the 31 judges to hear other pending cases at the Division of Administrative Hearings."
There are various topics intertwined in this proposal that bear discussion. First, Florida has not thus far shown any interest in either treatment guidelines or a formulary. The Tax Watch discussion seems to support that both UR and IMR, as they exist in California, are dependent upon the adoption of these standards. As I have heard about IMR from Californians, that is likewise the impression conveyed. The IMR could not viably process without standards.
According to the National Institute of Health, Clinical Practice Guidelines "are systematically developed statements to assist practitioner and patient decisions about appropriate health care for specific clinical circumstances.” In other words, for a particular malady or diagnosis, there are pre-determined treatments that are deemed appropriate. The UR process relies on that consensus to decide if the requested care is appropriate. The IMR process likewise relies upon it. Is it possible that some of the California medical savings is based not upon UR/IMR, but upon the existence of published, clear, guidelines and formulary definitions as to what is or is not appropriate?
If such guidelines were adopted in Florida, would that aid employers in making decisions about care, in a UR process? Would that "evidence-based" decision-making lead to fewer petitions being filed? Would the outcome of filed petitions before judges and mediators be more predictable? Would that "standard-based" process result in cost savings from less employer/carrier UR analysis, fewer petitions, and less litigation? If the guidelines produced that result, would a corresponding savings in attorney fees naturally follow, through resolution in the existing litigation system?
Similarly, would a list of medications that are covered in workers' compensation (a "formulary" according to Medicare) afford some objective standard for decisions regarding claims for medication? Would that "evidence-based" decision-making regarding medication likewise increase predictability and transparency, and perhaps expedite the resolution or adjudication of disputes?
Finally, there are two legal points worth mentioning. First, there are many disputes that would likely remain for adjudication. The term "compensability" as it is used in IMR would address whether a condition is or is not related to an event. However, it would not address whether or not the alleged event occurred. Those disputes would remain. Further, according to the 2017-18 OJCC Annual Report, over 30% of claims included a claim for temporary partial disability, slightly less sought temporary total, determination of the average weekly wage, permanent disability benefits, and other less frequent issues. Some systems for the resolution of those disputes would likely remain despite IMR.
The second legal point mentioned by some is the "detached" or "impersonal" nature of IMR. There is no "hearing" in that process. Documents are submitted by the worker seeking care and by the employer. The IMR decision is based on those papers. There is no cross-examination or determination of credibility. There are those who see that as a due process issue, although there is precedent concluding that IMR affords sufficient due process. That legal analysis will be for another post.
