CAAA calls for UR Reform
California Applicants' Attorneys Association Calls for Working Group to Examine Utilization Review (UR): Costly UR Abuse Undermines SB 863
Contact: Steve Hopcraft 916/457-5546, Steve@hopcraft.com; Twitter: @shopcraft
SACRAMENTO, CA - The California Applicants’ Attorneys Association (CAAA), whose members represent Californians injured on the job, today called for the Division of Workers’ Compensation to form a Working Group to examine “rampant Utilization Review (UR) denials of recommended medical treatment for injured workers, and find solutions.” CAAA President Jim Butler said, “We must bring out-of-control, costly Utilization Review (UR) to heel, as it threatens to undermine the anticipated cost savings from SB 863. No one in California even tracks UR denials, so it is on autopilot, denying even the most routine medical requests.” UR has almost quadrupled since 2005, and is one of the fastest-growing costs in California workers’ compensation insurance, costing several hundred million dollars per year.
CAAA is urging a thorough overhaul of the UR process. Butler pointed to the huge numbers of UR denials being appealed to the new Independent Medical Review (IMR) system as evidence of rampant UR denials.
SB 863 instituted Independent Medical Review (IMR) to resolve medical treatment disputes, a result of UR denials of recommended treatment, and over 15,000 IMR applications were filed in August, and 15,000 in September. Based on recent experience, this total could rise to almost 100,000 IMR appeals by the end of this year. “IMR is doomed to fail if invalid, unjust, unethical, and inefficient utilization review continues to be inaccurately overused. CAAA is very concerned that independent medical review requests in California workers compensation are 30 times higher than group health,” said Butler. “The estimated fees collected by Maximus in August alone were $9 million dollars, a projected annual cost of $100 million.”
“Of 15,731 reported utilization review denials in August alone, an estimated 12,000 of them were treatment requests by the employers’ MPN physicians,” said Butler. “The avalanche of UR denials is placing unsustainable pressure on the IMR system. Based on the number of UR denial appeals, we estimate that there could be up to 30,000 to 40,000 UR denials a month. Many insurers routinely send any and all recommended treatment to Utilization Review (UR). Delaying medical treatment not only harms injured workers, but also hurts employers by delaying workers returning to productive work.”
“Unless the UR process is improved,” Butler said, “it will continue to threaten the integrity of the IMR process. UR denies care even when the cost of denial is greater than the cost of the requested treatment. The cost of UR and IMR for an x- ray is much more costly than the x-ray itself. We find this abusive, and are calling for the DWC to form a Working Group to identify ways to curb this abuse.”
For more information, visit: www.caaa.org
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