The Workers' Compensation Insurance Rating Bureau recently released a new update detailing the impacts of Senate Bill 863, and it's pretty much in line with what we've been saying all along.
Less medical care for workers has lowered medical costs but increased friction with the escalating costs of the denial of this care, including the increase in defense attorney fees.
Insurers pushed for a system that allows for nearly automatic denials of claims and "Independent" Medical Review (IMR).
They cite the number of IMR reports being filed as significantly higher than they originally estimated, leading to significantly increased costs in the years immediately after the implementation of SB 863 in 2012, which continue to rise in 2019.
Did they think that injured workers would roll over and accept denial of medical treatment when their livelihoods and families depend on them getting care and getting back to work?
IMR isn't doing the job insurers had hoped for. It turns out that for every 100 denied claims in California, only 18 actually stay denied. The other 82 denials are reversed and end up costing an average of $27,419, while claims that weren't denied cost $16,833.
What's not so lucky is workers have to wait, wait, wait to receive care. California now has the slowest workers' compensation system for medical treatment authorizations as reported by a Workers' Compensation Research Institute (WCRI) study issued last year.
We'd say insurers have created a system that doesn't work for anyone, but clearly, their profits say otherwise. If we could get insurers out of the IMR business, employers would see cost savings as employees could get back on the job.
That might be a system that works for everyone.