CWCI Report Provides A Detailed Look at California WC Medical Dispute Resolution

Oakland, CA – As state lawmakers debate legislation that revisits the California workers’ compensation medical dispute resolution process, a new California Workers’ Compensation Institute (CWCI) Report to the Industry finds that the number of independent medical reviews (IMRs) used to resolve medical disputes hit a record low in 2022 as prescription drug disputes continue to decline, and that a small subset of doctors continue to generate most of the disputed treatment requests that go through IMR.

California law requires every workers’ compensation claims administrator to have a Utilization Review (UR) program to assure that care provided to injured workers meets the evidence-based guidelines in the state’s Medical Treatment Utilization Schedule (MTUS).  Most treatment requests are approved by UR, but in 2012 state lawmakers adopted IMR to allow injured workers to get an independent medical opinion on requests that UR physicians modify or deny.  IMR took effect for all claims in July 2013, and CWCI began tracking IMR activity in 2014.  In its new analysis, CWCI found that 127,215 IMR decision letters were issued in 2022 in response to applications submitted to the state, down 4.7% from 133,494 letters in 2021, and down 31.1% from the record 184,735 letters in 2018.

The latest data on outcomes show that after reviewing medical records and other information provided to support a disputed treatment request, IMR doctors upheld the UR physician’s modification or denial of the service in 91.1% of the 2022 IMRs, down slightly from the record 92.0% uphold rate in 2021.  Uphold rates among service categories ranged from 82.5% for psych services to 95.9% for injections.  The high uphold rates demonstrate a high degree of agreement in assessing the quality of care and in challenging inappropriate or excessive treatment requests.  Disputes over prescription drug requests represented a third of the 2022 determinations, well ahead of physical therapy (13.3%) and injections (11.9%), though that percentage is down from nearly half of all IMR disputes prior to the state’s adoption of Opioid and Chronic Pain Treatment Guidelines at the end of 2017 and the implementation of the MTUS Prescription Drug Formulary in January 2018.  A closer look at the prescription drug disputes shows that even with those guidelines and the formulary, opioids still accounted for nearly a quarter of the 2022 pharmaceutical IMRs, more than any other type of drug, though that percentage is down from 32.1% in 2018.

Not all UR challenges submitted for IMR involve treatment denials.  Since 2016, 1 out of 7 IMRs have involved modifications of treatment requests, most often because the volume of services requested exceeded the MTUS-recommended level.  For example, IMRs are often submitted after a UR physician approves the treatment on a modified basis, allowing fewer pills in a prescription or fewer physical therapy (PT) visits than were requested in order to meet the evidence-based guideline.  This can lead to a dispute, even though additional pills or PT visits can be requested later if the treatment proves successful.  Since 2017, 57.1% of all modification disputes resolved by IMR have involved prescription drugs, and 17.1% have involved PT, though with the adoption of the Pain Management and Opioid Guidelines and the implementation of the MTUS Formulary, disputes over prescription drug requests declined from 62.9% of the modification disputes in 2017 to 40.6% in 2022, while disputes over PT modifications increased from 15.0% to 21.9%.  Overall, since 2017, UR physician modifications have been upheld  91.5% of the time they have gone reviewed by IMR, with uphold rates ranging from 90.8% of the pharmaceutical modifications to 94.9% of the modifications to acupuncture requests.

In addition to providing new data on IMR volume and outcomes, the CWCI report reviews the history of dispute resolution in California workers’ compensation, details how medical dispute resolution in California workers’ compensation differs from other health care systems and notes the disproportionate share of disputed treatment requests that originate with a small percentage of high-volume providers – primarily pain management specialists and orthopedists.  For example, in 2022, the 80 physicians who comprised the top 1% of providers based on their volume of disputed treatment requests accounted for nearly 40% of all IMR activity, while the 803 physicians who comprised the top 10% accounted for nearly 83%.  Furthermore, on average, providers who made the top 10 list between 2015 and 2022 were among the top 10 providers 63.8% of the time, or about 5 of those 8 years.

CWCI has issued its analysis as a free Report to the Industry, “Resolving Medical Disputes: Factors that Drive IMR Volume and Outcomes in the California Workers’ Compensation System,” which is available here.  The Institute has also published an expanded summary of the 2014 – 2022 IMR data in a Bulletin which CWCI members and subscribers will find under the Communications tab at www.cwci.org.  In addition, Institute members can also access more IMR results and graphics by logging on to www.cwci.org then using the drop-down menu under the Research tab and clicking “Independent Medical Review.”