California's State Compensation Insurance Fund — the largest Workman's Comp Insurance provider in the state - recently announced the establishment of an enhanced Medical Provider Network.

The expanded network combines the resources of Kaiser Permanente, State Fund's Preferred Provider Network (PPO) and now includes selected member physicians from Blue Cross of California's PPO.

The move could help reduce fraudulent claims and deter unscrupulous activity in the system, according to some. It's a well-known fact that fraud is rampant when it comes to California's Workman's Compensation Insurance system. Another equally well-known fact is that the problem is difficult to police so the abuse has continued largely un-addressed for many years.

“This is a very positive step in Workman's Comp reform,” says Don Dressler, administrator of the Farm Labor Contractors Alliance and Risk Management Consultant. “We've been waiting for this one for a while and it's finally here. Now, an employer has a much better chance to make sure an injured employee gets a good, reputable doctor, rather than a doctor whose primary objective is to milk the system for all he or she can get.”

This new network is the latest initiative by State Fund to implement reform legislation enacted by the state legislature and signed into law last year by Governor Schwarzenegger. The reform legislation permitted, but did not require, insurers to create networks composed of doctors specializing in work-related injuries and doctors with expertise in general areas of medicine. Approximately 10,300 health care providers at 10,000 facilities are part of State Fund's new enhanced MPN.

State Fund Vice President Connie Raiche said, “Our Medical Provider Network enhances our ability to provide injured workers with skilled health care providers, as well as primary and specialized care facilities. It also has the potential to reduce costs and bring further rate relief to California employers.”

Network treatment

Under this system, State Fund can require, with few exceptions, that injured employees seek treatment within the network. The goal is to reduce unnecessary visits to doctors who are primarily interested in lining their pockets at the cost of the system rather than legitimately treating an injured worker. For protection of the worker, a clear set of procedures has been established by State Fund to address any dissatisfaction on the part of the employee regarding treatment within the network of medical care.

For employers who are fed up with the exorbitant costs of Workman's Compensation insurance, any move State Fund takes to reduce fraudulent claims and reduce the expenses associated with excessive medical care is welcome news.

Fraud within the system is out of control as far as Bakersfield-based farm labor contractor Chuck Addis is concerned. As owner and operator of A&B Harvesting in Bakersfield, Calif., Addis deals on a daily basis with Workman's Compensation issues — whether it's a claim or simply the cost of doing business.

“The worst thing about Workman's Comp is that you know you're paying for a lot of fraud,” Addis says. “There are too many unscrupulous doctors in cahoots with too many unscrupulous attorneys. And then the problem is compounded with a judicial and oversight infrastructure that is far too overloaded to adequately address the problems. Filing a complaint is hardly a deterrent to these crooks.

“In Kern County alone, the District Attorney currently has about a 100 cases on the books dealing with an assortment of illegal labor practices - including Workman's Comp — and only two people to work the caseload. No one has the funds to fight the fraud.”

Return integrity

Hopefully, for the state's embattled employers who are struggling to survive, the mandated Medical Provider Network with authorized physicians should help ease the burden and bring integrity back to the Workman's Comp system. For workers who deserve a fair shake at medical care for on-the-job injuries, the network should allow them that opportunity without compromise.

Under new Workman's Comp reform legislation, employers are required to provide information about medical provider networks to their employees. This information is available through a State Fund brochure entitled “Employee's Guide To The State Fund Medical Provider Network”. State Fund will distribute this brochure to policyholders, or the information can be accessed online at their Web site: www.scif.com

“In agriculture alone, about 30 percent of the lost time injury claims that are filed with State Fund involve fraud in one form or another,” Dressler says. “This reform should be a step forward. What every employer needs to keep in mind is that they should stay on top of the changes and periodically review their operations to take advantage of any positive reform and minimize any negative impact from the new requirements. Finally, if it's just too confusing or time-consuming, get some professional advice.”