As employers vocally complain that their injured employees struggle to find doctors, California legislators allow Preferred Provider Organizations (PPOs) to reap huge profits by making workers’ comp financially unsustainable for providers. ALL employers should be outraged by the following tale of PPO looting.

If you’re a daisyBill client and/or regular reader of daisyNews — or just a California provider who keeps an eye on their reimbursements — you probably know that PPOs can decimate the revenue earned for treating injured workers.

Cases in point: recently, both CorCare and Anthem drastically reduced reimbursements for one practice, paying a comically tiny sliver of the Official Medical Fee Schedule (OMFS) rates for the treatments rendered.

For treating an injured LA County employee, CorCare paid the doctor just 6% of the OMFS. For an employee of Photospin Inc, Anthem paid the doctor just 5% of the OMFS. Essentially, CorCare and Anthem stripped approximately 95% of the reimbursement owed to the doctor.

These absurd reduced reimbursements represent the devastating carnage left by PPOs throughout California workers’ comp. These PPOs reap extraordinary profits from employers and their injured workers, while providing zero medical care.

CorCare Cuts Deep for County of LA

An employee of Los Angeles County needed treatment for a work-related injury. The doctor obtained the necessary authorizations and treated the injury accordingly. But when the doctor sent the bill, LA County applied two CorCare PPO reductions, as follows:

Taking into account other non-reduced charges and an additional non-PPO adjustment, the overall total paid by LA County for the treatment of its injured employee was $49.17 — on a bill that totals $435.19 at Official Medical Fee Schedule (OMFS) rates.

In total, LA County reimbursed this provider a total of 11% of the OMFS payment due to the provider.

The Explanation of Review (EOR) is below:

Anthem Axes SCIF Bill - 5% of OMFS Paid to MD

The same practice treated a Photospin Inc. injured worker. Per the California OMFS, the doctor sent a bill to the California State Compensation Insurance Fund (SCIF) for the allowed reimbursement of $96.51 for the treatment per the OMFS.

In swooped Anthem’s pernicious contract. Using the Anthem PPO discount, SCIF paid the doctor only $3.85 (5% of the OMFS), instead of the $96.51 allowed by the OMFS.

SCIF and Anthem retained 95% of the provider’s reimbursement. The doctor, who actually treated the injured worker, was paid 5% of the OMFS.

We ask: As Anthem and CorCare plunder revenue from doctors, WHY do California legislators simply abdicate their responsibility to protect California workers’ comp from this PPO pillaging?

An equally important question: WHY do providers accept these reductions?

Providers are often tempted to join PPOs based on the PPO’s false promise of directing more patients to the doctor. As experienced by many doctors, PPOs serve only to loot provider revenue, while failing to actively direct injured workers to the providers that signed these PPO contracts.

California allows PPOs to profit wildly at doctors’ expense. Meanwhile, employees struggle to find doctors willing to treat their injuries. Knowing this, HOW can California legislators sleep at night?

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