At a meeting of California’s Commission on Health and Safety and Workers’ Compensation (CHSWC), a payer and network advocate argued that the state’s chaotic Medical Provider Network (MPN) system is a sterling success, despite overwhelming evidence to the contrary.

Lisa Anne Hurt-Forsythe of the American Association of Payers, Administrators and Networks (AAPAN) claimed that a general provider shortage, not a broken system riddled with pitfalls for providers, is the reason injured workers struggle to find doctors willing to treat them.

Hurt-Forsythe shared findings from an AAPAN white paper that clumsily presents research on broadly defined “provider networks” across multiple states as an argument for California MPNs specifically. Meanwhile, daisyNews has documented the profoundly negative real-world, on-the-ground realities of the MPN system, specifically:

• The often herculean or impossible task of verifying MPN applicability and provider membership
• The seeming refusal of the California Division of Workers’ Compensation (CA DWC) to monitor MPNs for compliance with state laws and regulations
• The common use of MPNs as a cudgel to push providers into Preferred Provider Organization (PPO) discount contracts

Hurt-Forsythe’s comments followed those of daisyBill CEO Catherine Montgomery, who presented evidence and examples demonstrating the abject failure of the MPN system. We derive our findings from our considerable store of California-specific data on the experiences of thousands of providers across millions of bills for injured worker treatment.

MPNs are not serving California’s employers, providers, or injured workers. No amount of repurposed research or misdirects to provider shortages can change that.

AAPAN Paints Rosy Picture of MPN Disaster

For an organization whose members have such a vested interest in the profitable friction generated by MPNs, one would think AAPAN would gather the most compelling evidence possible that MPNs are effective in facilitating prompt care and reducing employers’ costs.

Instead, the organization presented CHSWC with an opus of wishful thinking.

The AAPAN white paper, titled The Success of Medical Provider Networks in the California Workers’ Compensation System, claims that the MPN system:

• “Expedites access to care with shorter durations of disability for injured workers.” That will come as news to stakeholders in a state where claim durations are twice the national median, with data and tragic examples indicating that MPNs can delay care.

• “Lowers claim costs for employers,” even though the administrative costs of delivering comp benefits (including “Medical Cost Containment Programs“ like MPNs) are twice as high in California as the national median, and employers are facing their second consecutive premium increase. Meanwhile, almost every other state’s premiums are dropping.

• “Reduces the proportion of disputes relative to non-networked claims,” a misperception made possible by the CA DWC explicitly barring disputes over MPN and discount contract applicability from Independent Bill Review (IBR).

Hurt-Forsythe further claimed that “Contract-related friction is minimal. There are not zillions of people ringing the phones off our hooks complaining about our contracts,” as if providers were expected to contact AAPAN to address contract disputes with specific payers.

Three Ways MPNs Hurt CA Comp

Contrary to AAPAN’s deeply flawed take, MPNs fail for three primary reasons:

1. Verifying MPN applicability and membership is a nightmare. The CA DWC maintains an official online list of thousands of MPNs, most of which are suspended, terminated, withdrawn, or otherwise inactive.

Active MPNs often have no discernible connection to the employer or insurer involved, with many maintained by nebulous third-party “entities providing physician network services.“ Web links to provider rosters are missing or lead to marketing pages or password-protected portals.

Depending on the employer, it can be literally impossible to know if a given provider is eligible to treat the injured worker in front of them. This dynamic can delay treatment, and consistently leads to reimbursement denials.

2. California fails utterly to regulate MPNs. The CA DWC does not audit MPNs or their provider rosters, verify legal standards for access to prompt care, or otherwise meaningfully enforce MPN laws and regulations. When daisyBill filed a formal petition to revoke an MPN, demonstrating real violations of major statutory requirements, the CA DWC shrugged it off.

When it comes to payment disputes, payers improperly deny reimbursement for authorized care (in violation of state law establishing authorization as a non-rescindable assurance of payment) by citing non-participation in MPNs that turn out to be non-existent, inactive, inapplicable to the employer, or that include the provider.

These disputes rarely escalate to IBR, as AAPAN and Hurt-Forsythe misleadingly point out by noting that less than a fraction of a percent of IBR cases involve broadly defined “contract issues.” This figure is credible, but conveniently ignores the fact that the CA DWC has declared that disputes over a doctor’s eligibility to treat an injured worker (i.e., their MPN status) or the applicability of a discount contract are “ineligible” for IBR.

In other words, there aren’t many IBR cases about MPN status or contract applicability because IBR is not a remedy for those issues, as AAPAN notes elsewhere in its white paper.

3. MPNs are used to populate PPOs. MPNs effectively make provider membership contingent on signing PPO discount contracts, sometimes openly threatening providers’ eligibility to treat injured workers in order to secure their signatures. For years, daisyNews has referred to this well-known dynamic as the “pay-to-treat” system, because providers must surrender revenue for the privilege of MPN membership.

Once the doctor signs a PPO contract, the discount is often leased or otherwise shared with payers, bill review companies, and other entities looking to pay bottom-dollar for care. Our data from millions of bills submitted by over 4,100 providers show that, on average, these providers receive about 83% of state fee schedule rates.

AAPAN and Hurt-Forsythe devoted an inordinate percentage of their argument to impressing upon CHSWC the distinction between MPNs and PPOs, as if industry conflation of the two isn’t the direct result of their being inseparable.

As one MPN services company openly acknowledges, many MPNs simply “slap an MPN label on a PPO.”

See for Yourself, California

We encourage stakeholders to watch the meeting recording and evaluate Hurt-Forsythe’s testimony, but not without perusing the AAPAN white paper on which that testimony is based. Sharp-eyed readers will notice that AAPAN’s arguments in favor of MPNs are based on research that, to be exceedingly generous, has limited implications for the California MPN system.

We also encourage stakeholders to read the written comments daisyBill submitted to CHSWC on some of the systemic issues plaguing the California comp system, including the MPN disaster.

daisyBill has spent the last dozen years building an infrastructure and compiling an extensive database around workers’ comp billing, payment, and treatment authorization. We offer those data freely to any party, including (and especially) CHSWC, that seeks clarity on what needs to change.

We’ll continue this series of deeper dives into the CHSWC meeting and roundtable in future articles; stay tuned.

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