Two unfortunate necessities exemplify the broken state of California’s dysfunctional workers’ comp system:

• Too often, payers deny an injured worker's care, and the worker’s only recourse is to turn to the state and navigate an administratively complex review process.
• Even more often, payers refuse to reimburse providers for authorized treatment, and the provider’s only recourse is to pay the state to intervene, even when the state itself authorized the care over the insurer’s objections.

Both of those occurred in a single claim for an injured UPS employee covered by Liberty Mutual.

In a functioning workers' comp system:

1. A doctor recommends and furnishes appropriate treatment for an injured worker.
2. The insurer pays for the treatment.
3. The worker recovers and returns to work.

In California’s non-functioning workers' comp system:

1. A doctor recommended appropriate treatment for an injured UPS worker.
2. Liberty Mutual denied the care, so the injured worker had to petition the state through Independent Medical Review (IMR) to obtain authorization.
3. IMR overturned Liberty Mutual’s denial and approved the treatment.
4. When the physician rendered the care in question, Liberty Mutual twice refused payment despite the IMR ruling.
5. The provider had to pay $195 to submit an administratively time-consuming Independent Bill Review (IBR) request to obtain payment.

In a classic case of “IBR Chicken,” Liberty Mutual paid the bill within days of the provider’s IBR request, a pattern consistent with using dubious denials to delay payment (or, possibly, prevent payment altogether).

Moreover, Liberty Mutual did not reimburse the provider for the $195 IBR filing fee, nor pay the “self-executing” penalties and interest it now owes, thanks to the non-enforcement of laws and regulations that characterizes this system.

How often does this scenario, or something like it, play out in California? The state has chosen not to find out. The California Division of Workers’ Compensation (CA DWC) has failed to collect and analyze Utilization Review (UR) data, in violation of long-standing state law. The agency has also declared that reporting claims data to the Workers’ Compensation Information System (WCIS) is “voluntary” for payers, also in contravention of state law.

California is flying blind as injured workers suffer and doctors flee the system.

Meanwhile, claims cost twice as much in administrative expenses and take twice as long to resolve compared to the national medians. As a result, employers pay increasingly higher premiums, while premiums in most states are trending downward.

State Orders Liberty Mutual to Authorize UPS Worker's Treatment

A treating physician recommended a Functional Restoration Program for the injured UPS worker. Liberty Mutual's UR physicians apparently disagreed and refused to certify the treatment.

With no other option for care, the injured worker turned to the state through IMR.

Maximus, the entity California contracts to conduct both IMR and IBR, overturned Liberty Mutual's denial. Under California law, the determination is "binding on all parties," including Liberty Mutual.

How often does Liberty Mutual inappropriately deny injured workers’ treatment?

We cannot know, because the CA DWC refuses to collect the denial and approval data required by state law. We can reveal individual stories like this UPS worker’s, but the state has no comprehensive record of how systemic the problem really is.

As a result, insurers can deny injured workers’ necessary care without fear of repercussions.

Liberty Mutual Defies the State Twice

With the state's binding IMR order in hand, the provider furnished the treatment to the UPS worker, billed Liberty Mutual, and included the IMR decision with the bill.

Liberty Mutual refused to pay, citing the UR denial that the state had overturned:

• "THIS CHARGE IS DENIED AS THE SERVICE WAS NOT AUTHORIZED DURING THE UTILIZATION REVIEW PROCESS…"
• "PAYMENT FOR THIS CHARGE IS NOT RECOMMENDED PER UTILIZATION REVIEW."

The provider submitted a Second Review appeal, again attaching the IMR decision. Liberty Mutual denied the appeal, citing the same inapplicable "non-authorization" reason.

In other words, Liberty Mutual explicitly defied a binding state order twice, in writing, without consequence.

Provider Pays to Get Paid

With no other option, the provider paid $195 to Maximus, compiled a 39-page IBR request, and served Liberty Mutual by mail under penalty of perjury, all to have the state force the insurer to pay for treatment that the state explicitly authorized.

Once the provider requested IBR, Liberty Mutual broke the land-speed record for delivering full reimbursement, paying within 3 working days of the request. That’s even faster than the laudable average of seven days that Liberty Mutual normally takes to pay our providers’ bills, according to the daisyData.

The provider submitted the original bill on January 23, 2026, the Second Review appeal on April 6, and the IBR request on May 7. Liberty Mutual paid on May 12. That’s over three months of chasing down payment for treatment that the state deemed medically necessary and appropriate.

CA: No Consequences, No Compliance

Despite Liberty Mutual’s classic preemptive payment, the provider will not withdraw the IBR request, which we recommend providers never do.

Take stock of Liberty Mutual’s violations and their cost to the provider. Note that, in all likelihood, this needless, extended battle with a provider and injured worker will cost the insurer nothing in terms of fines, penalties, or other meaningful consequences.

The provider is out $195. The CA DWC does not enforce the requirement that payers refund the IBR filing fee, so even when Maximus orders a refund, the provider has no practical recourse other than retaining counsel and pursuing an order from the Workers’ Compensation Appeals Board (WCAB).

Liberty Mutual paid no penalties, which California law requires for untimely reimbursement. The CA DWC calls these penalties "self-executing," regulatory shorthand for optional.

Liberty Mutual paid no interest. As with the theoretical penalties, interest is also “self-executing.”

Liberty Mutual paid nothing for the over three months of time, effort, and administrative expense necessary to submit bills, appeals, the IBR package, and Proof of Service. The practice absorbed all of it.

Liberty Mutual faced no apparent consequence for twice refusing to pay for state-ordered care. The CA DWC has not, to our knowledge, taken any public enforcement action against any insurer for this kind of conduct, and we doubt it will do so, even after Maximus renders its IBR decision.

In the end, Liberty Mutual paid not a dime more than what it owed in the first place, months late, and walked away clean.

California Employers Pay the Price

Most discussion of California's high workers' comp premiums focuses on the obvious costs: medical treatment, indemnity payments, and attorney involvement. However, other drivers are subtler and arguably even more costly.

California allows needless delays and denials of care, so injured workers stay injured longer. 

Every wrongful UR denial is care delayed. Every delay increases the odds of extended disability and prolonged indemnity, and inflates the eventual cost of resolution. UPS's injured employee did not need months of bureaucratic warfare; they needed the treatment their physician prescribed.

California allows payers to improperly refuse payment for authorized care with impunity, driving doctors out of the system. 

Every wrongful payment denial represents staff hours diverted to appeals. Every IBR request is $195 out of pocket and months where rightful payment sits in Accounts Receivable purgatory. Providers, like any rational businesspeople, eventually stop accepting financial damage. The resulting dearth of willing providers means smaller networks, fewer options, and longer waits for UPS workers.

Both of the failure points above work in Liberty Mutual’s favor, inflating the cost of claims and giving insurers a pretext for premium rate increases, even as most states are watching premiums drop.

UPS, like every California employer, will keep paying until California enforces its own rules.

Until refusing to authorize care and refusing to pay for authorized care comes with consequences, this is California workers' comp: a system in which insurers instigate needless disputes, providers tap out, injured workers wait interminably for care, and employers ultimately pay for the dysfunction.

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