After serving months as acting Administrative Director (AD) of the California Division of Workers’ Compensation (CA DWC), Nicole Richardson is now officially in charge of the regulatory agency.

Governor Gavin Newsom’s office announced Richardson’s appointment as AD in late August, subject to state Senate confirmation. Having interacted with Richardson on multiple occasions, daisyNews can attest to her intelligence, expertise, and entirely non-partisan dedication to using her office for the betterment of the system.

Richardson faces the daunting task of righting a regulatory ship that, as we have written about extensively, has veered far off course.

The previous AD, George Parisotto, quietly retired in January of this year after a decade-long tenure. Under his stewardship, the agency failed to uphold (and follow) state law and the agency’s own regulations, and arguably incentivized payer non-compliance by refusing to impose consequences for even the most blatant, long-standing patterns of abuses.

As she demonstrated in a recent meeting with California’s Commission on Health and Safety and Workers’ Compensation (CHSWC), Richardson commands a deep understanding of the system and a clear vision of the agency’s role.

Cleaning up the mess she now inherits will not be an easy or quick process for Richardson. We congratulate the new AD on her appointment, and stand ready to offer our own extensive data and expertise in support of her efforts to bring meaningful change to a dysfunctional agency.

A New Dawn for the CA DWC?

Since 2017, Richardson served as Staff Counsel at the CA DWC before moving up to Chief Counsel this year. Richardson’s resume includes positions at California’s State Compensation Insurance Fund, Pacific Compensation Insurance Company, and Silicon Bay Training. She holds a Juris Doctor degree from Santa Clara University and a Bachelor’s in Political Science from the University of California, Berkeley.

In other words, she’s more than qualified.

Speaking with CHSWC as acting AD mere weeks before her full appointment, Richardson laid out a refreshing vision for the CA DWC, stating:

“My focus is compliance and looking at the best ways we can achieve that compliance.”

While being careful to note that the agency can only implement existing law and has no role in the legislative process, Richardson addressed multiple action items she intends to pursue, including:

• Updating the Workers’ Compensation Information System (WCIS): Richardson stated a need for new regulations and noted that “insurance carriers will need to comply with reporting requirements.” The CA DWC under the previous AD declared reporting to WCIS “voluntary” for payers.
• Improving Utilization Review (UR) data: Richardson stated that “We are also updating the utilization review database and are in the finalization phase of mapping out the data elements, and a pilot program will roll out next year.” For years, the CA DWC has ignored state law requiring the agency to collect comprehensive UR data to identify non-compliance and abuse.
• Implementing new Qualified Medical Evaluator (QME) forms, for both evaluation reports and for parties to communicate with QMEs prior to Medical-Legal evaluations.
• Reforming the State Insurance Benefits Trust Fund: Richardson will focus on “restoring the program to its original intent while controlling runaway costs,” which have reportedly grown outlandish.
• Updates to the interpreter fee schedule, an important effort given the frequency with which interpreters are improperly denied correct payment and the huge percentage of Independent Bill Review cases that involve disputes over interpreter reimbursement.
• A “bigger update” of the Official Medical Fee Schedule with input from a wide variety of sources, including the Workers’ Compensation Research Institute, the California Workers’ Compensation Institute, the Western Occupational & Environmental Medicine Association, and the Workers’ Compensation Insurance Rating Bureau.

Richardson also described, at length, pending efforts to address California’s chaotic Medical Provider Network (MPN) system, including measures to:

• Confirm that providers actually give active consent to participate in MPNs
• Remove password protection and other barriers to MPN physician rosters, and otherwise make provider listings “clearer to the end user”
• Update employee notification forms to encourage injured workers to bring the form to medical appointments to “help the physician identify which MPN is involved and confirm that they are part of” the MPN

The CA DWC has been failing in its duties for roughly a decade, a status quo that has arguably encouraged bad behavior by payers. Employers have paid the price in rising premiums, providers have paid the price in payment abuse and payer non-compliance, and injured workers have paid the price in delayed and denied care.

No one can remedy these issues overnight.

Nicole Richardson has a monumental task before her; we wish her the best as she tackles it. By following and implementing existing law and regulations, promulgating and acting on new regulations, and holding all parties accountable for compliance, the CA DWC can function as the safeguard it was intended to be.

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