It is crucial for doctors to understand both how California Medical Provider Networks (MPNs) operate to restrict doctors from treating injured workers and how some “entities” monetize California’s convoluted and restrictive MPN system.
Prior to treating every injured worker, California workers’ comp law holds the doctor responsible for determining whether the doctor is included in an MPN established by an insurer or an employer. California law dictates that if the doctor is not included in the MPN, the doctor is responsible for declining treatment to the injured worker.
Failure to decline treatment often results in the employer’s claims administrator* denying reimbursement for the care the doctor provides, even if the claims administrator authorized that care.
Many doctors incorrectly believe that a claim administrator is empowered to establish an insurer or employer’s MPN. Doctors often report to us some version of the following: “I don’t want to be kicked out of [claims administrator]’s MPN, because then I won’t be able to treat the injured workers.”
But in fact, California grants only two kinds of entities the authority to establish an MPN that restricts injured workers’ choice of doctors:
Crucially, a legitimate MPN is ultimately maintained by the injured workers’ employer — because either the employer’s insurer established the MPN on the employer’s behalf, or the employer is self-insured and established its own MPN.
Read on to learn some horrifying facts about how “entities” have contorted employer MPNs into “Monetized Provider Networks.”
Despite the facts outlined above, California Labor Code technically allows entities other than insurers and self-insured employers to establish an MPN. Specifically, the Labor Code allows an “Entity that provides physician network services” to establish an approved MPN.
“Entities” that have established approved California MPNs include third-party administrators (TPAs), bill reviews, Preferred Provider Organizations (PPOs), and ancillary networks. Except, an MPN established by an “entity that provides physician network services” is neither an insurer nor a self-insured employer MPN.
Remember, only an employer’s insurer or self-insured employer may establish an MPN that restricts physician choice. California Labor Code Section 4616(d) mandates that:
It is extremely important for doctors to understand that being listed in an MPN maintained by an “entity providing physician network services” is NOT equivalent to being included in an approved insurer or self-insured employer MPN. An MPN established by an “entity that provides physician network services” is only a list of doctors who agreed to be included in the “entity’s” MPN.
Often an “entity that provides physician network services” convinces doctors to accept reduced reimbursement rates in exchange for inclusion in the “entity’s” MPN. Subsequently, the “entity” may sell or lease the providers’ MPN contractual discounts to claims administrators and bill review services. Once sold or leased, payers use the contractual discount to reduce all of the doctor’s bills.
In this way, TPAs, PPOs, and other “entities” have turned MPNs into profit centers — without functioning as either an insurer or self-insured employer’s MPN.
Only the employer's insurer or the self-insured employer may establish an MPN to restrict the pool of doctors from whom the employer’s injured workers may seek care. According to the website maintained by the California Division of Workers’ Compensation (DWC):
Here are ten additional facts which demonstrate just how vicious this Monetized Provider Network system really is:
And a final “bonus” fact: California legislators attempted to do away with this corrupted MPN system and replace it with a statewide network. At the last minute, the proposed legislation was watered down to a meaningless “study” of the effects of MPNs.
California legislators should be horrified that self-dealing “entities” have taken California workers’ comp hostage, for the purpose of reaping enormous profits from doctors via Monetized Provider Networks.
Over the next several months, daisyBill will attempt to demonstrate precisely how each of the ten MPN facts above harm employers, injured workers, and the doctors who treat these injured workers. As a summary of the state of workers compensation in California:
Even Kafka would be horrified.
*In workers’ compensation, the “claims administrator” is the entity the provider bills for the treatment of the injured worker. Claims administrators may include self-insured and self-administered employers, self-administered insurers, or TPAs designated by the insurer or employer.
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