In response to our recent report on new, burdensome regulatory changes proposed by California’s Division of Workers’ Compensation (DWC), a California provider sent us an impassioned email—one that gives voice to the frustration and despair experienced by any provider trying to treat the state’s injured workers.

Below, we publish this email in its entirety, with our response.

Since the passage of Senate Bill 863 in 2012, California’s workers’ comp system has become defined by regulatory chaos and ineptitude, which is driving providers from the system and making it increasingly challenging for injured workers to get the care they need.

California employers and providers must ask uncomfortable questions about its workers’ comp system: Whose interests are served by a failure to return injured workers to health? Who profits?  

Throughout workers’ comp, private equity firms that own insurers and Third-Party Administrators (TPAs) profit from the chaos. These firms also own various workers’ comp-adjacent vendors. These vendors find novel ways to siphon the employer dollars that should be going to providers but are instead diverted to:

• Bill review entities
• Preferred Provider Organizations (PPOs) and other network discount contracting entities
• Medical Provider Networks (MPNs) and “entities providing physician network services”
• Utilization Review Organizations (UROs)
• Credit card companies, that enjoy fees for treatments paid with Virtual Credit Cards (VCCs)
• Pharmacy benefit managers  (PBMs)

The more physician visits and treatment an injured worker requires, the more profit claims administrators, side-kick vendors, and private equity owners can potentially reap from doctors and employers.

The arithmetic is shockingly simple, if you’re cold-blooded enough to see it through to its logical conclusion. An injured worker is nothing more than an annuity that generates increased profits each day they remain injured. The more drawn-out the treatment and healing process is, the more profit-wringing is possible.

In this cold calculation, it is in the financial interests of powerful actors to keep California’s workers’ comp broken—but we are at a loss to explain why state regulators inexplicably, unbelievably, and immorally fail to take action to protect injured workers, their employers, and the providers who care for them.

Read the provider’s message below, and know that as you do so, the DWC is holding its meeting today to discuss the latest roadblocks it will create to prevent injured workers’ recovery. It’s all in a day’s work for an agency that has shown no willingness to improve the system and whose actions and inactions nurture the chaos that fills some very, very deep pockets.

CA Provider: Insurers “treat us like criminals”

A California provider sent us the following email, lightly edited for clarity and with our emphases:

Hello Good People at DaisyBill,

Since one of the most expensive costs of a business owner is paying the work comp insurance on a monthly basis, they should be informed of how the insurers they are paying use their money.

Not for treating their injured employees, but paying for UR [Utilization Review] doctors and for Peer-to-Peer calls to deny treatment.

If the payors of the most expensive monthly insurance knew how their money was being spent, they might think harder on what insurance company they choose to use.

Insurance companies obviously do everything they can to keep all the money to themselves for profit instead of treating the injured employees as intended.

Might the business owner/employer have a voice in this?

These insurance companies treat us providers like criminals, as if we're trying to steal their money. They want us to jump through hoops to get on their MPN [Medical Provider Network] and then spend the rest of their time trying to kick us off their MPN, like a "Duck Shoot" at the fair.

The insurance companies want to claim MPN, MPN, MPN, but they all fail in what constitutes an MPN anyway. They are supposed to have three of each type of provider within a 30 mile radius of the injured workers home, which they fail consistently.

Since the insurance companies fail to pay their MPN doctors and/or underpay these doctors, it's no wonder these doctors no longer take work comp patients.

Maybe if the employers knew about all this, it might change where their dollars go?

daisyNews Response: It’s Worse Than You Think

Workers’ comp is different from private group healthcare. The ugly but undeniable truth in private healthcare is that payers will go to great lengths to prevent treatment, as it represents a financial loss. In workers’ comp, however, the profit calculation makes treatment a revenue-generator—the longer an injured worker remains sick, the more profits result.

If this sounds alarmist or overly cynical, we point you to the many, many horrific examples of harm perpetrated by private equity, whose profit models have no room for considering the impact of their actions on human lives.

The DWC, far from being the public champion there to reign in the excesses of private interests, has demonstrated itself content to play wingman to those interests. Providers are paying the financial price. Injured workers are paying the price with their health. And the money. Keeps. Coming.

We can’t un-corrupt the system. But we can empower practices to protect themselves from some of the worst abuses. Make workers’ comp a better deal for your practice; schedule a daisyBill demo.

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