In a workers’ comp claim, the treating physician is the single most consequential factor in health outcomes, the duration of disability payments, and employer liability.

While the payer ultimately controls treatment approval through Utilization Review (a redundant, costly process in need of its own examination), the right treating physician returns the injured worker to full employment faster, minimizes disability, and produces documentation that protects the employer in the event of a dispute.

California's Medical Provider Network (MPN) system was supposed to empower employers to send their injured employees to the right physicians. Instead, MPNs have become primarily a mechanism for pushing providers into discount reimbursement contracts, with no criteria for physician participation that benefit employers or injured workers.

There is no requirement for MPNs to publish their membership criteria. MPNs are a black box, able to add and remove physicians at a whim. There are seemingly no MPN participation standards that have anything to do with clinical outcomes, return-to-work rates, claim duration, or quality of medical documentation, i.e., the precise factors that most directly drive employer costs.  

The only clear requirement for MPN membership is to sign Preferred Provider Organization (PPO) contracts that reduce reimbursement to sub-fee-schedule rates.

When it comes time to actually treat an injured worker, it can be nearly impossible for providers to navigate the thousands of opaque, overlapping MPNs to determine which one applies and whether the physician is a member. Similarly, the injured worker may struggle to identify an eligible physician because the state barely enforces the largely theoretical MPN access standards.

The consequences are grim.

Specialists opt out of workers' comp rather than accept reimbursement rates that can fall below Medicare rates. Injured workers can wait months or more for appropriate care. Every day of that delay can cost employers hundreds or thousands of dollars in disability payments. Frustrated workers hire attorneys, adding Medical-Legal expenses, further treatment delays, and extended disability.

Adding insult to injury, employers pay fees to maintain MPNs, yet there is no substantive data showing that MPN participation yields cheaper care, better outcomes, or faster claim closure. Employers are paying for a system that cannot demonstrate its value.

California employers fund this broken system with increasingly higher premiums; a proposed 10.4% increase follows last year’s 8.7% increase. Meanwhile, California claims already cost twice as much and take twice as long to close as the national medians.

MPNs do not contain employers' costs. They are driving them up. As one workers' comp defense attorney wrote to daisyBill: "I can't think of a single benefit to employers of having an MPN."

Treating Physicians: The Biggest Factor in What Employers Pay

For any workers' comp claim, the treating physician sits at the center of three cost categories that directly determine employers' spending.

Medical treatment: The treating physician oversees all aspects of an injured worker's care, including treatment plans, diagnostic tests, specialist referrals, ancillary services, and recommendations for medical equipment. Appropriate, timely decisions here contain employers’ costs. Poor or delayed access to a qualified physician drives them up.

Disability costs: Every day an injured worker waits for care is a day the employer pays disability benefits. In California, Temporary Total Disability payments can reach $1,764 per week. Temporary Partial Disability can be up to $882 per week. For employers, time is of the essence because delayed care means delayed return to work, with the disability meter running the entire time.

Employer liability: When compensability is disputed, the employer's defense rests on the medical documentation provided by the treating physician. A qualified, engaged physician generates defensible reports that protect the employer. An unqualified or disengaged one creates exposure.

The right treating physician:

• Returns the injured worker to full employment more quickly
• Reduces disability payments
• Provides documentation that shields the employer from prolonged disputes

The MPN system's failure to prioritize physician quality is a direct financial liability for every California employer.

The Only Qualification for MPN Membership

Given how much rides on the treating physician, employers might reasonably expect the MPN system to screen physicians rigorously for clinical outcomes, return-to-work rates, claim duration, or quality of medical documentation.

Think again.

There are no published MPN participation criteria based on any clinical standard or employer cost metric. As MPN services organization Signature Networks acknowledges on its own website, the industry simply "slaps an MPN label on a PPO." Managed care organization EK Health's marketing materials acknowledge the widespread perception of MPNs as "mere discounting mechanisms."

The only meaningful qualification to join an MPN seems to be a willingness to accept reimbursements below fee schedule rates. daisyBill data show that California providers collectively receive just 83% of state fee schedule rates. Under some MPN-driven PPO contracts, reimbursement can fall below Medicare rates.

Specialists respond rationally: by opting out.

The physicians most capable of resolving claims quickly and efficiently are the ones least likely to subject themselves to an MPN’s revenue-gutting terms. Employers are left with a network defined not by physician quality, but by who's willing to take the deepest pay cuts.

The MPN Maze Nobody Can Navigate

The MPN system can make it nearly impossible for an injured worker to find an eligible physician. Likewise, it can be nearly impossible for a physician to determine which MPN applies to a given injured worker, or whether they’re a member.

With thousands of overlapping networks, each maintained by a different insurer, employer, or "entity that provides physician network services," the MPN maze can be un-navigable.

The CA DWC maintains an online MPN list, but the vast majority of the thousands of MPNs listed are terminated or otherwise defunct. Active listings often have no discernible connection to the employer or insurer involved in a claim. Web links lead to marketing pages or password-protected portals.

One major MPN openly instructs providers to simply call the employer and ask whether the insurer "considers you part of their specific MPN."

Making matters worse, MPN physicians have no reliable mechanism for tracking their participation status. Provider rosters change at a whim. A physician may be in a given MPN on Tuesday and removed on Wednesday, and not find out until a bill is denied on Thursday. The CA DWC requires MPNs to update their (often non-existent or impossible to find) provider rosters only quarterly.

As we’ve argued before, the CA DWC does not audit provider rosters, verify legal access standards, or meaningfully enforce MPN laws and regulations. When daisyBill filed a formal petition to revoke an MPN by documenting incontrovertible violations of major statutory requirements, the CA DWC apparently accepted the insurer's explanation that the MPN in question was "not an issue."

As one claims adjuster described it to daisyBill, the MPN system is "Kafkaesque." When care is delayed, workers hire attorneys, Medical-Legal costs mount, and disability duration extends.

Every one of those costs lands on the employer.

MPNs: No ROI for Employers

The compounding irony of California's MPN system is that employers don't just suffer its consequences; they pay for the privilege.

Employers bear the administrative costs of maintaining MPN compliance, yet receive no data showing that MPN participation produces cheaper care, better outcomes, or faster claim closure. There is no published evidence that MPNs deliver on their original promise. There is substantial evidence that they don't.

According to WorkCompCentral, a California Workers’ Compensation Institute (CWCI) study of 181,309 workers’ comp claims found that MPNs actually delivered initial treatment slightly slower than for non-MPN claims. In that study, the injured worker received treatment within 14 days in 91% of MPN claims, compared to 93% of non-MPN claims. Previous studies from CWCI and the Journal of Occupational and Environmental Medicine found negligible benefits to utilizing MPNs.

So where’s the return on investment for employers?

Across the country, states are lowering workers' comp premiums while California is raising them. Previous and pending rate hikes partially reflect the cumulative cost of extended disability, bloated administrative services, Medical-Legal expenses, and litigation, all of which MPNs help generate.

California claims cost more in administrative expenses and take longer to close than in the rest of the nation. Employers pay for networks that deter the best physicians, delay care for injured workers, and produce no measurable benefit while the entities that profit from MPN administration make bank.

MPNs don't control costs; they create them. California employers are paying the price.

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