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A Doctor's Warning: PPOs "Helped Close Our Doors"

A Doctor's Warning: PPOs "Helped Close Our Doors"

Recently we received an email from a retired California doctor. This doctor, after 35 years treating injured workers, was unable to sell his practice — because no other provider wants to take on the practice's workers’ comp patients.

Employers and claims administrators continue to call this doctor, attempting to locate surgeons to treat injured workers.

Despite the doctor’s best efforts, zero surgeons were willing to take on workers’ comp. Why? According to the doctor, the lack of interest is largely due to the extraordinary amount of doctor and administrative costs required to treat an injured worker, and the relatively low reimbursements for that extraordinary amount of work.

Our many, many, many articles demonstrate the insane difficulties faced by doctors trying to receive reimbursement for treating injured workers. EVEN WORSE, DaisyBill data clearly demonstrates that once a doctor actually receives payment, Preferred Provider Organizations (PPO) siphon a large portion of the doctor’s revenue.

Here at DaisyBill, we spill lots of digital ink decrying the crippling effect of PPOs on the California workers’ comp system. But every once in a while, one of the many doctors victimized by PPO greed sums up the outrage, helplessness, and general despair better than we can.

PPOs: A Warning To California Workers Comp Doctors

Lightly edited and with emphases added, the email below came in response to our decision to publicize reimbursement data for DaisyBill providers who are losing revenue due to PPO discount contracts.

Dear DaisyBill,

I hope you receive this note regarding the reason CA doctors won’t take workman’s compensation patients.

We just closed our business of 35 years [a specialist surgical center] and were unable to sell even the branding of this business as not one surgeon wanted the part of our referral base (about 60%) that was workman’s compensation.

While this has been a shock to us, as we had a very good system in place of working with W/C, we are very aware of the enormous amount of time and money we lost on each W/C patient. [We received] calls from employers and insurers from SanDiego to El Centro to Los Angeles wanting to know where to send their patients...and we had not one surgeon who would take them.

We closed June 15, 2021, and those calls keep coming in. I don’t know what can change this horrendously unfair system short of all providers going on “strike” against the prime offenders.

Unfortunately many of the larger facilities that exist based on W/C referrals know that writing off the lack of payment is just part of what is an acceptable price of doing business with the W/C industry.

As a small provider, that became a loss that finally helped close our doors.

Thank you for the valuable service that you offer. It  creates less stress for me to see in this article that Anthem was the PPO, as every time I would see it on an EOB [Explanation of Benefit] I felt alone in my anger and experience of this abuse.

Anthem, while certainly representative of the PPO syndrome that’s suffocating workers’ comp providers statewide, is not the only PPO. As our data shows, rampant PPO discount transfers, possibly in violation of California Labor Code, substantially drain revenue — often to rates lower than Medicare.  

While the law technically requires the disclosure of PPO discount transfers (to say nothing of requirements that patients are steered to the provider in exchange), it is practically impossible for providers to keep track of who’s paying what for which services, once the contract is signed.  

This doctor, like many providers who participate in California's work comp system, sacrificed revenue to PPOs to care for injured workers. His heroic choice to provide care despite the adverse effect on his bottom line is a testament to his integrity. Given this doctor’s inability to sell the practice, treating injured workers was a choice that ultimately cost him dearly.

Why does California allow PPOs to take revenue from exactly the kind of doctor that injured workers desperately need?

The provider calls rapacious PPO schemes the “acceptable price of doing business.” We call it anything but acceptable. At some point, California and other states will have to reckon with the ransacking of workers’ comp by PPOs.

In the meantime, try not to get hurt at your job. For injured workers, the doctor is not in — because they can’t afford to be.


You want to protect your practice. We want to help. Contact DaisyBill to learn more.

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