California Governor Gavin Newsom has never been charged with (or even credibly accused of) any serious crime. However, the presidential hopeful may have a serious blind spot regarding corruption that occurs under his nose.

An FBI probe into alleged fraud surrounding Newsom’s former chief of staff reportedly has California’s political elite on edge. For those of us in the workers’ comp space, it’s only the latest example of troubling state-level chicanery.

In California workers’ comp, payers, vendors, and other entities routinely flout state laws and regulations to abuse providers and injured workers. The California Division of Workers’ Compensation (CA DWC) not only fails to deter this abuse but arguably enables it.

Meanwhile, the Insurance Commissioner responsible for spiking California employers’ workers’ comp coverage rates is under investigation for spending taxpayer money on lavish trips.

In an era of increasing public concern about corruption, anyone hoping to earn voters’ trust will have to reassure the public that government can operate above board. Given the scandals in California and its workers’ comp system, can Gavin Newsom credibly fulfill that role?

CA Workers’ Comp: A Bad Look for a Presidential Hopeful

For providers and injured workers facing blatant abuse, the workers’ comp environment under Newsom and the CA DWC can feel almost lawless.

Utilization Review (UR) entities deny treatment in ways that disregard state laws and regulations, delaying or preventing necessary care to the enrichment of payers, vendors, and private equity investors. The state can’t properly police UR because the CA DWC, in open violation of the law, refuses to collect UR data.

Following treatment, payers improperly deny and reduce payment to providers based on failure to adhere to state fee schedules, inapplicable or non-existent discount reimbursement agreements, and implausibly frequent “errors” that derail the payment appeals process.

Moreover:

• The Medical Provider Network (MPN) system, by which payers and network “entities” dictate who provides what care to injured workers, is a slurry of abuse so appalling that even payers’ attorneys bemoan its dysfunction and twisted incentivizing.
  
• The Preferred Provider Organization (PPO) industry, which draws providers into discount reimbursement agreements under threat of exclusion from MPNs, is “legal robbery,” at least according to one industry insider (and supported by the experience of thousands of doctors).

Meanwhile, Insurance Commissioner Ricardo Lara raised employers’ rates for workers’ comp coverage and reportedly burned through boatloads of taxpayer cash on luxury travel to dozens of locations worldwide. Mr. Lara is currently under investigation by California’s Fair Political Practices Commission.

This is the state of California workers’ comp under the current CA DWC and the Newsom administration: failing to serve injured workers and the doctors who serve them, but enriching people and entities that profit from dysfunction.

Can Newsom Earn a Nation’s Trust?

daisyBill has filed formal Audit Complaints with the CA DWC, reporting hundreds of thousands of undeniable, thoroughly documented violations at scale.

No enforcement action or penalties have resulted. Daily, abuse continues as claims administrators and vendors fear no consequences from the state.

Governor Newsom is not personally implicated in any of the specific violations by payers, vendors, or Insurance Commissioner Lara. Still, these violations occur on Newsom’s watch, as the person voters empowered to govern state agencies like the Department of Insurance, the Department of Industrial Relations, and the CA DWC.

Similarly, Newsom himself is not under investigation for the alleged crimes of his former staffer, Dana Williamson, whom prosecutors say conspired to funnel over $200,000 from the disused campaign account of a former congressman and California attorney general.

However, at the very least, foul play can go unchallenged or unnoticed when Mr. Newsom is in charge.

If bad actors are this comfortable flouting the rules under Governor Newsom, what would that say about the national legal and regulatory environment under President Newsom? If he fails to address corruption from the Governor’s Mansion effectively, how can he tackle it from the White House?

There’s no evidence that Mr. Newsom ever engaged in corruption. But we deserve leaders who prioritize stamping it out.

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