The California Department of Industrial Relations (DIR) asked the State Assembly Budget Subcommittee on State Administration for an additional $22 million to update its Electronic Adjudication Management System (EAMS).

Below is our plea to Subcommittee Members to consider how little money is spent on technology that would help injured workers, their employers, and the California workers’ comp system.

Dear Subcommittee Members Quirk-Silva, Patterson, Ward, Gabriel, and Fong,

The DIR oversees the Division of Workers’ Compensation (DWC) and recently asked for over $22 million to replace EAMS. This technology platform allows attorneys to electronically file forms and documents with the Workers’ Compensation Appeals Board (WCAB).  

According to Workers’ Comp Executive, this is the third request for a cash injection to replace this electronic filing system, for a total (to date) of $45.8 million.

We urge the Subcommittee to consider how efficiently and effectively (or not) the DIR and DWC are using these dollars. Before you approve this latest request, demand an outside independent audit to determine whether this project represents money well spent.

Why the High EAMS Price Tag?

As a workers’ comp technology company that has built complex clearinghouse and fee schedule tools to process millions of electronic bills annually, along with Requests for Authorization (RFAs) and Utilization Review (UR) decisions, we cannot escape the conclusion that $45.8 million is a mind-boggling amount to spend to update or replace an existing platform.

Most importantly, while EAMS may be beneficial to the WCAB and preferable to storing and transporting paper documents around the state, this enormous expenditure fails to address the underlying systemic inefficiencies that demand such costly technology.

California taxpayer dollars should address, not enable, the hopeless inefficiency, lax regulatory enforcement, and bureaucratic wheel-spinning that characterizes the state’s crumbling workers’ comp system.

Required UR Data Can Preclude Unnecessary Disputes

The EAMS update project is hoovering up resources that could otherwise facilitate meaningful reform and reduce the need for injured workers to hire attorneys to pursue care and benefits.

Almost eight years ago, legislators (and Governor Newsom) recognized that UR data are critical to determining whether employers consistently authorize necessary care in a compliant and timely manner. When injured workers are improperly denied care, their only recourse is to hire an attorney.

Rather than handing the DWC even more money to facilitate litigation, the Assembly should ask the DWC to explain to employers, injured workers, legislators, and taxpayers why the agency has failed to implement Senate Bill 1160, passed in 2016, which amended the California Labor Code to:

 “...require the administrative director to develop a system for electronic reporting of documents related to utilization review performed by each employer, to be administered by the [DWC].”

UR data collection is the clear, objective way to identify potential abuse of the UR system. Such potential abuse can drive injured workers to hire attorneys, necessitating a vast electronic adjudication management system.

EAMS Does Not Help Injured Workers or Employers

As usual, California claims administrators benefit from the DWC’s failure to uphold UR compliance and accountability. And as usual, injured workers and their employers suffer from the lack of accountability.

Rather than adhering to California law and building technology to document UR compliance, the DWC demands an outrageous sum to update EAMS technology to enable and facilitate legal disputes.

Budget Subcommittee Members, before you agree to commit any more funds to wildly expensive tools (and staff) to manage conflicts rooted in the mismanagement of workers’ comp, consider examining why so much money is spent on technology for attorneys while so little is spent to ensure that injured workers receive the care they need.

Sincerely,

Catherine Montgomery

Co-Founder and CEO, daisyBill

Readers may contact Members of the Budget Subcommittee on State Administration at the following links:

Contact Assembly Member Sharon Quirk-Silva

Contact Assembly Member Joe Patterson

Contact Assembly Member Christopher M. Ward

Contact Assembly Member Jesse Gabriel

Contact Assembly Member Vince Fong

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