DWC Publishes Workers’ Comp Medical Provider Network Regulations
[Posted 12/09/04]

The Division of Workers’ Compensation (DWC) has issued emergency regulations that will allow “medical provider networks” to begin operating in California on January 1. These regulations are the result of the workers’ comp law passed by the state legislature this year.

Beginning in 2005, insurers and self-insured employers may establish medical provider networks (MPN) to provide care for injured workers. The goal is to cut costs by allowing employers to direct where their employees go for treatment of work-related injuries. In a network system, the employer or insurer can negotiate reimbursement upfront with its network of physicians, thus maintaining some control over costs.

CMA is concerned that the MPN system will lead to “silent PPO” network leasing, thus requiring physicians to accept contract terms they know nothing about and heavily discounted fees that do not reflect the actual cost of providing care to injured workers. Responding to CMA’s concerns, DWC will require employers and insurers to demonstrate that they have contractual agreements with physicians in their MPN networks in an attempt to curb silent PPO activity.

CMA also believes that the regulations should prohibit provider networks from establishing MPN fee schedules that reimburse physicians at rates lower than the DWC’s Official Medical Fee Schedule. CMA will continue to work with DWC to further clarify the regulations to explicitly prohibit silent PPO activity and ensure that physicians treating injured workers are fairly reimbursed.

To help CMA make sure that MPNs do not become managed-care-style profit centers, taking savings away from employers and squeezing physicians to pile up profits, please send us copies of any MPN contracts and fee schedules you have signed or have been asked to sign. Although CMA will not be able to provide physicians with individual analysis of their contracts, CMA will examine contracts for problems to ensure that the final regulations contain adequate safeguards for physicians. Forward any MPN information to Elizabeth McNeil by e-mail (emcneil@cmanet.org) or fax (415/882-3390).

For a more detailed description of MPNs, see CMA ON-CALL document #1932 “Medical Provider Networks.” ON-CALL documents are free to members CMA's members-only website. Nonmembers can purchase ON-CALL documents for $2 per page in the CMA Bookstore.

Contact: Elizabeth McNeil, 415/882-3376 or emcneil@cmanet.org