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Workers' compensation medical provider networks ("MPNs"), authorized by Senate Bill 899, create a new business opportunity for medical groups and IPAs, as well as employers and insurers. As of January 1, 2005, employers or insurers may establish a provider network from which an injured worker would be required to obtain care for a work-related injury or condition for the life of the claim. MPNs developed by medical groups and IPAs would contract directly with the self-insured employer or insurer, which would have the exclusive right to determine the providers to be included in the MPN. A summary of the MPN regulatory requirements is provided below.

Employee Choice for Treating Physician. Under existing law, when the injured employee notifies the employer of the injury or files a workers' compensation claim, the employer is required to arrange the initial medical examination and begin treatment. After this first visit, if the employer is not contracted with an MPN, the employee may be treated by a physician of his or her choice or at a facility of his or her choice. Under the new law, if the employer is contracted with an MPN, the employee has a right to be treated by a physician of his or her choice selected from the MPN. If the employee is dissatisfied with medical treatment rendered by an MPN provider, he/she must obtain second and third opinions from within the MPN. If the employee is still dissatisfied with the treatment, he/she may submit the dispute to independent medical review, which is newly established under SB 899.

Employee Notification. Employers that offer an MPN must notify each covered employee in writing about use of the MPN prior to implementation of the MPN, at the time of hire, or when an existing employee transfers into the MPN, whichever is appropriate to ensure that the employee has received the initial notification. The notification must also be sent to a covered employee at the time of the injury and must include specified information.

Pre-designation of Treating Physician. Under prior law, an employee could "pre-designate" a personal physician before the date of injury. If the employee pre-designated a physician, he/she was entitled to be treated by that physician instead of one chosen by the employer. SB 899 limits the circumstances under which employees may pre-designate and incorporates the new MPNs into the pre-designation process. Specifically, an employee may be treated by the pre-designated physician from the date of injury if: (1) the employer provides non-occupational group health coverage in a Knox-Keene health care service plan, or (2) the employer provides non-occupational health coverage in a group health plan or group policy that meets the requirements of the new MPNs.

MPN Treatment Standards. Treatment must be in accordance with the guidelines of the American College of Occupational and Environmental Medicine ("ACOEM") or with a medical treatment utilization schedule adopted by the Department of Workers' Compensation prior to the end of 2004.

MPN Physician Network Requirements. The MPN must include physicians primarily engaged in the treatment of occupational injuries and physicians primarily engaged in the treatment of non-occupational injuries, with at least 25% of the provider network engaged in the treatment of non-occupational injuries. The number of physicians in the MPN must be sufficient to enable treatment for injuries and conditions to be provided in a timely manner and include an adequate number and type of physicians to treat common injuries experienced by injured employees based on the type of occupation in which the employee is engaged, and the geographic area where the employees are employed.

MPN Accessibility Requirements. MPN medical treatment must be readily available at reasonable times to all employees and all medical treatment must be readily accessible. The regulation prescribes additional access to care requirements, including the following: MPN primary care physician and hospital/emergency medical care must be within 30 minutes or 15 miles from the employee's residence or work place; all other MPN providers must be within 60 minutes or 30 miles from the employee's residence or work place; there must be a written policy for providing treatment outside the above access areas; there must be a written policy for providing emergency treatment outside the MPN; an initial appointment for non-emergency treatment within the MPN must take place within three business days of the request for treatment; and non-emergency specialist treatment within the MPN must take place within 20 business days of the referral.

Treatment for Injuries that Occurred Prior to MPN Establishment. Treatment for injuries prior to the establishment of an MPN can be transferred into the MPN with the exception of (1) an acute condition, a serious chronic condition or a terminal illness (as those terms are defined in the regulation), or (2) a surgery or other procedure previously authorized to occur within 180 days. Treatment can be transferred post-procedure once the acute phase has passed.

MPN Application Requirements. An MPN must be approved by the Administrative Director before it can be used. Within 60 days of the Administrative Director's receipt of a complete application, the application will be approved or disapproved, based on the criteria specified in the MPN regulations. For example, the MPN must contain both physicians who primarily treat occupational injuries as well as those who primarily treat non-occupational injuries. The application must describe how the MPN complies with the accessibility standards mandated, and describe the employee notification process. Applicants must affirm that physician compensation is not structured in order to achieve the goal of reducing, delaying, or denying medical treatment or restricting access to medical treatment. In addition, applicants must file economic profiling, continuity of care, transfer of care, and completion of treatment policies and procedures, if applicable. Finally, a Knox-Keene plan, health or disability insurer, workers' compensation HCO certified network, or Taft-Hartley health and welfare fund may be deemed to be an MPN if it meets certain requirements.

If you require our assistance or have any questions please contact Michael Dowell at mdowell@tocounsel.com or the lawyer in the firm who generally handles your health care legal matters.