Erosion of the California Work Comp Reforms & MPN

Recently, we were researching the likely impact of an MPN (Medical Provider Network) implementation for a client in California.  The data can vary dramatically depending upon the client and region of the state.

The California Workers' Compensation Institute (CWCI) issued a Research Report in early June regarding the impact of physician networks in California Workers' Comp. In the report, one thing jumped out even more than the MPN data.  The recent reforms California has made are not working.  The workers’ compensation system is eroding badly.

First, though, a look at the MPN data.  In almost every instance, network providers had better results than non-network providers:

• Lower attorney involvement (17.4% for network  versus 32.9% for non-network providers)
• Faster claims closure rates
• Average risk-adjusted medical payments  were 16% less for network claims versus non-network claims 24 months post injury

The only area that was better for non-network providers was, surprisingly, opioid prescriptions (54.5% in network versus 30.4% out of network). Overall, it sounds good for the MPN (although the opioid data scares me).

However, in almost all situations, the results of the period prior to the MPN were better than those during the MPN period:

• Attorney involvement in indemnity claims went from 38.1% to 44.6%
• Indemnity claim closure rates  at 12 months decreased from 72.7% to 61.2% during the MPN period
• The percentage of in-network claims with at least one opioid prescription went from 39.1% to 54.5% during the MPN period

What I can glean from the data is that while the MPN produces somewhat better results in the current California environment, the overall changes in the California workers’ compensation environment since 2009 are all negatively impacting results—far more than the MPN is improving them.  This is not a trend anyone wants to see continue in the largest workers' compensation market.

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