CWCI Study Finds Sharp Drop in Independent Medical Examinations of Workers’ Compensation in California

OAKLAND, Calif.–(BUSINESS WIRE)–A California Workers’ Compensation Institute (CWCI) study of the Independent Medical Review (IMR) process used to resolve worker medical disputes shows that the number of IMR decision letters hit an all-time high in 2021 as that pharmaceutical disputes — especially those involving opioids — have continued to decline since the state adopted evidence-based guidelines for chronic pain and opioids and a prescription drug formulary.

CWCI’s study data was derived from more than 1.1 million IMR decision letters issued from 2015 to 2021 in response to requests submitted to the state after a doctor’s review of the use (UR) modified or denied a worker’s compensation medical service claim. In addition to measuring changes in the volume of IMR, the authors used the data to measure changes in the mix of medical services examined and maintain rates by broad category of medical services; IMR response time; regional variations; the distribution of prescription drug IMRs and the maintenance of rates for various drug classes; the proportion of RMI involving changes in medical service demand among six categories of services; and the concentration of IMRs involving high-volume medical providers.

The IMR letter count showed that since peaking at 184,735 letters in 2018, IMR letter volume has declined for three consecutive years, falling to 163,899 letters in 2019, 136,738 letters in 2020 and 133,494 letters in 2021. Although part of this drop reflects lower claims volume in 2020 – the first year of the pandemic – the study found that much of the drop came after the Compensation Division Workers’ Compensation (DWC) incorporated chronic pain and opioid guidelines into the Workers’ Compensation Medical Treatment Schedule in late 2017 and implemented a prescription drug formulary. In January 2018, the formulary established categories of drugs that were exempt from the prospective UR; Not exempt (or subject to prospective UR); or not listed; as well as non-exempt drug subcategories (Special Fill and Perioperative) that allow for special circumstances or preoperative and postoperative situations in which physicians may prescribe limited quantities of certain drugs that would otherwise be subject to prospective URs and IMRs. In the wake of these changes, prescription drug litigation has fallen from 47.3% of all RMIs in 2017 to 34.9% of all RMIs in 2021, with much of this decline due to a reduction opioid-related disputes, which fell by almost a third of pharmaceutical RMIs. in 2018 to just over a quarter of prescription drug AMIs last year.

Overall, there were more than 51,000 fewer IMR letters in 2021 than in 2018, with more than half of that decline occurring in 2020, when IMR letter volume fell by more than 27 000 letters. Since 2018, the number of IMR letters has decreased across all categories of medical services, although the huge reduction in IMR disputes involving prescription drug claims has led to a redistribution of IMRs among major medical service categories. The largest percentage increases were in physiotherapy; injections; and durable medical equipment, prosthetics, orthotics and supplies (DMEPOS), each of which has seen its share of IMR letters increase by 2.4 to 3.1 percentage points since 2018. The overall IMR retention rate of 92, 0% was up from 89.4% in 2020 and was the highest retention rate since IMR came into effect in 2014, although again results vary by medical service category, with retention rates ranging from 84.9% to 95% between the different categories.

The study’s regional analysis identified areas of the state where 2021 IMR letter volume was high or low relative to the volume of workers’ compensation claims in each region. Los Angeles County, widely known as a hotbed of workers’ compensation litigation, accounted for 24.7% of California workers’ compensation claims in 2021 and 27.6% of IMR letters, while that in contrast, IMR letter volume was disproportionately low in the Inland Empire/Orange County region, which held 20.7% of state claims but 13.9% of IMR letters. Surprisingly, the biggest disparity between complaint volume and IMR letters was in the San Francisco Bay Area, which had 17.8% of complaints but 25.7% of IMR letters. The study notes that one factor that likely contributed to this disparity is the prevalence of pain management specialists in the Bay Area. A review of doctors with the highest number of IMR disputes last year showed five of the top six in the state were pain management specialists, and four of the top six were located in the Bay Area. , which would at least partly explain the disproportionate number of IMR letters — especially those involving prescription drug disputes — sent to the region.

The CWCI has released its latest IMR analysis as a free research update report, “Independent Medical Review Decisions: January 2015 to December 2021”, which can be downloaded here.

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