California's Troubled Qme System: You Get What You Pay for

• Publication year: 2020
• Author: Julius Young, Esq.

California's Troubled QME System: You Get What You Pay For

Julius Young, Esq.

Oakland, California

California's QME system is troubled. Several studies have documented declining numbers of QMEs. Report quality remains a major concern among lawyers and judges. QME availability problems often lead to repeated requests for replacement panels. The DWC has struggled to settle on a new fee schedule. What are we to make of this, and where are we headed?

First, let us take a macro look at medical-legal costs within the California system.

According to the WCIRB 2019 State of the System (SOS) report, medical-legal costs were 8 percent of paid frictional costs in 2018. (By comparison, defense attorney costs were 24 percent of frictional costs.) As a percentage of paid medical costs, the 2019 SOS report notes that in 2018, medical-legal evaluations were 6 percent of paid medical benefits, which is the same as it was in 2013. A 2020 WCIRB report on 2019 results noted that in calendar year 2018, medical-legal costs were $280 million and in 2019 were $290 million.

So, then, while overall workers' compensation spending may have changed over the years, and aggregate medical-legal spending did increase, medical-legal costs have remained quite stable as a percentage of the pie. The medical-legal fee schedule has not been increased since 2006, however, leading to unhappiness among many QMEs. The pool of QMEs has been shrinking for years. Approximately 15 years ago, while I was speaking to a conference of QMEs, I noticed a sea of older people and noted that the QME pool was graying.

A history of this issue over the past ten years reveals increasing concern over dysfunction in the QME system. A report done for CHSWC in 2010 by Frank Neuhauser of UC Berkeley ("Evaluating the QME Process: Is it Equitable and Efficient?") noted that between 2005 and 2010 there was a 45 percent decline in the number of QMEs. Neuhauser's 2017 update to that study noted a further decline in QME numbers.

While QME numbers were declining, QME requests were increasing. Neuhauser's 2017 report noted that panel requests had increased 87 percent from 2007 to 2017. When the numbers of declining QMEs were blended with the increase in demand for evaluations, it showed the requests per QME had doubled between 2007 and 2017. While unrepresented panel request numbers declined, represented panel requests had increased 400 percent.

These numbers will not surprise the workers' comp bar. Anecdotally, attorneys often found there were few QMEs in many specialties, and many regions lacked sufficient QME availability. Many QMEs cannot schedule exams within the statutory time frame; as a result, multiple replacement panel requests are filed. Yet for years the DWC did little to address the problem of QME availability.

Instead, many QMEs complained of what they felt was harassment by the DWC Medical Unit, although the DWC claimed it was simply increasing enforcement against QME billing abuse. In particular, the DWC claimed that under ML 103 and ML 104, alleged complexity factors were being used to up-code billings.

In 2017 some QMEs filed Superior Court lawsuits against the DWC, challenging the DWC's inaction on their...