Managing managed care: an analysis of managed care within workers' compensation claims.

• Author: Perez, Mario L.
• Position: Florida

With the advent of the 1994 legislative amendments, the Florida Legislature completely overhauled the manner in which medical issues are analyzed in workers' compensation cases. In 1994, the legislature created F.S. [sections] 440.134. Section 440.134 set forth a medical outline to be applied to injured workers within the workers' compensation system. This outline created a managed care system similar to the HMO plans prevalent in private health care. Unfortunately, the new statutory scheme has spawned many questions and provided few answers.

In analyzing many of the most prominent issues created by the new managed care system, the authors first discuss how a carrier obtains approval for a valid managed care plan. Then how a managed care system should operate within the workers' compensation realm is discussed. Within this section, the possible rights and obligations of claimants and insurance carriers within a managed care system, as well as issues that arise regarding litigation of managed care issues in the workers' compensation system are addressed.

Applicability of Managed Care

Whether a managed care system takes effect in any given workers' compensation situation depends greatly on an insurer adhering to administrative requirements. Before managed care was even an option, [sections] 440.13(2)(a) and (b) required carriers to provide, generally, all medically necessary remedial treatment and attendant care necessitated by a compensable injury. The courts were, subsequently, left to determine the rights and obligations inherent under [sections] 440.13(2)(a) and (b). However, after January 1, 1997, the legislature attempted to codify the bulk of the rights and obligations injured workers and carriers would share by enacting a mandatory statutory scheme. In fact, after January 1, 1997, all employers or insurers are required to provide medically necessary treatment to all employees through a managed care arrangement as provided in [sections] 440.134 et seq. The new statutory framework was an obvious attempt to eliminate much of the litigation over medical issues within workers' compensation.

Before offering treatment through a managed care arrangement, an insurer must have a plan of operation, and such plan must be approved by the Agency for Health Care Administration (AHCA). See F.S. [sections] 440.134(4). The plan of operation must, at a minimum, adhere to the statutory requirements set forth in [sections] 440.134(5), (6), (7), (8), (9), (10), (11), (14), and (15). See also Fla. Admin. Code [sections] 59A-23.001 et seq. (1994). These statutory provisions require a carrier's plan of operation to provide evidence that:

1) Covered services are available and reasonably accessible, [sections] 440.134(5).

2) A quality assurance program exists requiring medical care be provided consistent with prevailing medical standards, [sections] 440.134(6)(c). See also Fla. Admin. Code [sections] 59A23.004 et seq.

3) The quality assurance program provides, among other rights, adequate methods of peer reviews, provision for the resolution of disputes, a process allowing employees a second opinion per specialty, and a provision for the selection of a primary care physician, [sections] 440.134(6)(c)(6), (7), (9), and (10).

Although by no means comprehensive, the above list illustrates several of the items that AHCA requires in a valid managed care plan of operation. If all the statutory requirements and rules are met, AHCA will approve the plan of operation. An insurer then has a valid managed care arrangement. See Fla. Admin. Code [sections] 59A-23.003 et seq. An insurer must follow the validation process for every entity or service area sought to be insured. See 59A-23.003(3). The authorization is valid only for a two-year period. Id. Finally, if greater than 50 percent of a controlling interest or ownership of a certified entity is transferred, a new application for authorization is required. Id.

Once these requirements are met, a carrier must require all care be received through the provisions of [sections] 440.134 et seq. In turn, it may avail itself of existent statutory protections. However, it is unclear what remedies are available for violations of the requirements explained above. Initially, it is clear a monetary fine may be assessed against the carrier. Section 440.134(22) allows AHCA to levy against carriers a monetary fine of $2500 for any nonwillful violation and $20,000 for each willful violation, with a cap of $10,000 for all nonwillful violations and $100,000 for all willful violations arising out of the same transaction. Additionally, AHCA may suspend or revoke a carrier's managed care plan of operation. See [sections] 440.134(23).

However, in the absence of suspension or revocation, how does a monetary fine against a carrier aid, for instance, an injured worker who is prejudiced by a carrier's violation of the applicable rule or statutes? Unfortunately, neither [sections] 440.134 nor applicable case law provide much guidance on this point. There is, however, one source of law on the issue. According to Farhangi v. Dunkin Donuts, 728 So. 2d 772 (Fla. 1st DCA 1999), a JCC may not strike the applicability of managed care, since no statutory provision exists granting a JCC such authority. Id. at 773-74. But in lieu of striking the applicability of managed care in its entirety, may a JCC suspend the enforcement of such provisions on the basis of some violation? Rather than striking managed care, the JCC would be holding that the carrier is estopped from relying on any protection offered by a provision it violated. The authority for this power would arise not from equity, but rather from powers necessary to enforce the purpose of [sections] 440.134. For example, if a carrier violated a JCC's discovery order requiring production...