Department of Industrial Relations Industrial Medical Council

Holiday Inn, LAX

Thursday, June 20, 2002

Members present:

Barry Halote, Ph.D. Michael Roback, M.D.

Robert Larsen, M.D. Kenneth Sim, M.D.

Maria Mayoral, M.D. Lawrence Tain, D.C.

Ira Monosson, M.D. Paul E. Wakim, D.O.

Steven Nagelberg, M.D. Gayle Walsh, D.C.

Glenn Ocker, DPM, MS Benjamin Yang, C.A. OMD

Richard Pitts, D.O.

Members absent:

Jonathan Ng, M.D., J.D.

Patricia Sinnott, PT, MPH

Richard Sommer, M.Phil., J.D.

1. The meeting was called to order by Co-Chair Dr. Richard Pitts.

2. Consent Agenda:

a. Adoption of the Minutes and Notice of Actions: Dr. Pitts asked for a motion on the Draft Minutes and Notice of Action of the May 16, 2002 IMC meeting. Dr. Walsh indicated some changes/corrections to the Minutes: Page 2, Item 3-CHSWC Proposal, para.1, last sentence, change "DWC" to "DIR"; Page 4, Item 5, to add after the "draft" and before "guidelines" "Evaluation of Neuromusculoskeletal"; Page 5, Item 7, change "Yang" to "Ng".

Action: The Consent Agenda was approved unanimously.

b. DWC Report:

Mr. Richard Gannon, Administrative Director, Division of Workers Comp. (DWC) gave an update on the DWC status. He said that on July 1st, DWC would lose 90 positions. People will not be released immediately, but DWC is in the process of responding to the requirements of the Department of Personnel Administration on over-staffing. DWC's budget has been cut by 7.3 million dollars as of July 1st. Most of these are personnel costs. DWC has to identify personnel for layoffs and positions that people can go to. Overstaff employees have priority for hiring in other agencies. DWC funding will be cut off for these positions and people will be laid off if they don't find another job.

Mr. Gannon said the only glimmer of hope that exists is the fact the Legislature passed AB 749, signed by the Governor last February, which creates new mandates for DWC. DWC has a lot of existing mandates: renewing and revising fee schedule every two years; holding

expedited hearings within 30 days of the filing of a Declaration of Readiness; and then holding mandatory settlement conferences within 30 days, and hearings within 75 days. They now have a list of new mandates that they will not be able to meet because of reduced staff and no funding for the positions. One of the good things about this, he said, is that he can pick and choose which mandates to ignore and to what degree to ignore them. In the budget bill there is an effort to fund the new mandates of AB 749. It would add $4.6 million dollars to the DWC budget, but they are losing $7.3 million. This does not cover everything that they are losing but it focuses on rule-making ability and on the courts and staffing for rule making as well as eight judge teams. It will also fund auditor positions because there is a new auditing set of rules that requires an audit of claims payment location once every five years. They are currently getting around to each site every 15 to 18 years. The mandate funding is in the budget that went through the Conference Committee that adopted the State Assembly version of it. If there are no changes, DWC will have some relief, as it will add 62 positions and will avoid lay offs. When the Conference Committee finishes up its work, its recommendation will go to the floor. If the floor of each of the houses does not pass the budget by a two-thirds majority, then it goes to the big five – the Governor, the Majority and Minority Leadership of the Senate, and the Majority and Minority Leadership of the Assembly. They then work out a way of identifying increases in revenue or cuts in spending to satisfy the balanced budget requirement in California.

Another problem is a Court of Appeals' decision that indicates that State employee, when working without a budget, will be paid by Federal minimum wage. The ramification of this is unknown as yet. Mr. Gannon said, if people are concerned about the services that the Division provides and would like services to continue and to meet the mandates, they should contact their local Legislator to ask them to keep the augmentation for the Division's budget, so that DWC will be able to go forward with the medical studies in the bill and go forward with some reasonable time limits to resolve disputes and other important things. The Supreme Court will probably have the opportunity to review the decision of the Court of Appeals.

Mr. Gannon also reported that in July, DWC will initiate rulemaking to incorporate a modification primarily to the Tenent decision and some other modifications to Rule 9785–Reporting Duties of the Primary Treating Physician; Rule 986-Petition for Change of Primary Treating Physician; minor revisions to Rule 987 an appeal from 30 days down to 20 days which is consistent with the Board, and some minor revisions to the PR2 and PR3. These drafts will be posted on the Web site "" and then choose the link to DWC/WCAB Form. Other rules including all of the Administrative Director Rules will be posted and people can comment on them for at least 30-days. Based on the comments, formal rulemaking process will begin which means submission to OAL to find out if it is consistent with the statutes, then a 45-day comment period culminating with a public hearing. DWC will be cutting back on public hearings and future hearings will all be held in San Francisco. The target date for the first group is July 1st.

Technical changes and clean-up regulations on the Official Medical Fee Schedule have been adopted; will become effective on July 1st; and will be posted on DWC web site. The prosthetic section has been adopted. There have been amendments on facility fees and accreditation of ambulatory health care facilities. The Fee Schedule has been amended: 1) to allow accreditation by any accrediting agency; 2) to clarify the formula for reimbursing supplies and materials and dispensing durable medical equipment; 3) to clarify that a consultant's report is separately reimbursed when the claim does not meet the criteria of a contested claim, and 4) to clarify that a physician's interpretation of X-rays maybe reimbursed by either a separate signed report, or a separate distinctly identifiable section in an overall report. Payment for

medical treatment's amendment is to conform to the statutory change in 4603.2. It basically requires an objection within 30 days rather than 60 days. There are also some changes in the medical legal schedules. These have gone through the formal rule making process and were submitted to OAL by June 12th and will be effective on July 12. They can also be downloaded at the DIR home page.

On RBRVS, DWC mailed out a letter to the community on April 4th, stating the basis for a change over to an RBRVS: 1) to create a fee schedule that is more grounded in the work that medical providers actually do, using resource-based relative values, and 2) to allow DWC to utilize the work of others in revising the fee schedule. They asked for comments on what should or should not be changed. They received comments, including one from the Orthopedic Association that stated if the DWC continues to pursue transitioning to the Medicare RBRVS; other Medicare rules should also be included. Mr. Gannon said that multiple conversion factors are critical to ensure that there is fairness in the fees. DWC is looking at a method of identifying the differences between various specialties. In the 1950's, DWC developed the California Relative Value Schedule. Other entities in California have since gotten away from it. DWC, in the very early 1990s, revised the fee schedule by going to Medicode, a private entity, who developed a relative value schedule for us. Five years later in 1999, when they started the revisions, the IMC funded another study by Medicode. DWC did not really have any insight into what methodology Medicode used to set the relative values. DWC is attempting to find a fair relative value schedule where we understand how it was set, why it was set and then how to deal with any adjustments. They would like to get the ground rules done by the time the Lewin Group gets done with the second study so when they ultimately model the information they have, DWC could move forward with this. DWC is not currently determining what the conversion factors are going to be nor are they determining at this stage what the ultimate resolution is going to be. They are trying to find out how Medicare did it; what would it look like in California if we use RBRVS; what problems will it cause and then they will start addressing these issues.

Mr. Gannon assured the audience that he is open to all comments on why we should or should not go this way. He said that if anybody would liked to talk about the ground rules, they can talk about it now; but conversations about what the conversion factor should be or what the relative values in California should be, are still a long way off. They have to wait until Lewin completes its work to understand what the impact is going to be and how they have to with deal it. He is as concerned about access to care and fairness of fees, as he is about cost saving. He does not want to give percentages. He added that fee schedules are a method of predictable prices and that is what the industry needs. But access for injured workers to the appropriate specialties is also just as important to DWC. If people are interested in talking about changes to the ground rules, that is something on DWC's agenda right now. Mr. Gannon said he provided some background about their problems to explain why DWC is not moving as quickly as it should in some of these areas, but this is not a reflection of its unwillingness to go forward with this project. He believes that we need to look moving to RBRVS as a source of helping us to develop and revise the fee schedule on a regular basis-biennially, if not more frequently. As reflected in the Kominski Report, other states not only adopted RBRVS but also have indexed it. One state has indexed theirs to the state average weekly wage. Some people have pointed out that many of the fees in the Official Medical Fee Schedule have not increased for eighteen years. It is probably time to look this at, so he suggested that interested parties write their Legislator and DWC will start looking at these issues.

Dr. Michael Roback thanked Mr. Gannon for his unusual ability for being able to do something, even in difficult times and especially with SB 9785. He commended Mr. Gannon for getting things done.

Dr. Paul Wakim said it is refreshing to hear Mr. Gannon refer to the fact that physicians have not had a raise effectively in eighteen years when everything else has quadrupled in costs. He is grateful to the fact that Mr. Gannon looked at this system, however, Dr. Wakim stated that whenever we do a Medicare kind of a schedule, this will drive the fees down to the point where one may find it difficult to find treating physicians who may associate with this. Nonetheless, he said the Mr. Gannon mentioned this would be a background study on RBRVS and that adjustment will be made to the needs of the workers' comp. providers. It is pleasant to hear it but it also creates apprehension among physicians.

c. Executive Medical Director's Report:

Dr. Susan McKenzie indicated that her EMD report stands as written. She extended her congratulations to Dr. Benjamin Yang who was appointed by the National Institutes of Health's National Advisory Council for Complementary and Alternative Medicine (NCCAM). It took a White House interview to receive this nomination, and this is an honor and an extremely important appointment. She asked the IMC and the audience to join her in congratulating Dr. Yang.

She invited the Council Members and the audience to join the 75th Anniversary Celebration of the Department of Industrial Relations on the 27th of June. She also reminded the Council to submit their TECs; the deadline is the 5th of July.

d. Legislative Report:

Mr. James Fisher indicated there is nothing to add to what is in the packet but said the bill that will affect the Council most is SB 1705. This would allow qualified acupuncturists to write disability reports both as a treating physicians and Qualified Medical Evaluators.

3. Education Committee Report:

Dr. Gayle Walsh reported that there are seven renewals for providers of continuing education courses. Mr. Fisher and staff reviewed each of the programs and materials submitted. The Committee recommended approval of the following: Center of Occupational & Environmental Health; California Workers' Compensation Defense Attorney's Association, approved for 5.25 hrs out of the requested 13.25 hours credit; California Chiropractic Association; Western Occupational Health Conference; American College of Chiropractic Orthopedists; Workers' Compensation Seminars, approved for 5 hours out of 6 hours, and Palmer Chiropractic.

Dr. Roback asked if the IMC contacts the providers who are short of the 6-hour required for accreditation. Mr. Fisher responded in the affirmative. He stated that after Dr. Anne Searcy and he review the contents of the program, then give the provider suggestions on how many hours are required so they have the opportunity to change the program. One of the problems is submission of late applications, so it is hard to change the program. Dr. Walsh said that the Committee also discussed this issue and sent out materials on what they are looking for and try to educate providers on what is being considered as materials appropriate to continuing education.

Dr. Walsh: Motion: That the Council approve the above seven providers for renewal of their continuing education courses. The motion was seconded.

Action: Motion passed unanimously.

Discussion ensued regarding the numbers of hours being credited for QMEs' continuing education.

Dr. Walsh said the Committee is still working on some of the regulations and hopes that in the next few months they will be able to bring the QME Regulations to the Council for review.

4. Fee Schedule Committee Report

Dr. Susan McKenzie reported, in addition to the very informative statement that Mr. Gannon gave on the larger fee schedule issues, that there was an update on the upcoming Lewin Studies. The Physician Work-Study will be presented in July by the Lewin Group who is continuing to do survey work on this. The Practice Expense Study is moving forward. Many have been asked to nominate people for the practice expense panels. These panels will be held in mid-July about the time of the meeting. They are hopeful that this study will be concluded for the September IMC meeting.

5. Musculoskeletal Committee Report:

Dr. Roback reported that the Committee decided the Neuromusculoskeletal Guidelines are ready for a 45-days public comment period. A couple of corrections were given: the word "symptom(s)"was changed to "complaint(s)" and page 7 should say "Low Back Injuries With or Without Radicular Component", this also applies to Section III – "Neck Injuries . . ." for conformity.

Dr. Roback: Motion: That the Council approve the 45-days public comment period for the Evaluation of Neuromusculoskeletal Disability Guidelines. The motion was seconded.

Action: Motion passed unanimously

6. Ad Hoc Committee on Educational Statements:

Dr. Roback said that the second discussion was the issue of fibromyalgia. He thanked Dr. Wakim for all his initial work gathering the information. At this time, the Committee is going back to talk to the DEU. Dr. McKenzie is going to discuss what they want from us to best help the system.

7. Schedule of Council Meetings:

Dr. McKenzie indicated that the Council was asked by DIR to prepare a list of its mandates and to prioritize them in light of some of the staff reductions. The Staff informally considered the idea of the schedule of the meetings and whether the Council wished to continue to have 12 meetings or to consider having longer but fewer meetings. Dr. McKenzie asked the Council for feedback.

Dr. Roback said the Council needs to meet every month but we could occasionally teleconference. If the IMC is going to complete its mission, it is up to some Council Members to start taking more of the responsibilities.

Dr. Wakim said he feels that we should have meetings monthly and should be open to the public for their participation. He does not think teleconferencing is useful and as it is less open to the public. If the financial matter is the most important factor, he concurred with Dr. Roback that the members of the Committee attend the meeting at their own costs and not accept payments or

defer payments until the budget allows it. He feels we should continue the monthly meetings both in Los Angeles and San Francisco and they should be open to the public.

Dr. Walsh said she brought up the subject of having meetings maybe every other month and would like see the Committees have longer meetings so they will be able to do more work and have longer discussions, in the general meeting room rather than in the small conference room.

The consensus is for the meeting schedules to stay as is.

Council Meeting's Closed Session began at 11:55 a.m. The open session resumed at

12:25 p.m.

8. Discipline Committee Report:

The Council voted to terminate the QME status of John A. Giddings, M.D. effective June 24, 2002, which is in the same date that the Medical Board revoked his Medical License. On the issue regarding Sheridon Groves, the Council tabled it for next month's meeting.

9. Announcements:

Dr. Pitts announced that the next meeting will be held in San Francisco and the Lewin Group will be doing their presentation. There will be no meeting in August. The Lewin Group will again be back in September in San Francisco for another presentation.

10. Meeting adjourned at 12:30 p.m.

Thursday, June 20, 2002

IMC Staff presents:

Susan McKenzie, M.D., EMD

James Fisher, Esq.

Anne Searcy, M.D. David Kizer, Esq.

Larry Williams Annadesa Gregorio

Mila Diadula

DWC Staff presents

Richard Gannon, Adm. Dir.

Members of the public presents:

Linda Coltrin, CCA Sheri Nolen, HNC Software

Mike Sackett, SCUHS Frank Navarro, CMA

Hector Hernandez, National Ambulatory Hernia Barbara Stanfield, DC, CCA

Ruth Brisss, National Ambulatory Hernia Benita Gagne, Intercommunity

Kimberly Wiswell, Kaiser Permanente Flora Greenhill, Team Post-op

Janet Jamieson, Medata Rea Crane, CWCI

Clint Mayers, Health Services Group Brenda Ramirez, State Fund

Sharon Ibarra, US Healthworks Joann Veitra, MedRecovery Plus, Inc.

Jim Snow West-Star Physical Therapy Dough Hikawa, Medex HCO

Shari Palmer, Intelligent Medical Solutions Jack Zahm, Medata, Inc.