Why the Workers' Compensation Reimbursement System is 'Broken'

April 5, 2014

Workers' compensation carriers are banking on the fact that at some point medical practices will give up and walk away.

A week or so ago, I had the privilege of sitting in on a Friday morning meeting with a local senator. A group of us discussed our concerns over the Affordable Care Act, as well as workers' compensation and its lack of reimbursement to providers. The meeting went well, and the senator provided some much needed insight into both areas.

Picture this: You are at a car manufacturing company observing the assembly line. Things seem to be going fine, and then one of the machines stops working. All of the cars start piling up on the back end. While the car manufacturer tries to fix the machine, you watch and realize that half of the cars that are considered complete have no paint on them, some are missing tires, and some lack window glass. These cars are loaded onto transport trucks and shipped to the dealerships that try to sell them as completed and fully built. You ask the president of the car manufacturing company, why this is happening. He responds simply, “Because we can. It would cost us too much to push out completed products because we keep having to fix our machines and those costs keep skyrocketing.”

This is exactly what workers' compensation plans are doing in the state of California. Their processes are so broken, antiquated, and without transparency and accountability, that they are returning to you, the physician, half to no payments for your claims. The worst part is trying to follow up on unpaid claims. You can never get a hold of an adjuster or the bill review department. Plus, they tell you, “You need to allow 60 days from now for this request to process.” Sixty days later, you get the same denial because their process is still broken.

I'd love to know what kind of software they are using because quite frankly, I think it's the old software I used in my high school computer courses back in the '80s. They do not accept electronic claims, but require you to print out each claim with each chart note, authorization, and prescription. This is time consuming for the billing department, and even when everything is correct and you've submitted to the correct address, the claim still comes back denied. They provide no reason for the denial. Then the broken cycle starts again.

These workers' compensation carriers are banking on the fact that at some point you will give up and walk away since you've already spent more money trying to recover the monies due than what the claim will actually pay.

Rest assured, there is a group of very intelligent and tenacious individuals who are fighting back. We believe it is time to stop the madness and get the appropriate individuals involved in order to fix this very broken system.

I will report back in a few weeks on the progress. In the meantime, keep an eye on that payer mix in your A/R. It can definitely get out of control very quickly.