Report 2019-102 Recommendation 5 Responses

Report 2019-102: Department of Industrial Relations: Its Failure to Adequately Administer the Qualified Medical Evaluator Process May Delay Injured Workers' Access to Benefits (Release Date: November 2019)

Recommendation #5 To: Industrial Relations, Department of

To ensure consistency and transparency in overseeing QMEs, DWC should, by April 2020, develop and implement written policies and procedures that define its internal process for reappointing QMEs and how that process should proceed if any disciplinary investigations are pending.

Annual Follow-Up Agency Response From October 2022

The utilization of the Reappointment Protocols has proven that these provisions keep the regulatory processes of discipline and reappointment separate.

In the past 12 months, the Medical Unit has processed 1117 applications for reappointment. In that time period only one physicians has been denied reappointment. The physician was denied reappointment because of failure to truthfully complete reappointment application (8 CCR section 50). The physician filed an appeal to the denial which was granted. The current denial rate for QMEs for reappointment is .08%. This declining denial percentage is evidence that of reappointment is not being used to discipline QMEs.

During that same 12 month period, not a single QME with an open investigation case was denied reappointment. Physicians that had a pending investigation at the time of reappointment were informed that the investigation was ongoing. However, as a result of stages of the investigations and application of the policies in the manuals, the physicians were reappointed. This means that the practical application of the policies outlined in the Litigation Manual and the Reappointment Protocols are working to ensure fair application of discipline processes and the reappointment of QMEs.

The DWC continues to pursue implementation of a rulemaking process on a series of regulations that deal with the QME process. As part of that regulatory process, a rewriting of 8 CCR 50-57 is contemplated. New subdivisions are being added to clarify the criteria upon which the Administrative Director can base a decision to deny reappointment of a QME. The regulations will specify the grounds as detailed in the statutes, regulations, and sanctions guidelines that grant mandatory or discretionary authority to the Administrative Director to deny reappointment of a QME. It is anticipated that these regulations will further clarify the reappointment process and help to eliminate any impression that it is part of the discipline process.

California State Auditor's Assessment of Annual Follow-Up Status: Partially Implemented

Although DWC created a reappointment review process for physicians under investigation and indicated that it has only denied reappointment once in the last 12 months, we have concerns that the policy does not require its staff to follow the reappointment process. DWC's new reappointment process indicates that physicians should be reappointed and notified of pending Discipline Unit action unless violations are of such a serious nature that denial is indicated or 8 CCR section 50-57 prevents reappointment. However, those sections of regulations do not prevent DWC from reappointing a QME. DWC should be expediting the investigations of QMEs up for reappointment, as well as following its reappointment regulations if it decides to deny reappointment. Again, DWC has two separate regulatory processes: one for discipline and one for reappointment. Those processes should remain separate and be outlined appropriately in its policy.

Annual Follow-Up Agency Response From November 2021

The DWC has utilized the provisions of the Reappointment Protocol over the past year with respect to QME reappointment. The results of the application of these policies has been a success. Since the time of the publication of the State Auditor's report, there have been eight QME reappointment cycles. In that time period, the Medical Unit has processed approximately 1,883 QME applications for reappointment. In that same time period, only 10 physicians have been denied reappointment. Of those 10, three were denied reappointment because of problems with their Medical Board licensing. The remaining seven denials were issued as a result of repeated violations of 8 CCR section 51 related to three instances of late reporting within a calendar year. All seven of these physicians filed appeals to the denials which were granted. All seven of these physicians are currently QMEs. It can be seen from these results that a denial rate of approximately 0.5% cannot sustain an allegation that denial of reappointment is being used to discipline QMEs.

The results of the most recent QME reappointment cycles also indicate that the policies outlined in the Reappointment Protocol are working. The practice of reappointing physicians with open discipline files when the investigation is not complete ensures that the DWC is not engaging in activities that give the appearance of using the reappointment process as discipline.

Once the proposed regulations have been adopted that give the Administrative Director the authority to assign hearing officers and effectuate speedy trials, QMEs who are unfortunate enough to find themselves subject to the Statement of Issues process will be assured of a hearing within a reasonable time.

California State Auditor's Assessment of Annual Follow-Up Status: Partially Implemented

Although DWC created a reappointment review process for physicians under investigation, we have concerns that the policy does not require its staff to follow the reappointment process. DWC's new reappointment process indicates that physicians should be reappointed and notified of pending Discipline Unit action unless violations are of such a serious nature that denial is indicated or 8 CCR section 50-57 prevents reappointment. However, those sections of regulations do not prevent DWC from reappointing a QME. DWC should be expediting the investigations of QMEs up for reappointment, as well as following its reappointment regulations if it decides to deny reappointment. Again, DWC has two separate regulatory processes: one for discipline and one for reappointment. Those processes should remain separate and be outlined appropriately in its policy.

1-Year Agency Response

The DWC attached the Legal Unit - QME Discipline - Litigation Manual as Exhibit C to its 180-day response. DWC has also developed and implemented specific written protocols to govern the handling of the reappointment process for a QME who is under investigation at the time of reappointment. That protocol is attached as Exhibit G. Both the Litigation Manual and the Reappointment Protocol have been officially adopted as the policies of the DWC QME Discipline Unit and make it clear that the reappointment process shall not be utilized to discipline QMEs, and the discipline and reappointment processes are independent of one another.

Training on use of the Litigation Manual and the Reappointment Protocol have been provided to all members of the QME Discipline Unit, and they have all been provided with copies of the manual, the protocol, and the memoranda adopting both documents as policy. Training will be provided on a recurring basis to all relevant staff.

The adopting memoranda are attached as Exhibits H & I.

California State Auditor's Assessment of 1-Year Status: Partially Implemented

Although DWC created a reappointment review process for physicians under investigation, we have concerns that the policy does not require its staff to follow the reappointment process. DWC's new reappointment process indicates that physicians should be reappointed and notified of pending Discipline Unit action unless violations are of such a serious nature that denial is indicated or 8 CCR section 50-57 prevents reappointment. However, those sections of regulations do not prevent DWC from reappointing a QME. DWC should be expediting the investigations of QMEs up for reappointment, as well as following its reappointment regulations if it decides to deny reappointment. Again, DWC has two separate regulatory processes: one for discipline and one for reappointment. Those processes should remain separate and be outlined appropriately in its policy.

6-Month Agency Response

DWC 180-Day Status on the Recommendation: Completed.

See Exhibit C: Legal Unit - QME Discipline - Litigation Manual; and

Exhibit F: Proposed amended title 8, California Code of Regs section 50.

California State Auditor's Assessment of 6-Month Status: No Action Taken

DWC did not develop and implement written policies and procedures that define the internal process for reappointing QMEs and how that process should proceed if any disciplinary investigations are pending. As stated in the report, there are two separate regulatory processes for discipline and reappointment. DWC should address this recommendation by developing a separate process for reappointment. Instead, DWC only created a policy (QME Discipline - Litigation Manual) for the discipline process. Further, the proposed amended regulations referenced do not address the recommendation.

60-Day Agency Response

The DWC has policies and procedures in place to address these issues and is currently re-evaluating these policies and procedures. The existing policies and procedures will be updated with specific protocols for the reappointment process when investigations are pending.

California State Auditor's Assessment of 60-Day Status: Pending

All Recommendations in 2019-102

Agency responses received are posted verbatim.