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By Nancy Grover

Christine Baker has been involved with the workers' comp system in California for more than 25 years, earning praise from virtually all factions of the industry. In December, she was appointed the director of the California Department of Industrial Relations. The DIR oversees several divisions, including the Division of Workers' Compensation.

Q: What do you see as some of the biggest challenges facing the workers' comp system in the immediate, as well as long-term, future?

A: Workers' compensation needs a change to restore a balance of benefits and costs that is acceptable to labor and management. In the long term, it may need a paradigm change. It was the first social insurance program -- before Medicare, before HMOs, before Social Security.

Having a separate program for occupational injuries requires us to spend time and money sorting out which conditions should be covered by the occupational program and which should be covered by the nonoccupational programs. For a fall from a derrick, that is simple, but for many of the chronic conditions that occur, the sorting isn't very accurate. Even for the clearly industrial injury, nonoccupational conditions and co-morbidities often get entangled in the treatment and the disability.

In the long term, workers' compensation should be absorbed into the medical and disability programs that meet every person's needs for treatment and income support, regardless of the cause of the injury or illness.

In the short term, we have to find ways to reduce spending on things that are not providing a benefit to workers or employers. The frictional costs are eating up the employers' premium dollars without helping the workers.

Some interest groups are making their livelihoods off the inefficiencies in the system, and they are the enemies of changes that could improve the benefits to workers while actually reducing costs to employers. That is the short-term problem that we face as we try to mitigate rising insurance costs and simultaneously improve the disability benefits payable to injured workers.

Q: Do you see an end to the increasing use of pharmaceuticals and compound drugs in the system? What might be solutions or ways to address that?

A: Yes, I do look forward to stopping the increase in the use of pharmaceuticals and compounded drugs.

The Legislature passed and Gov. Brown signed a change in statute that took effect on Jan. 1. California has taken a big step to reduce the financial incentive for doctors to prescribe unnecessary compounds, medical foods, and other products that have little to do with patient health and everything to do with doctors' profits. I expect to see the use of compounds and specialty over-the-counter drugs fall off substantially.

Opioids have been another area of unwanted growth. NCCI reported that OxyContin has become the most widely prescribed drug in workers' compensation nationwide. Opioid use is up across the country and so are opioid-related deaths.

Responsible pain medicine specialists know that opioids are being overprescribed. The California Workers' Compensation Institute has identified a couple hundred physicians -- a small number in a state our size -- who write the great majority of the workers' comp opioid prescriptions.

On the one hand, we want the best specialists to be managing these dangerous drugs. On the other hand, the very high doses being prescribed suggest that some of those high-volume prescribers are not the best specialists.

I look forward to California developing tools to control the inappropriate prescribing of opioids. We haven't got a handle on it yet. We are still looking at alternatives to assure that workers get no more and no less than all medical treatment that is appropriate for their injuries. I hope to have better controls over opioids within 24 months.

Q: What about liens? Do they continue to plague the system?

A: Liens are still a huge problem. It costs nothing to file a lien, whether the claim has any merit or not. Some medical providers just file a lien instead of sending a bill. That's against the rules, but they do it anyway.

Some lien collectors try to squeeze the employers for more money even after the bill has been paid according to the fee schedule. Some doctors defy the employer's right to keep treatment in networks, and just go on treating and filing liens. They charge enough to make this profitable for them even if they don't always succeed in collecting on those liens.

Liens are taking up time in the courts and making injured workers wait longer to get their day in court. Yes, liens are a problem, but we are working on it.

One pending bill would tighten up the statute of limitations on old claims, and the Division of Workers' Compensation is working to develop fee schedules on some of the frequently disputed issues, and there are other measures under consideration to get the unnecessary liens out of the system for good.

Q: Any additional thoughts about the state of workers' comp at this point in time?

A: Labor and management are the two key stakeholders that need to come together to address the inequities and the inefficiencies. I look forward to working with them and others in the system to restore that balance between costs and benefits. I and my team will be holding listening tours throughout California in the near future to get feedback on the necessary changes.

Read more at the WorkersComp Forum homepage.

March 12, 2012

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