The following article was first published by the Workers’ Compensation Section of the State Bar of California in the Workers’ Compensation Quarterly Vol. 23, No. 3 (fall, 2012)
Panel QMEs: Time to Stop the Madness?
By: Mark Gearheart and Johnny Shiu[1]
Introduction
In 2004, as part of the Workers’ Compensation “Reform” Act, SB 899 changed the procedure by which the parties obtained expert medical evidence in Workers’ Compensation cases. In place of each party selecting their own medical expert in represented cases, a state bureaucracy assigns “Panels” of physicians from which each side strike a name leaving but one expert to evaluate the injured worker. Proponents of this change argued that it would eliminate the bias inherent in each party selecting their own qualified medical evaluator (QME) and provide a more equitable, efficient, and inexpensive way to resolve medical-legal controversies. We have now had 8 years of experience with this procedure. The experience of practitioners suggests that the hopes of its proponents notwithstanding, the Panel QME system is inefficient, causes increased delays and frictional costs, and in many cases leads to poor quality and sometimes even biased evidence. These problems are discussed in more detail below.
The purpose of this article is to highlight the problems with the current medical legal procedure, and to call for the reinstitution of the old system. What this piece is not intended to do is to indict any person, or physician. The authors cite to at least one formal study and marshal anecdotal evidence in support of their contentions. We will argue that the old system will likely increase efficiency, unclog the WCAB in adjudicating Panel issues, reintroduce the adversarial spirit of discovery to better ascertain the truth, and propagate resolution of cases.
The 2004 Changes
For injuries occurring prior to January 1, 2005, the law allowed each side in represented cases to obtain its own QME if the parties cannot agree to an Agreed Medical Evaluator (AME) (“old medical legal process”). Simi v. Sav-Max Foods, Inc., (2005)(WCAB en banc) 70 CCC 217.
For injuries occurring on or after January 1, 2005, the parties are subject to the current medical legal system. In represented cases, the parties must confer in an attempt to agree to an AME. Labor Code section 4062.2. After 16 days from the date of the written proposal (if provided by mail or other means other than personal service) identifying potential Agreed Medical Evaluators (AME), and failing an agreement, each side may then “race” to the DWC Medical Unit and request a Panel of three doctors in a particular specialty. Messele v. Pitco Foods (2011) (en banc) 76 CCC 956. The specialty of the Panel is largely governed by the “first come-first serve” method. That is, the party that reaches the Medical Unit first usually dictates the medical specialty of the Panel list. In unrepresented cases, and regardless of the date of injury, the defendant may not attempt to agree with an injured worker in using an AME.
The Panel QME Process Causes Significant Delays
When a party in a represented case requests a QME Panel, they must mail the appropriate paperwork into the Division of Workers’ Compensation office in Oakland. The request is processed and a purportedly “random” Panel of physicians from the designated specialty and is assigned and the parties are notified. Although the DWC is required in unrepresented cases to issue these Panels within 30 days, or the injured worker can simply select any QME, there is no set time limit for represented cases.
This system is fraught with delays. For example, in one case the parties waited 5 or 6 months for a Panel. The necessary striking ensued. While attempting to schedule the appointment with the remaining Panel doctor the parties learned that the doctor could not see the injured worker within the mandatory 90 day timeframe. The opposition would not waive the time limits. As a result, the parties were forced to request a new Panel. In other cases, Panels are issued where one or more of the physicians are in the same treatment group as the treating physician, or some of the physicians no longer perform evaluations. The parties are left with requesting another Panel. The net effect is that the parties may wait over a year for a viable Panel.
While some cases do not suffer from the delays, there are other cases where the delays create tremendous problems. For example, when there is a dispute concerning medical treatment and Utilization Review has non-certified the treating physician’s recommendation, the parties may request a QME Panel to help resolve the issue. However, during this process the treatment remains on hold because of the delay in obtaining a Panel. Moreover, the defendant is often forced to continue to pay temporary disability during the interim, unless the injured worker can return to work or if the statutory cap applies.[2]
Consider also the cases where reports from multiple specialties are required. It is common for the parties to initially request a report from one specialty and inquire whether other specialist evaluations are needed to address the full “whole person” impairment. When the initial evaluator does recommend additional evaluations, the process starts over again, and new panels need to issue.
By contrast, under the old system if time was critical, a party could contact several competent medical-legal evaluators to identify one who could see the injured worker in a reasonable time and issue a report. To the extent that the Panel QME system was intended to make the medical-legal discovery process quicker it has fallen short.
Increased Frictional Costs
Proponents of the current Panel QME system also argued that it would reduce costs. Specifically, the current system would promote one single medical legal expert in lieu of two (one on each side), theoretically cutting medical-legal discovery costs in half. However, there is no a priori reason for this proposition.
First, the analysis ignores the increasing litigation costs associated with the Panel QME system. In an increasing number of cases, the parties are finding it necessary to go to the Appeals Board to resolve disputes over the Panel process. In fact, one of the authors[3] of this article has tried at least 3 cases to submission in the last 12 months solely on the issue of who is the Panel QME. Inevitably, each side argues over who first requested the Panel, whether the Panel was timely and properly requested, whether the parties struck when they had the legal right to strike or did they strike prematurely, or whether the Panel specialty is appropriate.
Second, the Workers’ Compensation Judges are called upon to resolve disputes over the propriety of a Panel. The DWC Medical Unit should not and likely could not resolve these sorts of disputes; these issues are rightly reserved for the Workers’ Compensation Judges to adjudicate. But Board time is precious and scarce. A party who is not content with the Panel reporting may petition the Medical Unit and the WCAB for a replacement Panel based on a list of reasons under the Rules.[4] This procedure is increasingly being exercised and litigation has multiplied. The current system has engendered more litigation over procedural issues than in the previous regime. District offices are devoting valuable time in addressing the in vogue question: “Who is the doctor?” The Board presumably can better spend its time in deciding the substantive rights in a matter rather than being entangled in ruling which party kept better count. Third, additional costs are incurred when the parties decide to ultimately abandon the Panel QME and opt for an AME. For instance, in some cases where the parties obtain a biased or insubstantial report from a Panel QME, either side may be forced to retain legal counsel to combat the report. Next, counsel then notices the deposition of the Panel QME. If at the deposition sufficient facts are brought forward that a judge would either find the physician incompetent or biased or both, it is not unusual for the parties to agree on an AME or request a new Panel. While no statistics are cited here for the latter proposition, anecdotally we know that it happens frequently. Thus, the savings from having one doctor is largely illusory. Instead, the parties are left with the added costs of a deposition, litigation costs, and an additional evaluator by way of either a new Panel or an AME.
Fourth, the one doctor system sidelines the enormous importance of what medical specialty a particular Panel is made up of. The honest practitioner readily admits that the makeup of the Panel dictates frequently how the case may evolve. Recognizing that medical experts too have their biases, it is no wonder that each side is often relegated to rattle sabers over which medical specialty should govern the medical issues. As a result, both sides incur litigation costs, monetary or otherwise, to advance its own specialty in hopes to gain some advantage over the long run. Putting aside that a particular specialty may not even be the most appropriate medically to assess an injured worker’s predicament, the litigation has in many instances become an end unto itself. And in cases where the selected medical specialty is inappropriate or unable to address all of the medical legal issues, the one doctor system has not sustained quality medical evidence; indeed, both anecdotal and empirical evidence demonstrates the decline of it.
The Declining Quality of Medical Reporting
Perhaps the most startling consequence of the current Panel system is the decline in quality medical reporting. To be sure, there are numerous highly qualified, skilled, impartial medical-legal evaluators operating in the Workers’ Compensation system. However, the current Panel QME process has fundamentally changed the nature of the QME medical-legal practice and has engendered a significant decline in the quality and objectivity of reporting. This conclusion is supported not only by anecdotal evidence but also by a study from the California Commission on Health, Safety and Workers’ Compensation.
Since the state’s method of “randomly” assigning QMEs for evaluations is based upon office locations and not the individual name of the doctor, a physician can increase his or her chance of showing up on QME Panels and thus obtaining QME reporting work by subletting multiple offices throughout the state. The more offices a physician has, the more likely that the physician’s name will appear on a QME Panel. In fact, at least one well-known, rather large orthopedic group has sublet a huge number of offices from Oregon to the Mexican border and rotates their often semi-retired orthopedic evaluators between offices listing each doctor as practicing at each office location. Groups who practice this type of gamesmanship receive a disproportionate number of QME referrals. In fact, a study by the state of California in 2010 documented that there are certain QMEs who are assigned a disproportionate share of evaluations. These “high volume” QMEs often use several tactics. They will list multiple specialties within orthopedics, by far the most dominant specialty for Panel assignments, and they list more than 10 or 20 different locations where they will performs evaluations. Over the period from 2005 to 2010, the state reports that the number of QMEs registered ranged between 3000 and 5500, but just 31 QMEs wrote 10% of all reports evaluated by the DEU. [Evaluating the QME Process: Is it Equitable and Efficient? (September 2010) Neuhauser, et. al. for California Commission on Health, Safety and Workers’ Compensation, page 21.]
In addition, the Panel QME system is contributing to the exodus of medical-legal evaluators from the system. In January 2005, there were 5500 doctors registered to do QME evaluations in California. By May 2010, the number had dropped to 3000. [Evaluating the QME Process: Is it Equitable and Efficient? (September 2010) Neuhauser, et. al. for California Commission on Health, Safety and Workers’ Compensation, page 8.] One could not infer that the decline in the number of Qualified Medical Evaluators is solely responsible for the substandard quality of some medical reports; to be sure, the advent of the AMA Guides in California Workers’ Compensation is likely partly responsible for the challenges in penning forensic medical responses. Nevertheless, the one-doctor rule enshrined in the current Panel system fails in hold the evaluators accountable. With nearly no expectation of repeat business, some Panel doctors may be less than inspired to produce a quality product. After all, unlike the old medical legal set up, the way to entice repeat business in the current regime is not necessarily through quality, rather, it is through increasing the odds in being selected in the lottery. This compounded with the exit of nearly 2,750 QMEs, it is of wonder whether the remaining QMEs may be led to believe that quantity overrides quality. This reality is not necessarily the doing of the physicians themselves. The problem is one attributed to the system.
Not only has the Panel QME process failed in its objective in randomly assigning QME work, it has also amplified biases to permeate parts of the system. The 2010 CCHSWC study documents that nearly every high volume QME shows a marked tendency towards conservative ratings. [Evaluating the QME Process: Is it Equitable and Efficient? (September 2010) Neuhauser et al for California Commission on Health, Safety and Workers’ Compensation, page 23.] Thus, one of the primary effects of the Panel system is to reward physicians who game the system by listing multiple specialties and office addresses and to concentrate evaluations among a group of physicians with a pronounced conservative bias.
On the other hand, there are no shortages of QMEs who produce liberal reports. For instance, a recent Panel report provided a 98% WPI despite the fact that the injured workers’ mechanism of injury was a 5 mph bump on the road causing a strain with no objective findings and negative diagnostic results. The Applicant’s counsel cannot recommend an AME and the defendant is left to litigate the matter to its end. Thus, the current Panel system appears to produce more controversial reports than ones that assess the contested medical legal issues equitably.
Meritocracy or Gamesmanship?
Under the old system, the individual parties had a free choice of expert. Presumably, they would select their medical experts based upon merit lest they live with the consequences of their choices. Under the current system, decision-making is centralized at the State of California DWC Medical Unit office in Oakland. The Medical Unit primarily decides what is best for the individual parties. As discussed above, the Panel system rewards “high volume” QMEs who engage in procedural games so that their names appear on the list frequently and enables lopsidedness within the system. However, Workers’ Compensation would be better served by a merit-based system wherein the parties have a free choice in selecting their experts.
Parties who are permitted to select their own medical legal experts would shorten the wait time for an evaluation. Instead of relying on the Medical Unit to provide a Panel of doctors, the parties may privately secure its own medical expert. Should time be of the essence, a party is free to contact its top doctors among several and select the one most appropriate who could evaluate the Applicant on an expedited basis.
More importantly, the old medical legal system would also foster an environment based upon merit. Instead of multiple office locations, it will be quality, and timely medical reporting that will garner the respect of the practitioners. Gamesmanship will be passé. The system arguably will correct itself and encourage top-notch medical writing and reporting. And human biases, which are always inherent in judgment calls (physicians included), would be tempered due to the counteracting physicians’ opinions. Attorneys inevitably will choose the physician who has credibility with both the opposition and the WCAB in order to either facilitate settlement or, if the case must be tried, to maximize the chances of prevailing at trial. The old medical legal system would discourage a party from choosing an incompetent physician for some phantom advantage since the opposition has the opportunity to secure a credible doctor. While outliers will persist, the old medical legal system in large part would very likely dissuade mismatches of medical experts.
Impact on Adversarial System
In addition to the various drawbacks of the current medical legal system, there is a fundamental side effect, which is an affront to the very nature of Workers’ Compensation discovery. The current system eliminated the parties’ right to secure its own medical legal expert, which is the core of any adversarial system. Of course, the underlying assumption is that an adversarial system is superior to a single doctor monopoly. And for reasons outlined earlier, the adversarial system forces each side to bring its very best and in the process the action-reaction of the dueling physicians provide the parties a way to resolve disputes.
One need not look any further than our tort cousin, whereby the plaintiff is free to obtain his own medical expert, and the defendant enjoys the same right. Other than the deposition of the interested parties, the medical legal examination in Workers’ Compensation likely stands to be the next most important piece of evidence, if not the most important, that is designed to ferret out the truth of a controversy. The medical legal expert is in the position to illuminate the medical problems, provide the “proper” diagnosis, and to measure in the most accurate manner the level of impairment that the injured worker has sustained.
However, the Panel QME is but one medical expert and her report typically subordinates all other medical legal reports, whether from the primary treating physician or a consulting physician. This power necessarily could be manifested intentionally or unintentionally in ill-suited manners. By contrast, pre April 14, 2004 when each side in a represented case was able to secure its own medical expert, it acted as a check and balance system. No one medical expert could be the arbiter of ultimate medical truth.
The best method to address disputed issues is to have each side’s experts independently review the medical records, interview and examine the injured worker, and answer the medical legal questions. The medical experts should review each other’s reports in an attempt to address any disagreements, oversight, misconceptions, and errors. This process necessarily requires each side to recognize that it must associate itself with credible medical evaluators. Litigants who deviate from this paradigm risk compromising their own credibility before the WCAB. By all counts, the old system was optimal, and congruent with the adversarial nature of American legal jurisprudence.
A Solution: Nostalgia
In this article, we have surveyed the old and current medical legal system. It must be evident by now that the two authors, while necessarily on opposite sides of the aisle, are attempting to speak in unison on this matter. We propose that lawmakers revisit the current procedure and consider reintroducing the old medical legal process into our Workers’ Compensation delivery system. Unrepresented injured workers will still have the right to a Panel of doctors. Not only will the old medical legal system expedite the discovery process, but it is also in harmony with the adversarial nature of the American legal system. While in represented cases outliers will exist, we posit that the parties will largely adapt and obtain quality medical evidence with the aim to resolve cases and controversies. Each side’s medical expert opinion will likely serve as a check and balance on contested issues. Finally, the old medical legal system will improve the quality of medical evidence, reduce overall costs, encourage settlement, and in cases where issues must be tried generate a superior record upon which the trier of fact may rely in order to adjudicate the dispute.
[1] Mark Gearheart is an applicant’s attorney at Gearheart & Otis, LLP. He earned his J.D. degree from the U.C. Hastings College of Law. Mark is a certified specialist in Workers’ Compensation, and serves on the Board of Directors of California Applicant’s Attorney Association.
Johnny Shiu is a defense attorney at Armstrong, Callan & Shiu, LLP. He holds a B.A. from U.C. Berkeley, Magna Cum Laude, and earned his J.D. from the UCLA School of Law.
[2] Barring the 104 week temporary disability cap provided under Labor Code section 4656. For injuries occurring on or after January 1, 2005, the cap is 104 weeks within two years from the date of injury while injuries occurring on of after January 1, 2008 merit 104 weeks of temporary disability within five years from the date of injury. See also Hawkins v. Amberwood Goods (2007) 72 Cal. Comp. Cases 807.
[3] Mark Gearheart.
[4] For example, see Rules 31-38. Title VIII CCR Regulations