Change Needed to Nevada’s Law on Physician Choice for Injured Workers
A. A Short History of the Law
In 1913, Nevada first enacted the Nevada Industrial Insurance Act and the Nevada Occupational Disease Act, now known as NRS Chapters 616A-D, and NRS Chapter 617. It was administered by the NIC (Nevada Industrial Commission). The NIC was a monopolistic state agency. No private insurers were allowed to provide policies to employers, and there were no self-insured employers. In 1973, the legislature directed the NIC to appoint a panel of physicians statewide who were competent to treat injured workers, and the NIC could add, suspend or remove doctors from the panel.
In 1979, large employers were allowed to become self-insured, and the Dept. of Administration took over the Hearings Division from the NIC. In 1981, the SIIS (State Industrial Insurance System) replaced the NIC. The Division of Industrial Relations, a sub-agency of the Dept. of Business and Industry was given regulatory authority over the SIIS and self-insured employers. During that period of time, the NIC, and then the DIR, continued to maintain a panel of physicians from which the injured worker was free to choose a treating doctor. Almost all doctors licensed to practice in Nevada were added to the panel. Healthcare providers were reimbursed based upon a fee schedule developed by DIR and based upon customary billings procedures. Providers were paid their full bill or the amount allowed under the fee schedule, whichever was less.
In 1993, SIIS management claimed that it was unable to pay its long term liabilities. The alleged insolvency became a crisis since SIIS was a state agency. Sweeping legislative changes were made to reduce the perceived deficit, including managed care. SIIS was authorized by the legislature to contract with a limited number of providers. The idea was that competition to become a provider on the insurer’s panel of doctors would result in providers agreeing to substantially lower fees for service. The legislature also abrogated the right of the injured worker to choose any doctor from the DIR’s panel of physicians. It passed NRS 616C.090, requiring an injured worker to select a treating doctor from the employer insurer’s MCO plan.
In 1999, SIIS was privatized, and the state fund was replaced by a mutual insurance company called Employers Insurance Company of Nevada (EICON). Private insurance carriers were also allowed to underwrite policies. More large employers went self-insured.
In response to complaints by labor advocates regarding the lack of choice of treating doctors available to injured workers under the managed care provision, the legislature passed a law in 2003 allowing DIR to adopt regulations concerning the adequacy of physicians on provider panels. DIR was to hold a public hearing and then adopt regulations ensuring that injured workers had a meaningful choice of physicians. Private carriers, EICON and self-insurers were still authorized to contract with a limited number of providers while seeking the lowest charge possible for medical services, but DIR was supposed to determine what adequate provider panels were. However, DIR never adopted regulations.
In 2007, the Nevada Supreme Court upheld NRS 616C.090, the law that requires an injured worker to choose a doctor from the insurer’s MCO provider list, even if that meant the injured worker had to change doctors whenever the MCO’s provider list changed. The court stated in Valdez v. EICON, 162 P.3d 148 (Nev. 2007) that while the right to receive medical treatment is a statutory right, limits on physician choice is not. Instead, the physician choice law is a procedural mechanism for managing the workers’ compensation system.
In 2009, the legislature clarified that an injured worker could make an alternative choice of doctor from the insurer’s provider list within the first 90 days of the claim. It also provided that the insurer should give a specific reason for denying any requests to change doctors after 90 days. Insurers and TPA’s were also required to send a DIR-approved notice regarding the law on choice of physicians to injured workers. The provider list is available to an injured worker within 3 working days if the request for the list is in writing. This remains the law today.
B. Why the Law Should Be Changed
Allowing insurers, self-insureds, and their third-party administrators to require that injured workers treat only with doctors on their exclusive provider lists is unfair to injured workers and to physicians. In order to get on an exclusive provider list and stay on it, a physician must agree to accept fees for services that are less than what the Nevada fee schedule provides as reasonable and customary. These exclusive provider lists change at the whim of the insurer or its TPA, depending on whether the insurer or its TPA likes the way the physician is diagnosing injuries, providing care, and is releasing the injured worker to full duty or is stating that there isn’t a likely ratable impairment. The quality of care to the patient is compromised by undue pressure on physicians to satisfy the insurer’s cost-cutting measures and early claim closure practices. It isn’t unusual for an injured worker to report that his physician told him he couldn’t request more physical therapy because it would anger the insurance company, or that his physician told him the insurer wouldn’t allow him to take the patient off work.
Under the current law, the injured worker only has an absolute right to change doctors to another on the particular insurer or TPA’s provider list within the first 90 days of the claim. After 90 days, the adjuster can deny the request to change doctors. Although the law requires the adjuster to have a valid reason for denying these requests, adjusters routinely deny request for a new doctor after 90 days. One of the most significant problems with medical treatment under a workers’ compensation claim is the length of time it takes for an adjuster to authorize diagnostics and specialty consultations. The claim may be 4 months old, for example, before the adjuster authorizes an MRI and schedules the worker with an orthopedic physician after the clinic doctor has been requesting this for 3 months. If the injured worker doesn’t like the orthopedic surgeon the adjuster chooses to see him, and wants a consultation with another one, the adjuster may deny the request. It then takes time to appeal this denial. An injured worker ought to be able to choose which doctor will perform a surgery on her.
It is unfair to have a law requiring that injured workers treat only with the insurer’s exclusive medical providers, while insurers often rely on opinions from physicians who are not on their provider lists to deny surgeries and to deny other treatment recommended by the authorized treating doctor. Utilization review doctors aren’t on insurers’ provider lists, but these are the doctors the insurers rely on when an insurer doesn’t agree with the treatment recommendation of their own provider physicians.
Amending the law so that the injured worker can choose as her physician any doctor who is in good standing on a provider list maintained by the DIR, whose doctor agrees to accept the Nevada fee schedule, would be a fair way of ensuring adequate medical care at uniform and reasonable costs. DIR would have the authority to remove any doctors from the panel for good cause, thereby addressing any concerns the insurers or injured workers might have about doctors who are disciplined, or doctors who aren’t following regulations on how to treat injured workers.
The historical reason for adopting managed care with provider lists controlled by insurers was to avert a supposed financial crisis facing the state-run SIIS. That reason is no longer valid. The DIR is in the process of reviewing its fee schedule so that it is reasonable and in step with customary medical charges. Doctors who want to be on a DIR-controlled panel of providers can easily be educated as to what the law requires of doctors who treat injured workers. Good doctors who refuse to accept less than what the fee schedule provides can again treat injured workers, and no doctors will feel pressured by insurers to adjust patient care decisions just to remain on an exclusive provider lists.
Thank you to Ray Badger for help with the history.