Medical treatment decision making in workers' compensation
Alternative dispute resolution 
By Lance Watkins, VP, client services, Sedgwick MCO

Our previous article discussed the managed care organization’s (MCO) oversight role in the medical treatment process for state-funded workers’ compensation claims. Alternative dispute resolution was covered briefly as a part of the medical decision-making process, and this article will further explore this topic.

Alternative dispute resolution, or ADR, is the process available to contest an MCO treatment decision.  When the MCO addresses a treatment request submitted by a physician with an approval or denial, any party to the claim can file an appeal to have that decision reconsidered.  The initial appeal is submitted to the MCO who then engages a physician from an independent panel to review the requested treatment within the context of claim allowances and past treatment. 

The ADR process is necessary to ensure all parties to the claim have input, but it comes with delays in medical treatment that can be trying for everyone and add to costly lost workdays.  By a wide margin, the majority of ADR appeals we receive at Sedgwick MCO come from treating physicians and claimants’ attorney’s in response to a denied treatment request.  In most cases, we attempt to discuss the requested treatment with the physician in an effort to find agreement on a viable treatment direction that will progress the recovery for the injured worker.  It is not uncommon for the formal ADR process to be avoided by this communication effort, preventing frustrating delays in treatment while the appeal process plays out. 

There are two options available to the MCO for this stage of the ADR process.  An ADR file review can be conducted to examine the requested treatment against allowed conditions and prior treatment.  The cost of the ADR file review is covered by the MCO as an administrative cost.  A more thorough ADR IME (independent medical exam) is also an option, which requires the claimant to appear for the in-person exam with a panel physician.  The cost of an ADR IME is a risk charge to the claim but offers a much closer evaluation of the injured employee’s condition, recovery status and viability of the proposed treatment.  The MCO decides between a rile review or ADR IME in an effort to get clarity on the treatment options that will most likely move the injured worker toward recovery and return to work.  It is important to note that both the file review and ADR IME focus only on medical treatment issues and will not address questions on allowed conditions or compensability. 

The MCO will share the results of the peer review (file review of ADR IME) with all parties to the claim, and that decision can also be appealed within 14 days.  If appealed, a hearing would then be scheduled before the Industrial Commission to settle the dispute.  This step in the process typically adds several weeks to the process and further extends the period with no medical treatment.

While the ADR process helps ensure that medical treatment is appropriate for the nature of injury and allowed conditions of the claim, it is best for everyone to avoid ADR if possible.  Fluid communication with injured employees and treating physicians can facilitate productive treatment and limit delays and points of frustration.