Insight, analysis & opinion from Joe Paduda

< Back to Home


Those horrible people at the California State Fund

From our friends on the west coast comes a story that demands much more discussion – the California State Fund’s (SCIF) decision to change its contracts with treating physicians in SCIF’s Medical Provider Network. [membership required] To read the response from a couple of California work comp groups, you’d think SCIF was stealing their kids and selling them.
It’s not like SCIF is imposing onerous terms, slashing payments by half, or requiring treating physicians to do anything immoral or illegal. What SCIF is doing is addressing the ongoing, rampant overuse of opioids in California, a disaster that has been well-documented by CWCI. Among other provisions, the new provider contract language:
“requires physicians to limit prescriptions for opioid medications to 60-day supplies unless they can show cause for a prolonged regimen. [emphasis added]
CSIMS [California Society of Industrial Medicine and Surgery] charged that such limitations potentially run roughshod over tenets of California’s statutory Pain Patient’s Bill of Rights.
In establishing the legitimacy of opiates in the treatment of pain, California Health and Safety Code section 124960 allows physicians to prescribe opiates in a dosage deemed medically necessary, the group noted.”
For several reasons, I’m having a very tough time understanding CSIMS’ position.
1. Physicians CAN “show cause” for prescribing more than a 60 day supply.
2. the Safety Code allows docs to prescribe if medically necessary; (we’ll ignore the likely unimportant distinction between opiates and opioids) one would think that the meds will be approved if ‘medically necessary’; the reforms earlier in this decade addressed the definition thereof and have been thoroughly clarified in regulations and litigation.
3. Physicians can freely agree to participate in SCIF’s MPN, or not. They have no legal right to participate, and SCIF has no legal obligation to include any specific provider or group of providers in their MPN.
4. Finally, and most troubling, is the head-in-the-sand attitude of CSIMS and their supporters. The widespread and wholesale abuse of opioids in California’s work comp system is not a theory; it is real, it occurs every day, it kills claimants, runs up employers’ costs, increases the tax burden, and does immeasurable harm to families.
CSIMS’ position is untenable, illogical, and indefensible.
There’s more to write on this, and I’ll expand on the topic in future posts. Of course, I welcome dissenting opinions, as long as they’re factual.
(thanks to Mark Walls’ LinkedIN Work Comp Analysis Group for the tip)
As if we needed more evidence of the problem, the latest in the ongoing litany of news about the impact of prescription drug abuse is this:457 people in Michigan died as a result of prescription drug abuse in 2009, a twelve percent increase from the year before.
That’s more than died from heroin and cocaine (and its various forms) combined.

2 thoughts on “Those horrible people at the California State Fund”

  1. Joe,
    With all due respect, you are ignoring the fact that SCIF has approx 35% of California Workers Comp Market. If Dr.s do not do what SCIF says they lose 35% of there WC business. In California the doctors can not just “Drop Out” SCIF has to make an offical change with the DWC if 10% of the panel changes. Do insurance companies have authority to control how doctors practice medicine? Isn’t this the job of medical board and police. Your previous articles said only 8% of the doctors are causing this problem. SCIF allowed these doctors on there panel because they agreed to take 10% below schedule.

  2. Jeffrey – thanks for the note.
    Couple points.
    1. CSMIS estimates SCIF has about 16% of the market – perhaps they are considering self insured business as well. That said, it is a significant amount of business
    2. I understand the 10% rule, however SCIF’s MPC has thousands of providers, so it will take a lot of disenrollment to hit the 10% number. I’m sure SCIF anticipated this, and if >10% disenroll, they’ll file the appropriate paperwork.
    3. I disagree with the premise of your statement “Do insurance companies have authority to control how doctors practice medicine?” That implies SCIF is somehow doing just that. They are not. In fact, SCIF is requiring physicians to provide backup for their decision to prescribe >60 days treatment with opioids. That isn’t ‘control’, that is being responsible with claimants’ lives and employers’ funds.
    I’d like to see the evidence-based clinical support for treating musculo-skeletal conditions with long term courses of opioids.
    As to how SCIF selected their docs, my sense is there were many facets to that decision, yours being one of them.

Comments are closed.

Joe Paduda is the principal of Health Strategy Associates



A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



© Joe Paduda 2023. We encourage links to any material on this page. Fair use excerpts of material written by Joe Paduda may be used with attribution to Joe Paduda, Managed Care Matters.

Note: Some material on this page may be excerpted from other sources. In such cases, copyright is retained by the respective authors of those sources.