SUMMARY OF ARTICLE:

A tempest appears to be brewing in the California workers' compensation system regarding Silent PPOs.

A feature of the medical insurance landscape for several years, PPOs (preferred provider organizations) are entities that enter into contracts with health care providers (e.g., physicians, hospitals) that require the PPOs (Blue Cross is a prominent example in California) to structure their insurance products in such a way as to direct their insureds to the contracting providers, who in return for the increased volume of patients accept reduced rates of payment for their services. The mechanisms by which insureds are directed to in-network providers include lower co-payments, lower deductibles, and lower premiums. Typically, a PPO creator distributes a provider directory that identifies the preferred providers in its network.

A Silent PPO is created when a PPO sells its reduced provider rates to others, such as workers' compensation insurers and self-insured employers without proper disclosure to the medical provider. As a result, physicians, hospitals, and others who have contracted with PPOs unexpectedly find themselves treating patients, including injured workers, who are not directly insured by the PPO at the reduced billing rates called for in their contract with the PPO.

David Bryan Leonard, a California workers’ compensation attorney who represents medical providers, discusses general Silent PPO arrangements, analyzes their impact on the California workers' compensation system, and suggests ways in which health care providers may protect themselves from Silent PPOs. Leonard states that within the California workers' compensation system, litigation has mushroomed. Leonard examines several recent Appeals Board panel decisions, including Woodruff v. Greenfield Trucking, 2007 Cal. Wrk. Comp. P.D. LEXIS 93.  (To read the entire article, you must register or login to download the article.)