Sandy Shtab, Healthesystems VP of Industry and State Affairs, comments on regulatory activity across the country.
For those of us working in the workers’ comp system, there are many moving parts to consider in each state. Consider how many claims professionals manage multiple states, and the moving parts become even more complex to navigate.
Injured workers can become frustrated when they’re unable to gain access to the care they need, which leads them to seek legal representation, adding yet another layer of complexity. By all accounts, workers’ comp is one of the more complicated institutional systems for any injured worker, provider, or claims professional. And we can’t forget the employers. They too have the burden of dealing with state-specific systems, and many of them have skin in the game via large deductible programs, high self-insured retentions, or risk-based bidding, which impacts their ability to compete in the commercial marketplace.
All of this to say, workers’ comp is a space that demands commitment and resilience from all of those involved. Navigating this system takes attention to detail and ongoing education. Regulations can change each year and external factors such as the economy, labor market, and immigration policy can impact the system, and how we manage claims within it.
Workers’ comp is more than a fifty-state system, counting the Federal Employees Program, Black Lung, Longshore, Jones Act – and let’s not forget those U.S. territories. No two jurisdictions are alike, and while some have similar frameworks in place, the mechanisms for provider selection, authorization of care, and dispute resolution vary significantly. Simply put, there are more flavors to these systems than you’d find in your local ice cream shop.
Let’s consider three components of this complexity from a claims management perspective:
Who selects the treating physician and other medical providers
How treatment is authorized
How disputes are resolved
This should be a straightforward process, but it can be wrought with complications. Provider selection regulations are highly varied, and even when injured workers must use providers selected by the employer carrier initially, many states allow injured workers to request a one-time change of physician after 30 days or later, if needed.
Other states allow injured workers to choose any provider. A third framework involves managed care networks. For example: in California, Florida and Texas, three of the most populated states, each state enables the employer/payer to utilize a managed care network, but each has a distinct regulatory framework.
Employers can opt out, and in California specifically, workers can even pre-designate their personal primary care physician prior to sustaining an injury. Despite the commonality of provider networks, claims professionals must contend with unique notice and reporting requirements to the injured worker, and the providers must comply with different forms, medical authorization rules, and treatment guidelines.
Providers who treat injured workers are faced with additional complexities as well. Healthcare system standards adopted by health plans set coverage and mandatory pre-authorization requirements for many services, as does workers’ comp. But workers’ comp adds an additional layer of administrative work, and it is generally more high-touch than working with patients covered by health benefits.
Some specialties like orthopedics have dedicated staff who work with payers to discuss treatment plans. Physician practices must understand and comply with state regulatory requirements like adherence to medical treatment guidelines, formularies, and timely submission of mandated paper forms. On top of this, each payer may have their own unique requirements, outside of the regulatory framework.
As much as the regulatory framework is designed to ensure medical treatment is appropriate and cost effective for the injury type, “appropriate” can vary depending on the perspective. Some payers might choose to automatically authorize prescription drugs or initial physical therapy visits, especially when prescribed by a “trusted provider,” while others require pre-authorization for every service.
Physicians and other medical providers are becoming more vocal about these administrative burdens in stakeholder meetings and advisory committee settings. Some have even considered leaving the workers’ comp system altogether due to the increasing complexities and reimbursement pressures associated with treating injured workers.
These complexities extend beyond office visits, prescriptions, physical therapy and diagnostics. Surgical interventions and their associated authorizations are even more complicated , often requiring utilization review, second opinions, or a peer-to-peer discussion. In states with treatment guidelines, the intent is to streamline the approval process for delivering care to injured workers, yet some payers may opt to initiate utilization review, which is seen as a gatekeeper for treatment approval.
Additionally, some states have performance-based oversight programs which evaluate providers based on their adherence to system mandates, like prescribing and medical treatment guidelines, as well as their billing practices.
With no universal standard across jurisdictions, navigating these systems can be challenging for all stakeholders.
Resolving disputes over medical care is another area of complexity for all parties; the provider who receives the denial; the payer who may issue a denial or an adverse determination based on factors such as causal relationship, missing documentation, or a deviation from treatment protocols; and caught in the middle of it all, the injured worker – who waits while the clock ticks on their recovery.
To underscore again, the payer is navigating this dispute resolution within a highly fragmented, 50+ state system, each with its own rules and processes.
For instance, in New York, disputes over treatment authorization and medical payments are managed via the OnBoard claims portal. Prior Authorization Requests (PAR) are intended to proactively address variances from the official treatment guidelines, yet sometimes arbitration and orders from the Chair are still needed to resolve payment disputes. The portal – which is still in its limited release stages – is the first of its kind in workers’ compensation. As the state expands its capabilities, there is some promise it could speed care and minimize friction between the provider and payer. Only time will tell.
In California, providers routinely file requests for Independent Medical Review (IMR) or Independent Bill Review (IBR), both of which are administered by an external entity. Studies indicate providers continue to file IMRs despite a nearly 90% denial uphold rate, and prescription drugs continue to trend as the largest share of filed IMRs at 30% as of early 2025.
Florida and Texas both have processes to address disputes that involve a formal filing, which can be done by an unrepresented worker, and a mandatory mediation or benefit review conference; both states have a well-staffed Ombudsman office to assist unrepresented workers. However, neither process is very expeditious, and the injured worker is waiting while conference dates and hearings are calendared. It can sometimes be weeks or months after the dispute is filed before the issue is resolved.
For the claims professional, managing these disputes in multiple states for the same employer requires not only paying close attention to evolving regulations, but also a close eye on the clock, as most states enforce a strict response timeline to preserve the payers’ defenses.
It is a lot to keep track of, and increasingly payers must rely on technology to help them manage the complexities. For injured workers, features like automated text messaging, mobile apps and even web-portals – all of which can push reminders on claim activities, upcoming appointments and indemnity payments – can help to streamline the process. While carriers can streamline these complexities, either directly or through vendor partners, state regulations are often slow to keep up.
One important way stakeholders can help advance automation and regulatory standardization in these complex systems is through their engagement with workers’ comp agencies. It’s essential for regulators to gain deeper insight into how the day-to-day users of claims systems and medical authorizations are expanding their business capabilities to bring efficiency and speed to these complex processes.
Only then can there be some modification and standardization in regulations to better embrace technology and modern communication.
It is so important to have a dedicated voice representing the payer community, one that understands the specialized support needed to navigate claims processes and manage medical and pharmacy care effectively.
One strong step toward reducing friction for all stakeholders – and especially for the injured worker – is to partner with experts like Healthesystems, who understand the regulatory environment and actively engage with the regulator community to advocate for progress and reforms that embrace technologies designed to speed care delivery and improve patient outcomes.
Looking for state-specific policy updates? Visit our webpage for real-time state updates and more insight from our Advocacy & Compliance team.
