BILL NUMBER: SBX4 3 INTRODUCED
BILL TEXT
INTRODUCED BY Senators Poochigian, Aanestad, Ackerman, Ashburn,
Battin, Hollingsworth, Johnson, Knight, Margett, McPherson, Morrow,
and Oller
NOVEMBER 19, 2003
An act to amend Section 1877.5 of the Insurance Code, and to amend
Sections 3201.5, 3208, 3208.1, 3209.3, 3600, 4060, 4061, 4062,
4062.5, 4064, 4068, 4600, 4600.2, 4600.7, 4603.2, 4604, 4658, 4660,
and 6401.7 of, to amend and renumber the heading of Part 1
(commencing with Section 3200) of Division 4 of, to add Sections
4600.31, 4604.5, 4611, 4611.1, 4611.2, 4658.1, 4658.6, and 5705.1 to,
to add Article 2.3 (commencing with Section 3737) to Chapter 4 of
Part 1.5 of Division 4 of, to add Part 1 (commencing with Section
3110) to Division 4 of, to repeal Sections 3139.48, 3139.49, 4062.9,
4600.35, 4600.6, 4601, 4602, 4603, 4609, 4614, 4614.1, and 5814.5 of,
to repeal Chapter 5 (commencing with Section 110) of Division 1 of,
and to repeal and add Sections 4600.3, 4600.5, and 5814 of, the Labor
Code, relating to workers' compensation, and declaring the urgency
thereof, to take effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
SB 3, as introduced, Poochigian. Workers' compensation.
(1) Existing law establishes a workers' compensation system to
compensate an employee for injuries sustained in the course of his or
her employment. Chapters 635 and 639 of the Statutes of 2003 (AB
227 and SB 228) will make changes to the workers' compensation system
effective January 1, 2004.
Existing law provides that the Division of Workers' Compensation
is under the control of the administrative director.
This bill would repeal and renumber various provisions pertaining
to the division. The bill would recast certain of these provisions
relating to the procedures to be followed by physicians in evaluating
the existence and extent of permanent impairment and limitations
resulting from an injury.
(2) Existing law establishes the Industrial Medical Council,
consisting of various types of medical practitioners, and requires
the council to perform various functions and duties in connection
with the provision of medical services under the workers'
compensation program. Existing law establishes the Industrial
Medicine Fund into which specified fees are deposited for the
administration of the council. Chapter 639 of the Statutes of 2003
will eliminate the council and transfer many of its functions and
duties to the administrative director.
This bill would transfer additional functions and duties from the
council to the administrative director. This bill would eliminate
the Industrial Medicine Fund and require that the specified fees be
deposited, instead, into the Workers' Compensation Administration
Revolving Fund, available for expenditure upon appropriation by the
Legislature, for the administration of the programs of the division
related to the provision of medical treatment to injured employees.
The bill would make conforming changes.
(3) Existing law authorizes collective bargaining agreements
between a private employer or groups of employers and a recognized or
certified exclusive bargaining representative that establish a
dispute resolution process for workers' compensation instead of the
hearing before the Workers' Compensation Appeals Board and its
workers' compensation administrative law judges, or that provides for
specified other alternative workers' compensation programs.
Existing law limits the applicability of these provisions to
employers engaged in construction, construction maintenance, or other
related activities.
This bill would expand the applicability of these provisions by
removing this industry limitation.
(4) Existing law defines injury for purposes of the workers'
compensation program.
This bill would revise this definition. The bill would specify
the conditions under which injuries are compensable under the workers'
compensation program. The bill would also provide that an injury
sustained by a person while incarcerated or imprisoned in a county
jail or the state prison is not compensable.
(5) Existing law defines physician for purposes of the workers'
compensation program, to include among others, acupuncturists and
chiropractic practitioners. Existing law provides that this
definition does not authorize acupuncturists to determine disability
for specified purposes under the workers' compensation program.
This bill would, instead, provide that an acupuncturist or
chiropractic practitioner shall not determine disability for
specified purposes under the workers' compensation program.
(6) Existing law establishes liability for compensation against an
employer for the injury or death of an employee under specified
circumstances, including where, at the time of the injury, both the
employer and the employee are subject to the state's workers'
compensation provisions.
This bill would include among these circumstances that establish
liability for an employer circumstances where the employer and
employee are not subject to a rule of liability for injury or death
arising out of and in the course of employment provided by the laws
of the United States.
(7) Existing law authorizes an employer to secure the payment of
workers' compensation by securing from the Director of Industrial
Relations a certificate of consent to self-insure either as an
individual employer or as one employer in a group of employers upon
proof satisfactory to the director of the ability to self-insure and
to pay any compensation that may become due to employees.
This bill would establish procedures that would apply to private
self-insurance groups upon certification by the Insurance
Commissioner that these procedures meet prescribed criteria.
(8) Existing law establishes procedures under which medical
evaluations may be performed that apply to disputes over the
compensability of any injury. Evaluations performed under these
provisions are not limited to the issue of the compensability of the
injury, but may also address medical issues in dispute.
This bill would limit these evaluations to the issue of the
compensability of the injury.
(9) Existing law establishes procedures with respect to disputes
between employers and employees regarding the compensability of the
injury and the extent and scope of medical treatment for that injury,
including procedures relating to obtaining medical-legal evaluations
by qualified medical evaluators. Existing law creates a presumption
in certain circumstances that the treating physician of an employee,
who has been predesignated by the employee, is correct.
This bill would repeal this presumption, and would revise the
procedures relating to medical-legal evaluations.
(10) Existing law requires an employer to provide to an employee
who is injured on the job medical treatment that is reasonably
required to cure or relieve from the effects of the injury.
This bill would define medical treatment that is reasonably
required to cure or relieve from the effects of the injury and would
apply this definition to all treatment requested on or after July 1,
2004, including treatment for injuries sustained prior to that date.
The bill would make conforming changes.
(11) Existing law authorizes an employee to be treated by a
physician or at a facility of his or her own choice within a
reasonable geographic area after 30 days from the date the injury is
reported. Existing law also authorizes an employee that has notified
his or her employer in writing prior to the date of injury that he
or she has a personal physician to be treated by that physician from
the date of injury.
This bill, instead, would authorize these choices only if the
selection of the physician or facility is mutually agreed to by the
employer.
(12) Existing law provides for obtaining health coverage for
workers' compensation from a health care organization, establishes
certification requirements for those health care organizations, and
limits the funds that may be received as a loan from the General Fund
to support the administration of these provisions.
This bill would recast these provisions. Among other changes, the
bill would revise the certification requirements and would delete
the limitation on certain loans from the General Fund.
(13) Existing law requires an employer, upon the request of an
employee, to tender the employee one change of physician, authorizes
the employer to petition the administrative director for a change of
physician, and establishes various obligations of an employee and
employer once a physician is selected.
This bill would repeal these provisions.
(14) Chapter 639 of the Statutes of 2003 will require the
administrative director, on or before December 1, 2004, to adopt,
after public hearings, a medical treatment utilization schedule.
This bill would provide that this schedule would create a
rebuttable presumption that the schedule adopted pursuant to those
provisions is correct on the issue of extent and scope of medical
treatment of a worker's injuries and that this presumption may be
controverted. It would also provide that certain guidelines shall be
presumptively correct on the issue of extent and scope of medical
treatment of a worker's injuries for a specified period of time. The
bill, notwithstanding the medical treatment utilization schedule and
specified guidelines, would limit the number of chiropractic and
physical therapy visits by an employee per industrial injury.
(15) Existing law, with respect to contracts providing for the
payment of preferred reimbursement rates by payors for health care
services rendered by health care providers, imposes certain
disclosure and related requirements on contracting agents, as
defined, who sell, lease, assign, transfer, or convey a list of
contracting providers and their contracted preferred reimbursement
rates to other payors or contracting agents. Existing law also
imposes certain requirements on payors who seek to pay a preferred
rate, and provides that the failure to comply with these requirements
renders the payor liable to pay the nonpreferred rate.
This bill would repeal these provisions.
(16) Existing law establishes procedures with respect to disputes
between employers and employees regarding the compensability of the
injury and the extent and scope of medical treatment for that injury.
This bill would establish, commencing July 1, 2004, the
Independent Medical Review System to resolve disputes involving any
disputed health care service. The bill would authorize the Department
of Industrial Relations to contract with one or more independent
medical review organizations to conduct reviews for this purpose.
The cost of the independent medical review under these provisions
would be borne by the employer.
(17) Existing law limits the amount of fees payable to medical
providers under contracts with the employee's health benefit program
for health care services rendered to employees.
This bill would repeal those provisions.
(18) Existing law provides certain methods for determining workers'
compensation benefits payable to a worker or his or her dependents
for purposes of temporary disability, permanent total disability,
permanent partial disability, and in case of death.
This bill would provide, with respect to an injury that causes
permanent disability, extended benefits that would become operative
only if the Secretary of Labor and Workforce Development files a
declaration that certain conditions exist with respect to the cost of
workers' compensation insurance in California.
(19) Chapter 635 of the Statutes of 2003 will provide, with
specified exceptions, that if an injury causes permanent partial
disability and the injured employee does not return to work for the
employer within 60 days of the termination of the temporary
disability indemnity payments, the injured employee shall receive a
supplemental job displacement benefit.
This bill would revise the exceptions.
(20) Existing workers' compensation law authorizes the
administrative director to prepare, adopt, and from time to time
amend a schedule for the determination of the percentage of permanent
disabilities in accordance with specified provisions. Existing law
provides that the schedule and amendments to the schedule apply
prospectively.
This bill would require the administrative director to prepare,
adopt, and amend the schedule. The bill would delete the provisions
that would apply the schedule prospectively.
Existing law provides that when determining the percentages of
permanent disability, account shall be taken of various factors,
including the nature of the physical injury or disfigurement and with
consideration being given to the diminished ability of the injured
employee to compete in an open labor market.
This bill would require that the nature of the physical injury or
disfigurement be established by a preponderance of medical evidence
based upon objective findings, as defined, and would instead, require
that consideration be given to the injured employee's adaptability
to perform a given job. The bill would also require that the
physical injury or disfigurement be the sole factor to be considered
under certain circumstances.
(21) Existing law prescribes which party must bear the burden of
proof in various aspects of workers' compensation proceedings.
This bill would provide that the burden of proof for apportionment
regarding permanent disability shall rest on the defendant and would
establish the standard of proof. This bill would also limit the
accumulation of all permanent disability awards issued to one
individual and would prohibit the payment of permanent disability and
death benefits unless the industrial injury is the predominant cause
of the disability or death when compared to all causes of injury in
total.
(22) Existing law provides that when payment has been unreasonably
delayed or refused, the full amount of the order, decision, or award
shall be increased by 10%. Existing law requires the appeals board
to determine the question of delay and reasonableness and to award
reasonable attorney's fees incurred in enforcing the payment of
compensation awarded.
This bill would repeal these provisions. The bill would, instead,
prescribe procedures under which, when the payment of compensation
has been unreasonably delayed or refused, the amount of the payment
unreasonably delayed or refused may be increased up to 15% or $500,
whichever is greater. The bill would require the appeals board to use
its discretion to accomplish a fair balance and substantial justice
between the parties.
(23) This bill would declare that it is to take effect immediately
as an urgency statute.
Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1877.5 of the Insurance Code is amended to
read:
1877.5. No insurer, or agent authorized by an
insurer to act on its behalf, or licensed rating organization
who furnishes information, written or oral, pursuant to this
article, and no authorized governmental agency or its employees who
(a) furnishes or receives information, written or oral, pursuant to
this article, or (b) assists in any investigation of a suspected
violation of Section 1871.1, 1871.4, 11760, or 11880, or of Section
549 of the Penal Code, or of Section 3215 or
, 3219 , or 3823 of the Labor Code conducted by an
authorized governmental agency, shall be subject to any civil
liability in a cause or action of any kind where the insurer,
authorized agent, licensed rating organization, or
authorized governmental agency acts in good faith, without malice,
and reasonably believes that the action taken was warranted by the
then known facts, obtained by reasonable efforts. Nothing in this
chapter is intended to, nor does in any way or manner, abrogate or
lessen the existing common law or statutory privileges and immunities
of an insurer, agent authorized by that insurer to act on its
behalf, licensed rating organization, or any authorized
governmental agency or its employees.
SEC. 1.5. Chapter 5 (commencing with Section 110) of Division 1 of
the Labor Code is repealed.
SEC. 2. Part 1 (commencing with Section 3110) is added to Division
4 of the Labor Code, to read:
PART 1. DIVISION OF WORKERS' COMPENSATION
3110. As used in this part the following definitions shall apply:
(a) "Appeals board" means the Workers' Compensation Appeals Board.
The title of a member of the board is "commissioner."
(b) "Administrative director" means the Administrative Director of
the Division of Workers' Compensation.
(c) "Division" means the Division of Workers' Compensation.
(d) "Medical director" means the physician appointed by the
administrative director pursuant to Section 3122.
(e) "Qualified medical evaluator" means physicians appointed by
the administrative director pursuant to Section 3139.2.
(f) "Court administrator" means the administrator of the workers'
compensation adjudicatory process at the trial level.
3111. (a) The Workers' Compensation Appeals Board, consisting of
seven members, shall exercise all judicial powers vested in it under
this code. In all other respects, the Division of Workers'
Compensation is under the control of the administrative director and,
except as to those duties, powers, jurisdiction, responsibilities,
and purposes as are specifically vested in the appeals board, the
administrative director shall exercise the powers of the head of a
department within the meaning of Article 1 (commencing with Section
11150) of Chapter 2 of Part 1 of Division 3 of Title 2 of the
Government Code with respect to the Division of Workers' Compensation
which shall include supervision of, and responsibility for,
personnel, and the coordination of the work of the division, except
personnel of the appeals board.
(b) The administrative director shall prepare and submit, on March
1 of each year, a report to the Governor and the Legislature
covering the activities of the division during the prior year. The
report shall include recommendations for improvement and the need, if
any, for legislation to enhance the delivery of compensation to
injured workers. The report shall include data on penalties imposed
on employers or insurers due to delays in compensation or notices, or
both, by category of penalty imposed.
3112. (a) The members of the appeals board shall be appointed by
the Governor with the advice and consent of the Senate. The term of
office of the members appointed prior to January 1, 1990, shall be
four years, and the term of office of members appointed on or after
January 1, 1990, shall be six years and they shall hold office until
the appointment and qualification of their successors.
(b) Five of the members of the appeals board shall be experienced
attorneys at law admitted to practice in the State of California.
The other two members need not be attorneys at law. All members
shall be selected with due consideration of their judicial
temperament and abilities. Each member shall receive the salary
provided for by Chapter 6 (commencing with Section 11550) of Part 1
of Division 3 of Title 2 of the Government Code.
3113. (a) The Governor shall designate the chair of the appeals
board from the membership of the appeals board. The person so
designated shall hold the office of chair at the pleasure of the
Governor.
(b) The chair may designate in writing one of the other members of
the appeals board to act as chair during any time that he or she may
be absent from the state on official business, on vacation, or
absent due to illness.
3115. (a) Actions of the appeals board shall be taken by decision
of a majority of the appeals board except as otherwise expressly
provided.
(b) The chair shall assign pending cases in which reconsideration
is sought to any three members thereof for hearing, consideration,
and decision. Assignments by the chair of members to these cases
shall be rotated on a case-by-case basis with the composition of the
members so assigned being varied and changed to assure that there
shall never be a fixed and continued composition of members. Any
case assigned to any three members in which the finding, order,
decision, or award is made and filed by any two or more of those
members shall be the action of the appeals board unless
reconsideration is had in accordance with Article 1 (commencing with
Section 5900) of Chapter 7 of Part 4. Any case assigned to three
members shall be heard and decided only by them, unless the matter
has been reassigned by the chair on a majority vote of the appeals
board to the appeals board as a whole in order to achieve uniformity
of decision, or in cases presenting novel issues.
3116. The seal of the appeals board bearing the inscription
"Workers' Compensation Appeals Board, Seal" shall be affixed to all
writs and authentications of copies of records and to any other
instruments as the appeals board directs.
3117. The administrative director may appoint an attorney
licensed to practice law in the state as counsel to the division.
3119. The attorney shall do all of the following:
(a) Represent and appear for the state and the Division of Workers'
Compensation and the appeals board in all actions and proceedings
arising under any provision of this code administered by the division
or under any order or act of the division or the appeals board and,
if directed, intervene, if possible, in any action or proceeding in
which any such question is involved.
(b) Commence, prosecute, and expedite the final determination of
all actions or proceedings, directed or authorized by the
administrative director or the appeals board.
(c) Advise the administrative director, the appeals board, and
each member of the appeals board, upon request, in regard to the
jurisdiction, powers, or duties of the administrative director, the
appeals board, and each member of the appeals board.
(d) Generally perform the duties and services as attorney to the
division and the appeals board that are required of him or her.
3120. The administrative director and the chair of the appeals
board may each respectively appoint a secretary and assistant
secretaries to perform services as prescribed under this part.
3121. The chair of the appeals board may authorize its secretary
and any two assistant secretaries to act as deputy appeals board
members and may delegate authority and duties to these deputies. Not
more than three deputies may act as appeals board members at any one
time. No act of any deputy shall be valid unless it is concurred in
by at least one member of the appeals board.
3122. The administrative director shall appoint a medical
director who shall possess a physician's and surgeon's certificate
granted under Chapter 5 (commencing with Section 2000) of Division 2
of the Business and Professions Code. The medical director shall
employ medical assistants who shall also possess physicians' and
surgeons' certificates and other staff necessary to the performance
of his or her duties. The salaries for the medical director and his
or her assistants shall be fixed by the Department of Personnel
Administration, commensurate with the salaries paid by private
industry to medical directors and assistant medical directors.
3123. The administrative director may employ necessary
assistants, officers, experts, statisticians, actuaries, accountants,
workers' compensation administrative law judges, stenographic
shorthand reporters, legal secretaries, disability evaluation raters,
program technicians, and other employees to implement new, efficient
court management systems. The salaries of the workers' compensation
administrative law judges shall be fixed by the Department of
Personnel Administration for a class of positions that perform
judicial functions.
3123.3. Any official reporter employed by the administrative
director shall render stenographic or clerical assistance as directed
by the presiding workers' compensation administrative law judge of
the office to which the reporter is assigned, when the presiding
workers' compensation administrative law judge determines that the
reporter is not engaged in the performance of any other duty imposed
by law.
3123.5. (a) Workers' compensation administrative law judges
employed by the administrative director and supervised by the court
administrator pursuant to this part shall be taken from an eligible
list of attorneys licensed to practice law in this state, who have
the qualifications prescribed by the State Personnel Board. In
establishing eligible lists for this purpose, state civil service
examinations shall be conducted in accordance with the State Civil
Service Act (Part 2 (commencing with Section 18500) of Division 5 of
Title 2 of the Government Code). Every workers' compensation judge
shall maintain membership in the State Bar of California during his
or her tenure.
(b) All workers' compensation administrative law judges appointed
on or after January 1, 2003, shall be attorneys licensed to practice
law in California for five or more years prior to their appointment
and shall have experience in workers' compensation law.
(c) A workers' compensation administrative law judge may not
receive his or her salary as a workers' compensation administrative
law judge while any cause before the workers' compensation
administrative law judge remains pending and undetermined for 90 days
after it has been submitted for decision.
3123.6. (a) All workers' compensation administrative law judges
employed by the administrative director and supervised by the court
administrator shall subscribe to the Code of Judicial Ethics adopted
by the Supreme Court pursuant to subdivision (m) of Section 18 of
Article VI of the California Constitution for the conduct of judges
and shall not otherwise, directly or indirectly, engage in conduct
contrary to that code or to the commentary to the Code of Judicial
Ethics made by the California Judges Association.
(b) Honoraria or travel allowed by the court administrator, and
not otherwise prohibited by this section in connection with any
public or private conference, convention, meeting, social event, or
like gathering, the cost of which is significantly paid for by
attorneys who practice before the board, may not be accepted unless
the court administrator has provided prior approval in writing to the
workers' compensation administrative law judge allowing him or her
to accept those payments.
(c) In consultation with both the court administrator and the
Commission on Judicial Performance, the administrative director shall
adopt regulations to enforce this section. Existing regulations
shall remain in effect until new regulations based on the
recommendations of the court administrator and the Commission on
Judicial Performance have become effective. To the extent possible,
the regulations shall be consistent with the procedures established
by the Commission on Judicial Performance for regulating the
activities of state judges, and, to the extent possible, with the
gift, honoraria, and travel restrictions on legislators contained in
the Political Reform Act of 1974 (Title 9 (commencing with Section
81000) of the Government Code). The court administrator shall have
the authority to enforce the regulations adopted by the
administrative director.
3123.7. The appeals board may, by rule or regulation, establish
procedures whereby attorneys who are either certified specialists in
workers' compensation by the California State Bar, or are eligible
for this certification, may be appointed by the presiding workers'
compensation judge of each board office to serve as a pro tempore
workers' compensation judge in a particular case, upon the
stipulation of the employee or his or her representative, and the
employer or the insurance carrier. Service in this capacity by an
attorney shall be voluntary and without pay. It is the intent of the
Legislature that the use of pro tempore workers' compensation judges
pursuant to this section shall not result in a reduction of the
number of permanent civil service employees or the number of
authorized full-time equivalent positions.
3124. (a) In administering and enforcing this division, the
division shall protect the interests of injured workers who are
entitled to the timely provision of compensation.
(b) Forms and notices required to be given to employees by the
division shall be in English and Spanish.
3125. The administrative director shall cause to be printed and
furnished free of charge to any person blank forms that may
facilitate or promote the efficient performance of the duties of the
division.
3126. The division, including the administrative director and the
appeals board, shall keep minutes of all their proceedings and other
books or records requisite for proper and efficient administration.
All records shall be kept in their respective offices.
3127. The administrative director and court administrator may do
all of the following:
(a) Charge and collect fees for copies of papers and records, for
certified copies of official documents and orders or of the evidence
taken or proceedings had, for transcripts of testimony, and for
inspection of case files not stored in the place where the inspection
is requested. The administrative director shall fix those fees in
an amount sufficient to recover the actual costs of furnishing the
services. No fees for inspection of case files shall be charged to
an injured employee or his or her representative.
(b) Publish and distribute from time to time, in addition to the
reports to the Governor, further reports and pamphlets covering the
operations, proceedings, and matters relative to the work of the
division.
(c) Prepare, publish, and distribute an office manual, for which a
reasonable fee may be charged, and to which additions, deletions,
amendments, and other changes from time to time may be adopted,
published, and distributed, for which a reasonable fee may be charged
for the revision, or for which a reasonable fee may be fixed on an
annual subscription basis.
(d) Fix and collect reasonable charges for publications issued.
3127.5. In the exercise of his or her functions, the court
administrator shall further the interests of uniformity and
expedition of proceedings before workers' compensation administrative
law judges, ensure that all workers' compensation administrative law
judges are qualified and adhere to deadlines mandated by law or
regulation, and manage district office procedural matters at the
trial level.
3127.6. (a) The administrative director shall, in consultation
with the Commission on Health and Safety and Workers' Compensation,
other state agencies, and researchers and research institutions with
expertise in health care delivery and occupational health care
service, conduct a study of medical treatment provided to workers who
have sustained industrial injuries and illnesses. The study shall
focus on, but not be limited to, all of the following:
(1) Factors contributing to the rising costs and utilization of
medical treatment and case management in the workers' compensation
system.
(2) An evaluation of case management procedures that contribute to
or achieve early and sustained return to work within the employee's
temporary and permanent work restrictions.
(3) Performance measures for medical services that reflect patient
outcomes.
(4) Physician utilization, quality of care, and outcome
measurement data.
(5) Patient satisfaction.
(b) The administrative director shall begin the study on or before
July 1, 2003, and shall report and make recommendations to the
Legislature based on the results of the study on or before July 1,
2004.
(c) In implementing this section, the administrative director
shall ensure the confidentiality and protection of patient-specific
data.
3128. The appeals board may accept appointment as deputy
commissioner under, or accept any delegation of authority to enforce,
the United States Longshoremen's and Harbor Worker's Compensation
Act. The appeals board may enter into arrangements with the United
States, subject to the approval of the Department of Finance, for the
payment of any expenses incurred in the performance of services
under said act. In the performance of any duties under that act,
appointment, or authority, the appeals board may, subject to the
provisions thereof, exercise any authority conferred upon the appeals
board by the laws of this state.
3129. (a) To make certain that injured workers, or their
dependents in the event of their death, receive promptly and
accurately the full measure of compensation to which they are
entitled, the administrative director shall audit insurers,
self-insured employers, and third-party administrators to determine
if they have met their obligations under this code. Each audit
subject shall be audited at least once every five years. The audit
subjects shall be selected and the audits conducted pursuant to
subdivision (b). The results of audits of insurers shall be provided
to the Insurance Commissioner, and the results of audits of
self-insurers and third-party administrators shall be provided to the
Director of Industrial Relations. Nothing in this section shall
restrict the authority of the Director of Industrial Relations or the
Insurance Commissioner to audit their licensees.
(b) The administrative director shall schedule and conduct audits
as follows:
(1) A profile audit review of every audit subject shall be
conducted once every five years and on additional occasions indicated
by target audit criteria. The administrative director shall
annually establish a profile audit review performance standard that
will identify the poorest performing audit subjects.
(2) A full compliance audit shall be conducted of each profile
audited subject failing to meet or exceed the profile audit review
performance standard. The full compliance audit shall be a
comprehensive and detailed evaluation of the audit subject's
performance. The administrative director shall annually establish a
full compliance audit performance standard that will identify the
audit subjects that are performing satisfactorily. Any full
compliance audit subject that fails to meet or exceed the full
compliance audit performance standard shall be audited again within
two years.
(3) A targeted profile audit review or a full compliance audit may
be conducted at any time in accordance with target audit criteria
adopted by the administrative director. The target audit criteria
shall be based on information obtained from benefit notices, from
information and assistance officers, and from other reliable sources
providing factual information that indicates an insurer, self-insured
employer, or third-party administrator is failing to meet its
obligations under this division or Division 4 (commencing with
Section 3200) or the regulations of the administrative director.
(c) (1) If, as a result of a profile audit review or a full
compliance audit, the administrative director determines that any
compensation, interest, or penalty is due and unpaid to an employee
or dependent, the administrative director shall issue and cause to be
served upon the insurer, self-insured employer, or third-party
administrator a notice of assessment detailing the amounts due and
unpaid in each case, and shall order the amounts paid to the person
entitled thereto. The notice of assessment shall be served
personally or by registered mail in accordance with subdivision (c)
of Section 11505 of the Government Code. A copy of the notice of
assessment shall also be sent to the affected employee or dependent.
(2) If the amounts are not paid within 30 days after service of
the notice of assessment, the employer shall also be liable for
reasonable attorney's fees necessarily incurred by the employee or
dependent to obtain amounts due. The administrative director shall
advise each employee or dependent still owed compensation after this
30-day period of his or her rights with respect to the commencement
of proceedings to collect the compensation owed. Amounts unpaid
because the person entitled thereto cannot be located shall be paid
to the Workers' Compensation Administration Revolving Fund. The
Director of Industrial Relations shall adopt rules and regulations
establishing standards and procedures for the payment of compensation
from moneys deposited in the Workers' Compensation Administration
Revolving Fund whenever the person entitled thereto applies for
compensation.
(d) A determination by the administrative director that an amount
is or is not due to an employee or dependent shall not in any manner
limit the jurisdiction or authority of the appeals board to determine
the issue.
(e) Annually, commencing on April 1, 1991, the administrative
director shall publish a report detailing the results of audits
conducted pursuant to this section during the preceding calendar
year. The report shall include the name of each insurer,
self-insured employer, and third-party administrator audited during
that period. For each insurer, self-insured employer, and
third-party administrator audited, the report shall specify the total
number of files audited, the number of violations found by type and
amount of compensation, interest and penalties payable, and the
amount collected for each violation. The report shall not identify
the particular claim file that resulted in a particular violation or
penalty. Except as required by this subdivision or other provisions
of law, the contents of individual claim files and auditor's working
papers shall be confidential. Disclosure of claim information to the
administrative director pursuant to an audit shall not waive the
provisions of the Evidence Code relating to privilege.
(f) The administrative director shall also publish and make
available to the public on request a list ranking all insurers,
self-insured employers, and third-party administrators audited during
the period according to their performance measured by the profile
audit review and full compliance audit performance standards.
(g) A profile audit review of the adjustment of claims against the
Uninsured Employers Fund by the claims and collections unit of the
Division of Workers' Compensation shall be conducted at least every
five years. The results of this profile audit review shall be
included in the report required by subdivision (e).
3129.5. (a) The administrative director may assess an
administrative penalty against an insurer, self-insured employer, or
third-party administrator for any of the following:
(1) Failure to comply with the notice of assessment issued
pursuant to subdivision (c) of Section 3129 within 15 days of
receipt.
(2) Failure to pay when due the undisputed portion of an indemnity
payment, the reasonable cost of medical treatment of an injured
worker, or a charge or cost implementing an approved vocational
rehabilitation plan.
(3) Failure to comply with any rule or regulation of the
administrative director.
(b) The administrative director shall adopt regulations
establishing a schedule of violations and the amount of the
administrative penalty to be imposed for each type of violation. The
schedule shall provide for imposition of a penalty of up to one
hundred dollars ($100) for each violation of the less serious type
and for imposition of penalties in progressively higher amounts for
the most serious types of violations to be set at up to five thousand
dollars ($5,000) per violation. The administrative director is
authorized to impose penalties pursuant to rules and regulations that
give due consideration to the appropriateness of the penalty with
respect to the following factors:
(1) The gravity of the violation.
(2) The good faith of the insurer, self-insured employer, or
third-party administrator.
(3) The history of previous violations, if any.
(4) The frequency of the violations.
(5) Whether the audit subject has met or exceeded the profile
audit review performance standard.
(6) Whether a full compliance audit subject has met or exceeded
the full compliance audit performance standard.
(7) The size of the audit subject location.
(c) The administrative director shall assess penalties as follows:
(1) If, after a profile audit review, the administrative director
determines that the profile audit subject met or exceeded the profile
audit review performance standard, no penalties shall be assessed
under this section, but the audit subject shall be required to pay
any compensation due and penalties due under subdivision (d) of
Section 4650 as provided in subdivision (c) of Section 3129.
(2) If, after a full compliance audit, the administrative director
determines that the audit subject met or exceeded the full
compliance audit performance standards, penalties for unpaid or late
paid compensation, but no other penalties under this section, shall
be assessed. The audit subject shall be required to pay any
compensation due and penalties due under subdivision (d) of Section
4650 as provided in subdivision (c) of Section 3129.
(3) If, after a full compliance audit, the administrative director
determines that the audit subject failed to meet the full compliance
audit performance standards, penalties shall be assessed as provided
in a full compliance audit
failure penalty schedule to be adopted by the administrative
director. The full compliance audit failure penalty schedule shall
adjust penalty levels relative to the size of the audit location to
mitigate inequality between total penalties assessed against small
and large audit subjects. The penalty amounts provided in the full
compliance audit failure penalty schedule for the most serious type
of violations shall not be limited by subdivision (b), but in no
event shall the penalty for a single violation exceed forty thousand
dollars ($40,000).
(d) The notice of penalty assessment shall be served personally or
by registered mail in accordance with subdivision (c) of Section
11505 of the Government Code. The notice shall be in writing and
shall describe the nature of the violation, including reference to
the statutory provision or rule or regulation alleged to have been
violated. The notice shall become final and the assessment shall be
paid unless contested within 15 days of receipt by the insurer,
self-insured employer, or third-party administrator.
(e) (1) In addition to the penalty assessments permitted by
subdivisions (a), (b), and (c), the administrative director may
assess a civil penalty, not to exceed one hundred thousand dollars
($100,000), upon finding, after hearing, that an employer, insurer,
or third-party administrator for an employer has knowingly committed
or performed with sufficient frequency so as to indicate a general
business practice any of the following:
(A) Induced employees to accept less than compensation due, or
made it necessary for employees to resort to proceedings against the
employer to secure compensation.
(B) Refused to comply with known and legally indisputable
compensation obligations.
(C) Discharged or administered compensation obligations in a
dishonest manner.
(D) Discharged or administered compensation obligations in a
manner as to cause injury to the public or those dealing with the
employer or insurer.
(2) Any employer, insurer, or third-party administrator that fails
to meet the full compliance audit performance standards in two
consecutive full compliance audits shall be rebuttably presumed to
have engaged in a general business practice of discharging and
administering its compensation obligations in a manner causing injury
to those dealing with it.
(3) Upon a second or subsequent finding, the administrative
director shall refer the matter to the Insurance Commissioner or the
Director of Industrial Relations and request that a hearing be
conducted to determine whether the certificate of authority,
certificate of consent to self-insure, or certificate of consent to
administer claims of self-insured employers, as the case may be,
shall be revoked.
(f) An insurer, self-insured employer, or third-party
administrator may file a written request for a conference with the
administrative director within seven days after receipt of a notice
of penalty assessment issued pursuant to subdivision (a) or (c).
Within 15 days of the conference, the administrative director shall
issue a notice of findings and serve it upon the contesting party by
registered or certified mail. Any amount found due by the
administrative director shall become due and payable 30 days after
receipt of the notice of findings. The 30-day period shall be tolled
during any appeal. A writ of mandate may be taken from the findings
to the appropriate superior court upon the execution by the
contesting party of a bond to the state in the principal sum that is
double the amount found due and ordered by the administrative
director, on the condition that the contesting party shall pay any
judgment and costs rendered against it for the amount.
(g) (1) An insurer, self-insured employer, or third-party
administrator may file a written request for a hearing before the
appeals board within seven days after receipt of a notice of penalty
assessment issued pursuant to subdivision (e).
(2) Within 30 days of the hearing, the appeals board shall issue
findings and orders and serve them upon the contesting party in the
manner provided in its rules. Any amount found due by the appeals
board shall become due and payable 45 days after receipt of the
notice of findings. Judicial review of the findings and order shall
be had in the manner provided by Article 2 (commencing with Section
5950) of Chapter 7 of Part 4 of Division 4. The 45-day period shall
be tolled during appellate proceedings upon execution by the
contesting party of a bond to the state in a principal sum that is
double the amount found due and ordered by the appeals board on the
condition that the contesting party shall pay the amount ultimately
determined to be due and any costs awarded by an appellate court.
(h) Nothing in this section shall create nor eliminate a civil
cause of action for the employee and his or her dependents.
(i) All moneys collected under this section shall be deposited in
the State Treasury and credited to the Workers' Compensation
Administration Revolving Fund.
3130. The appeals board and each of its members, and its
secretary, assistant secretaries, and workers' compensation judges,
may administer oaths, certify to all official acts, and issue
subpoenas for the attendance of witnesses and the production of
papers, books, accounts, documents, and testimony in any inquiry,
investigation, hearing, or proceeding in any part of the state.
3131. Each witness who appears by order of the appeals board or
any of its members, or a workers' compensation judge, shall receive,
if demanded, for his or her attendance the same fees and mileage
allowed by law to a witness in civil cases, paid by the party at
whose request the witness is subpoenaed, unless otherwise ordered by
the appeals board. When any witness who has not been required to
attend at the request of any party is subpoenaed by the appeals
board, his or her fees and mileage may be paid from the funds
appropriated for the use of the appeals board in the same manner as
other expenses of the appeals board are paid. Any witness
subpoenaed, except one whose fees and mileage are paid from the funds
of the appeals board, may, at the time of service, demand the fee to
which he or she is entitled for travel to and from the place at
which he or she is required to appear, and one day's attendance. If
a witness demands his or her fees at the time of service, and they
are not at that time paid or tendered, he or she shall not be
required to attend as directed in the subpoena. All fees and mileage
to which any witness is entitled under this section may be collected
by action therefor instituted by the person to whom the fees are
payable.
3132. The superior court in and for the county in which any
proceeding is held by the appeals board or a workers' compensation
judge may compel the attendance of witnesses, the giving of testimony
and the production of papers, including books, accounts, and
documents, as required by any subpoena regularly issued under this
part. In case of the refusal of any witness to obey the subpoena the
appeals board or the workers' compensation judge, before whom the
testimony is to be given or produced, may report to the superior
court in and for the county in which the proceeding is pending, by
petition, setting forth that due notice has been given of the time
and place of attendance of the witness, or the production of the
papers, that the witness has been subpoenaed in the prescribed
manner, and that the witness has failed and refused to obey the
subpoena, or has refused to answer questions propounded to him or her
in the course of the proceeding, and ask an order of the court,
compelling the witness to attend and testify or produce the papers
before the appeals board. The court shall thereupon enter an order
directing the witness to appear before the court at a time and place
fixed in the order, the time to be not more than 10 days from the
date of the order, and then and there show cause why he or she had
not attended and testified or produced the papers before the appeals
board or the workers' compensation judge. A copy of the order shall
be served upon the witness. If it appears to the court that the
subpoena was regularly issued under this part and that the witness
was legally bound to comply therewith, the court shall thereupon
enter an order that the witness appear before the appeals board or
the workers' compensation judge at a time and place fixed in the
order, and testify or produce the required papers, and upon failure
to obey the order, the witness shall be dealt with as for contempt of
court. The remedy provided in this section is cumulative, and shall
not impair or interfere with the power of the appeals board or a
member thereof to enforce the attendance of witnesses and the
production of papers, and to punish for contempt in the same manner
and to the same extent as courts of record.
3132.5. (a) It is the declared policy of this state that there
should not be discrimination against workers who are injured in the
course and scope of their employment.
(b) Any employer who discharges, or threatens to discharge, or in
any manner discriminates against any employee because he or she has
filed or made known his or her intention to file a claim for
compensation with his or her employer or an application for
adjudication, or because the employee has received a rating, award,
or settlement, is guilty of a misdemeanor and the employee's
compensation shall be increased by one-half, but in no event more
than ten thousand dollars ($10,000), together with costs and expenses
not in excess of two hundred fifty dollars ($250). The employee
shall also be entitled to reinstatement and reimbursement for lost
wages and work benefits caused by the acts of the employer.
(c) Any insurer that advises, directs, or threatens an insured
under penalty of cancellation or a raise in premium or for any other
reason, to discharge an employee because he or she has filed or made
known his or her intention to file a claim for compensation with his
or her employer or an application for adjudication, or because the
employee has received a rating, award, or settlement, is guilty of a
misdemeanor and subject to the increased compensation and costs
provided in subdivision (b).
(d) Any employer who discharges, or threatens to discharge, or in
any manner discriminates against any employee because the employee
testified or made known his or her intentions to testify in another
employee's case before the appeals board, is guilty of a misdemeanor,
and the employee shall be entitled to reinstatement and
reimbursement for lost wages and work benefits caused by the acts of
the employer.
(e) Any insurer that advises, directs, or threatens an insured
employer under penalty of cancellation or a raise in premium or for
any other reason, to discharge or in any manner discriminate against
an employee because the employee testified or made known his or her
intention to testify in another employee's case before the appeals
board, is guilty of a misdemeanor.
(f) Proceedings for increased compensation as provided in
subdivision (b), or for reinstatement and reimbursement for lost
wages and work benefits, are to be instituted by filing an
appropriate petition with the appeals board, but these proceedings
may not be commenced more than one year from the discriminatory act
or date of termination of the employee. The appeals board is vested
with full power, authority, and jurisdiction to try and determine
finally all matters specified in this section subject only to
judicial review, except that the appeals board shall have no
jurisdiction to try and determine a misdemeanor charge. The appeals
board may refer and any worker may complain of suspected violations
of the criminal misdemeanor provisions of this section to the
Division of Labor Standards Enforcement, or directly to the office of
the public prosecutor.
3133. The division, including the administrative director, the
court administrator, and the appeals board, shall have power and
jurisdiction to do all things necessary or convenient in the exercise
of any power or jurisdiction conferred upon it under this code.
3134. The appeals board or any member thereof may issue writs or
summons, warrants of attachment, warrants of commitment, and all
necessary process in proceedings for contempt, in like manner and to
the same extent as courts of record. The process issued by the
appeals board or any member thereof shall extend to all parts of the
state and may be served by any persons authorized to serve process of
courts of record or by any person designated for that purpose by the
appeals board or any member thereof. The person executing process
shall receive compensation allowed by the appeals board, not to
exceed the fees prescribed by law for similar services. The fees
shall be paid in the same manner as provided Section 3131 for the
fees of witnesses.
3135. In accordance with rules of practice and procedure that it
may adopt, the appeals board may, with the approval of the Department
of Finance, destroy or otherwise dispose of any file kept by it in
connection with any proceeding under this division or Division 4.5
(commencing with Section 6100).
3138. The administrative director and the court administrator may
each appoint a deputy to act during that time as he or she may be
absent from the state due to official business, vacation, or illness.
3138.1. (a) The administrative director shall be appointed by the
Governor with the advice and consent of the Senate and shall hold
office at the pleasure of the Governor. He or she shall receive the
salary provided for by Chapter 6 (commencing with Section 11550) of
Part 1 of Division 3 of Title 2 of the Government Code.
(b) The court administrator shall be appointed by the Governor
with the advice and consent of the Senate. The court administrator
shall hold office at the pleasure of the administrative director.
The court administrator shall receive the salary provided for by
Chapter 6 (commencing with Section 11550) of Part 1 of Division 3 of
Title 2 of the Government Code.
3138.2. (a) The headquarters of the division shall be based at
and operated from a centrally located city. The administrative
director and the court administrator shall have an office in that
city with suitable rooms, necessary office furniture, stationery, and
supplies, and may rent quarters in other places for the purpose of
establishing branch or service offices, and for that purpose may
provide those offices with necessary furniture, stationery, and
supplies.
(b) The administrative director shall provide suitable rooms, with
necessary office furniture, stationery, and supplies, for the
appeals board at the centrally located city in which the board shall
be based and from which it shall operate, and may rent quarters in
other places for the purpose of establishing branch or service
offices for the appeals board, and for that purpose may provide those
offices with necessary furniture, stationery, and supplies.
(c) All meetings held by the administrative director shall be open
and public. Notice thereof shall be published in papers of general
circulation not more than 30 days and not less than 10 days prior to
each meeting in Sacramento, San Francisco, Fresno, Los Angeles, and
San Diego. Written notice of all meetings shall be given to all
persons who request in writing directed to the administrative
director that they be given notice.
3138.3. The administrative director shall, with respect to all
injuries, adopt, in accordance with Section 5402, reasonable rules
and regulations requiring the employer to serve notice on the injured
employee that he or she may be entitled to benefits under this
division.
3138.4. (a) For the purpose of this section, "claims
administrator" means a self-administered workers' compensation
insurer, self-administered self-insured employer, self-administered
legally uninsured employer, or self-administered joint powers
authority, or a third-party claims administrator for an insurer,
self-insured employer, legally uninsured employer, or joint powers
authority.
(b) With respect to injuries resulting in lost time beyond the
employee's work shift at the time of injury or medical treatment
beyond first aid the following shall apply:
(1) If the claims administrator obtains knowledge that the
employer has not provided a claim form or a notice of potential
eligibility for benefits to the employee, it shall provide the form
and notice to the employee within three working days of its knowledge
that the form or notice was not provided.
(2) If the claims administrator cannot determine if the employer
has provided a claim form and notice of potential eligibility for
benefits to the employee, the claims administrator shall provide the
form and notice to the employee within 30 days of the administrator's
date of knowledge of the claim.
(c) The administrative director shall adopt reasonable rules and
regulations for serving on the employee or the employee's dependents,
in the case of death, notices dealing with the payment, nonpayment,
or delay in payment of temporary disability, permanent disability,
and death benefits and the provision of vocational rehabilitation
services and notices of any change in the amount or type of benefits
being provided, the termination of benefits, the rejection of any
liability for compensation, and an accounting of benefits paid.
3138.5. (a) The division shall cooperate in the enforcement of
child support obligations. At the request of the Department of Child
Support Services, the administrative director shall assist in
providing to the State Department of Child Support Services
information concerning persons who are receiving permanent disability
benefits or who have filed an application for adjudication of a
claim that the Department of Child Support Services determines is
necessary to carry out its responsibilities pursuant to Section 17510
of the Family Code.
(b) The process of sharing information with regard to applicants
for and recipients of permanent disability benefits required by this
section shall be known as the Workers' Compensation Notification
Project.
3138.6. (a) The administrative director, in consultation with the
Insurance Commissioner and the Workers' Compensation Insurance
Rating Bureau, shall develop a cost-efficient workers' compensation
information system that shall be administered by the division. The
administrative director shall adopt regulations specifying the data
elements to be collected by electronic data interchange.
(b) The information system shall do all of the following:
(1) Assist the department to manage the workers' compensation
system in an effective and efficient manner.
(2) Facilitate the evaluation of the efficiency and effectiveness
of the benefit delivery system.
(3) Assist in measuring how adequately the system indemnifies
injured workers and their dependents.
(4) Provide statistical data for research into specific aspects of
the workers' compensation program.
(c) The data collected electronically shall be compatible with the
Electronic Data Interchange System of the International Association
of Industrial Accident Boards and Commissions. The administrative
director may adopt regulations authorizing the use of other
nationally recognized data transmission formats in addition to those
set forth in the Electronic Data Interchange System for the
transmission of data required pursuant to this section. The
administrative director shall accept data transmissions in any
authorized format. If the administrative director determines that
any authorized data transmission format is not in general use by
claims administrators, conflicts with the requirements of state or
federal law, or is obsolete, the administrative director may adopt
regulations eliminating that data transmission format from those
authorized pursuant to this subdivision.
3138.7. (a) Except as expressly permitted in subdivision (b), a
person or public or private entity not a party to a claim for workers'
compensation benefits may not obtain individually identifiable
information obtained or maintained by the division on that claim.
For purposes of this section, "individually identifiable information"
means any data concerning an injury or claim that is linked to a
uniquely identifiable employee, employer, claims administrator, or
any other person or entity.
(b) (1) The administrative director, or a statistical agent
designated by the administrative director, may use individually
identifiable information for purposes of creating and maintaining the
workers' compensation information system as specified in Section
3138.6.
(2) The State Department of Health Services may use individually
identifiable information for purposes of establishing and maintaining
a program on occupational health and occupational disease prevention
as specified in Section 105175 of the Health and Safety Code.
(3) (A) Individually identifiable information may be used by the
division, the Division of Occupational Safety and Health, and the
Division of Labor Statistics and Research as necessary to carry out
their duties. The administrative director shall adopt regulations
governing the access to the information described in this subdivision
by these divisions. These regulations shall set forth the specific
uses for which this information may be obtained.
(B) Individually identifiable information maintained in the
workers' compensation information system and the division may be used
by researchers employed by or under contract to the Commission on
Health and Safety and Workers' Compensation as necessary to carry out
the commission's research. The administrative director shall adopt
regulations governing the access to the information described in this
subdivision by commission researchers. These regulations shall set
forth the specific uses for which this information may be obtained
and include provisions guaranteeing the confidentiality of
individually identifiable information. Individually identifiable
information obtained under this subdivision shall not be disclosed to
commission members. No individually identifiable information
obtained by researchers under contract to the commission pursuant to
this subparagraph may be disclosed to any other person or entity,
public or private, for a use other than that research project for
which the information was obtained. Within a reasonable period of
time after the research for which the information was obtained has
been completed, the data collected shall be modified in a manner so
that the subjects cannot be identified, directly or through
identifiers linked to the subjects.
(4) The administrative director shall adopt regulations allowing
reasonable access to individually identifiable information by other
persons or public or private entities for the purpose of bona fide
statistical research. This research shall not divulge individually
identifiable information concerning a particular employee, employer,
claims administrator, or any other person or entity. The regulations
adopted pursuant to this paragraph shall include provisions
guaranteeing the confidentiality of individually identifiable
information. Within a reasonable period of time after the research
for which the information was obtained has been completed, the data
collected shall be modified in a manner so that the subjects cannot
be identified, directly or through identifiers linked to the
subjects.
(5) This section shall not operate to exempt from disclosure any
information that is considered to be a public record pursuant to the
California Public Records Act (Chapter 3.5 (commencing with Section
6250) of Division 7 of Title 1 of the Government Code) contained in
an individual's file once an application for adjudication has been
filed pursuant to Section 5501.5.
However, individually identifiable information shall not be
provided to any person or public or private entity who is not a party
to the claim unless that person identifies himself or herself or
that public or private entity identifies itself and states the reason
for making the request. The administrative director may require the
person or public or private entity making the request to produce
information to verify that the name and address of the requester is
valid and correct. If the purpose of the request is related to
preemployment screening, the administrative director shall notify the
person about whom the information is requested that the information
was provided and shall include the following in 12-point type:
"IT MAY BE A VIOLATION OF FEDERAL AND STATE LAW TO DISCRIMINATE
AGAINST A JOB APPLICANT BECAUSE THE APPLICANT HAS FILED A CLAIM FOR
WORKERS' COMPENSATION BENEFITS."
Any residence address is confidential and shall not be disclosed
to any person or public or private entity except to a party to the
claim, a law enforcement agency, an office of a district attorney,
any person for a journalistic purpose, or other governmental agency.
Nothing in this paragraph shall be construed to prohibit the use
of individually identifiable information for purposes of identifying
bona fide lien claimants.
(c) Except as provided in subdivision (b), individually
identifiable information obtained by the division is privileged and
is not subject to subpoena in a civil proceeding unless, after
reasonable notice to the division and a hearing, a court determines
that the public interest and the intent of this section will not be
jeopardized by disclosure of the information. This section shall not
operate to restrict access to information by any law enforcement
agency or district attorney's office or to limit admissibility of
that information in a criminal proceeding.
(d) It shall be unlawful for any person who has received
individually identifiable information from the division pursuant to
this section to provide that information to any person who is not
entitled to it under this section.
3139.2. (a) The administrative director shall appoint qualified
medical evaluators in each of the respective specialties as required
for the evaluation of medical-legal issues. The appointments shall
be for two-year terms.
(b) The administrative director shall appoint or reappoint as a
qualified medical evaluator a physician, as defined in Section
3209.3, who is licensed to practice in this state and who
demonstrates that he or she meets the requirements in paragraphs (1),
(2), (6), and (7), and, if the physician is a medical doctor, doctor
of osteopathy, doctor of chiropractic, or a psychologist, that he or
she also meets the
applicable requirements in paragraph (3), (4), or (5).
(1) Prior to his or her appointment as a qualified medical
evaluator, passes an examination written and administered by the
administrative director for the purpose of demonstrating competence
in evaluating medical-legal issues in the workers' compensation
system. Physicians shall not be required to pass an additional
examination as a condition of reappointment. A physician seeking
appointment as a qualified medical evaluator on or after January 1,
2001, shall also complete prior to appointment, a course on
disability evaluation report writing approved by the administrative
director. The administrative director shall specify the curriculum
to be covered by disability evaluation report writing courses, which
shall include, but is not limited to, 12 or more hours of
instruction.
(2) Devotes at least one-third of total practice time to providing
direct medical treatment, or has served as an agreed medical
evaluator on eight or more occasions in the 12 months prior to
applying to be appointed as a qualified medical evaluator.
(3) Is a medical doctor or doctor of osteopathy and meets one of
the following requirements:
(A) Is board certified in a specialty by a board recognized by the
administrative director and either the Medical Board of California
or the Osteopathic Medical Board of California.
(B) Has successfully completed a residency training program
accredited by the American College of Graduate Medical Education or
the osteopathic equivalent.
(C) Was an active qualified medical evaluator on June 30, 2000.
(D) Has qualifications that the administrative director and either
the Medical Board of California or the Osteopathic Medical Board of
California, as appropriate, both deem to be equivalent to board
certification in a specialty.
(4) Is a doctor of chiropractic and meets either of the following
requirements:
(A) Has completed a chiropractic postgraduate specialty program of
a minimum of 300 hours taught by a school or college recognized by
the administrative director, the Board of Chiropractic Examiners, and
the Council on Chiropractic Education.
(B) Has been certified in California workers' compensation
evaluation by a provider recognized by the administrative director.
The certification program shall include instruction on disability
evaluation report writing that meets the standards set forth in
paragraph (1).
(5) Is a psychologist and meets one of the following requirements:
(A) Is board certified in clinical psychology by a board
recognized by the administrative director.
(B) Holds a doctoral degree in psychology, or a doctoral degree
deemed equivalent for licensure by the Board of Psychology pursuant
to Section 2914 of the Business and Professions Code, from a
university or professional school recognized by the administrative
director and has not less than five years' postdoctoral experience in
the diagnosis and treatment of emotional and mental disorders.
(C) Has not less than five years' postdoctoral experience in the
diagnosis and treatment of emotional and mental disorders, and has
served as an agreed medical evaluator on eight or more occasions
prior to January 1, 1990.
(6) Does not have a conflict of interest as determined under the
regulations adopted by the administrative director pursuant to
subdivision (o).
(7) Meets any additional medical or professional standards adopted
pursuant to paragraph (6) of subdivision (j).
(c) The administrative director shall adopt standards for
appointment of physicians who are retired or who hold teaching
positions who are exceptionally well qualified to serve as a
qualified medical evaluator even though they do not otherwise qualify
under paragraph (2) of subdivision (b). In no event shall a
physician whose full-time practice is limited to the forensic
evaluation of disability be appointed as a qualified medical
evaluator under this subdivision.
(d) (1) The qualified medical evaluator, upon request, shall be
reappointed if he or she meets the qualifications of subdivision (b)
and meets all of the following criteria:
(A) Is in compliance with all applicable regulations and
evaluation guidelines adopted by the administrative director.
(B) Has not had more than five of his or her evaluations that were
considered by a workers' compensation judge at a contested hearing
rejected by the judge or the appeals board pursuant to this section
during the most recent two-year period during which the physician
served as a qualified medical evaluator. If the judge or the appeals
board rejects the qualified medical evaluator's report on the basis
that it fails to meet the minimum standards for those reports
established by the administrative director or the appeals board, the
judge or the appeals board, as the case may be, shall make a specific
finding to that effect, and shall give notice to the medical
evaluator and to the administrative director. Any rejection shall
not be counted as one of the five qualifying rejections until the
specific finding has become final and time for appeal has expired.
(C) Has completed within the previous 24 months at least 12 hours
of continuing education in impairment evaluation or workers'
compensation-related medical dispute evaluation approved by the
administrative director.
(D) Has not been terminated, suspended, placed on probation, or
otherwise disciplined by the administrative director during his or
her most recent term as a qualified medical evaluator.
(2) If the evaluator does not meet any one of the criteria
specified in paragraph (1), the administrative director may in his or
her discretion reappoint or deny reappointment according to
regulations adopted by the administrative director. In no event may
a physician who does not currently meet the requirements for initial
appointment or who has been terminated under subdivision (e) because
his or her license has been revoked or terminated by the licensing
authority be reappointed.
(e) The administrative director may, in his or her discretion,
suspend or terminate a qualified medical evaluator during his or her
term of appointment without a hearing as provided under subdivision
(k) or (l) whenever either of the following conditions occurs:
(1) The evaluator's license to practice in California has been
suspended by the relevant licensing authority so as to preclude
practice, or has been revoked or terminated by the licensing
authority.
(2) The evaluator has failed to timely pay the fee required by the
administrative director pursuant to subdivision (n).
(f) The administrative director shall furnish a physician, upon
request, with a written statement of his or her reasons for
termination of, or for denying appointment or reappointment as, a
qualified medical evaluator. Upon receipt of a specific response to
the statement of reasons, the administrative director shall review
his or her decision not to appoint or reappoint the physician or to
terminate the physician and shall notify the physician of his or her
final decision within 60 days after receipt of the physician's
response.
(g) The administrative director shall establish agreements with
qualified medical evaluators to assure the expeditious evaluation of
cases assigned to them for comprehensive medical evaluations.
(h) (1) When the injured worker is not represented by an attorney,
the medical director appointed pursuant to Section 3122, shall
assign three-member panels of qualified medical evaluators within
five working days after receiving a request for a panel. If a panel
is not assigned within 15 working days, the employee shall have the
right to obtain a medical evaluation from any qualified medical
evaluator of his or her choice. The medical director shall use a
random selection method for assigning panels of qualified medical
evaluators. The medical director shall select evaluators who are
specialists whose specialty is relevant to the injury for which the
evaluation is sought as identified by the report of the treating
physician. The medical director shall advise the employee that he or
she should consult with his or her treating physician prior to
deciding which type of specialist to request.
(2) The administrative director shall prescribe a form that shall
notify the employee of the physicians selected for his or her panel.
The form shall include, for each physician on the panel, the
physician's name, address, telephone number, specialty, number of
years in practice, and a brief description of his or her education
and training, and shall advise the employee that he or she is
entitled to receive transportation expenses and temporary disability
for each day necessary for the examination. The form shall also
state in a clear and conspicuous location and type: "You have the
right to consult with an information and assistance officer at no
cost to you prior to selecting the doctor to prepare your evaluation,
or you may consult with an attorney. If your claim eventually goes
to court, the judge will consider the evaluation prepared by the
doctor you select to decide your claim."
(3) When compiling the list of evaluators from which to select
randomly, the medical director shall include all qualified medical
evaluators who meet all of the following criteria:
(A) He or she does not have a conflict of interest in the case, as
defined by regulations adopted pursuant to subdivision (o).
(B) He or she is certified by the administrative director to
evaluate in an appropriate specialty and at locations within the
general geographic area of the employee's residence.
(C) He or she has not been suspended or terminated as a qualified
medical evaluator for failure to pay the fee required by the
administrative director pursuant to subdivision (n) or for any other
reason.
(4) When the medical director determines that an employee has
requested an evaluation by a type of specialist that is appropriate
for the employee's injury, but there are not enough qualified medical
evaluators of that type within the general geographic area of the
employee's residence to establish a three-member panel, the medical
director shall include sufficient qualified medical evaluators from
other geographic areas and the employer shall pay all necessary
travel costs incurred in the event the employee selects an evaluator
from another geographic area.
(i) The medical director appointed pursuant to Section 3122, shall
continuously review the quality of comprehensive medical evaluations
and reports prepared by agreed and qualified medical evaluators and
the timeliness with which evaluation reports are prepared and
submitted. The review shall include, but not be limited to, a review
of a random sample of reports submitted to the division, and a
review of all reports alleged to be inaccurate or incomplete by a
party to a case for which the evaluation was prepared. The medical
director shall submit to the administrative director an annual report
summarizing the results of the continuous review of medical
evaluations and reports prepared by agreed and qualified medical
evaluators and make recommendations for the improvement of the system
of medical evaluations and determinations.
(j) After public hearing pursuant to Section 5307.4, the
administrative director shall adopt regulations concerning the
following medical issues:
(1) Standards governing the timeframes within which medical
evaluations shall be prepared and submitted by agreed and qualified
medical evaluators. Except as provided in this subdivision, the
timeframe for initial medical evaluations to be prepared and
submitted shall be no more than 30 days after the evaluator has seen
the employee or otherwise commenced the medical evaluation procedure.
The administrative director shall develop timeframes governing
availability of qualified medical evaluators for unrepresented
employees under Sections 4061 and 4062. These timeframes shall give
the employee the right to the addition of a new evaluator to his or
her panel, selected at random, for each evaluator not available to
see the employee within a specified period of time, but shall also
permit the employee to waive this right for a specified period of
time thereafter. The administrative director shall adopt regulations
governing the provision of extensions of the 30-day period in both
of the following cases:
(A) Where the evaluator has not received test results or
consulting physician's evaluations in time to meet the 30-day
deadline.
(B) To extend the 30-day period by not more than 15 days when the
failure to meet the 30-day deadline was for good cause. For purposes
of this subdivision, "good cause" means any of the following:
(i) Medical emergencies of the evaluator or evaluator's family.
(ii) Death in the evaluator's family.
(iii) Natural disasters or other community catastrophes that
interrupt the operation of the evaluator's business.
(2) Procedures to be followed by all physicians in evaluating the
existence and extent of permanent impairment and limitations
resulting from an injury. In order to produce complete, accurate,
uniform, and replicable evaluations, the procedures shall require
that an evaluation of anatomical loss, functional loss, and the
presence of physical complaints be supported, to the extent feasible,
by objective findings and based on standardized examinations and
testing techniques generally accepted by the medical community.
Objective findings in support of medical evidence are verifiable
indications of injury or disease that may include, but are not
limited to, range of motion, atrophy, muscle strength, and palpable
muscle spasm. Objective findings do not include physical findings or
subjective responses to physical examinations that are not
reproducible, measurable, or observable.
(3) Procedures governing the determination of any disputed medical
issues.
(4) Procedures to be used in determining the compensability of
psychiatric injury. The procedures shall be in accordance with
Section 3208.3 and shall require that the diagnosis of a mental
disorder be expressed using the terminology and criteria of the
American Psychiatric Association's Diagnostic and Statistical Manual
of Mental Disorders, Third Edition-Revised, or the terminology and
diagnostic criteria of other psychiatric diagnostic manuals generally
approved and accepted nationally by practitioners in the field of
psychiatric medicine.
(5) Guidelines for the range of time normally required to perform
the following:
(A) A medical-legal evaluation that has not been defined and
valued pursuant to Section 5307.6. However, the administrative
director may recommend guidelines for evaluations that have been
defined and valued pursuant to Section 5307.6 for the purpose of
governing the appointment, reappointment, and discipline of qualified
medical evaluators. The guidelines shall establish minimum times
for patient contact in the conduct of the evaluations, and shall be
consistent with regulations adopted pursuant to Section 5307.6.
(B) Any treatment procedures that have not been defined and valued
pursuant to Section 5307.1.
(C) Any other evaluation procedure requested by the Insurance
Commissioner or deemed appropriate by the administrative director.
(6) Any additional medical or professional standards that a
medical evaluator shall meet as a condition of appointment,
reappointment, or maintenance in the status of a medical evaluator.
(k) (1) Except as provided in this subdivision, the administrative
director may, in his or her discretion, suspend or terminate the
privilege of a physician to serve as a qualified medical evaluator if
the administrative director, after hearing pursuant to subdivision
(l), determines, based on substantial evidence, that a qualified
medical evaluator:
(A) Has violated any material statutory or administrative duty.
(B) Has failed to follow the medical procedures or qualifications
established by the administrative director pursuant to paragraph (2),
(3), (4), or (5) of subdivision (j).
(C) Has failed to comply with the timeframe standards established
by the administrative director pursuant to subdivision (j).
(D) Has failed to meet the requirements of subdivision (b) or (c).
(E) Has prepared medical-legal evaluations that fail to meet the
minimum standards for those reports established by the administrative
director or the appeals board.
(F) Has made material misrepresentations or false statements in an
application for appointment or reappointment as a qualified medical
evaluator.
(2) No hearing shall be required prior to the suspension or
termination of a physician's privilege to serve as a qualified
medical evaluator when the physician has done either of the
following:
(A) Failed to timely pay the fee required pursuant to subdivision
(n).
(B) Had his or her license to practice in California suspended by
the relevant licensing authority so as to preclude practice, or had
the license revoked or terminated by the licensing authority.
(l) The administrative director shall cite the qualified medical
evaluator for a violation listed in subdivision (k) and shall set a
hearing on the alleged violation within 30 days of service of the
citation on the qualified medical evaluator. In addition to the
authority to terminate or suspend the qualified medical evaluator
upon finding a violation listed in subdivision (k), the
administrative director may, in his or her discretion, place a
qualified medical evaluator on probation subject to appropriate
conditions, including ordering continuing education or training. The
administrative director shall report to the appropriate licensing
board the name of any qualified medical evaluator who is disciplined
pursuant to this subdivision.
(m) The administrative director shall terminate from the list of
medical evaluators any physician where licensure has been terminated
by the relevant licensing board, or who has been convicted of a
misdemeanor or felony related to the conduct of his or her medical
practice, or of a crime of moral turpitude. The administrative
director shall suspend or terminate as a medical evaluator any
physician who has been suspended or placed on probation by the
relevant licensing board. If a physician is suspended or terminated
as a qualified medical evaluator under this subdivision, a report
prepared by the physician that is not complete, signed, and furnished
to one or more of the parties prior to the date of conviction or
action of the licensing board, whichever is earlier, shall not be
admissible in any proceeding before the appeals board nor shall there
be any liability for payment for the report and any expense incurred
by the physician in connection with the report.
(n) Each qualified medical evaluator shall pay a fee, as
determined by the administrative director, for appointment or
reappointment. Any qualified medical evaluator appointed prior to
January 1, 1993, shall also pay the same fee as specified in
accordance with this subdivision. These fees shall be based on a
sliding scale as established by the administrative director. All
revenues from fees paid under this subdivision shall be deposited
into the Workers' Compensation Administration Revolving Fund and are
available for expenditure upon appropriation by the Legislature for
the administration of the programs of the Division of Workers'
Compensation related to the provision of medical treatment to injured
employees.
(o) An evaluator may not request or accept any compensation or
other thing of value from any source that does or could create a
conflict with his or her duties as an evaluator under this code. The
administrative director, after consultation with the Commission on
Health and Safety and Workers' Compensation, shall adopt regulations
to implement this subdivision.
3139.3. (a) Notwithstanding any other provision of law, to the
extent those services are paid pursuant to this division, it is
unlawful for a physician to refer a person for clinical laboratory,
diagnostic nuclear medicine, radiation oncology, physical therapy,
physical rehabilitation, psychometric testing, home infusion therapy,
or diagnostic imaging goods or services whether for treatment or
medical-legal purposes if the physician or his or her immediate
family has a financial interest with the person or in the entity that
receives the referral.
(b) For purposes of this section and Section 3139.31, the
following shall apply:
(1) "Diagnostic imaging" includes, but is not limited to, all
X-ray, computed axial tomography magnetic resonance imaging, nuclear
medicine, positron emission tomography, mammography, and ultrasound
goods and services.
(2) "Immediate family" includes the spouse and children of the
physician, the parents of the physician, and the spouses of the
children of the physician.
(3) "Physician" means a physician as defined in Section 3209.3.
(4) A "financial interest" includes, but is not limited to, any
type of ownership, interest, debt, loan, lease, compensation,
remuneration, discount, rebate, refund, dividend, distribution,
subsidy, or other form of direct or indirect payment, whether in
money or otherwise, between a licensee and a person or entity to whom
the physician refers a person for a good or service specified in
subdivision (a). A financial interest also exists if there is an
indirect relationship between a physician and the referral recipient,
including, but not limited to, an arrangement whereby a physician
has an ownership interest in any entity that leases property to the
referral recipient. Any financial interest transferred by a
physician to, or otherwise established in, any person or entity for
the purpose of avoiding the prohibition of this section shall be
deemed a financial interest of the physician.
(5) A "physician's office" is either of the following:
(A) An office of a physician in solo practice.
(B) An office in which the services or goods are personally
provided by the physician or by employees in that office, or
personally by independent contractors in that office, in accordance
with other provisions of law. Employees and independent contractors
shall be licensed or certified when that licensure or certification
is required by law.
(6) The "office of a group practice" is an office or offices in
which two or more physicians are legally organized as a partnership,
professional corporation, or not-for-profit corporation licensed
according to subdivision (a) of Section 1204 of the Health and Safety
Code for which all of the following are applicable:
(A) Each physician who is a member of the group provides
substantially the full range of services that the physician routinely
provides, including medical care, consultation, diagnosis, or
treatment, through the joint use of shared office space, facilities,
equipment, and personnel.
(B) Substantially all of the services of the physicians who are
members of the group are provided through the group and are billed in
the name of the group and amounts so received are treated as
receipts of the group, and except that in the case of multispecialty
clinics, as defined in subdivision (l) of Section 1206 of the Health
and Safety Code, physician services are billed in the name of the
multispecialty clinic and amounts so received are treated as receipts
of the multispecialty clinic.
(C) The overhead expenses of, and the income from, the practice
are distributed in accordance with methods previously determined by
members of the group.
(c) (1) It is unlawful for a licensee to enter into an arrangement
or scheme, such as a cross-referral arrangement, that the licensee
knows, or should know, has a principal purpose of ensuring referrals
by the licensee to a particular entity that, if the licensee directly
made referrals to that entity, would be in violation of this
section.
(2) It shall be unlawful for a physician to offer, deliver,
receive, or accept any rebate, refund, commission, preference,
patronage dividend, discount, or other consideration, whether in the
form of money or otherwise, as compensation or inducement for a
referred evaluation or consultation.
(d) No claim for payment shall be presented by an entity to any
individual, third-party payor, or other entity for a good or service
furnished pursuant to a referral prohibited under this section.
(e) A physician who refers to or seeks consultation from an
organization in which the physician has a financial interest shall
disclose this interest to the patient or if the patient is a minor,
to the patient's parents or legal guardian in writing at the time of
the referral.
(f) No insurer, self-insurer, or other payor shall pay a charge or
lien for any good or service resulting from a referral in violation
of this section.
(g) A violation of subdivision (a) is a misdemeanor. The
appropriate licensing board shall review the facts and circumstances
of any conviction pursuant to subdivision (a) and take appropriate
disciplinary action if the licensee has committed unprofessional
conduct. Violations of this section may also be subject to civil
penalties of up to five thousand dollars ($5,000) for each offense,
which may be enforced by the Insurance Commissioner, Attorney
General, or a district attorney. A violation of subdivision (c),
(d), (e), or (f) is a public offense and is punishable upon
conviction by a fine not exceeding fifteen thousand dollars ($15,000)
for each violation and appropriate disciplinary action, including
revocation of professional licensure, by the Medical Board of
California or other appropriate governmental agency.
3139.31. The prohibition of Section 3139.3 shall not apply to or
restrict any of the following:
(a) A physician may refer a patient for a good or service
otherwise prohibited by subdivision (a) of Section 3139.3 if the
physician's regular practice is where there is no alternative
provider of the service within either 25 miles or 40 minutes
traveling time, via the shortest route on a paved road. A physician
who refers to, or seeks consultation from, an organization in which
the physician has a financial interest under this subdivision shall
disclose this interest to the patient or the patient's parents or
legal guardian in writing at the time of referral.
(b) A physician who has one or more of the following arrangements
with another physician, a person, or an entity, is not prohibited
from referring a patient to the physician, person, or entity because
of the arrangement:
(1) A loan
between a physician and the recipient of the referral, if the loan
has commercially reasonable terms, bears interest at the prime rate
or a higher rate that does not constitute usury, is adequately
secured, and the loan terms are not affected by either party's
referral of any person or the volume of services provided by either
party.
(2) A lease of space or equipment between a physician and the
recipient of the referral, if the lease is written, has commercially
reasonable terms, has a fixed periodic rent payment, has a term of
one year or more, and the lease payments are not affected by either
party's referral of any person or the volume of services provided by
either party.
(3) A physician's ownership of corporate investment securities,
including shares, bonds, or other debt instruments that were
purchased on terms that are available to the general public through a
licensed securities exchange or NASDAQ, do not base profit
distributions or other transfers of value on the physician's referral
of persons to the corporation, do not have a separate class or
accounting for any persons or for any physicians who may refer
persons to the corporation, and are in a corporation that had, at the
end of the corporation's most recent fiscal year, total gross assets
exceeding one hundred million dollars ($100,000,000).
(4) A personal services arrangement between a physician or an
immediate family member of the physician and the recipient of the
referral if the arrangement meets all of the following requirements:
(A) It is set out in writing and is signed by the parties.
(B) It specifies all of the services to be provided by the
physician or an immediate family member of the physician.
(C) The aggregate services contracted for do not exceed those that
are reasonable and necessary for the legitimate business purposes of
the arrangement.
(D) A written notice disclosing the existence of the personal
services arrangement and including information on where a person may
go to file a complaint against the licensee or the immediate family
member of the licensee, is provided to the following persons at the
time any services pursuant to the arrangement are first provided:
(i) An injured worker who is referred by a licensee or an
immediate family member of the licensee.
(ii) The injured worker's employer, if self-insured.
(iii) The injured worker's employer's insurer, if insured.
(iv) If the injured worker is known by the licensee or the
recipient of the referral to be represented, the injured worker's
attorney.
(E) The term of the arrangement is for at least one year.
(F) The compensation to be paid over the term of the arrangement
is set in advance, does not exceed fair market value, and is not
determined in a manner that takes into account the volume or value of
any referrals or other business generated between the parties,
except that if the services provided pursuant to the arrangement
include medical services provided under this division, compensation
paid for the services shall be subject to the official medical fee
schedule promulgated pursuant to Section 5307.1 or subject to any
contract authorized by Section 5307.11.
(G) The services to be performed under the arrangement do not
involve the counseling or promotion of a business arrangement or
other activity that violates any state or federal law.
(c) (1) A physician may refer a person to a health facility as
defined in Section 1250 of the Health and Safety Code, or to any
facility owned or leased by a health facility, if the recipient of
the referral does not compensate the physician for the patient
referral, and any equipment lease arrangement between the physician
and the referral recipient complies with the requirements of
paragraph (2) of subdivision (b).
(2) Nothing shall preclude this subdivision from applying to a
physician solely because the physician has an ownership or leasehold
interest in an entire health facility or an entity that owns or
leases an entire health facility.
(3) A physician may refer a person to a health facility for any
service classified as an emergency under subdivision (a) or (b) of
Section 1317.1 of the Health and Safety Code. For nonemergency
outpatient diagnostic imaging services performed with equipment for
that, when new, has a commercial retail price of four hundred
thousand dollars ($400,000) or more, the referring physician shall
obtain a service preauthorization from the insurer, or self-insured
employer. Any oral authorization shall be memorialized in writing
within five business days.
(d) A physician compensated or employed by a university may refer
a person to any facility owned or operated by the university, or for
a physician service, to another physician employed by the university,
provided that the facility or university does not compensate the
referring physician for the patient referral. For nonemergency
diagnostic imaging services performed with equipment that, when new,
has a commercial retail price of four hundred thousand dollars
($400,000) or more, the referring physician shall obtain a service
preauthorization from the insurer or self-insured employer. An oral
authorization shall be memorialized in writing within five business
days. In the case of a facility that is totally or partially owned
by an entity other than the university, but that is staffed by
university physicians, those physicians may not refer patients to the
facility if the facility compensates the referring physician for
those referrals.
(e) The prohibition of Section 3139.3 shall not apply to any
service for a specific patient that is performed within, or goods
that are supplied by, a physician's office, or the office of a group
practice. Further, the provisions of Section 3139.3 shall not alter,
limit, or expand a physician's ability to deliver, or to direct or
supervise the delivery of, in-office goods or services according to
the laws, rules, and regulations governing his or her scope of
practice. With respect to diagnostic imaging services performed with
equipment that, when new, had a commercial retail price of four
hundred thousand dollars ($400,000) or more, or for physical therapy
services, or for psychometric testing that exceeds the routine
screening battery protocols, with a time limit of two to five hours,
established by the administrative director, the referring physician
shall obtain a service preauthorization from the insurer or
self-insured employer. Any oral authorization shall be memorialized
in writing within five business days.
(f) The prohibition of Section 3139.3 shall not apply where the
physician is in a group practice as defined in Section 3139.3 and
refers a person for services specified in Section 3139.3 to a
multispecialty clinic, as defined in subdivision (l) of Section 1206
of the Health and Safety Code. For diagnostic imaging services
performed with equipment that, when new, had a commercial retail
price of four hundred thousand dollars ($400,000) or more, or
physical therapy services, or psychometric testing that exceeds the
routine screening battery protocols, with a time limit of two to five
hours, established by the administrative director, performed at the
multispecialty facility, the referring physician shall obtain a
service preauthorization from the insurer or self-insured employer.
Any oral authorization shall be memorialized in writing within five
business days.
(g) The requirement for preauthorization in Sections (c), (e), and
(f) shall not apply to a patient for whom the physician or group
accepts payment on a capitated risk basis.
(h) The prohibition of Section 3139.3 shall not apply to any
facility when used to provide health care services to an enrollee of
a health care service plan licensed pursuant to the Knox-Keene Health
Care Service Plan Act of 1975 (Chapter 2.2 (commencing with Section
1340) of Division 2 of the Health and Safety Code).
3139.4. (a) The administrative director may review advertising
copy to ensure compliance with Section 651 of the Business and
Professions Code and may require qualified medical evaluators to
maintain a file of all advertising copy for a period of 90 days from
the date of its use. Any file so required to be maintained shall be
available to the administrative director upon his or her request for
review.
(b) No advertising copy shall be used after its use has been
disapproved by the administrative director and the qualified medical
evaluator has been notified in writing of the disapproval.
(c) A qualified medical evaluator who is found by the
administrative director to have violated any provision of this
section may be terminated, suspended, or placed on probation by the
administrative director.
(d) Proceedings to determine whether a violation of this section
has occurred shall be conducted pursuant to Chapter 4 (commencing
with Section 11370) of Part 1 of Division 3 of Title 2 of the
Government Code.
(e) The administrative director shall adopt regulations governing
advertising by physicians with respect to industrial injuries or
illnesses. In adopting regulations pursuant to this subdivision, the
administrative director shall review existing regulations, including
regulations adopted by the State Bar, to identify those existing
regulatory approaches that may serve as a model for regulations
required by this subdivision.
(f) Subdivision (a) shall not be construed to alter the
application of Section 651 of the Business and Professions Code.
3139.43. (a) No person or entity shall advertise, print, display,
publish, distribute, or broadcast, or cause or permit to be
advertised, printed, displayed, published, distributed, or broadcast
in any manner, any statement concerning services or benefits to be
provided to an injured worker, that is paid for directly or
indirectly by that person or entity and is false, misleading, or
deceptive, or that omits material information necessary to make the
statement therein not false, misleading, or deceptive.
(b) The administrative director shall adopt regulations governing
advertising by persons or entities other than physicians and
attorneys with respect to services or benefits for injured workers.
In promulgating regulations pursuant to this subdivision, the
administrative director shall review existing regulations, including
those adopted by the State Bar, to identify those regulatory
approaches that may serve as a model for regulations required by this
subdivision.
(c) A violation of subdivision (a) is a misdemeanor, punishable by
incarceration in a county jail for not more than one year, or by a
fine not exceeding ten thousand dollars ($10,000), or both.
(d) This section shall not apply to physicians or attorneys. It
is the intent of the Legislature to exempt physicians and attorneys
from this section because the conduct regulated by this section, with
respect to physicians and attorneys, is governed by other provisions
of law.
3139.45. (a) In adopting regulations pursuant to Sections 3139.4
and 3139.43, the administrative director shall take particular care
to preclude any advertisements with respect to industrial injuries or
illnesses that are false or mislead the public with respect to
workers' compensation. In adopting rules with respect to advertising,
the State Bar and physician licensing boards shall also take
particular care to achieve the same goal.
(b) For purposes of subdivision (a), false or misleading
advertisements shall include advertisements that do any of the
following:
(1) Contain an untrue statement.
(2) Contain any matter, or present or arrange any matter in a
manner or format that is false, deceptive, or that tends to confuse,
deceive, or mislead.
(3) Omit any fact necessary to make the statement made, in the
light of the circumstances under which the statement is made, not
misleading.
(4) Are transmitted in any manner that involves coercion, duress,
compulsion, intimidation, threats, or vexatious or harassing conduct.
(5) Entice a person to respond by the offering of any
consideration, including a good or service but excluding free medical
evaluations or treatment, that would be provided either at no charge
or for less than market value. No free medical evaluation or
treatment shall be offered for the purpose of defrauding any entity.
3139.47. The Director of Industrial Relations shall establish and
maintain a program to encourage, facilitate, and educate employers
to provide early and sustained return to work after occupational
injury or illness. The program shall do both of the following:
(a) Develop educational materials and guides, in easily
understandable language in both print and electronic form, for
employers, health care providers, employees, and labor unions. These
materials shall address issues including, but not limited to, early
return to work, assessment of functional abilities and limitations,
development of appropriate work restrictions, job analysis, worksite
modifications, assistive equipment and devices, and available
resources.
(b) Conduct training for employee and employer organizations and
health care providers concerning the accommodation of injured
employees and the prevention of reinjury.
3139.48. (a) The administrative director shall establish the
Return-to-Work Program in order to promote the early and sustained
return to work of the employee following a work-related injury or
illness.
(b) Upon submission by employers of documentation in accordance
with regulations adopted pursuant to subdivision (h), the
administrative director shall pay the wage reimbursement, workplace
modification expense reimbursement, and premium reimbursement allowed
under this section.
(c) Any employer, except the state or an employer eligible to
secure the payment of compensation pursuant to subdivision (c) of
Section 3700, may apply for a reimbursement for wages paid to an
employee who has returned to modified or alternative work, as defined
in paragraphs (5) and (6) of subdivision (a) of Section 4644, with
the employer during the period the employee is temporarily disabled
from his or her employment in accordance with all of the following:
(1) The reimbursement shall be allowed for up to 50 percent of
wages paid to the employee.
(2) The reimbursement shall be allowed for a period of no more
than 90 days, or until the employee is released to the full duties of
his or her usual occupation, or until the employee's condition
becomes permanent and stationary, whichever occurs first.
(3) The modified or alternative work is compatible with the
employee's documented work restrictions imposed by the treating
physician as a result of the work injury or illness.
(4) The reimbursement shall be paid from the Workers' Compensation
Return-to-Work Fund, created in subdivision (i), as a reimbursement
to the employer after submission of documentation of eligibility and
wages paid.
(d) The administrative director shall reimburse an employer for
expenses incurred to make workplace modifications to accommodate the
employee's return to modified or alternative work, as follows:
(1) The maximum reimbursement to an employer for expenses to
accommodate each temporarily disabled injured worker is one thousand
two hundred fifty dollars ($1,250).
(2) The maximum reimbursement to an employer for expenses to
accommodate each permanently disabled worker who is a qualified
injured worker is two thousand five hundred dollars ($2,500). If the
employer received reimbursement under paragraph (1), the amount of
the reimbursement under paragraph (1) and this paragraph shall not
exceed two thousand five hundred dollars ($2,500).
(3) The modification expenses shall be incurred in order to allow
a temporarily disabled worker to perform modified or alternative work
within physician-imposed temporary work restrictions, or to allow a
permanently disabled worker who is a qualified injured worker to
return to sustained modified or alternative employment with the
employer within physician-imposed permanent work restrictions.
(4) Allowable expenses may include physical modifications to the
worksite, equipment, devices, furniture, tools, or other necessary
costs for accommodation of the employee's restrictions.
(e) (1) An insured employer may apply to the administrative
director for reimbursement of workers' compensation insurance
premiums attributable to the sustained employment of a qualified
injured worker following the period for premium refund provided in
subdivision (a) of Section 4638. The reimbursement shall be equal to
the standard premium computed on the wages paid by the employer to
the qualified injured worker during each 12-month period.
(2) An employer that employs 100 or fewer employees on the date of
injury may be reimbursed for 100 percent of the workers'
compensation insurance premium paid for the employee for up to two
years. An employer that employs more than 100 employees on the date
of injury may be reimbursed for 50 percent of the workers'
compensation insurance premium paid for the employee for up to two
years. The period subject to premium reimbursement shall begin on
the first day after the end of the 12-month period for premium refund
provided in subdivision (a) of Section 4638 and shall continue for a
maximum of two years.
(3) The premium reimbursement shall be paid to the employer
annually after each consecutive period of 12 months, provided that
the qualified injured worker continues modified or alternative
employment with that employer in a regular position that pays at
least 85 percent of the employee's pre-injury wages and compensation.
(f) This section shall not create a preference in employment for
injured employees over noninjured employees. It shall be unlawful
for an employer to discriminatorily terminate, lay off, demote, or
otherwise displace an employee in order to return an industrially
injured employee to employment for the purpose of obtaining the
reimbursement set forth in subdivisions (c), (d), or (e).
(g) For purposes of this section, "employee" means a worker who
has suffered a work-related injury or illness on or after July 1,
2004.
(h) The administrative director shall adopt regulations to carry
out this section. Regulations allocating budget funds that are
insufficient to implement the maximum wage reimbursement, workplace
modification expense reimbursement, and premium reimbursement
provided for in this section shall include a prioritization schema
according to which employers with less than 100 employees shall be
given preference in the allocation of those funds.
(i) The Workers' Compensation Return-to-Work Fund is hereby
created as a special fund in the State Treasury. The fund shall be
administered by the administrative director. Moneys in the fund may
be expended by the administrative director, upon appropriation by the
Legislature, only for purposes of implementing this section. The
unencumbered balance remaining in the fund as of January 1, 2009,
shall revert to the General Fund.
(j) This section shall be operative on July 1, 2004.
(k) This section shall not be implemented unless and until funds
are appropriated by the Legislature for this purpose in the annual
Budget Act or other statute commencing with the 2004-05 fiscal year.
(l) This section shall remain in effect only until January 1,
2009, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2009, deletes or extends
that date.
3139.49. (a) The administrative director shall contract with an
independent research organization to conduct a study and issue a
report on the Return-to-Work Program established in Section 3139.48.
The study shall examine at least two years' operation of the program
and shall address all of the following:
(1) The effectiveness of the wage reimbursement, workplace
modification expense reimbursement, and premium reimbursement
components of the program.
(2) The rate of participation by insured and self-insured
employers, including information on the size and industry of
employers.
(3) Comparison of rates of utilization of modified and alternative
work before and after establishment of the program and evaluation of
whether there is an increase in sustained return to work.
(4) The impact of the program on injured employees.
(5) The cost-effectiveness of the program.
(6) Identification of potential future funding mechanisms for the
program.
(b) On or before January 1, 2008, the administrative director
shall make the report available to the public and the Legislature.
(c) This section shall remain in effect only until January 1,
2009, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2009, deletes or extends
that date.
3139.5. (a) The administrative director shall establish a
vocational rehabilitation unit that shall include appropriate
professional staff and have the following duties:
(1) To foster, review, and approve vocational rehabilitation plans
developed by a qualified rehabilitation representative of the
employer, insurer, state agency, or employee. Plans agreed to by the
employer and employee do not require approval by the vocational
rehabilitation unit unless the employee is unrepresented.
(2) To develop rules and regulations, to be adopted by the
administrative director, providing for a procedure in which an
employee may waive the services of a qualified rehabilitation
representative where the employee has been enrolled and made
substantial progress toward completion of a degree or certificate
from a community college, California State University, or the
University of California and desires a plan to complete the degree or
certificate. These rules and regulations shall provide that this
waiver as well as any plan developed without the assistance of a
qualified rehabilitation representative must be approved by the
rehabilitation unit.
(3) To develop rules and regulations, to be adopted by the
administrative director, which would expedite and facilitate the
identification, notification and referral of industrially injured
employees to vocational rehabilitation services.
(4) To coordinate and enforce the implementation of vocational
rehabilitation plans.
(5) To develop a fee schedule, to be adopted by the administrative
director, governing reasonable fees for vocational rehabilitation
services provided on and after January 1, 1991. The initial fee
schedule promulgated under this paragraph shall be designed to reduce
the cost of vocational rehabilitation services by 10 percent from
the level of fees paid during 1989. On or before July 1, 1994, the
administrative director shall establish the maximum aggregate
permissible fees that may be charged for counseling. Those fees
shall not exceed four thousand five hundred dollars ($4,500) and
shall be included within the sixteen thousand dollar ($16,000) cap.
The fee schedule shall permit up to (A) three thousand dollars
($3,000) for vocational evaluation, evaluation of vocational
feasibility, initial interview, vocational testing, counseling and
research for plan development, and preparation of the Division of
Workers' Compensation Form 102, and (B) three thousand five hundred
dollars ($3,500) for plan monitoring, job seeking skills, and job
placement research and counseling. However, in no event shall the
aggregate of (A) and (B) exceed four thousand five hundred dollars
($4,500).
(6) To develop standards, to be adopted by the administrative
director, for governing the timeliness and the quality of vocational
rehabilitation services.
(b) The salaries of the personnel of the vocational rehabilitation
unit shall be fixed by the Department of Personnel Administration.
(c) When an employee is determined to be medically eligible and
chooses to participate in a vocational rehabilitation program, he or
she shall continue to receive temporary disability indemnity payments
only until his or her medical condition becomes permanent and
stationary and, thereafter, may receive a maintenance allowance.
Rehabilitation maintenance allowance payments shall begin after the
employee's medical condition becomes permanent and stationary, upon a
request for vocational rehabilitation services. Thereafter, the
maintenance allowance shall be paid for a period not to exceed 52
weeks in the aggregate, except where the overall cap on vocational
rehabilitation services can be exceeded under this section or Section
4642 or subdivision (d) or (e) of Section 4644.
The employee also shall receive additional living expenses
necessitated by the vocational rehabilitation services, together with
all reasonable and necessary vocational training, at the expense of
the employer, but in no event shall the expenses, counseling fees,
training, maintenance allowance, and costs associated with, or
arising out of, vocational rehabilitation services incurred after the
employee's request for vocational rehabilitation services, except
temporary disability payments, exceed sixteen thousand dollars
($16,000). The administrative director shall adopt regulations to
ensure that the continued receipt of vocational rehabilitation
maintenance allowance benefits is dependent upon the injured worker's
regular and consistent attendance at, and participation in, his or
her vocational rehabilitation program.
(d) The amount of the maintenance allowance due under subdivision
(c) shall be two-thirds of the employee's average weekly earnings at
the date of injury payable as follows:
(1) The amount the employee would have received as continuing
temporary disability indemnity, but not more than two hundred
forty-six dollars ($246) a week for injuries occurring on or after
January 1, 1990.
(2) At the employee's option, an additional amount from permanent
disability indemnity due or payable, sufficient to provide the
employee with a maintenance allowance equal to two-thirds of the
employee's average weekly earnings at the date of injury subject to
the limits specified in subdivision (a) of Section 4453 and the
requirements of Section 4661.5. In no event shall temporary
disability indemnity and maintenance allowance be payable
concurrently.
If the employer disputes the treating physician's determination of
medical eligibility, the employee shall continue to receive that
portion of the maintenance allowance payable under paragraph (1)
pending final determination of the dispute. If the employee disputes
the treating physician's determination of medical eligibility and
prevails, the employee shall be entitled to that portion of the
maintenance allowance
payable under paragraph (1) retroactive to the date of the employee's
request for vocational rehabilitation services. These payments
shall not be counted against the maximum expenditures for vocational
rehabilitation services provided by this section.
(e) No provision of this section nor of any rule, regulation, or
vocational rehabilitation plan developed or adopted under this
section nor any benefit provided pursuant to this section shall apply
to an injured employee whose injury occurred prior to January 1,
1975. Nothing in this section shall affect any plan, benefit, or
program authorized by this section as added by Chapter 1513 of the
Statutes of 1965 or as amended by Chapter 83 of the Statutes of 1972.
(f) The time within which an employee may request vocational
rehabilitation services is set forth in Sections 5405.5, 5410, and
5803.
(g) An offer of a job within state service to a state employee in
State Bargaining Unit 1, 4, 15, 18, or 20 at the same or similar
salary and the same or similar geographic location is a prima facie
offer of vocational rehabilitation under this statute.
(h) It shall be unlawful for a qualified rehabilitation
representative or rehabilitation counselor to refer any employee to
any work evaluation facility or to any education or training program
if the qualified rehabilitation representative or rehabilitation
counselor, or a spouse, employer, coemployee, or any party with whom
he or she has entered into contract, express or implied, has any
proprietary interest in or contractual relationship with the work
evaluation facility or education or training program. It shall also
be unlawful for any insurer to refer any injured worker to any
rehabilitation provider or facility if the insurer has a proprietary
interest in the rehabilitation provider or facility or for any
insurer to charge against any claim for the expenses of employees of
the insurer to provide vocational rehabilitation services unless
those expenses are disclosed to the insured and agreed to in advance.
(i) Any charges by an insurer for the activities of an employee
who supervises outside vocational rehabilitation services shall not
exceed the vocational rehabilitation fee schedule, and shall not be
counted against the overall cap for vocational rehabilitation or the
limit on counselor's fees provided for in this section. These
charges shall be attributed as expenses by the insurer and not losses
for purposes of insurance rating pursuant to Article 2 (commencing
with Section 11730) of Chapter 3 of Division 2 of the Insurance Code.
(j) Any costs of an employer of supervising vocational
rehabilitation services shall not be counted against the overall cap
for vocational rehabilitation or the limit on counselor's fees
provided for in this section.
(k) This section shall only apply to injuries that occurred before
January 1, 2004.
3139.6. (a) The administrative director shall establish and
effect within the Division of Workers' Compensation a continuing
program to provide information and assistance concerning the rights,
benefits, and obligations of the workers' compensation law to
employees and employers subject thereto. The program shall include,
but not be limited to, the following:
(1) The preparation, publishing, and as necessary, updating, of
guides to the California workers' compensation system for employees
and employers. The guides shall detail, in easily understandable
language, the rights and obligations of employees and employers, the
procedures for obtaining benefits, and the means provided for
resolving disputes. Separate guides may be prepared for employees
and employers. The appropriate guide shall be provided to all labor
and employer organizations known to the administrative director, and
to any other person upon request.
(2) The preparation, publishing, and as necessary, updating, of a
pamphlet advising injured workers of their basic rights under workers'
compensation law, and informing them of rights under the Americans
with Disabilities Act, and the provisions of the Fair Employment and
Housing Act relating to individuals with a disability. The pamphlet
shall be written in easily understandable language. The pamphlet
shall be available in both English and Spanish, and shall include
basic information concerning the circumstances under which injured
employees are entitled to the various types of workers' compensation
benefits, the protections against discrimination because of an
injury, the procedures for resolving any disputes which arise, and
the right to seek information and advice from an information and
assistance officer or an attorney.
(b) In each district office of the division, the administrative
director shall appoint an information and assistance officer, and any
other deputy information and assistance officers as the work of the
district office may require. The administrative director shall
provide office facilities and clerical support appropriate to the
functions of these information and assistance officers.
(c) Each information and assistance officer shall be responsible
for the performance of the following duties:
(1) Providing continuing information concerning rights, benefits,
and obligations under workers' compensation laws to injured workers,
employers, lien claimants, and other interested parties.
(2) Upon request by the injured worker, assisting in the prompt
resolution of misunderstanding, disputes, and controversies arising
out of claims for compensation, without formal proceedings, in order
that full and timely compensation benefits shall be furnished. In
performing this duty, information and assistance officers shall not
be responsible for reviewing applications for adjudication or
declarations of readiness to proceed. This function shall be
performed by workers' compensation judges. This function may also be
performed by settlement conference referees upon delegation by the
appeals board.
(3) Distributing any information pamphlets in English and Spanish
as are prepared and approved by the administrative director to all
inquiring injured workers and any other parties that may request
copies of these pamphlets.
(4) Establishing and maintaining liaison with the persons located
in the geographic area served by the district office, with other
affected state agencies, and with organizations representing
employees, employers, insurers, and the medical community.
SEC. 3. The heading of Part 1 (commencing with Section 3200) of
Division 4 of the Labor Code is amended and renumbered to read:
PART 1. 1.5. SCOPE AND
OPERATION
SEC. 4. Section 3201.5 of the Labor Code is amended to read:
3201.5. (a) Except as provided in subdivisions (b) and (c), the
Department of Industrial Relations and the courts of this state shall
recognize as valid and binding any provision in a collective
bargaining agreement between a private employer or groups of
employers engaged in construction, construction maintenance,
or activities limited to rock, sand, gravel, cement and asphalt
operations, heavy-duty mechanics, surveying, and construction
inspection and a union that is the recognized or certified
exclusive bargaining representative that establishes any of the
following:
(1) An alternative dispute resolution system governing disputes
between employees and employers or their insurers that supplements or
replaces all or part of those dispute resolution processes contained
in this division, including, but not limited to, mediation and
arbitration. Any system of arbitration shall provide that the
decision of the arbiter or board of arbitration is subject to review
by the appeals board in the same manner as provided for
reconsideration of a final order, decision, or award made and filed
by a workers' compensation administrative law judge pursuant to the
procedures set forth in Article 1 (commencing with Section 5900) of
Chapter 7 of Part 4 of Division 4, and the court of appeals pursuant
to the procedures set forth in Article 2 (commencing with Section
5950) of Chapter 7 of Part 4 of Division 4, governing orders,
decisions, or awards of the appeals board. The findings of fact,
award, order, or decision of the arbitrator shall have the same force
and effect as an award, order, or decision of a workers'
compensation administrative law judge. Any provision for arbitration
established pursuant to this section shall not be subject to
Sections 5270, 5270.5, 5271, 5272, 5273, 5275, and 5277.
(2) The use of an agreed list of providers of medical treatment
that may be the exclusive source of all medical treatment provided
under this division.
(3) The use of an agreed, limited list of qualified medical
evaluators and agreed medical evaluators that may be the exclusive
source of qualified medical evaluators and agreed medical evaluators
under this division.
(4) Joint labor management safety committees.
(5) A light-duty, modified job or return-to-work program.
(6) A vocational rehabilitation or retraining program utilizing an
agreed list of providers of rehabilitation services that may be the
exclusive source of providers of rehabilitation services under this
division.
(b) Nothing in this section shall allow a collective bargaining
agreement that diminishes the entitlement of an employee to
compensation payments for total or partial disability, temporary
disability, vocational rehabilitation, or medical treatment fully
paid by the employer as otherwise provided in this division. The
portion of any agreement that violates this subdivision shall be
declared null and void.
(c) Subdivision (a) shall apply only to the following:
(1) An employer developing or projecting an annual workers'
compensation insurance premium, in California, of two hundred fifty
thousand dollars ($250,000) or more, or any employer that paid an
annual workers' compensation insurance premium, in California, of two
hundred fifty thousand dollars ($250,000) in at least one of the
previous three years.
(2) Groups of employers engaged in a workers' compensation safety
group complying with Sections 11656.6 and 11656.7 of the Insurance
Code, and established pursuant to a joint labor management safety
committee or committees, that develops or projects annual workers'
compensation insurance premiums of two million dollars ($2,000,000)
or more.
(3) Employers or groups of employers that are self-insured in
compliance with Section 3700 that would have projected annual workers'
compensation costs that meet the requirements of, and that meet the
other requirements of, paragraph (1) in the case of employers, or
paragraph (2) in the case of groups of employers.
(4) Employers covered by an owner or general contractor provided
wrap-up insurance policy applicable to a single construction site
that develops workers' compensation insurance premiums of two million
dollars ($2,000,000) or more with respect to those employees covered
by that wrap-up insurance policy.
(d) Employers and labor representatives who meet the eligibility
requirements of this section shall be issued a letter by the
administrative director advising each employer and labor
representative that, based upon the review of all documents and
materials submitted as required by the administrative director, each
has met the eligibility requirements of this section.
(e) The premium rate for a policy of insurance issued pursuant to
this section shall not be subject to the requirements of Section
11732 or 11732.5 of the Insurance Code.
(f) No employer may establish or continue a program established
under this section until it has provided the administrative director
with all of the following:
(1) Upon its original application and whenever it is renegotiated
thereafter, a copy of the collective bargaining agreement and the
approximate number of employees who will be covered thereby.
(2) Upon its original application and annually thereafter, a valid
and active license where that license is required by law as a
condition of doing business in the state within the industries set
forth in subdivision (a) of Section 3201.5.
(3) Upon its original application and annually thereafter, a
statement signed under penalty of perjury, that no action has been
taken by any administrative agency or court of the United States to
invalidate the collective bargaining agreement.
(4) The name, address, and telephone number of the contact person
of the employer.
(5) Any other information that the administrative director deems
necessary to further the purposes of this section.
(g) No collective bargaining representative may establish or
continue to participate in a program established under this section
unless all of the following requirements are met:
(1) Upon its original application and annually thereafter, it has
provided to the administrative director a copy of its most recent
LM-2 or LM-3 filing with the United States Department of Labor, along
with a statement, signed under penalty of perjury, that the document
is a true and correct copy.
(2) It has provided to the administrative director the name,
address, and telephone number of the contact person or persons of the
collective bargaining representative or representatives.
(h) Commencing July 1, 1995, and annually thereafter, the Division
of Workers' Compensation shall report to the Director of the
Department of Industrial Relations the number of collective
bargaining agreements received and the number of employees covered by
these agreements.
(i) By June 30, 1996, and annually thereafter, the Administrative
Director of the Division of Workers' Compensation shall prepare and
notify Members of the Legislature that a report authorized by this
section is available upon request. The report based upon aggregate
data shall include the following:
(1) Person hours and payroll covered by agreements filed.
(2) The number of claims filed.
(3) The average cost per claim shall be reported by cost
components whenever practicable.
(4) The number of litigated claims, including the number of claims
submitted to mediation, the appeals board, or the court of appeal.
(5) The number of contested claims resolved prior to arbitration.
(6) The projected incurred costs and actual costs of claims.
(7) Safety history.
(8) The number of workers participating in vocational
rehabilitation.
(9) The number of workers participating in light-duty programs.
The division shall have the authority to require those employers
and groups of employers listed in subdivision (c) to provide the data
listed above.
(j) The data obtained by the administrative director pursuant to
this section shall be confidential and not subject to public
disclosure under any law of this state. However, the Division of
Workers' Compensation shall create derivative works pursuant to
subdivisions (h) and (i) based on the collective bargaining
agreements and data. Those derivative works shall not be
confidential, but shall be public. On a monthly basis the
administrative director shall make available an updated list of
employers and unions entering into collective bargaining agreements
containing provisions authorized by this section.
SEC. 5. Section 3208 of the Labor Code is amended to read:
3208. "Injury" includes any injury or disease arising out of the
employment that is certified by a physician using medical
evidence based on objective medical findings, as defined in paragraph
(2) of subdivision (j) of Section 3139.2 , including injuries
to artificial members, dentures, hearing aids, eyeglasses ,
and medical braces of all types ; provided, however,
that . However eyeglasses and hearing aids will
not be replaced, repaired, or otherwise compensated for, unless
injury to them is incident to an injury causing disability.
SEC. 6. Section 3208.1 of the Labor Code is amended to read:
3208.1. (a) An injury may be either : (a)
"specific," of the following:
(1) "Specific" and thus occurring as the result of one
incident or exposure which that causes
disability or need for medical treatment ; or (b)
"cumulative," .
(2) "Cumulative" and thus occurring as repetitive mentally
or physically traumatic activities extending over a period of time,
the combined effect of which causes any disability or need for
medical treatment. The
(b) The date of a cumulative injury shall be the date
determined under Section 5412.
(c) In order to establish that a cumulative injury is compensable,
an employee shall demonstrate by a preponderance of the medical
evidence, that the injury was substantially caused by actual
activities of employment.
(d) In order to establish that a specific injury is compensable,
an employee shall demonstrate that the injury has contributed at
least 10 percent to the cause of the disability or death when
compared to all causes of injury in total.
(e) Notwithstanding any other provision of law, an injury shall
not be considered compensable if the person was injured while
incarcerated or imprisoned in a county jail or the state prison.
SEC. 7. Section 3209.3 of the Labor Code is amended to read:
3209.3. (a) "Physician" includes physicians and surgeons holding
an M.D. or D.O. degree, psychologists, acupuncturists, optometrists,
dentists, podiatrists, and chiropractic practitioners licensed by
California state law and within the scope of their practice as
defined by California state law.
(b) "Psychologist" means a licensed psychologist with a doctoral
degree in psychology, or a doctoral degree deemed equivalent for
licensure by the Board of Psychology pursuant to Section 2914 of the
Business and Professions Code, and who either has at least two years
of clinical experience in a recognized health setting or has met the
standards of the National Register of the Health Service Providers in
Psychology.
(c) When treatment or evaluation for an injury is provided by a
psychologist, provision shall be made for appropriate medical
collaboration when requested by the employer or the insurer.
(d) "Acupuncturist" means a person who holds an acupuncturist's
certificate issued pursuant to Chapter 12 (commencing with Section
4925) of Division 2 of the Business and Professions Code.
(e) Nothing in this section shall be construed to
authorize acupuncturists to "Chiropractic practitioner"
means a person who holds a certificate to practice chiropractic
issued pursuant to the Chiropractic Act.
(f) Notwithstanding subdivision (a) and any other provision of
law, an acupuncturist and a chiropractic practitioner may not
determine disability for the purposes of Article 3 (commencing with
Section 4650) of Chapter 2 of Part 2, or under Section 2708 of the
Unemployment Insurance Code.
SEC. 7.5. Section 3600 of the Labor Code is amended to read:
3600. (a) Liability for the compensation
provided by this division, in lieu of any other liability whatsoever
to any person except as otherwise specifically provided in Sections
3602, 3706, and 4558, shall, without regard to negligence, exist
against an employer , including for any injury sustained
by his or her employees arising out of and in the course of the
employment and for the death of any employee if the injury
proximately causes death, in those cases where the following
conditions of compensation concur:
(1) Where, at the time of the injury, both the employer and the
employee are subject to the compensation provisions of this division
and where the employer and employee are not subject to a rule of
liability for injury or death arising out of and in the course of
employment provided by the laws of the United States .
(2) Where, at the time of the injury, the employee is performing
service growing out of and incidental to his or her employment and is
acting within the course of his or her employment.
(3) Where the injury is proximately caused by the employment,
either with or without negligence.
(4) Where the injury is not caused by the intoxication, by alcohol
or the unlawful use of a controlled substance, of the injured
employee. As used in this paragraph, "controlled substance" shall
have the same meaning as prescribed in Section 11007 of the Health
and Safety Code.
(5) Where the injury is not intentionally self-inflicted.
(6) Where the employee has not willfully and deliberately caused
his or her own death.
(7) Where the injury does not arise out of an altercation in which
the injured employee is the initial physical aggressor.
(8) Where the injury is not caused by the commission of a felony,
or a crime which is punishable as specified in subdivision (b) of
Section 17 of the Penal Code, by the injured employee, for which he
or she has been convicted.
(9) Where the injury does not arise out of voluntary participation
in any off-duty recreational, social, or athletic activity not
constituting part of the employee's work-related duties, except where
these activities are a reasonable expectancy of, or are expressly or
impliedly required by, the employment. The administrative director
shall promulgate reasonable rules and regulations requiring employers
to post and keep posted in a conspicuous place or places a notice
advising employees of the provisions of this subdivision. Failure of
the employer to post the notice shall not constitute an expression
of intent to waive the provisions of this subdivision.
(10) Except for psychiatric injuries governed by subdivision (e)
of Section 3208.3, where the claim for compensation is filed after
notice of termination or layoff, including voluntary layoff, and the
claim is for an injury occurring prior to the time of notice of
termination or layoff, no compensation shall be paid unless the
employee demonstrates by a preponderance of the evidence that one or
more of the following conditions apply:
(A) The employer has notice of the injury, as provided under
Chapter 2 (commencing with Section 5400), prior to the notice of
termination or layoff.
(B) The employee's medical records, existing prior to the notice
of termination or layoff, contain evidence of the injury.
(C) The date of injury, as specified in Section 5411, is
subsequent to the date of the notice of termination or layoff, but
prior to the effective date of the termination or layoff.
(D) The date of injury, as specified in Section 5412, is
subsequent to the date of the notice of termination or layoff.
For purposes of this paragraph, an employee provided notice
pursuant to Sections 44948.5, 44949, 44951, 44955, 44955.6, 72411,
87740, and 87743 of the Education Code shall be considered to have
been provided a notice of termination or layoff only upon a district'
s final decision not to reemploy that person.
A notice of termination or layoff that is not followed within 60
days by that termination or layoff shall not be subject to the
provisions of this paragraph, and this paragraph shall not apply
until receipt of a later notice of termination or layoff. The
issuance of frequent notices of termination or layoff to an employee
shall be considered a bad faith personnel action and shall make this
paragraph inapplicable to the employee.
(b) Where an employee, or his or her dependents, receives the
compensation provided by this division and secures a judgment for, or
settlement of, civil damages pursuant to those specific exemptions
to the employee's exclusive remedy set forth in subdivision (b) of
Section 3602 and Section 4558, the compensation paid under this
division shall be credited against the judgment or settlement, and
the employer shall be relieved from the obligation to pay further
compensation to, or on behalf of, the employee or his or her
dependents up to the net amount of the judgment or settlement
received by the employee or his or her heirs, or that portion of the
judgment as has been satisfied.
SEC. 8. Article 2.3 (commencing with Section 3737) is added to
Chapter 4 of Part 1.5 of Division 4 of the Labor Code, to read:
Article 2.3. Private Self-Insurance Groups
3737. For purposes of establishing the ability of a private
self-insured group to self-insured and pay compensation that may
become due under Section 3700, the following shall apply:
(a) A new member employer to a self-insured group shall not be
required to provide certified independently audited financials if the
group has reached and maintains a consolidated net worth of five
million dollars ($5,000,000). However, the new member's financials
may be required to be reviewed as provided by the department.
(b) A new member employer to a self-insured group shall not be
required to have its financials reviewed by the department if the
group has reached and maintains a net worth of ten million dollars
($10,000,000).
3737.3. (a) A private self-insured group may admit a new member
employer, subject to the application for membership being approved by
the department within 30 days of the admittance.
(b) If the department denies the application for membership, the
employer shall leave the group and find coverage elsewhere within 30
to 60 days of the denial of application, as determined by the
department.
(c) A private self-insured group that elects to accept new member
employers prior to the approval of an application by the department
shall do so pursuant to bylaws adopted to address this category of
membership.
(d) An administrator of a self-insured group that demonstrates an
inability to manage the procedures established pursuant to this
section and the bylaws of the private self-insured group for
admitting a new member employer to an existing self-insured group may
be fined or disciplined by the department.
3737.5. Notwithstanding any other provisions of law, an agreement
between a private self-insured group and any entity to administer a
group self-insurance plan or provide marketing or claims handling
services to that private self-insured group, if the agreement is for
a term of five years or less and the total of all operating expenses
does not exceed maximum expense, established by the department by
regulation, shall be presumed valid and deemed approved if the
agreement has been fully disclosed to each member employer of the
group and signed by legal counsel representing the founding members
of the group self-insurer.
3737.7. (a) A private self-insured
group may self-insure a group of employers that are engaged in a
common trade or business as provided in this section. Such a private
self-insured group shall file with the department a statement that
complies with the conditions set forth in paragraph (3) of
subdivision (a) of Section 11656.6 of the Insurance Code.
(b) For purposes of this section, "common trade or business" has
the same meaning as provided in subdivision (b) of Section 11656.6 of
the Insurance Code.
3737.8. This article shall be operative on the date the Insurance
Commissioner certifies to the Secretary of State that this article
is consistent with the model act of the National Association of
Insurance Commissioners.
SEC. 9. Section 4060 of the Labor Code is amended to read:
4060. (a) This section shall only apply to disputes
over the compensability of any injury. This section shall not apply
where injury to any part or parts of the body is accepted as
compensable by the employer.
(b) Neither the employer nor the employee shall be liable for any
comprehensive medical-legal evaluation performed by other than the
treating physician either in whole or in part on behalf of the
employee prior to the filing of a claim form and prior to the time
the claim is denied or becomes presumptively compensable under
Section 5402. However, reports of treating physicians shall be
admissible.
(c) If a medical evaluation is required to determine
compensability at any time after the period specified in subdivision
(b), and the employee is represented by an attorney, each party may
select a qualified medical evaluator to conduct a comprehensive
medical-legal evaluation. Neither party may obtain more than one
comprehensive medical-legal report, provided, however, that any party
may obtain additional reports at their own expense. The parties may,
at any time, agree on one medical evaluator to evaluate the issues
in dispute.
(d) If a medical evaluation is required to determine
compensability at any time after the period specified in subdivision
(b), and the employee is not represented by an attorney, the employer
shall not seek agreement with the employee on a physician to prepare
a comprehensive medical-legal evaluation. The employee may select a
qualified medical evaluator to prepare a comprehensive medical-legal
evaluation. The division shall assist unrepresented employees, and
shall make available to them the list of medical evaluators compiled
under Section 139.2 3139.2 . Neither
party may obtain more than one comprehensive medical-legal report,
provided, however, that any party may obtain additional reports at
their own expense. If an employee has received a comprehensive
medical-legal evaluation under this subdivision, and he or she later
becomes represented by an attorney, he or she shall not be entitled
to an additional evaluation at the employer's expense.
(e) Evaluations performed under this section shall not
be limited to the issue of the compensability of the injury
, but shall address all medical issues in dispute
.
SEC. 10. Section 4061 of the Labor Code is amended to read:
4061. (a) Together with the last payment of temporary disability
indemnity, the employer shall, in a form prescribed by the
administrative director pursuant to Section 138.4
3138.4 , provide the employee one of the following:
(1) Notice either that no permanent disability indemnity will be
paid because the employer alleges the employee has no permanent
impairment or limitations resulting from the injury or notice of the
amount of permanent disability indemnity determined by the employer
to be payable. The notice shall include information concerning how
the employee may obtain a formal medical evaluation pursuant to
subdivision (c) if he or she disagrees with the position taken by the
employer. The notice shall be accompanied by the form prescribed by
the Industrial Medical Council
administrative director for requesting assignment of a panel of
qualified medical evaluators, unless the employee is represented by
an attorney. If the employer determines permanent disability
indemnity is payable, the employer shall advise the employee of the
amount determined payable and the basis on which the determination
was made and whether there is need for continuing medical care.
(2) Notice that permanent disability indemnity may be or is
payable, but that the amount cannot be determined because the
employee's medical condition is not yet permanent and stationary.
The notice shall advise the employee that his or her medical
condition will be monitored until it is permanent and stationary, at
which time the necessary evaluation will be performed to determine
the existence and extent of permanent impairment and limitations for
the purpose of rating permanent disability and to determine the need
for continuing medical care, or at which time the employer will
advise the employee of the amount of permanent disability indemnity
the employer has determined to be payable. If an employee is
provided notice pursuant to this paragraph and the employer later
takes the position that the employee has no permanent impairment or
limitations resulting from the injury, or later determines permanent
disability indemnity is payable, the employer shall in either event,
within 14 days of the determination to take either position, provide
the employee with the notice specified in paragraph (1).
(b) Each notice required by subdivision (a) shall describe the
administrative procedures available to the injured employee and
advise the employee of his or her right to consult an information and
assistance officer or an attorney. It shall contain the following
language:
"Should you decide to be represented by an attorney, you may or
may not receive a larger award, but, unless you are determined to be
ineligible for an award, the attorney's fee will be deducted from any
award you might receive for disability benefits. The decision to be
represented by an attorney is yours to make, but it is voluntary and
may not be necessary for you to receive your benefits."
(c) If the parties do not agree to a permanent disability rating
based on the treating physician's evaluation or the assessment of
need for continuing medical care, and the employee is represented by
an attorney, the employer shall seek agreement with the employee on a
physician to prepare a comprehensive medical evaluation of the
employee's permanent impairment and limitations and any need for
continuing medical care resulting from the injury. If no agreement
is reached within 10 days, or any additional time not to exceed 20
days agreed to by the parties, the parties may not later select an
agreed medical evaluator. Evaluations of an employee's permanent
impairment and limitations obtained prior to the period to reach
agreement shall not be admissible in any proceeding before the
appeals board. After the period to reach agreement has expired,
either party may select a qualified medical evaluator to conduct the
comprehensive medical evaluation. Neither party may obtain more than
one comprehensive medical-legal report, provided, however, that any
party may obtain additional reports at their own expense.
(d) (1) If the parties do not agree to a permanent
disability rating based on the treating physician's evaluation, and
if the employee is not represented by an attorney, the employer shall
not seek agreement with the employee on a physician to prepare an
additional medical evaluation. The employer shall
immediately provide the employee with a form prescribed by the
medical director with which to request assignment of a panel of three
qualified medical evaluators. The employer shall
immediately request assignment of a panel of three qualified medical
evaluators from the medical director and notify the employee of the
request on a form prescribed by the administrator director. A copy
of the treating physician's evaluation shall be included with the
request. Within 30 days of receipt of notice of the assignment of
the panel from the medical director, the employee shall select
a physician from the panel to prepare a medical evaluation of the
employee's permanent impairment and limitations and any need for
continuing medical care resulting from the injury.
For injury. If a comprehensive medical legal
evaluation has been prepared by the treating physician, and no good
cause exists, as defined in subdivision (g), for the failure of the
employee to select a qualified medical evaluator within the 30-day
time period set forth in this subdivision, or, if no assignment of a
panel has been made by the medical director within the timeframes
required by subdivision (h) of Section 3139.2 and the employee has
failed to select a qualified medical evaluator within 45 days of
receipt of the notice from the employer that a panel has been
requested, issues relating to the existence or extent of permanent
impairment and limitations or the need for continuing medical care
resulting from the injury may be the subject of a declaration of
readiness to proceed.
(2) For injuries occurring on or after January 1, 2003,
except as provided in subdivision (b) of Section 4064,
the report of the qualified medical evaluator and the
reports of the treating physician or physicians shall be the only
admissible reports and shall be the only reports obtained by the
employee or the employer on the issues subject to this section.
(e) If an employee obtains a qualified medical evaluator from a
panel pursuant to subdivision (d) or pursuant to subdivision (b) of
Section 4062, and thereafter becomes represented by an attorney and
obtains an additional qualified medical evaluator, the employer shall
have a corresponding right to secure an additional qualified medical
evaluator.
(f) The represented employee shall be responsible for making an
appointment with an agreed medical evaluator.
(g) The unrepresented employee shall be responsible for
making make an appointment with a qualified
medical evaluator selected from a panel of three qualified medical
evaluators within 30 days of receipt of the notice of the
assignment of the panel from the medical director . If a
comprehensive medical-legal evaluation has been completed by the
treating physician, and if no good cause exists for the failure of
the employee to schedule the evaluation, issues relating to the
existence or extent of permanent impairment and limitations or the
need for continuing medical care resulting from the injury may be the
subject of a declaration of readiness to proceed. The
evaluator shall give the employee, at the appointment, a brief
opportunity to ask questions concerning the evaluation process and
the evaluator's background. The unrepresented employee shall then
participate in the evaluation as requested by the evaluator unless
the employee has good cause to discontinue the evaluation. For
purposes of this subdivision, "good cause" shall include evidence
that the evaluator is biased against the employee because of his or
her race, sex, national origin, religion, or sexual preference or
evidence that the evaluator has requested the employee to submit to
an unnecessary medical examination or procedure. If the
unrepresented employee declines to proceed with the evaluation, he or
she shall have the right to a new panel of three qualified medical
evaluators from which to select one to prepare a comprehensive
medical evaluation. If the appeals board subsequently determines
that the employee did not have good cause to not proceed with the
evaluation, the cost of the evaluation shall be deducted from any
award the employee obtains.
(h) Upon selection or assignment pursuant to subdivision (c) or
(d), the medical evaluator shall perform a comprehensive
medical medical-legal evaluation according to
the procedures promulgated adopted by
the Industrial Medical Council administrative
director under paragraphs (2) and (3) of subdivision (j) of
Section 139.2 3139.2 and summarize the
medical findings on a form prescribed by the
Industrial Medical Council administrative
director . The comprehensive medical
medical-legal evaluation shall address all contested
medical issues regarding the employee's permanent
impairment and limitations and any need for continuing medical care
arising from all injuries reported on one or more claim forms
prior to the date of the employee's initial appointment with the
medical evaluator. If, after a comprehensive medical
medical-legal evaluation is prepared, the
employer or the employee subsequently objects to any new
medical issue regarding the employee's permanent
impairment and limitations and any need for continuing medical care
, the parties, to the extent possible, shall utilize the same
medical evaluator who prepared the previous evaluation to resolve the
medical dispute.
(i) Except as provided in Section 139.3
3139.3 , the medical evaluator may obtain consultations from
other physicians who have treated the employee for the injury whose
expertise is necessary to provide a complete and accurate evaluation.
(j) The qualified medical evaluator who has evaluated an
unrepresented employee shall serve the comprehensive medical
evaluation and the summary form on the employee, employer, and the
administrative director. The unrepresented employee or the employer
may submit the treating physician's evaluation for the calculation of
a permanent disability rating. Within 20 days of receipt of the
comprehensive medical evaluation, the administrative director shall
calculate the permanent disability rating according to Section 4660
and serve the rating on the employee and employer.
(k) Any comprehensive medical evaluation concerning an
unrepresented employee which indicates that part or all of an
employee's permanent impairment or limitations may be subject to
apportionment pursuant to Sections 4663 or 4750 shall first be
submitted by the administrative director to a workers' compensation
judge who may refer the report back to the qualified medical
evaluator for correction or clarification if the judge determines the
proposed apportionment is inconsistent with the law.
(l) Within 30 days of receipt of the rating, if the employee is
unrepresented, the employee or employer may request that the
administrative director reconsider the recommended rating or obtain
additional information from the treating physician or medical
evaluator to address issues not addressed or not completely addressed
in the original comprehensive medical evaluation or not prepared in
accord with the procedures of the Industrial Medical Council
promulgated administrative director adopted
under paragraph (2) or (3) of subdivision (j) of Section
139.2 3139.2 . This request shall be in
writing, shall specify the reasons the rating should be reconsidered,
and shall be served on the other party. If the administrative
director finds the comprehensive medical evaluation is not complete
or not in compliance with the required procedures, the administrative
director shall return the report to the treating physician or
qualified medical evaluator for appropriate action as the
administrative director instructs. Upon receipt of the treating
physician's or qualified medical evaluator's final comprehensive
medical evaluation and summary form, the administrative director
shall recalculate the permanent disability rating according to
Section 4660 and serve the rating, the comprehensive medical
evaluation, and the summary form on the employee and employer.
(m) If a comprehensive medical evaluation from the treating
physician or an agreed medical evaluator or a qualified medical
evaluator selected from a three-member panel resolves any issue so as
to require an employer to provide compensation, the employer shall
commence the payment of compensation or promptly commence proceedings
before the appeals board to resolve the dispute. If the employee
and employer agree to a stipulated findings and award as provided
under Section 5702 or to compromise and release the claim under
Chapter 2 (commencing with Section 5000) of Part 3, or if the
employee wishes to commute the award under Chapter 3 (commencing with
Section 5100) of Part 3, the appeals board shall first determine
whether the agreement or commutation is in the best interests of the
employee and whether the proper procedures have been followed in
determining the permanent disability rating. The administrative
director shall promulgate a form to notify the employee, at the time
of service of any rating under this section, of the options specified
in this subdivision, the potential advantages and disadvantages of
each option, and the procedure for disputing the rating.
(n) No issue relating to the existence or extent of permanent
impairment and limitations or the need for continuing medical care
resulting from the injury may be the subject of a declaration of
readiness to proceed unless there has first been a medical evaluation
by a treating physician or an agreed or qualified medical evaluator.
With the exception of an evaluation or evaluations prepared by the
treating physician or physicians, no evaluation of permanent
impairment and limitations or need for continuing medical care
resulting from the injury shall be obtained prior to service of the
comprehensive medical evaluation on the employee and employer if the
employee is unrepresented, or prior to the attempt to select an
agreed medical evaluator if the employee is represented. Evaluations
obtained in violation of this prohibition shall not be admissible in
any proceeding before the appeals board. However, the testimony,
records, and reports offered by the treating physician or physicians
who treated the employee for the injury and comprehensive medical
evaluations prepared by a qualified medical evaluator selected by an
unrepresented employee from a three-member panel shall be admissible.
SEC. 10.5. Section 4062 of the Labor Code is amended to read:
4062. (a) If either the employee or employer objects to a
medical determination made by the treating
physician concerning the permanent and stationary status of
the employee's medical condition, the employee's preclusion
or likely preclusion to engage in his or her usual occupation
, the extent and scope of medical treatment,
or the existence of new and further disability, or any
other medical issues not covered by Section 4060 or 4061,
the objecting party shall notify the other party in writing of the
objection within 20 days of receipt of the report if the employee is
represented by an attorney or within 30 days of receipt of the report
if the employee is not represented by an attorney. These time
limits may be extended for good cause or by mutual agreement. If the
employee is represented by an attorney, the parties shall seek
agreement with the other party on a physician, who need not be a
qualified medical evaluator, to prepare a report resolving the
disputed issue. If no agreement is reached within 10 days, or any
additional time not to exceed 20 days agreed upon by the parties, the
parties may not later select an agreed medical evaluator.
Evaluations obtained prior to the period to reach agreement shall not
be admissible in any proceeding before the appeals board. After the
period to reach agreement has expired, the objecting party may
select a qualified medical evaluator to conduct the comprehensive
medical evaluation. Neither party may obtain more than one
comprehensive medical-legal report, provided, however, that any party
may obtain additional reports at their own expense. The
nonobjecting party may continue to rely on the treating physician's
report or may select a qualified medical evaluator to conduct an
additional evaluation.
(b) (1) If the employee is not represented by an
attorney, the employer shall not seek agreement with the employee on
a physician to prepare the comprehensive medical evaluation.
The employer shall immediately provide the employee with a form
prescribed by the medical director with which to request assignment
of a panel of three qualified medical evaluators. The
employer shall immediately request assignment of a panel of three
qualified medical evaluators from the medical director and notify the
employee of the request on a form prescribed by the administrative
director. A copy of the treating physician's evaluation shall be
included with the request. Within 30 days of receipt of notice of
the assignment of the panel from the medical director, the
employee shall select a physician from the panel to prepare a
comprehensive medical evaluation. For If no
good cause exists, as defined in subdivision (g) of Section 4061, for
the failure of the employee to select a qualified medical evaluator
within the 30-day time period set forth in this subdivision, or, in
no assignment of a panel has been made by the medical director within
the timeframes required by subdivision (h) of Section 3139.2 and the
employee has failed to select a qualified medical evaluator within
45 days of receipt of the notice from the employer that a panel has
been requested, issues relating to the existence or extent of
permanent impairment and limitations or the need for continuing
medical care resulting from the injury may be the subject of a
declaration of readiness to proceed.
(2) For injuries occurring on or after January 1, 2003,
except as provided in subdivision (b) of Section 4064, the evaluation
of the qualified medical evaluator selected from a panel of three
and the reports of the treating physician or physicians shall be the
only admissible reports and shall be the only reports obtained by the
employee or employer on issues subject to this section in a case
involving an unrepresented employee.
(c) Upon completing a determination of the disputed
medical issue, the physician selected under subdivision (a) or (b) to
perform the medical evaluation shall summarize the medical findings
on a form prescribed by the Industrial Medical Council and shall
serve the formal medical evaluation and the summary form on the
employee, employer, and administrative director. The medical
evaluation shall address all contested medical issues arising from
all injuries reported on one or more claim forms prior to the date of
the employee's initial appointment with the medical evaluator. If,
after a medical evaluation is prepared, the employer or the employee
subsequently objects to any new medical issue, the parties, to the
extent possible, shall utilize the same medical evaluator who
prepared the previous evaluation to resolve the medical dispute.
(d) No disputed medical issue specified in subdivision (a) may be
the subject of a declaration of readiness to proceed unless there has
first been an evaluation by the treating physician or an agreed or
qualified medical evaluator.
(e) With the exception of a report or reports prepared
by the treating physician or physicians, no report determining
disputed medical issues set forth in subdivision
(a) shall be obtained prior to the expiration of the period to reach
agreement on the selection of an agreed medical evaluator under
subdivision (a). Reports obtained in violation of this prohibition
shall not be admissible in any proceeding before the appeals board.
However, the testimony, records, and reports offered by the treating
physician or physicians who treated the employee for the injury shall
be admissible.
SEC. 11. Section 4062.5 of the Labor Code is amended to read:
4062.5. If a qualified medical evaluator selected by an
unrepresented employee from a three-member panel fails to complete
the formal medical evaluation within the time-frames
timeframes established by the
Industrial Medical Council administrative director
pursuant to paragraph (1) of subdivision (j) of Section
139.2 3139.2 , the employee shall have
the right to a new panel of three qualified medical evaluators from
which to select one to prepare a formal medical evaluation. Neither
the employee nor the employer shall have any liability for payment
for the formal medical evaluation which was not completed within the
required timeframes unless the employee, on a form prescribed by the
Industrial Medical Council administrative
director , waives his or her right to a new evaluation and
elects to accept the original evaluation even though it was not
completed within the required timeframes.
SEC. 12. Section 4062.9 of the Labor Code is repealed.
4062.9. (a) For injuries occurring on or after January 1, 2003,
in cases where an additional comprehensive medical evaluation is
obtained under Section 4061 or 4062, if the employee has been treated
by his or her personal physician, or by his or her personal
chiropractor, as defined in Section 4601, who was predesignated prior
to the date of injury as provided under Section 4600, the findings
of the personal physician or personal chiropractor are presumed to be
correct. This presumption is rebuttable and may be controverted by
a preponderance of medical opinion indicating a different level of
disability. However, the presumption shall not apply where both
parties select qualified medical examiners.
(b) The administrative director, in consultation with the
Industrial Medical Council, shall develop, not later than January 1,
2004, and periodically revise as necessary thereafter, educational
materials to be used to provide treating physicians and chiropractors
with information and training in basic concepts of workers'
compensation, the role of the treating physician, the conduct of
permanent and stationary evaluations, and report writing.
SEC. 12.5. Section 4064 of the Labor Code is
amended to read:
4064. (a) The employer shall be liable for the cost of each
reasonable and necessary comprehensive medical-legal evaluation
obtained by the employee pursuant to Sections 4060, 4061, and 4062.
Each comprehensive medical-legal evaluation shall address all
contested medical issues arising from all injuries reported on one or
more claim forms.
(b) For injuries occurring on or after January 1, 2003,
if an unrepresented employee obtains an attorney after the evaluation
pursuant to subdivision (d) of Section 4061 or subdivision (b) of
Section 4062 has been completed, the employee shall be entitled to
the same reports at employer expense as an employee who has been
represented from the time the dispute arose and those reports shall
be admissible in any proceeding before the appeals board.
(c) Subject to Section 4906, if an employer files an
application for adjudication and the employee is unrepresented at the
time the application is filed, the employer shall be liable for any
attorney's fees incurred by the employee in connection with the
application for adjudication.
(d)
(c) The employer shall not be liable for the cost of any
comprehensive medical medical-legal
evaluations obtained by the employee other than those authorized
pursuant to Sections 4060, 4061, and 4062. However, no party is
prohibited from obtaining any medical evaluation
or consultation at the party's own expense. In no event shall an
employer or employee be liable for an evaluation obtained in
violation of subdivision (b) of Section 4060. All comprehensive
medical medical-legal evaluations
obtained by any party shall be admissible in any proceeding before
the appeals board except as provided in subdivisions (d) and (m) of
Section 4061 and subdivisions (b) and (e) of Section 4062.
SEC. 13. Section 4068 of the Labor Code is amended to read:
4068. (a) Upon determining that a treating physician's report
contains opinions that are the result of conjecture, are not
supported by adequate evidence, or that indicate bias, the appeals
board shall so notify the administrative director in writing in a
manner he or she has specified.
(b) If the administrative director believes that any treating
physician's reports show a pattern of unsupported opinions, he or she
shall notify in writing the physician's applicable licensing body of
his findings. If the treating physician is a medical
evaluator, the administrative director shall also notify the
Industrial Medical Council.
SEC. 14. Section 4600 of the Labor Code is amended to read:
4600. (a) Medical, surgical, chiropractic,
acupuncture, and hospital treatment, including nursing, medicines,
medical and surgical supplies, crutches, and apparatus, including
orthotic and prosthetic devices and services, that is reasonably
required to cure or relieve from the effects of the injury shall be
provided by the employer. In the case of his or her neglect or
refusal seasonably to do so, the employer is liable for the
reasonable expense incurred by or on behalf of the employee in
providing treatment. After
(b) (1) As used in the division and notwithstanding any other
provision of law, medical treatment that is reasonably required to
cure or relieve the injured worker from the effects of his or her
injury means treatment that complies with all of the following:
(A) The treatment is in accordance with high-grade evidence-based
guidelines adopted by medical specialty professional groups, or at a
minimum, generally accepted standards of medical practice that are
based on credible scientific evidence published in peer reviewed
medical literature generally recognized by the relevant medical
community or evidence-based medical treatment guidelines generally
recognized by the medical community.
(B) The treatment is clinically appropriate, in terms of safety,
type, frequency, extent, site, and duration, and considered effective
for the patient's injury.
(C) The treatment is not primarily for the convenience of the
patient, physician, or other health care provider, and not more
costly than an alternative service or sequence of services likely to
produce equivalent therapeutic or diagnostic results as to the
diagnosis or treatment of the injured worker's injury.
(2) Paragraph (1) shall apply to all treatment requested on or
after July 1, 2004, including treatment for injuries sustained prior
to that date.
(c) After 30 days from the date the injury is reported, the
employee may be treated by a physician of his or her own choice or at
a facility of his or her own choice within a reasonable geographic
area , only if the selection of the physician or facility is
mutually agreed to by the employer . However, if an employee
has notified his or her employer in writing prior to the date of
injury that he or she has a personal physician and the employer
has agreed to the choice , the employee shall have the right to
be treated by that physician from the date of injury. If an
employee requests a change of physician pursuant to Section 4601, the
request may be made at any time after the injury, and the
alternative physician, chiropractor, or acupuncturist shall be
provided within five days of the request as required by Section 4601.
For the purpose of this section, "personal physician" means the
employee's regular physician and surgeon, licensed pursuant to
Chapter 5 (commencing with Section 2000) of Division 2 of the
Business and Professions Code, who has previously directed the
medical treatment of the employee, and who retains the employee's
medical records, including his or her medical history.
Where
(d) (1) Where at the request of the employer, the employer's
insurer, the administrative director, the appeals board, or a
workers' compensation judge, the employee submits to examination by a
physician, he or she shall be entitled to receive in addition to all
other benefits herein provided all reasonable expenses of
transportation, meals, and lodging incident to reporting for the
examination, together with one day of temporary disability indemnity
for each day of wages lost in submitting to the examination.
Regardless
(2) Regardless of the date of injury, "reasonable expenses of
transportation" includes mileage fees from the employee's home to
the place of the examination and back at the rate of twenty-one cents
($0.21) a mile or the mileage rate adopted by the Director of the
Department of Personnel Administration pursuant to Section 19820 of
the Government Code, whichever is higher, plus any bridge tolls. The
mileage and tolls shall be paid to the employee at the time he or
she is given notification of the time and place of the examination.
Where
(e) Where at the request of the employer, the employer's
insurer, the administrative director, the appeals board, a workers'
compensation judge, an employee submits to examination by a physician
and the employee does not proficiently speak or understand the
English language, he or she shall be entitled to the services of a
qualified interpreter in accordance with conditions and a fee
schedule prescribed by the administrative director. These services
shall be provided by the employer. For purposes of this section,
"qualified interpreter" means a language interpreter certified, or
deemed certified, pursuant to Article 8 (commencing with Section
11435.05) of Chapter 4.5 of Part 1 of Division 3 of Title 2 of, or
Section 68566 of, the Government Code.
(f) This section shall not apply to employees and employers
covered under Section 4600.3 or 4600.31.
SEC. 15. Section 4600.2 of the Labor Code is amended to read:
4600.2. (a) Notwithstanding In accordance
with subdivision (b) of Section 4600, when a self-insured
employer, group of self-insured employers, insurer of an employer, or
group of insurers contracts with a pharmacy, group of pharmacies, or
pharmacy benefit network to provide medicines and medical supplies
required by this article to be provided to injured employees, those
injured employees that are subject to the contract shall be provided
medicines and medical supplies in the manner prescribed in the
contract for as long as medicines or medical supplies are reasonably
required to cure or relieve the injured employee from the effects of
the injury as prescribed in Section 4600 .
(b) Nothing in this section shall affect the ability of
employee-selected physicians to continue to prescribe and have the
employer provide medicines and medical supplies that the physicians
deem reasonably required to cure or relieve the injured employee from
the effects of the injury as prescribed in Section 4600 .
(c) Each contract described in subdivision (a) shall comply with
standards adopted by the administrative director. In adopting those
standards, the administrative director shall seek to reduce
pharmaceutical costs and may consult any relevant studies or
practices in other states. The standards shall provide for access to
a pharmacy within a reasonable geographic distance from an injured
employee's residence.
SEC. 16. Section 4600.3 of the Labor Code is repealed.
4600.3. (a) (1) Notwithstanding Section 4600, when a self-insured
employer, group of self-insured employers, or the insurer of an
employer contracts with a health care organization certified pursuant
to Section 4600.5 for health care services required by this article
to be provided to injured employees, those employees who are subject
to the contract shall receive medical services in the manner
prescribed in the contract, providing that the employee may choose to
be treated by a personal physician, personal chiropractor, or
personal acupuncturist that he or she has designated prior to the
injury, in which case the employee shall not be treated by the health
care organization. Every employee shall be given an affirmative
choice at the time of employment and at least annually thereafter to
designate or change the designation of a health care organization or
a personal physician, personal chiropractor, or personal
acupuncturist. The choice shall be memorialized in writing and
maintained in the employee's personnel records. The employee who has
designated a personal physician, personal chiropractor, or personal
acupuncturist may change their designated caregiver at any time prior
to the injury. Any employee who fails to designate a personal
physician, personal chiropractor, or personal acupuncturist shall be
treated by the health care organization selected by the employer. If
the health care organization offered by the employer is the workers'
compensation insurer that covers the employee or is an entity that
controls or is controlled by that insurer, as defined by Section 1215
of the Insurance Code, this information shall be included in the
notice of contract with a health care organization.
(2) Each contract described in paragraph (1) shall comply with the
certification standards provided in Section 4600.5, and shall
provide all medical, surgical, chiropractic, acupuncture, and
hospital treatment, including nursing, medicines, medical and
surgical supplies, crutches, and apparatus, including artificial
members, that is reasonably required to cure or relieve the effects
of the injury, as required by this division, without any payment by
the employee of deductibles, copayments, or any share of the premium.
However, an employee may receive immediate emergency medical
treatment that is compensable from a medical service or health care
provider who is not a member of the health care organization.
(3) Insured employers, a group of self-insured employers, or
self-insured employers who contract with a health care organization
for medical services shall give notice to employees of eligible
medical service providers and any other information regarding the
contract and manner of receiving medical services as the
administrative director may prescribe. Employees shall be duly
notified that if they choose to receive care from the health care
organization they must receive treatment for all occupational
injuries and illnesses as prescribed by this section.
(b) Notwithstanding subdivision (a), no employer which is required
to bargain with an exclusive or certified bargaining agent which
represents employees of the employer in accordance with state or
federal employer-employee relations law shall contract with a health
care organization for purposes of Section 4600.5 with regard to
employees whom the bargaining agent is recognized or certified to
represent for collective bargaining purposes pursuant to state or
federal employer-employee relations law unless authorized to do so by
mutual agreement between the bargaining agent and the employer. If
the collective bargaining agreement is subject to the National Labor
Relations Act, the employer may contract with a health care
organization for purposes of Section 4600.5 at any time when the
employer and bargaining agent have bargained to impasse to the extent
required by federal law.
(c) (1) When an employee is not receiving or is not eligible to
receive health care coverage for nonoccupational injuries or
illnesses provided by the employer, if 90 days from the date the
injury is reported the employee who has been receiving treatment from
a health care organization or his or her physician, chiropractor,
acupuncturist, or other agent notifies his or her employer in writing
that he or she desires to stop treatment by the health care
organization, he or she shall have the right to be treated by a
physician, chiropractor, or acupuncturist or at a facility of his or
her own choosing within a reasonable geographic area.
(2) When an employee is receiving or is eligible to receive health
care coverage for nonoccupational injuries or illnesses provided by
the employer, and has agreed to receive care for occupational
injuries and illnesses from a health care organization provided by
the employer, the employee may be treated for occupational injuries
and diseases by a physician, chiropractor, or acupuncturist of his or
her own choice or at a facility of his or her own choice within a
reasonable geographic area if the employee or his or her physician,
chiropractor, acupuncturist, or other agent notifies his or her
employer in writing only after 180 days from the date the injury was
reported, or upon the date of contract renewal or open enrollment of
the health care organization, whichever occurs first, but in no case
until 90 days from the date the injury was reported.
(3) For purposes of this subdivision, an employer shall be deemed
to provide health care coverage for nonoccupational injuries and
illnesses if the employer pays more than one-half the costs of the
coverage, or if the plan is established pursuant to collective
bargaining.
(d) An employee and employer may agree to other forms of therapy
pursuant to Section 3209.7.
(e) An employee enrolled in a health care organization shall have
the right to no less than one change of physician on request, and
shall be given a choice of physicians affiliated with the health care
organization. The health care organization shall provide the
employee a choice of participating physicians within five days of
receiving a request. In addition, the employee shall have the right
to a second opinion from a participating physician on a matter
pertaining to diagnosis or treatment from a participating physician.
(f) Nothing in this section or Section 4600.5 shall be construed
to prohibit a self-insured employer, a group of self-insured
employers, or insurer from engaging in any activities permitted by
Section 4600.
(g) Notwithstanding subdivision (c), in the event that the
employer, group of employers, or the employer's workers' compensation
insurer no longer contracts with the health care organization that
has been treating an injured employee, the employee may continue
treatment provided or arranged by the health care organization. If
the employee does not choose to continue treatment by the health care
organization, the employer may control the employee's treatment for
30 days from the date the injury was reported. After that period,
the employee may be treated by a physician of his or her own choice
or at a facility of his or her own choice within a reasonable
geographic area.
SEC. 17. Section 4600.3 is added to the Labor Code, to read:
4600.3. (a) This section shall only apply to employees who are
eligible to receive health care coverage for nonoccupational injuries
or illnesses provided in whole or part by their employer.
(b) (1) A self-insured employer, group of self-insured employers,
or the insurer of an employer may contract with a health care
organization certified pursuant to Section 4600.5 for health care
services required by this article to be provided to injured
employees, and those employees who are subject to the contract shall
receive medical services in the manner prescribed in the contract.
An employer may contract for health care coverage for nonoccupational
injuries or illnesses with the same entity that provides medical
treatment required by this article. The employee shall receive
medical treatment in the manner prescribed in the contract.
(2) The employee may choose to be treated by a personal physician
prior to the injury, in which case, the physician shall be chosen
from the list of medical providers authorized by the health care
organization.
(3) Each contract described in paragraph (1) shall comply with the
certification standards provided in Section 4600.5, and shall
provide all medically necessary treatment consistent with the
Knox-Keene Health Care Service Plan of 1975 (Chapter 2.2 (commencing
with Section 1340) of Division 2 of the Health and Safety Code),
which shall be presumed to be treatment reasonably required to cure
or relieve the injured worker from the effects of his or her injury.
This presumption affects the burden of proof. Notwithstanding any
other provision of law, all services provided by the health care
organization, including those provided pursuant to the organization's
utilization review and independent medical review, shall also be
presumed to be treatment reasonably required to cure or relieve the
injured worker from the effects of his or her injury. This
presumption affects the burden of proof.
(4) Notwithstanding any other provision of this section, an
employee may receive immediate emergency medical treatment that is
compensable from a medical service or health care provider who is not
a member of the health care organization.
(5) Notwithstanding any provision of this article, no employee
shall be required to pay any deductible, copayment, or any share of
the premium.
(c) An employee enrolled in a health care organization shall have
the right to no less than one change of physician on request and for
this purpose shall choose from physicians affiliated with the health
care organization. The health care organization shall provide the
employee with a choice of these participating physicians within five
days of receiving a request. In addition, the employee shall have
the right to a second opinion from a participating physician on a
matter pertaining to diagnosis or treatment from a participating
physician.
(d) Nothing in this section or Section 4600.5 shall be construed
to prohibit a self-insured employer, a group of self-insured
employers, or insurer from engaging in any activities permitted by
Section 4600.
(e) Notwithstanding subdivision (c), in the event that the
employer, group of employers, or the employer's workers' compensation
insurer no longer contracts with the health care organization that
has been treating an injured employee, the employee may continue
treatment provided or arranged by the health care organization for an
additional 90 days.
SEC. 18. Section 4600.31 is added to the Labor Code, to read:
4600.31. (a) (1) A self-insured employer, group of self-insured
employers, or the insurer of an employer may contract with a health
care organization certified pursuant to Section 4600.5 for health
care services required by this article to be provided to injured
employees, and those employees who are subject to the contract shall
receive medical services in the manner prescribed in the contract.
The employee shall receive medical treatment in the manner prescribed
in the contract that is consistent with Section 4600.
(2) The employee may choose to be treated by a personal physician
prior to the injury, in which case, the physician shall be chosen
from the list of medical providers authorized by the health care
organization.
(3) Each contract described in paragraph (1) shall comply with the
certification standards provided in Section 4600.5, and shall
provide all medically necessary treatment consistent with Section
4600.
(4) Notwithstanding any other provision of this section, an
employee may receive immediate emergency medical treatment that is
compensable from a medical service or health care provider who is not
a member of the health care organization.
(5) Notwithstanding any provision of this article, no employee
shall be required to pay any deductible, copayment, or any share of
the premium.
(b) An employee enrolled in a health care organization shall have
the right to no less than one change of physician on request, and for
this purpose shall choose from physicians affiliated with the health
care organization. The health care organization shall provide the
employee with a choice of these participating physicians within five
days of receiving a request. In addition, the employee shall have
the right to a second opinion from a participating physician on a
matter pertaining to diagnosis or treatment from a participating
physician.
(c) Nothing in this section or Section 4600.5 shall be construed
to prohibit a self-insured employer, a group of self-insured
employers, or insurer from engaging in any activities permitted by
Section 4600.
(d) Notwithstanding subdivision (c), in the event that the
employer, group of employers, or the employer's workers' compensation
insurer no longer contracts with the health care organization that
has been treating an injured employee, the employee may continue
treatment provided or arranged by the health care organization for an
additional 90 days.
SEC. 19. Section 4600.35 of the Labor Code is repealed.
4600.35. Any entity seeking to reimburse health care providers
for health care services rendered to injured workers on a capitated,
or per person per month basis, shall be licensed pursuant to the
Knox-Keene Health Care Service Plan Act of 1975 (Chapter 2.2
(commencing with Section 1340) of Division 2 of the Health and Safety
Code).
SEC. 20. Section 4600.5 of the Labor Code is repealed.
4600.5. (a) Any health care service plan licensed pursuant to the
Knox-Keene Health Care Service Plan Act, a disability insurer
licensed by the Department of Insurance, or any entity, including,
but not limited to, workers' compensation insurers and third-party
administrators authorized by the administrative director under
subdivision (e), may make written application to the administrative
director to become certified as a health care organization to provide
health care to injured employees for injuries and diseases
compensable under this article.
(b) Each application for certification shall be accompanied by a
reasonable fee prescribed by the administrative director, sufficient
to cover the actual cost of processing the application. A
certificate is valid for the period that the director may prescribe
unless sooner revoked or suspended.
(c) If the health care organization is a health care service plan
licensed pursuant to the Knox-Keene Health Care Service Plan Act, and
has provided the Managed Care Unit of the Division of Workers'
Compensation with the necessary documentation to comply with this
subdivision, that organization shall be deemed to be a health care
organization able to provide health care pursuant to Section 4600.3,
without further application duplicating the documentation already
filed with the Department of Managed Health Care. These plans shall
be required to remain in good standing with the Department of Managed
Health Care, and shall meet the following additional requirements:
(1) Proposes to provide all medical and health care services that
may be required by this article.
(2) Provides a program involving cooperative efforts by the
employees, the employer, and the health plan to promote workplace
health and safety, consultative and other services, and early return
to work for injured employees.
(3) Proposes a timely and accurate method to meet the requirements
set forth by the administrative director for all carriers of workers'
compensation coverage to report necessary information
regarding medical and health care
service cost and utilization, rates of return to work, average time
in medical treatment, and other measures as determined by the
administrative director to enable the director to determine the
effectiveness of the plan.
(4) Agrees to provide the administrative director with
information, reports, and records prepared and submitted to the
Department of Managed Health Care in compliance with the Knox-Keene
Health Care Service Plan Act, relating to financial solvency,
provider accessibility, peer review, utilization review, and quality
assurance, upon request, if the administrative director determines
the information is necessary to verify that the plan is providing
medical treatment to injured employees in compliance with the
requirements of this code.
Disclosure of peer review proceedings and records to the
administrative director shall not alter the status of the proceedings
or records as privileged and confidential communications pursuant to
Sections 1370 and 1370.1 of the Health and Safety Code.
(5) Demonstrates the capability to provide occupational medicine
and related disciplines.
(6) Complies with any other requirement the administrative
director determines is necessary to provide medical services to
injured employees consistent with the intent of this article,
including, but not limited to, a written patient grievance policy.
(d) If the health care organization is a disability insurer
licensed by the Department of Insurance, and is in compliance with
subdivision (d) of Sections 10133 and 10133.5 of the Insurance Code,
the administrative director shall certify the organization to provide
health care pursuant to Section 4600.3 if the director finds that
the plan is in good standing with the Department of Insurance and
meets the following additional requirements:
(1) Proposes to provide all medical and health care services that
may be required by this article.
(2) Provides a program involving cooperative efforts by the
employees, the employer, and the health plan to promote workplace
health and safety, consultative and other services, and early return
to work for injured employees.
(3) Proposes a timely and accurate method to meet the requirements
set forth by the administrative director for all carriers of workers'
compensation coverage to report necessary information regarding
medical and health care service cost and utilization, rates of return
to work, average time in medical treatment, and other measures as
determined by the administrative director to enable the director to
determine the effectiveness of the plan.
(4) Agrees to provide the administrative director with
information, reports, and records prepared and submitted to the
Department of Insurance in compliance with the Insurance Code
relating to financial solvency, provider accessibility, peer review,
utilization review, and quality assurance, upon request, if the
administrative director determines the information is necessary to
verify that the plan is providing medical treatment to injured
employees consistent with the intent of this article.
Disclosure of peer review proceedings and records to the
administrative director shall not alter the status of the proceedings
or records as privileged and confidential communications pursuant to
subdivision (d) of Section 10133 of the Insurance Code.
(5) Demonstrates the capability to provide occupational medicine
and related disciplines.
(6) Complies with any other requirement the administrative
director determines is necessary to provide medical services to
injured employees consistent with the intent of this article,
including, but not limited to, a written patient grievance policy.
(e) If the health care organization is a workers' compensation
insurer, third-party administrator, or any other entity that the
administrative director determines meets the requirements of Section
4600.6, the administrative director shall certify the organization to
provide health care pursuant to Section 4600.3 if the director finds
that it meets the following additional requirements:
(1) Proposes to provide all medical and health care services that
may be required by this article.
(2) Provides a program involving cooperative efforts by the
employees, the employer, and the health plan to promote workplace
health and safety, consultative and other services, and early return
to work for injured employees.
(3) Proposes a timely and accurate method to meet the requirements
set forth by the administrative director for all carriers of workers'
compensation coverage to report necessary information regarding
medical and health care service cost and utilization, rates of return
to work, average time in medical treatment, and other measures as
determined by the administrative director to enable the director to
determine the effectiveness of the plan.
(4) Agrees to provide the administrative director with
information, reports, and records relating to provider accessibility,
peer review, utilization review, quality assurance, advertising,
disclosure, medical and financial audits, and grievance systems, upon
request, if the administrative director determines the information
is necessary to verify that the plan is providing medical treatment
to injured employees consistent with the intent of this article.
Disclosure of peer review proceedings and records to the
administrative director shall not alter the status of the proceedings
or records as privileged and confidential communications pursuant to
subdivision (d) of Section 10133 of the Insurance Code.
(5) Demonstrates the capability to provide occupational medicine
and related disciplines.
(6) Complies with any other requirement the administrative
director determines is necessary to provide medical services to
injured employees consistent with the intent of this article,
including, but not limited to, a written patient grievance policy.
(7) Complies with the following requirements:
(A) An organization certified by the administrative director under
this subdivision may not provide or undertake to arrange for the
provision of health care to employees, or to pay for or to reimburse
any part of the cost of that health care in return for a prepaid or
periodic charge paid by or on behalf of those employees.
(B) Every organization certified under this subdivision shall
operate on a fee-for-service basis. As used in this section, fee for
service refers to the situation where the amount of reimbursement
paid by the employer to the organization or providers of health care
is determined by the amount and type of health care rendered by the
organization or provider of health care.
(C) An organization certified under this subdivision is prohibited
from assuming risk.
(f) (1) A workers' compensation health care provider organization
authorized by the Department of Corporations on December 31, 1997,
shall be eligible for certification as a health care organization
under subdivision (e).
(2) An entity that had, on December 31, 1997, submitted an
application with the Commissioner of Corporations under Part 3.2
(commencing with Section 5150) shall be considered an applicant for
certification under subdivision (e) and shall be entitled to priority
in consideration of its application. The Commissioner of
Corporations shall provide complete files for all pending
applications to the administrative director on or before January 31,
1998.
(g) The provisions of this section shall not affect the
confidentiality or admission in evidence of a claimant's medical
treatment records.
(h) Charges for services arranged for or provided by health care
service plans certified by this section and that are paid on a
per-enrollee-periodic-charge basis shall not be subject to the
schedules adopted by the administrative director pursuant to Section
5307.1.
(i) Nothing in this section shall be construed to expand or
constrict any requirements imposed by law on a health care service
plan or insurer when operating as other than a health care
organization pursuant to this section.
(j) In consultation with interested parties, including the
Department of Corporations and the Department of Insurance, the
administrative director shall adopt rules necessary to carry out this
section.
(k) The administrative director shall refuse to certify or may
revoke or suspend the certification of any health care organization
under this section if the director finds that:
(1) The plan for providing medical treatment fails to meet the
requirements of this section.
(2) A health care service plan licensed by the Department of
Managed Health Care, a workers' compensation health care provider
organization authorized by the Department of Corporations, or a
carrier licensed by the Department of Insurance is not in good
standing with its licensing agency.
(3) Services under the plan are not being provided in accordance
with the terms of a certified plan.
(l) (1) When an injured employee requests chiropractic treatment
for work-related injuries, the health care organization shall provide
the injured worker with access to the services of a chiropractor
pursuant to guidelines for chiropractic care established by paragraph
(2). Within five working days of the employee's request to see a
chiropractor, the health care organization and any person or entity
who directs the kind or manner of health care services for the plan
shall refer an injured employee to an affiliated chiropractor for
work-related injuries that are within the guidelines for chiropractic
care established by paragraph (2). Chiropractic care rendered in
accordance with guidelines for chiropractic care established pursuant
to paragraph (2) shall be provided by duly licensed chiropractors
affiliated with the plan.
(2) The health care organization shall establish guidelines for
chiropractic care in consultation with affiliated chiropractors who
are participants in the health care organization's utilization review
process for chiropractic care, which may include qualified medical
evaluators knowledgeable in the treatment of chiropractic conditions.
The guidelines for chiropractic care shall, at a minimum,
explicitly require the referral of any injured employee who so
requests to an affiliated chiropractor for the evaluation or
treatment, or both, of neuromusculoskeletal conditions.
(3) Whenever a dispute concerning the appropriateness or necessity
of chiropractic care for work-related injuries arises, the dispute
shall be resolved by the health care organization's utilization
review process for chiropractic care in accordance with the health
care organization's guidelines for chiropractic care established by
paragraph (2).
Chiropractic utilization review for work-related injuries shall be
conducted in accordance with the health care organization's approved
quality assurance standards and utilization review process for
chiropractic care. Chiropractors affiliated with the plan shall have
access to the health care organization's provider appeals process
and, in the case of chiropractic care for work-related injuries, the
review shall include review by a chiropractor affiliated with the
health care organization, as determined by the health care
organization.
(4) The health care organization shall inform employees of the
procedures for processing and resolving grievances, including those
related to chiropractic care, including the location and telephone
number where grievances may be submitted.
(5) All guidelines for chiropractic care and utilization review
shall be consistent with the standards of this code that require care
to cure or relieve the effects of the industrial injury.
(m) Individually identifiable medical information on patients
submitted to the division shall not be subject to the California
Public Records Act (Chapter 3.5 (commencing with Section 6250) of
Division 7 of Title 1 of the Government Code).
(n) (1) When an injured employee requests acupuncture treatment
for work-related injuries, the health care organization shall provide
the injured worker with access to the services of an acupuncturist
pursuant to guidelines for acupuncture care established by paragraph
(2). Within five working days of the employee's request to see an
acupuncturist, the health care organization and any person or entity
who directs the kind or manner of health care services for the plan
shall refer an injured employee to an affiliated acupuncturist for
work-related injuries that are within the guidelines for acupuncture
care established by paragraph (2). Acupuncture care rendered in
accordance with guidelines for acupuncture care established pursuant
to paragraph (2) shall be provided by duly licensed acupuncturists
affiliated with the plan.
(2) The health care organization shall establish guidelines for
acupuncture care in consultation with affiliated acupuncturists who
are participants in the health care organization's utilization review
process for acupuncture care, which may include qualified medical
evaluators. The guidelines for acupuncture care shall, at a minimum,
explicitly require the referral of any injured employee who so
requests to an affiliated acupuncturist for the evaluation or
treatment, or both, of neuromusculoskeletal conditions.
(3) Whenever a dispute concerning the appropriateness or necessity
of acupuncture care for work-related injuries arises, the dispute
shall be resolved by the health care organization's utilization
review process for acupuncture care in accordance with the health
care organization's guidelines for acupuncture care established by
paragraph (2).
Acupuncture utilization review for work-related injuries shall be
conducted in accordance with the health care organization's approved
quality assurance standards and utilization review process for
acupuncture care. Acupuncturists affiliated with the plan shall have
access to the health care organization's provider appeals process
and, in the case of acupuncture care for work-related injuries, the
review shall include review by an acupuncturist affiliated with the
health care organization, as determined by the health care
organization.
(4) The health care organization shall inform employees of the
procedures for processing and resolving grievances, including those
related to acupuncture care, including the location and telephone
number where grievances may be submitted.
(5) All guidelines for acupuncture care and utilization review
shall be consistent with the standards of this code that require care
to cure or relieve the effects of the industrial injury.
SEC. 21. Section 4600.5 is added to the Labor Code, to read:
4600.5. (a) Any health care service plan licensed pursuant to the
Knox-Keene Health Care Service Plan Act, a disability insurer
licensed by the Department of Insurance, or any entity, including,
but not limited to, workers' compensation insurers and third-party
administrators authorized by the administrative director under
subdivision (e), may make written application to the administrative
director to become certified as a health care organization to provide
health care to injured employees for injuries and diseases
compensable under this article. The administrative director shall
establish or process for the timely review of applications.
(b) Each application for certification shall be accompanied by a
reasonable fee prescribed by the administrative director, sufficient
to cover the actual cost of processing the application. A
certificate is valid for the period that the administrative director
may prescribe unless sooner revoked or suspended.
(c) If the health care organization is a health care service plan
licensed pursuant to the Knox-Keene Health Care Service Plan Act, and
has provided the Managed Care Unit of the Division of Workers'
Compensation with the necessary documentation to comply with this
subdivision, that organization shall be deemed to be a health care
organization able to provide health care pursuant to Section 4600.3,
without further application duplicating the documentation already
filed with the Department of Managed Health Care. These plans shall
be required to remain in good standing with the Department of Managed
Health Care, and shall meet all of the requirements the
administrative director deems necessary.
(d) If the health care organization is a disability insurer
licensed by the Department of Insurance, and is in compliance with
subdivision (d) of Sections 10133 and 10133.5 of the Insurance Code,
the administrative director shall certify the organization to provide
health care pursuant to Section 4600.3 if the administrative
director finds that the plan is in good standing with the Department
of Insurance and meets all of the requirements the administrative
director deems necessary.
(e) If the health care organization is a workers' compensation
insurer, third-party administrator, or any other entity that the
administrative director determines meets the requirements of Section
4600.6, the administrative director shall certify the organization to
provide health care pursuant to this article.
(f) Charges for services arranged for or provided by health care
service plans certified by this section and that are paid on a
per-enrollee-periodic-charge basis shall not be subject to the
schedules adopted by the administrative director pursuant to Section
5307.1.
(g) Nothing in this section shall be construed to expand or
constrict any requirements imposed by law on a health care service
plan or insurer when operating as other than a health care
organization pursuant to this section.
(h) In consultation with interested parties, including the
Department of Corporations and the Department of Insurance, the
administrative director shall adopt rules necessary to carry out this
section.
(i) The administrative director shall refuse to certify or may
revoke or suspend the certification of any health care organization
under this section if the director finds that any of the following
circumstances exist:
(1) The plan for providing medical treatment fails to meet the
requirements of this section.
(2) A health care service plan licensed by the Department of
Managed Health Care, a workers' compensation health care provider
organization authorized by the Department of Corporations, or a
carrier licensed by the Department of Insurance is not in good
standing with its licensing agency.
(3) Services under the plan are not being provided in accordance
with the terms of a certified plan.
(j) When an injured employee requests chiropractic treatment for
work-related injuries, the health care organization shall provide the
injured worker with access to the services of a chiropractor.
Chiropractic care rendered in accordance with guidelines for
chiropractic care shall be provided by duly licensed chiropractors
affiliated with the plan.
(k) When an injured employee requests acupuncture treatment for
what the treating physician agrees are work-related injuries, the
health care organization shall provide the injured worker with access
to the services of an acupuncturist. Acupuncture care rendered in
accordance with guidelines for acupuncture care shall be provided by
duly licensed acupuncturists affiliated with the plan.
SEC. 22. Section 4600.6 of the Labor Code is repealed.
4600.6. Any workers' compensation insurer, third-party
administrator, or other entity seeking certification as a health care
organization under subdivision (e) of Section 4600.5 shall be
subject to the following rules and procedures:
(a) Each application for authorization as an organization under
subdivision (e) of Section 4600.5 shall be verified by an authorized
representative of the applicant and shall be in a form prescribed by
the administrative director. The application shall be accompanied by
the prescribed fee and shall set forth or be accompanied by each and
all of the following:
(1) The basic organizational documents of the applicant, such as
the articles of incorporation, articles of association, partnership
agreement, trust agreement, or other applicable documents and all
amendments thereto.
(2) A copy of the bylaws, rules, and regulations, or similar
documents regulating the conduct of the internal affairs of the
applicant.
(3) A list of the names, addresses, and official positions of the
persons who are to be responsible for the conduct of the affairs of
the applicant, which shall include, among others, all members of the
board of directors, board of trustees, executive committee, or other
governing board or committee, the principal officers, each
shareholder with over 5 percent interest in the case of a
corporation, and all partners or members in the case of a partnership
or association, and each person who has loaned funds to the
applicant for the operation of its business.
(4) A copy of any contract made, or to be made, between the
applicant and any provider of health care, or persons listed in
paragraph (3), or any other person or organization agreeing to
perform an administrative function or service for the plan. The
administrative director by rule may identify contracts excluded from
this requirement and make provision for the submission of form
contracts. The payment rendered or to be rendered to the provider of
health care services shall be deemed confidential information that
shall not be divulged by the administrative director, except that the
payment may be disclosed and become a public record in any
legislative, administrative, or judicial proceeding or inquiry. The
organization shall also submit the name and address of each provider
employed by, or contracting with, the organization, together with his
or her license number.
(5) A statement describing the organization, its method of
providing for health services, and its physical facilities. If
applicable, this statement shall include the health care delivery
capabilities of the organization, including the number of full-time
and part-time physicians under Section 3209.3, the numbers and types
of licensed or state-certified health care support staff, the number
of hospital beds contracted for, and the arrangements and the methods
by which health care will be provided, as defined by the
administrative director under Sections 4600.3 and 4600.5.
(6) A copy of the disclosure forms or materials that are to be
issued to employees.
(7) A copy of the form of the contract that is to be issued to any
employer, insurer of an employer, or a group of self-insured
employers.
(8) Financial statements accompanied by a report, certificate, or
opinion of an independent certified public accountant. However, the
financial statements from public entities or political subdivisions
of the state need not include a report, certificate, or opinion by an
independent certified public accountant if the financial statement
complies with any requirements that may be established by regulation
of the administrative director.
(9) A description of the proposed method of marketing the
organization and a copy of any contract made with any person to
solicit on behalf of the organization or a copy of the form of
agreement used and a list of the contracting parties.
(10) A statement describing the service area or areas to be
served, including the service location for each provider rendering
professional services on behalf of the organization and the location
of any other organization facilities where required by the
administrative director.
(11) A description of organization grievance procedures to be
utilized as required by this part, and a copy of the form specified
by paragraph (3) of subdivision (j).
(12) A description of the procedures and programs for internal
review of the quality of health care pursuant to the requirements set
forth in this part.
(13) Evidence of
adequate insurance coverage or self-insurance to respond to claims
for damages arising out of the furnishing of workers' compensation
health care.
(14) Evidence of adequate insurance coverage or self-insurance to
protect against losses of facilities where required by the
administrative director.
(15) Evidence of adequate workers' compensation coverage to
protect against claims arising out of work-related injuries that
might be brought by the employees and staff of an organization
against the organization.
(16) Evidence of fidelity bonds in such amount as the
administrative director prescribes by regulation.
(17) Other information that the administrative director may
reasonably require.
(b) (1) An organization, solicitor, solicitor firm, or
representative may not use or permit the use of any advertising or
solicitation that is untrue or misleading, or any form of disclosure
that is deceptive. For purposes of this chapter:
(A) A written or printed statement or item of information shall be
deemed untrue if it does not conform to fact in any respect that is
or may be significant to an employer or employee, or potential
employer or employee.
(B) A written or printed statement or item of information shall be
deemed misleading whether or not it may be literally true, if, in
the total context in which the statement is made or the item of
information is communicated, the statement or item of information may
be understood by a person not possessing special knowledge regarding
health care coverage, as indicating any benefit or advantage, or the
absence of any exclusion, limitation, or disadvantage of possible
significance to an employer or employee, or potential employer or
employee.
(C) A disclosure form shall be deemed to be deceptive if the
disclosure form taken as a whole and with consideration given to
typography and format, as well as language, shall be such as to cause
a reasonable person, not possessing special knowledge of workers'
compensation health care, and the disclosure form therefor, to expect
benefits, service charges, or other advantages that the disclosure
form does not provide or that the organization issuing that
disclosure form does not regularly make available to employees.
(2) An organization, solicitor, or representative may not use or
permit the use of any verbal statement that is untrue, misleading, or
deceptive or make any representations about health care offered by
the organization or its cost that does not conform to fact. All
verbal statements are to be held to the same standards as those for
printed matter provided in paragraph (1).
(c) It is unlawful for any person, including an organization,
subject to this part, to represent or imply in any manner that the
person or organization has been sponsored, recommended, or approved,
or that the person's or organization's abilities or qualifications
have in any respect been passed upon, by the administrative director.
(d) (1) An organization may not publish or distribute, or allow to
be published or distributed on its behalf, any advertisement unless
(A) a true copy thereof has first been filed with the administrative
director, at least 30 days prior to any such use, or any shorter
period as the administrative director by rule or order may allow, and
(B) the administrative director by notice has not found the
advertisement, wholly or in part, to be untrue, misleading,
deceptive, or otherwise not in compliance with this part or the rules
thereunder, and specified the deficiencies, within the 30 days or
any shorter time as the administrative director by rule or order may
allow.
(2) If the administrative director finds that any advertisement of
an organization has materially failed to comply with this part or
the rules thereunder, the administrative director may, by order,
require the organization to publish in the same or similar medium, an
approved correction or retraction of any untrue, misleading, or
deceptive statement contained in the advertising.
(3) The administrative director by rule or order may classify
organizations and advertisements and exempt certain classes, wholly
or in part, either unconditionally or upon specified terms and
conditions or for specified periods, from the application of
subdivision (a).
(e) (1) The administrative director shall require the use by each
organization of disclosure forms or materials containing any
information regarding the health care and terms of the workers'
compensation health care contract that the administrative director
may require, so as to afford the public, employers, and employees
with a full and fair disclosure of the provisions of the contract in
readily understood language and in a clearly organized manner. The
administrative director may require that the materials be presented
in a reasonably uniform manner so as to facilitate comparisons
between contracts of the same or other types of organizations. The
disclosure form shall describe the health care that is required by
the administrative director under Sections 4600.3 and 4600.5, and
shall provide that all information be in concise and specific terms,
relative to the contract, together with any additional information as
may be required by the administrative director, in connection with
the organization or contract.
(2) All organizations, solicitors, and representatives of a
workers' compensation health care provider organization shall, when
presenting any contract for examination or sale to a prospective
employee, provide the employee with a properly completed disclosure
form, as prescribed by the administrative director pursuant to this
section for each contract so examined or sold.
(3) In addition to the other disclosures required by this section,
every organization and any agent or employee of the organization
shall, when representing an organization for examination or sale to
any individual purchaser or the representative of a group consisting
of 25 or fewer individuals, disclose in writing the ratio of premium
cost to health care paid for contracts with individuals and with
groups of the same or similar size for the organization's preceding
fiscal year. An organization may report that information by
geographic area, provided the organization identifies the geographic
area and reports information applicable to that geographic area.
(4) Where the administrative director finds it necessary in the
interest of full and fair disclosure, all advertising and other
consumer information disseminated by an organization for the purpose
of influencing persons to become members of an organization shall
contain any supplemental disclosure information that the
administrative director may require.
(f) When the administrative director finds it necessary in the
interest of full and fair disclosure, all advertising and other
consumer information disseminated by an organization for the purpose
of influencing persons to become members of an organization shall
contain any supplemental disclosure information that the
administrative director may require.
(g) (1) An organization may not refuse to enter into any contract
or may not cancel or decline to renew or reinstate any contract
because of the race, color, national origin, ancestry, religion, sex,
marital status, sexual orientation, or age of any contracting party,
prospective contracting party, or person reasonably expected to
benefit from that contract as an employee or otherwise.
(2) The terms of any contract shall not be modified, and the
benefits or coverage of any contract shall not be subject to any
limitations, exceptions, exclusions, reductions, copayments,
coinsurance, deductibles, reservations, or premium, price, or charge
differentials, or other modifications because of the race, color,
national origin, ancestry, religion, sex, marital status, sexual
orientation, or age of any contracting party, potential contracting
party, or person reasonably expected to benefit from that contract as
an employee or otherwise; except that premium, price, or charge
differentials because of the sex or age of any individual when based
on objective, valid, and up-to-date statistical and actuarial data
are not prohibited. Nothing in this section shall be construed to
permit an organization to charge different rates to individual
employees within the same group solely on the basis of the employee's
sex.
(3) It shall be deemed a violation of subdivision (a) for any
organization to utilize marital status, living arrangements,
occupation, gender, beneficiary designation, ZIP Codes or other
territorial classification, or any combination thereof for the
purpose of establishing sexual orientation. Nothing in this section
shall be construed to alter in any manner the existing law
prohibiting organizations from conducting tests for the presence of
human immunodeficiency virus or evidence thereof.
(4) This section shall not be construed to limit the authority of
the administrative director to adopt or enforce regulations
prohibiting discrimination because of sex, marital status, or sexual
orientation.
(h) (1) An organization may not use in its name any of the words
"insurance," "casualty," "health care service plan," "health plan,"
"surety," "mutual," or any other words descriptive of the health
plan, insurance, casualty, or surety business or use any name similar
to the name or description of any health care service plan,
insurance, or surety corporation doing business in this state unless
that organization controls or is controlled by an entity licensed as
a health care service plan or insurer pursuant to the Health and
Safety Code or the Insurance Code and the organization employs a name
related to that of the controlled or controlling entity.
(2) Section 2415 of the Business and Professions Code, pertaining
to fictitious names, does not apply to organizations certified under
this section.
(3) An organization or solicitor firm may not adopt a name style
that is deceptive, or one that could cause the public to believe the
organization is affiliated with or recommended by any governmental or
private entity unless this affiliation or endorsement exists.
(i) Each organization shall meet the following requirements:
(1) All facilities located in this state, including, but not
limited to, clinics, hospitals, and skilled nursing facilities, to be
utilized by the organization shall be licensed by the State
Department of Health Services, if that licensure is required by law.
Facilities not located in this state shall conform to all licensing
and other requirements of the jurisdiction in which they are located.
(2) All personnel employed by or under contract to the
organization shall be licensed or certified by their respective board
or agency, where that licensure or certification is required by law.
(3) All equipment required to be licensed or registered by law
shall be so licensed or registered and the operating personnel for
that equipment shall be licensed or certified as required by law.
(4) The organization shall furnish services in a manner providing
continuity of care and ready referral of patients to other providers
at any time as may be appropriate and consistent with good
professional practice.
(5) All health care shall be readily available at reasonable times
to all employees. To the extent feasible, the organization shall
make all health care readily accessible to all employees.
(6) The organization shall employ and utilize allied health
manpower for the furnishing of health care to the extent permitted by
law and consistent with good health care practice.
(7) The organization shall have the organizational and
administrative capacity to provide services to employees. The
organization shall be able to demonstrate to the department that
health care decisions are rendered by qualified providers, unhindered
by fiscal and administrative management.
(8) All contracts with employers, insurers of employers, and
self-insured employers and all contracts with providers, and other
persons furnishing services, equipment, or facilities to or in
connection with the workers' compensation health care organization,
shall be fair, reasonable, and consistent with the objectives of this
part.
(9) Each organization shall provide to employees all workers'
compensation health care required by this code. The administrative
director shall not determine the scope of workers' compensation
health care to be offered by an organization.
(j) (1) Every organization shall establish and maintain a
grievance system approved by the administrative director under which
employees may submit their grievances to the organization. Each
system shall provide reasonable procedures in accordance with
regulations adopted by the administrative director that shall ensure
adequate consideration of employee grievances and rectification when
appropriate.
(2) Every organization shall inform employees upon enrollment and
annually thereafter of the procedures for processing and resolving
grievances. The information shall include the location and telephone
number where grievances may be submitted.
(3) Every organization shall provide forms for complaints to be
given to employees who wish to register written complaints. The
forms used by organizations shall be approved by the administrative
director in advance as to format.
(4) The organization shall keep in its files all copies of
complaints, and the responses thereto, for a period of five years.
(k) Every organization shall establish procedures in accordance
with regulations of the administrative director for continuously
reviewing the quality of care, performance of medical personnel,
utilization of services and facilities, and costs. Notwithstanding
any other provision of law, there shall be no monetary liability on
the part of, and no cause of action for damages shall arise against,
any person who participates in quality of care or utilization reviews
by peer review committees that are composed chiefly of physicians,
as defined by Section 3209.3, for any act performed during the
reviews if the person acts without malice, has made a reasonable
effort to obtain the facts of the matter, and believes that the
action taken is warranted by the facts, and neither the proceedings
nor the records of the reviews shall be subject to discovery, nor
shall any person in attendance at the reviews be required to testify
as to what transpired thereat. Disclosure of the proceedings or
records to the governing body of an organization or to any person or
entity designated by the organization to review activities of the
committees shall not alter the status of the records or of the
proceedings as privileged communications.
The above prohibition relating to discovery or testimony does not
apply to the statements made by any person in attendance at a review
who is a party to an action or proceeding the subject matter of which
was reviewed, or to any person requesting hospital staff privileges,
or in any action against an insurance carrier alleging bad faith by
the carrier in refusing to accept a settlement offer within the
policy limits, or to the administrative director in conducting
surveys pursuant to subdivision (o).
This section shall not be construed to confer immunity from
liability on any workers' compensation health care organization. In
any case in which, but for the enactment of the preceding provisions
of this section, a cause of action would arise against an
organization, the cause of action shall exist notwithstanding the
provisions of this section.
(l) Nothing in this chapter shall be construed to prevent an
organization from utilizing subcommittees to participate in peer
review activities, nor to prevent an organization from delegating the
responsibilities required by subdivision (i) as it determines to be
appropriate, to subcommittees including subcommittees composed of a
majority of nonphysician health care providers licensed pursuant to
the Business and Professions Code, as long as the organization
controls the scope of authority delegated and may revoke all or part
of this authority at any time. Persons who participate in the
subcommittees shall be entitled to the same immunity from monetary
liability and actions for civil damages as persons who participate in
organization or provider peer review committees pursuant to
subdivision (i).
(m) Every organization shall have and shall demonstrate to the
administrative director that it has all of the following:
(1) Adequate provision for continuity of care.
(2) A procedure for prompt payment and denial of provider claims.
(n) Every contract between an organization and an employer or
insurer of an employer, and every contract between any organization
and a provider of health care, shall be in writing.
(o) (1) The administrative director shall conduct periodically an
onsite medical survey of the health care delivery system of each
organization. The survey shall include a review of the procedures
for obtaining health care, the procedures for regulating utilization,
peer review mechanisms, internal procedures for assuring quality of
care, and the overall performance of the organization in providing
health care and meeting the health needs of employees.
(2) The survey shall be conducted by a panel of qualified health
professionals experienced in evaluating the delivery of workers'
compensation health care. The administrative director shall be
authorized to contract with professional organizations or outside
personnel to conduct medical surveys. These organizations or
personnel shall have demonstrated the ability to objectively evaluate
the delivery of this health care.
(3) Surveys performed pursuant to this section shall be conducted
as often as deemed necessary by the administrative director to assure
the protection of employees, but not less frequently than once every
three years. Nothing in this section shall be construed to require
the survey team to visit each clinic, hospital, office, or facility
of the organization.
(4) Nothing in this section shall be construed to require the
medical survey team to review peer review proceedings and records
conducted and compiled under this section or in medical records.
However, the administrative director shall be authorized to require
onsite review of these peer review proceedings and records or medical
records where necessary to determine that quality health care is
being delivered to employees. Where medical record review is
authorized, the survey team shall ensure that the confidentiality of
the physician-patient relationship is safeguarded in accordance with
existing law and neither the survey team nor the administrative
director or the administrative director's staff may be compelled to
disclose this information except in accordance with the
physician-patient relationship. The administrative director shall
ensure that the confidentiality of the peer review proceedings and
records is maintained. The disclosure of the peer review proceedings
and records to the administrative director or the medical survey
team shall not alter the status of the proceedings or records as
privileged and confidential communications.
(5) The procedures and standards utilized by the survey team shall
be made available to the organizations prior to the conducting of
medical surveys.
(6) During the survey, the members of the survey team shall offer
such advice and assistance to the organization as deemed appropriate.
(7) The administrative director shall notify the organization of
deficiencies found by the survey team. The administrative director
shall give the organization a reasonable time to correct the
deficiencies, and failure on the part of the organization to comply
to the administrative director's satisfaction shall constitute cause
for disciplinary action against the organization.
(8) Reports of all surveys, deficiencies, and correction plans
shall be open to public inspection, except that no surveys,
deficiencies or correction plans shall be made public unless the
organization has had an opportunity to review the survey and file a
statement of response within 30 days, to be attached to the report.
(p) (1) All records, books, and papers of an organization,
management company, solicitor, solicitor firm, and any provider or
subcontractor providing medical or other services to an organization,
management company, solicitor, or solicitor firm shall be open to
inspection during normal business hours by the administrative
director.
(2) To the extent feasible, all the records, books, and papers
described in paragraph (1) shall be located in this state. In
examining those records outside this state, the administrative
director shall consider the cost to the organization, consistent with
the effectiveness of the administrative director's examination, and
may upon reasonable notice require that these records, books, and
papers, or a specified portion thereof, be made available for
examination in this state, or that a true and accurate copy of these
records, books, and papers, or a specified portion thereof, be
furnished to the administrative director.
(q) (1) The administrative director shall conduct an examination
of the administrative affairs of any organization, and each person
with whom the organization has made arrangements for administrative,
or management services, as often as deemed necessary to protect the
interest of employees, but not less frequently than once every five
years.
(2) The expense of conducting any additional or nonroutine
examinations pursuant to this section, and the expense of conducting
any additional or nonroutine medical surveys pursuant to subdivision
(o) shall be charged against the organization being examined or
surveyed. The amount shall include the actual salaries or
compensation paid to the persons making the examination or survey,
the expenses incurred in the course thereof, and overhead costs in
connection therewith as fixed by the administrative director. In
determining the cost of examinations or surveys, the administrative
director may use the estimated average hourly cost for all persons
performing examinations or surveys of workers' compensation health
care organizations for the fiscal year. The amount charged shall be
remitted by the organization to the administrative director.
(3) Reports of all examinations shall be open to public
inspection, except that no examination shall be made public, unless
the organization has had an opportunity to review the examination
report and file a statement or response within 30 days, to be
attached to the report.
SEC. 23. Section 4600.7 of the Labor Code is amended to read:
4600.7. (a) The Workers' Compensation Managed
Care Fund is hereby created in the State Treasury for the
administration of Sections 4600.3 and 4600.5 by the Division of
Workers' Compensation. The administrative director shall establish a
schedule of fees and revenues to be charged to certified health care
organizations and applicants for certification to fully fund the
administration of these provisions and to repay amounts received as a
loan from the General Fund. All fees and revenues shall be
deposited in the Workers' Compensation Managed
Care Fund and shall be used when appropriated
by the Legislature solely for the purpose of carrying out the
responsibilities of the Division of Workers' Compensation under
Section 4600.3 or 4600.5.
(b) On and after July 1, 1998, no funds received as a loan from
the General Fund shall be used to support the administration of
Sections 4600.3 and 4600.5. The loan amount shall be repaid to the
General Fund by assessing a surcharge on the enrollment fee for each
of the next five fiscal years. In the event the surcharge does not
produce sufficient revenue over this period, the surcharge shall be
adjusted to fully repay the loan over the following three fiscal
years, with the final assessment calculated by dividing the balance
of the loan by the enrollees at the end of the final fiscal year.
SEC. 24. Section 4601 of the Labor Code is repealed.
4601. (a) If the employee so requests, the employer shall tender
the employee one change of physician. The employee at any time may
request that the employer tender this one-time change of physician.
Upon request of the employee for a change of physician, the maximum
amount of time permitted by law for the employer or insurance carrier
to provide the employee an alternative physician or, if requested by
the employee, a chiropractor, or an acupuncturist shall be five
working days from the date of the request. Notwithstanding the
30-day time period specified in Section 4600, a request for a change
of physician pursuant to this section may be made at any time. The
employee is entitled, in any serious case, upon request, to the
services of a consulting physician, chiropractor, or acupuncturist of
his or her choice at the expense of the employer. The treatment
shall be at the expense of the employer.
(b) If an employee requesting a change of physician pursuant to
subdivision (a) has notified his or her employer in writing prior to
the date of injury that he or she has a personal chiropractor, the
alternative physician tendered by the employer to the employee, if
the employee so requests, shall be the employee's personal
chiropractor. For the purpose of this article, "personal
chiropractor" means the employee's regular chiropractor licensed
pursuant to Chapter 2 (commencing with Section 1000) of Division 2 of
the Business and Professions Code, who has previously directed
treatment of the employee, and who retains the employee's
chiropractic treatment records, including his or her chiropractic
history.
(c) If an employee requesting a change of physician pursuant to
subdivision (a) has notified his or her employer in writing prior to
the date of injury that he or she has a personal acupuncturist, the
alternative physician tendered by the employer to the employee, if
the employee so requests, shall be the employee's personal
acupuncturist. For the purpose of this article, "personal
acupuncturist" means the employee's regular acupuncturist licensed
pursuant to Chapter 12 (commencing with Section 4935) of Division 2
of the Business and Professions Code, who has previously directed
treatment of the employee, and who retains the employee's acupuncture
treatment records, including his or her acupuncture history.
SEC. 25. Section 4602 of the Labor Code is repealed.
4602. If the employee so requests, the employer shall procure
certification by either the administrative director or the appeals
board as the case may be of the competency, for the particular case,
of the consulting or additional physicians.
SEC. 26. Section 4603 of the Labor Code is repealed.
4603. If the employer desires a change of physicians or
chiropractor, he may petition the administrative director who, upon a
showing of good cause by the employer, may order the employer to
provide a panel of five physicians, or if requested by the employee,
four physicians and one chiropractor competent to treat the
particular case, from which the employee must select one.
SEC. 27. Section 4603.2 of the Labor Code is amended to read:
4603.2. (a) Upon selecting a physician pursuant to Section 4600,
the employee or physician shall forthwith notify the employer of the
name and address of the physician. The physician shall submit a
report to the employer within five working days from the date of the
initial examination and shall submit periodic reports at intervals
that may be prescribed by rules and regulations adopted by the
administrative director.
(b) Payment for medical treatment provided or authorized by the
treating physician selected by the employee or designated by the
employer shall be made by the employer within 60 days after receipt
of each separate, itemized billing, together with any required
reports and any written authorization for services that may have been
received by the physician. If the billing or a portion thereof is
contested, denied, or considered incomplete, the physician shall be
notified, in writing, that the billing is contested, denied, or
considered incomplete, within 30 working days after receipt of the
billing by the employer. A notice that a billing is incomplete shall
state all additional information required to make a decision. Any
properly documented amount not paid within the 60-day period shall be
increased by 10 percent, together with interest at the same rate as
judgments in civil actions retroactive to the date of receipt of the
bill, unless the employer does both of the following:
(1) Pays the uncontested amount within the 60-day period.
(2) Advises, in the manner prescribed by the administrative
director, the physician, or another provider of the items being
contested, the reasons for contesting these items, and the remedies
available to the physician or the other provider if he or she
disagrees. In the case of a bill which that
includes charges from a hospital, outpatient surgery center, or
independent diagnostic facility, advice that a request has been made
for an audit of the bill shall satisfy the requirements of this
paragraph.
If an employer contests all or part of a billing, any amount
determined payable by the appeals board shall carry interest from the
date the amount was due until it is paid.
An employer's liability to a physician or another provider under
this section for delayed payments shall not affect its liability to
an employee under Section 5814 or any other provision of this
division.
(c) Any interest or increase in compensation paid by an insurer
pursuant to this section shall be treated in the same manner as an
increase in compensation under subdivision (d) of Section 4650 for
the purposes of any classification of risks and premium rates, and
any system of merit rating approved or issued pursuant to Article 2
(commencing with Section 11730) of Chapter 3 of Part 3 of Division 2
of the Insurance Code.
(d) (1) Whenever an employer or insurer employs an individual or
contracts with an entity to conduct a review of a billing submitted
by a physician or medical provider, the employer or insurer shall
make available to that individual or entity all documentation
submitted together with that billing by the physician or medical
provider. When an individual or entity conducting a bill review
determines that additional information or documentation is necessary
to review the billing, the individual or entity shall contact the
claims administrator or insurer to obtain the necessary information
or documentation that was submitted by the physician or medical
provider pursuant to subdivision (b).
(2) An individual or entity reviewing a bill submitted by a
physician or medical provider shall not alter the procedure codes
billed or recommend reduction of the amount of the bill unless the
documentation submitted by the physician or medical provider with the
bill has been reviewed by that individual or entity. If the
reviewer does not recommend payment as billed by the physician or
medical provider, the explanation of review shall provide the
physician or medical provider with a specific explanation as to why
the reviewer altered the procedure code or amount billed and the
specific deficiency in the billing or documentation that caused the
reviewer to conclude that the altered procedure code or amount
recommended for payment more accurately represents the service
performed.
(3) Unless the physician or medical provider has billed for
extraordinary circumstances related to the unusual nature of the
medical services rendered pursuant to subdivision (b) of Section
5307.1, this subdivision shall not apply when a bill submitted by a
physician or medical provider is reduced to the amount or amounts
specified in the Official Medical Fee Schedule, preferred provider
contract, or negotiated rate for the procedure codes billed.
(4) The appeals board shall have jurisdiction over disputes
arising out of this subdivision pursuant to Section 5304.
(e) This section shall not apply to employees and employers to
whom Section 4600.3 or 4600.31 applies.
SEC. 28. Section 4604 of the Labor Code is amended to read:
4604. Controversies between an employer and employee
arising under this chapter shall be determined by the appeals board,
upon the request of either party. For those employees and
employers to whom Section 4600.3 or 4600.31 applies, controversies
arising under this article shall be determined pursuant to the
contract.
SEC. 29. Section 4604.5 is added to the Labor Code, to read:
4604.5. (a) Upon adoption by the administrative director of a
medical treatment utilization schedule pursuant to Section 5307.27,
the recommended guidelines set forth in the schedule shall be
presumptively correct on the issue of extent and scope of medical
treatment. The presumption is rebuttable and may be controverted by
a preponderance of scientific medical evidence establishing that a
variance from the guidelines is reasonably required to cure or
relieve the employee from the effects of his or her injury pursuant
to Section 4600. The presumption created is one affecting the burden
of proof.
(b) The recommended guidelines set forth in the schedule adopted
pursuant to subdivision (a) shall reflect practices that are evidence
and scientifically based, nationally recognized, and peer-reviewed.
The guidelines shall be educational and designed to assist providers
by offering an analytical framework for the evaluation and treatment
of the more common problems of injured workers, and shall assure
appropriate and necessary care for all injured workers diagnosed with
industrial conditions.
(c) Three months after the publication date of the updated
American College of Occupational and Environmental Medicine,
Occupational Medicine Practice Guidelines, and continuing until the
effective date of a medical treatment utilization schedule, pursuant
to Section 5307.27, the recommended guidelines set forth in the
American College of Occupational and Environmental Medicine,
Occupational Medicine Practice Guidelines shall be presumptively
correct on the issue of extent and scope of medical treatment. The
presumption is rebuttable and may be controverted by a preponderance
of the evidence establishing that a variance from the guidelines is
reasonably required to cure and relieve the employee from the effects
of his or her injury pursuant to Section 4600.
(d) Notwithstanding the medical treatment utilization schedule or
the guidelines set forth in the American College of Occupational and
Environmental Medicine, Occupational Medicine Practice Guidelines,
for injuries occurring on and after January 1, 2004, an employee
shall be entitled to no more than 24 chiropractic and 24 physical
therapy visits per industrial injury.
(e) The presumption afforded to the treating physician in Section
4062.9 shall not be applicable to cases arising under this section.
(f) This section shall not apply when an insurance carrier
authorizes, in writing, additional visits to a health care
practitioner for physical medicine services.
(g) For all injuries not covered by the American College of
Occupational and Environmental Medicine, Occupational Medicine
Practice Guidelines or official utilization schedule after adoption
pursuant to Section 5307.27, authorized treatment shall be in
accordance with other evidence-based medical treatment guidelines
generally recognized by the national medical community and that are
scientifically based.
(h) This section shall not be apply to employees and employers
whom to Section 4600.3 or 4600.31 applies.
SEC. 30. Section 4609 of the Labor Code is repealed.
4609. (a) In order to prevent the improper selling, leasing, or
transferring of a health care provider's contract, it is the intent
of the Legislature that every arrangement that results in any payor
paying a health care provider a reduced rate for health care services
based on the health care provider's participation in a network or
panel shall be disclosed by the contracting agent to the provider in
advance and shall actively encourage employees to use the network,
unless the health care provider agrees to provide discounts without
that active encouragement.
(b) Beginning July 1, 2000, every contracting agent that sells,
leases, assigns, transfers, or conveys its list of contracted health
care providers and their contracted reimbursement rates to a payor,
as defined in subparagraph (A) of paragraph (3) of subdivision (d),
or another contracting agent shall, upon entering or renewing a
provider contract, do all of the following:
(1) Disclose whether the list of contracted providers may be sold,
leased, transferred, or conveyed to other payors or other
contracting agents, and specify whether those payors or contracting
agents include workers' compensation insurers or automobile insurers.
(2) Disclose what specific practices, if any, payors utilize to
actively encourage employees to use the list of contracted providers
when obtaining medical care that entitles a payor to claim a
contracted rate. For purposes of this paragraph, a payor is deemed
to have actively encouraged employees to use the list of contracted
providers if the employer provides information directly to employees
during the period the employer has medical control advising them of
the existence of the list of contracted providers through the use of
a variety of advertising or marketing approaches that supply the
names, addresses, and telephone numbers of contracted providers to
employees; or in advance of a workplace injury, or upon notice of an
injury or claim by an employee, the approaches may include, but are
not limited to, the use of provider directories, the use of a list of
all contracted providers in an area geographically accessible to the
posting site, the use of wall cards that direct employees to a
readily accessible listing of those providers at the same location as
the wall cards, the use of wall cards that direct employees to a
toll-free telephone number or Internet Web site address, or the use
of toll-free telephone numbers or Internet Web site addresses
supplied directly during the period the employer has medical control.
However, Internet Web site addresses alone shall not be deemed to
satisfy the requirements of this paragraph. Nothing in this
paragraph shall prevent contracting agents or payors from providing
only listings of providers located within a reasonable geographic
range of an employee. A payor who otherwise meets the requirements
of this paragraph is deemed to have met the requirements of this
paragraph regardless of the employer's ability to control medical
treatment pursuant to Sections 4600 and 4600.3.
(3) Disclose whether payors to which the list of contracted
providers may be sold, leased, transferred, or conveyed may be
permitted to pay a provider's contracted rate without actively
encouraging the employees to use the list of contracted providers
when obtaining medical care. Nothing in this subdivision shall be
construed to require a payor to actively encourage the employees to
use the list of contracted providers when obtaining medical care in
the case of an emergency.
(4) Disclose, upon the initial signing of a contract, and within
15 business days of receipt of a written request from a provider or
provider panel, a payor summary of all payors currently eligible to
claim a provider's contracted rate due to the provider's and payor's
respective written agreements with any contracting agent.
(5) Allow providers, upon the initial signing, renewal, or
amendment of a provider contract, to decline to be included in any
list of contracted providers that is sold, leased, transferred, or
conveyed to payors that do not actively encourage the employees to
use the list of contracted providers when obtaining medical care as
described in paragraph (2). Each provider's election under this
paragraph shall be binding on the contracting agent with which the
provider has the contract and any other contracting agent that buys,
leases, or otherwise obtains the list of contracted providers.
A provider shall not be excluded from any list of contracted
providers that is sold, leased, transferred, or conveyed to payors
that actively encourage the employees to use the list of contracted
providers when obtaining medical care, based upon the provider's
refusal to be included on any list of contracted providers that is
sold, leased, transferred, or conveyed to payors that do not actively
encourage the employees to use the list of contracted providers when
obtaining medical care.
(6) If the payor's explanation of benefits or explanation of
review does not identify the name of the network that has a written
agreement signed by the provider whereby the payor is entitled,
directly or indirectly, to pay a preferred rate for the services
rendered, the contracting agent shall do the following:
(A) Maintain a Web site that is accessible to all contracted
providers and updated at least quarterly and maintain a toll-free
telephone number accessible to all contracted providers whereby
providers may access payor summary information.
(B) Disclose through the use of an Internet Web site, a toll-free
telephone number, or through a delivery or mail service to its
contracted providers, within 30 days, any sale, lease assignment,
transfer or conveyance of the contracted reimbursement rates to
another contracting agent or payor.
(7) Nothing in this subdivision shall be construed to impose
requirements or regulations upon payors, as defined in subparagraph
(A) of paragraph (3) of subdivision (d).
(c) Beginning July 1, 2000, a payor, as defined in subparagraph
(B) of paragraph (3) of subdivision (d), shall do all of the
following:
(1) Provide an explanation of benefits or explanation of review
that identifies the name of the network with which the payor has an
agreement that entitles them to pay a preferred rate for the services
rendered.
(2) Demonstrate that it is entitled to pay a contracted rate
within 30 business days of receipt of a written request from a
provider who has received a claim payment from the payor. The
provider shall include in the request a statement explaining why the
payment is not at the correct contracted rate for the services
provided. The failure of the provider to include a statement shall
relieve the payor from the responsibility of demonstrating that it is
entitled to pay the disputed contracted rate. The failure of a
payor to make the demonstration to a properly documented request of
the provider within 30 business days shall render the payor
responsible for the lesser of the provider's actual fee or, as
applicable, any fee schedule pursuant to this division, which amount
shall be due and payable within 10 days of receipt of written notice
from the provider, and shall bar the payor from taking any future
discounts from that provider without the provider's express written
consent until the payor can demonstrate to the provider that it is
entitled to pay a contracted rate as provided in this subdivision. A
payor shall be deemed to have demonstrated that it is entitled to
pay a contracted rate if it complies with either of the following:
(A) Describes the specific practices the payor utilizes to comply
with paragraph (2) of subdivision (b), and demonstrates compliance
with paragraph (1).
(B) Identifies the contracting agent with whom the payor has a
written agreement whereby the payor is not required to actively
encourage employees to use the list of contracted providers pursuant
to paragraph (5) of subdivision (b).
(d) For the purposes of this section, the following terms have
the following meanings:
(1) "Contracting agent" means an insurer licensed under the
Insurance Code to provide workers' compensation insurance, a health
care service plan, including a specialized health care service plan,
a preferred provider organization, or a self-insured employer, while
engaged, for monetary or other consideration, in the act of selling,
leasing, transferring, assigning, or conveying a provider or provider
panel to provide health care services to employees for work-related
injuries.
(2) "Employee" means a person entitled to seek health care
services for a work-related injury.
(3) (A) For the purposes of subdivision (b), "payor" means a
health care service plan, including a specialized health care service
plan, an insurer licensed under the Insurance Code to provide
disability insurance that covers hospital, medical, or surgical
benefits, automobile insurance, or workers' compensation insurance,
or a self-insured employer that is responsible to pay for health care
services provided to beneficiaries.
(B) For the purposes of subdivision (c), "payor" means an insurer
licensed under the Insurance Code to provide workers' compensation
insurance, a self-insured employer, a third-party administrator or
trust, or any other third party that is responsible to pay health
care services provided to employees for work-related injuries, or an
agent of an entity included in this definition.
(4) "Payor summary" means a written summary that includes the
payor's name and the type of plan, including, but not limited to, a
group health plan, an automobile insurance plan, and a workers'
compensation insurance plan.
(5) "Provider" means any of the following:
(A) Any person licensed or certified pursuant to Division 2
(commencing with Section 500) of the Business and Professions Code.
(B) Any person licensed pursuant to the Chiropractic Initiative
Act or the Osteopathic Initiative Act.
(C) Any person licensed pursuant to Chapter 2.5 (commencing with
Section 1440) of Division 2 of the Health and Safety Code.
(D) A clinic, health dispensary, or health facility licensed
pursuant to Division 2 (commencing with Section 1200) of the Health
and Safety Code.
(E) Any entity exempt from licensure pursuant to Section 1206 of
the Health and Safety Code.
(e) This section shall become operative on July 1, 2000.
SEC. 31. Section 4611 is added to the Labor Code, to read:
4611. (a) Commencing July 1, 2004, there is hereby established
the Independent Medical Review System that shall resolve disputes
involving any disputed health care service.
(b) "Health care service" means any medical treatment, as defined
in Section 4600, recommended by a physician, as defined in Section
3209.3, or any disputed diagnostic service recommended by a
physician, as defined in Section 3209.3.
(c) A dispute over health care service may be submitted by an
employee or employer with respect to the denial, modification, delay,
or approval of any health care service.
(d) In order to request independent medical review under this
article, the employee or employer requesting review shall submit to
the administrative director a one-page application. All applications
for dispute that meet the requirements of this section shall be
reviewed. An applicant is not required to have first participated in
the process pursuant to Section 4610 in order to be eligible for
independent medical review.
(e) The administrative director shall notify the court
administrator of all requests for independent medical review within
five days of receipt of the request. The court administrator shall
determine whether the claim of the injured worker seeking independent
medical review is subject to any additional disputed issue over
which the appeals board has jurisdiction. If such a dispute exists,
the court administrator shall promptly notify the board
that there is an independent medical
review of medical issues in the claim.
(f) As used in this division, "permanent and stationary" means
that, based on objective findings of medical evidence, no further
material improvement would reasonably be expected from additional
medical treatment or the passage of time. Notwithstanding any other
provision of law, disputes regarding whether an employee is permanent
and stationary shall be resolved by the independent medical review
system created by this section.
SEC. 32. Section 4611.1 is added to the Labor Code, to read:
4611.1. (a) The department may contract with one or more
independent medical review organizations in the state to conduct
reviews for purposes of Section 4611. The director may establish
additional requirements, including conflict-of-interest standards,
consistent with the purposes of this article, that an organization
shall be required to meet in order to qualify for participation in
the Independent Medical Review System and to assist the department in
carrying out its responsibilities.
(b) The independent medical review organizations and the medical
professionals selected by these organizations to conduct reviews
shall be deemed to be medical consultants for purposes of Section
43.98 of the Civil Code.
(c) An independent medical review organization shall conduct the
review in accordance with any regulations or orders of the
administrative director. The organization's review shall be limited
to an examination of the medical necessity of the disputed medical
treatment services and shall not include any consideration of
compensability or other legal issues.
(d) Neither the independent medical review organization, nor any
experts it designates to conduct a review, shall have any material
professional, familial, or financial affiliation, as determined by
the administrative director, with any of the following:
(1) The employer, the employer's workers' compensation insurer or
third-party claims administrator, or any other entity contracting
with the employer to provide utilization review services pursuant to
Section 4610.
(2) Any officer, director, or employee of the employer's health
care provider, workers' compensation insurer, or third-party claims
administrator.
(3) A physician, the physician's medical group, or the independent
practice association involved in the health care service in dispute.
(4) The facility or institution at which either the proposed
health care service, or the alternative service, if any, recommended
by the employer's health care provider, workers' compensation
insurer, or third-party claims administrator, would be provided.
(5) The development or manufacture of the principal drug, device,
procedure, or other therapy proposed by the employee or his or her
treating physician whose treatment is under review, or the
alternative therapy, if any, recommended by the employer or other
entity.
(6) The employee or the employee's immediate family.
(7) The employee's or employer's legal representative or the legal
representative's immediate family.
(e) In order to contract with the division for purposes of this
section, an independent medical review organization shall meet all of
the requirements of the administrative director and shall not be an
affiliate, parent organization, or subsidiary of, nor in any way be
owned or controlled by, a workers' compensation insurer or
third-party claims administrator.
(f) Upon receipt of information and documents related to a case,
the medical professional reviewer or reviewers selected to conduct
the review by the independent medical review organization shall
promptly review all pertinent medical records of the employee,
medical provider reports, as well as any other information submitted
to the organization as authorized by the division or requested by the
reviewers from any of the parties to the dispute. If reviewers
request information from any of the parties, a copy of the request
and the response shall be provided to all of the parties. The
reviewer or reviewers shall also review relevant information related
to the criteria set forth in subdivision (g).
(g) Following its review, the reviewer or reviewers shall
determine whether the disputed health care service was medically
necessary based on peer-reviewed scientific and objective medical
evidence regarding the effectiveness of the disputed service.
(h) The organization shall complete its review and make its
determination in writing, and in layperson's terms to the maximum
extent practicable, within 30 days of the receipt of the application
for review and supporting documentation, or within less time as
prescribed by the administrative director. If the disputed medical
treatment service has not been provided and the employee's provider
or the division certifies in writing that an imminent and serious
threat to the health of the employee may exist, the analyses and
determinations of the reviewers shall be expedited and rendered
within three days of the receipt of the information. Subject to the
approval of the administrative director, reviews may be extended for
up to three days in extraordinary circumstances or for good cause.
The administrative director shall adopt regulations specifying a
standardized format for, and minimum required elements of,
determinations made pursuant to this section.
(i) The medical professionals' analyses and determinations shall
state whether the disputed health care service is medically
necessary. Each analysis shall cite the employee's medical
condition, the relevant documents in the record, and any relevant
findings associated to support the determination.
(j) The independent medical review organization shall promptly
serve the administrative director, the employer, the employee, and
the employee's treating physician with the analyses and
determinations of the medical professionals reviewing the case, and a
description of the qualifications of the medical professionals. The
determination shall be accompanied by a notice, in a form determined
by the administrative director, informing the parties of their
appeal rights. The independent medical review organization shall
keep the names of the reviewers confidential in all communications
with entities or individuals outside the independent medical review
organization, except in response to orders of the appeals board or a
court. If more than one medical professional reviewed the case and
the result was differing determinations, the independent medical
review organization shall provide each of the separate reviewer's
analyses and determinations.
(k) The determination of the independent medical review shall be
final and binding upon the parties to the dispute. The determination
may not be appealed to the division, a workers' compensation
administrative law judge, or the board. Upon a determination by the
independent medical treatment review organization that the disputed
medical treatment is medically necessary, the employer or other
entity shall authorize the disputed medical treatment.
(l) The independent medical review record shall be admissible
before the appeals board.
(m) The independent medical review record shall be made available
to a qualified medical examiner or an agreed medical examiner if
disputes arise over the compensability of the same injury as was the
subject of the independent medical review. Either party to the
dispute over compensability may make the independent medical review
available to the QME/AME.
SEC. 33. Section 4611.2 is added to the Labor Code, to read:
4611.2. (a) The cost of the independent medical review authorized
under Section 4611 shall be borne by the employer.
(b) The administrative director shall establish a reasonable
reimbursement schedule for payment of independent medical reviews,
including administrative costs.
SEC. 34. Section 4614 of the Labor Code is repealed.
4614. (a) (1) Notwithstanding Section 5307.1, where the employee'
s individual or organizational provider of health care services
rendered under this division and paid on a fee-for-service basis is
also the provider of health care services under contract with the
employee's health benefit program, and the service or treatment
provided is included within the range of benefits of the employee's
health benefit program, and paid on a fee-for-service basis, the
amount of payment for services provided under this division, for a
work-related occurrence or illness, shall be no more than the amount
that would have been paid for the same services under the health
benefit plan, for a non-work-related occurrence or illness.
(2) A health care service plan that arranges for health care
services to be rendered to an employee under this division under a
contract, and which is also the employee's organizational provider
for nonoccupational injuries and illnesses, with the exception of a
nonprofit health care service plan that exclusively contracts with a
medical group to provide or arrange for medical services to its
enrollees in a designated geographic area, shall be paid by the
employer for services rendered under this division only on a
capitated basis.
(b) (1) Where the employee's individual or organizational provider
of health care services rendered under this division who is not
providing services under a contract is not the provider of health
care services under contract with the employee's health benefit
program or where the services rendered under this division are not
within the benefits provided under the employer-sponsored health
benefit program, the provider shall receive payment that is no more
than the average of the payment that would have been paid by five of
the largest preferred provider organizations by geographic region.
Physicians, as defined in Section 3209.3, shall be reimbursed at the
same averaged rates, regardless of licensure, for the delivery of
services under the same procedure code. This subdivision shall not
apply to a health care service plan that provides its services on a
capitated basis.
(2) The administrative director shall identify the regions and the
five largest carriers in each region. The carriers shall provide
the necessary information to the administrative director in the form
and manner requested by the administrative director. The
administrative director shall make this information available to the
affected providers on an annual basis.
(c) Nothing in this section shall prohibit an individual or
organizational health care provider from being paid fees different
from those set forth in the official medical fee schedule by an
employer, insurance carrier, third-party administrator on behalf of
employers, or preferred provider organization representing an
employer or insurance carrier provided that the administrative
director has determined that the alternative negotiated rates between
the organizational or individual provider and a payer, a third-party
administrator on behalf of employers, or a preferred provider
organization will produce greater savings in the aggregate than if
each item on billings were to be charged at the scheduled rate.
(d) For the purposes of this section, "organizational provider"
means an entity that arranges for health care services to be rendered
directly by individual caregivers. An organizational provider may
be a health care service plan, disability insurer, health care
organization, preferred provider organization, or workers'
compensation insurer arranging for care through a managed care
network or on a fee-for-service basis. An individual provider is
either an individual or institution that provides care directly to
the injured worker.
SEC. 35. Section 4614.1 of the Labor Code is repealed.
4614.1. Notwithstanding subdivision (f) of Section 1345 of the
Health and Safety Code, a health care service plan licensed pursuant
to the Knox-Keene Health Care Service Plan Act and certified by the
administrative director pursuant to Section 4600.5 to provide health
care pursuant to Section 4600.3 shall be permitted to accept payment
from a self-insured employer, a group of self-insured employers, or
the insurer of an employer on a fee-for-service basis for the
provision of such health care as long as the health care service plan
is not both the health care organization in which the employee is
enrolled and the plan through which the employee receives regular
health benefits.
SEC. 36. Section 4658 of the Labor Code is amended to read:
4658. (a) For injuries occurring prior to January 1, 1992, if the
injury causes permanent disability, the percentage of disability to
total disability shall be determined, and the disability payment
computed and allowed, according to paragraph (1). However, in no
event shall the disability payment allowed be less than the
disability payment computed according to paragraph (2).
(1)
Column 2--Number of weeks
for which two-thirds of
Column 1--Range average weekly earnings
of percentage allowed for each 1 percent
of permanent of permanent disability
disability incurred: within percentage range:
Under 10 ....................... 3
10-19.75 ....................... 4
20-29.75 ....................... 5
30-49.75 ....................... 6
50-69.75 ....................... 7
70-99.75 ....................... 8
The number of weeks for which payments shall be allowed set forth
in column 2 above based upon the percentage of permanent disability
set forth in column 1 above shall be cumulative, and the number of
benefit weeks shall increase with the severity of the disability.
The following schedule is illustrative of the computation of the
number of benefit weeks:
Column 1--
Percentage Column 2--
of permanent Cumulative
disability number of
incurred: benefit weeks:
5 .......................... 15.00
10 .......................... 30.25
15 .......................... 50.25
20 .......................... 70.50
25 .......................... 95.50
30 .......................... 120.75
35 .......................... 150.75
40 .......................... 180.75
45 .......................... 210.75
50 .......................... 241.00
55 .......................... 276.00
60 .......................... 311.00
65 .......................... 346.00
70 .......................... 381.25
75 .......................... 421.25
80 .......................... 461.25
85 .......................... 501.25
90 .......................... 541.25
95 .......................... 581.25
100 .......................... for life
(2) Two-thirds of the average weekly earnings for four weeks for
each 1 percent of disability, where, for the purposes of this
subdivision, the average weekly earnings shall be taken at not more
than seventy-eight dollars and seventy-five cents ($78.75).
(b) This subdivision shall apply to injuries occurring on or after
January 1, 1992. If the injury causes permanent disability, the
percentage of disability to total disability shall be determined, and
the disability payment computed and allowed, according to paragraph
(1). However, in no event shall the disability payment allowed be
less than the disability payment computed according to paragraph (2).
(1)
Column 2--Number of weeks
for which two-thirds of
Column 1--Range average weekly earnings
of percentage allowed for each 1 percent
of permanent of permanent disability
disability incurred: within percentage range:
Under 10 ....................... 3
10-19.75 ....................... 4
20-24.75 ....................... 5
25-29.75 ....................... 6
30-49.75 ....................... 7
50-69.75 ....................... 8
70-99.75 ....................... 9
The numbers set forth in column 2 above are based upon the
percentage of permanent disability set forth in column 1 above and
shall be cumulative, and shall increase with the severity of the
disability in the manner illustrated in subdivision (a).
(2) Two-thirds of the average weekly earnings for four weeks for
each 1 percent of disability, where, for the purposes of this
subdivision, the average weekly earnings shall be taken at not more
than seventy-eight dollars and seventy-five cents ($78.75).
(c) This subdivision shall apply to injuries occurring on or after
January 1, 2004. If the injury causes permanent disability, the
percentage of disability to total disability shall be determined, and
the disability payment computed and allowed as follows:
Column 2--Number of weeks
for which two-thirds of
Column 1--Range average weekly earnings
of percentage allowed for each 1 percent
of permanent of permanent disability
disability incurred: within percentage range:
Under 10 ....................... 4
10-19.75 ....................... 5
20-24.75 ....................... 5
25-29.75 ....................... 6
30-49.75 ....................... 7
50-69.75 ....................... 8
70-99.75 ....................... 9
The numbers set forth in column 2 above are based upon the
percentage of permanent disability set forth in column 1 above and
shall be cumulative, and shall increase with the severity of the
disability in the manner illustrated in subdivision (a).
(d) This section shall become inoperative on the January 1st after
the Secretary of Labor and Workforce Development files a declaration
with the Secretary of State that all of the following have occurred:
(1) The cost of workers' compensation insurance, per one hundred
dollars ($100) of payroll, in California is equal to or less than the
national average of the remaining 49 states and the District of
Columbia for the same period of time.
(2) The administrative director has certified that the cost of
workers' compensation insurance per one hundred dollars ($100) of
payroll, in California is equal to or less than the national average
of the remaining 49 states and the District of Columbia for the same
period of time.
(3) The certification of the administrative director pursuant to
paragraph (2) has been reviewed and agreed to by the rating
organization, as defined in Section 11750.1 of the Insurance Code.
SEC. 37. Section 4658.1 is added to the Labor Code, to read:
4658.1. (a) For injuries occurring prior to January 1, 1992, if
the injury causes permanent disability, the percentage of disability
to total disability shall be determined, and the disability payment
computed and allowed, according to paragraph (1). However, in no
event shall the disability payment allowed be less than the
disability payment computed according to paragraph (2).
(1)
Column 2--Number of weeks
for which two-thirds of
Column 1--Range average weekly earnings
of percentage allowed for each 1 percent
of permanent of permanent disability
disability incurred: within percentage range:
Under 10 ....................... 3
10-19.75 ....................... 4
20-29.75 ....................... 5
30-49.75 ....................... 6
50-69.75 ....................... 7
70-99.75 ....................... 8
The number of weeks for which payments shall be allowed set forth
in column 2 above based upon the percentage of permanent disability
set forth in column 1 above shall be cumulative, and the number of
benefit weeks shall increase with the severity of the disability.
The following schedule is illustrative of the computation of the
number of benefit weeks:
Column 1--
Percentage Column 2--
of permanent Cumulative
disability number of
incurred: benefit weeks:
5 .......................... 15.00
10 .......................... 30.25
15 .......................... 50.25
20 .......................... 70.50
25 .......................... 95.50
30 .......................... 120.75
35 .......................... 150.75
40 .......................... 180.75
45 .......................... 210.75
50 .......................... 241.00
55 .......................... 276.00
60 .......................... 311.00
65 .......................... 346.00
70 .......................... 381.25
75 .......................... 421.25
80 .......................... 461.25
85 .......................... 501.25
90 .......................... 541.25
95 .......................... 581.25
100 .......................... for life
(2) Two-thirds of the average weekly earnings for four weeks for
each 1 percent of disability, where, for the purposes of this
subdivision, the average weekly earnings shall be taken at not more
than seventy-eight dollars and seventy-five cents ($78.75).
(b) This subdivision shall apply to injuries occurring on or after
January 1, 1992. If the injury causes permanent disability, the
percentage of disability to total disability shall be determined, and
the disability payment computed and allowed, according to paragraph
(1). However, in no event shall the disability payment allowed be
less than the disability payment computed according to paragraph (2).
(1)
Column 2--Number of weeks
for which two-thirds of
Column 1--Range average weekly earnings
of percentage allowed for each 1 percent
of permanent of permanent disability
disability incurred: within percentage range:
Under 10 ....................... 3
10-19.75 ....................... 4
20-24.75 ....................... 5
25-29.75 ....................... 6
30-49.75 ....................... 7
50-69.75 ....................... 8
70-99.75 ....................... 9
The numbers set forth in column 2 above are based upon the
percentage of permanent disability set forth in column 1 above and
shall be cumulative, and shall increase with the severity of the
disability in the manner illustrated in subdivision (a).
(2) Two-thirds of the average weekly earnings for four weeks for
each 1 percent of disability, where, for the purposes of this
subdivision, the average weekly earnings shall be taken at not more
than seventy-eight dollars and seventy-five cents ($78.75).
(c) This subdivision shall apply to injuries occurring on or after
January 1, 2004. If the injury causes permanent disability, the
percentage of disability to total disability shall be determined, and
the disability payment computed and allowed as follows:
Column 2--Number of weeks
for which two-thirds of
Column 1--Range average weekly earnings
of percentage allowed for each 1 percent
of permanent of permanent disability
disability incurred: within percentage range:
Under 10 ....................... 4
10-19.75 ....................... 5
20-24.75 ....................... 5
25-29.75 ....................... 6
30-49.75 ....................... 7
50-69.75 ....................... 8
70-99.75 ....................... 9
The numbers set forth in column 2 above are based upon the
percentage of permanent disability set forth in column 1 above and
shall be cumulative, and shall increase with the severity of the
disability in the manner illustrated in subdivision (a).
(d) This subdivision shall apply to injuries occurring on or after
the operative date of this section. If the injury causes permanent
disability, the percentage
of disability to total disability shall be determined, and the
disability payment computed and allowed as follows:
Column 2--Number of weeks
for which two-thirds of
Column 1--Range average weekly earnings
of percentage allowed for each 1 percent
of permanent of permanent disability
disability incurred: within percentage range:
Under 10 ....................... 4
10-19.75 ....................... 5
20-24.75 ....................... 5
25-29.75 ....................... 6
30-49.75 ....................... 7
50-69.75 ....................... 8
70-99.75 ....................... 12
The numbers set forth in column 2 above are based upon the
percentage of permanent disability set forth in column 1 above and
shall be cumulative, and shall increase with the severity of the
disability in the manner illustrated in subdivision (a).
(e) This section shall only become operative on the January 1st
after the Secretary of Labor and Workforce Development files a
declaration with the Secretary of State that all of following have
occurred:
(1) The cost of workers' compensation insurance, per one hundred
dollars ($100) of payroll, in California is equal to or less than the
national average of the remaining 49 states and the District of
Columbia for the same period of time.
(2) The administrative director has certified that the cost of
workers' compensation insurance, per one hundred dollars ($100) of
payroll, in California is equal to or less than the national average
of the remaining 49 states and the District of Columbia for the same
period of time.
(3) The certification of the administrative director pursuant to
paragraph (2) has been reviewed and agreed to by the rating
organization, as defined in Section 11750.1 of the Insurance Code.
SEC. 38. Section 4658.6 is added to the Labor Code, to read:
4658.6. The employer shall not be liable for the supplemental job
displacement benefit if the employer meets either of the following
conditions:
(a) Within 30 days of the termination of temporary disability
indemnity payments, the employer offers, and the employee, within 30
days from the date of the offer, rejects, or fails to accept in the
form and manner prescribed by the administrative director, modified
work, accommodating the employee's work restrictions, lasting at
least 12 months.
(b) Within 30 days of the termination of temporary disability
indemnity payments, the employer offers, and the employee, within 30
days from the date of the offer, rejects, or fails to accept in the
form and manner prescribed by the administrative director,
alternative work meeting all of the following conditions:
(1) The employee has the ability to perform the essential
functions of the job provided.
(2) The job provided is in a regular position lasting at least 12
months.
(3) The job provided offers wages and compensation that are within
15 percent of those paid to the employee at the time of injury.
(4) The job is located within reasonable commuting distance of the
employee's residence at the time of injury.
SEC. 39. Section 4660 of the Labor Code is amended to read:
4660. (a) In determining the percentages of permanent disability,
account shall be taken of the nature of the physical injury or
disfigurement, established by a preponderance of medical
evidence based upon objective findings, as defined in paragraph (2)
of subdivision (j) of Section 3139.2, the occupation of the
injured employee, and his or her age at the time of
such the injury, consideration being
given to the diminished ability of such injured
employee to compete in an open labor market
employee's adaptability to perform a given job .
(b) (1) The nature of the physical injury or disfigurement
shall be the sole factor to be considered in determining percentages
of permanent disability if any of the following circumstances exist:
(A) The employee returns to regular work at the job held at the
time of injury.
(B) The treating physician releases the injured employee to
regular work at the job held at the time of injury and the job is
available but the worker refuses to return to that job.
(C) The treating physician releases the injured employee to
regular work at the job held at the time of injury but the worker's
employment is terminated for cause unrelated to the injury.
(2) The nature of the physical injury or disfigurement, the
occupation of the injured employee, and his or her age at the time of
the injury shall be the sole factors to be considered in determining
percentages of permanent disability if any of the following
circumstances exist:
(A) The employee returns to modified or alternative work with the
same employer that provides wages and compensation that are not less
than 15 percent of those paid to the employee at the time of injury
and, if the job is not at the same physical location as the job held
at the time of injury, the job is located within reasonable commuting
distance of the employee's residence at the time of injury.
(B) The treating physician releases the injured employee to
regular work at the job offered pursuant to this subdivision and the
job is available but the worker refuses to return to that job.
(C) The treating physician releases the injured employee to
regular work at the job offered pursuant to this subdivision but the
worker's employment is terminated for cause unrelated to the injury.
(c) (1) The administrative director may
shall prepare, adopt, and from time to time amend, a
schedule for the determination of the percentage of permanent
disabilities in accordance with this section. Such
The schedule shall be available for public
inspection , and , without formal
introduction in evidence , shall be prima facie evidence
of the percentage of permanent disability to be attributed to each
injury covered by the schedule.
(c) Any such schedule and any amendment thereto or revision
thereof shall apply prospectively and shall apply to and govern only
those permanent disabilities which result from compensable injuries
received or occurring on and after the effective date of the adoption
of such schedule, amendment or revision, as the fact may be.
(d) On or before January 1, 1995, the administrative director
shall review and revise the schedule for the determination of the
percentage of permanent disabilities. The revision shall include,
but not be limited to, an updating of the standard disability ratings
and occupations to reflect the current labor market. However, no
change in standard disability ratings shall be adopted without the
approval of the Commission of Health and Safety and Workers'
Compensation. A proposed revision shall be submitted to the
commission on or before July 1, 1994. The schedule
shall promote uniformity of ratings for substantially similar
disabilities throughout the state, and for injuries not subject to
subdivision (b) or (c) and shall set forth a methodology for
determining the percentage of permanent disability that gives
appropriate weight to each of the factors of disability set forth in
subdivision (a). The schedule shall be promulgated and administered
to reflect the effects of physical injury or disfigurement on the
individual worker in combination with the injured worker's
adaptability to perform a given job. The schedule shall not allow
for the determination of the percentage of permanent disability to be
determined solely upon the assessment of the adaptability of the
worker to perform a given job. The administrative director shall
adopt, as an emergency regulation, changes to the schedule to reflect
medical conditions or occupational classifications that were not in
effect at the time of the promulgation of the schedule within 30 days
after actual notice that a compensable injury or an occupation at
the time of injury was not set forth in the schedule at the time the
injury took place. In developing the schedule, the administrative
director may utilize for reference nationally recognized guidelines
for impairment.
(2) The adoption, amendment, repeal, or readoption of the
regulations that the administrative director is authorized pursuant
to paragraph (1) to adopt as emergency regulations are deemed to be
necessary for the immediate preservation of the public peace, health
and safety, or general welfare, for purposes of Sections 11346.1 and
11349.6 of the Government Code, and the administrative director is
hereby exempted from the requirement that it describe specific facts
showing the need for immediate action. For purposes of subdivision
(e) of Section 11346.1 of the Government Code, the 120-day period, as
applicable to the effective period of an emergency regulatory action
and submission of specified materials to the Office of
Administrative Law, is hereby extended to 180 days.
(d) For compensable claims arising before the effective date of
the schedule and any amendment thereto or revision thereof, the
revised schedule shall apply to the determination of permanent
disabilities where there has either been no comprehensive
medical-legal report, or report by a treating physician, indicating
the existence of permanent disability, or where the employer is not
required to provide the notice required by Section 4061 to the
injured worker.
SEC. 40. Section 5705.1 is added to the Labor Code, to read:
5705.1. (a) The burden of proof for the apportionment regarding
permanent disability under Sections 4663, 4750, and 4750.5 shall rest
upon the defendant. In accordance with Section 3202.5, the
defendant shall demonstrate by a preponderance of the evidence, and
by reasonable medical probability, that absent the industrial injury,
the injured worker had lost, as a consequence of a preexisting
injury or illness, some capacity to perform the activity affected by
the injury.
(b) Notwithstanding any other provision of this code relating to
workers' compensation benefits, in denying apportionment the appeals
board may not, in determining permanent disability, rely on any
medical report that fails to fully address the issue of apportionment
and fails to set forth the basis of the medical opinion. In denying
apportionment, the appeals board may not rely on any medical report
that fails to apportion a previous injury or illness that has been
the subject of a prior claim for damages or that fails to provide a
discussion of the medical processes by which a previously asserted
injury or illness resolved without affecting bodily function.
(c) If the applicant has received a prior award of permanent
disability, it shall be conclusively presumed that the prior
permanent disability exists at the time of any subsequent industrial
injury.
(d) The accumulation of all permanent disability awards issued to
one individual employee shall not exceed 100 percent unless the
employee's injury or illness is conclusively presumed to be total in
character pursuant to Section 4662.
(e) Permanent disability or death benefits shall not be payable
unless the industrial injury is the predominant cause of the
disability or death when compared to all causes of injury in total.
SEC. 41. Section 5814 of the Labor Code is repealed.
5814. When payment of compensation has been unreasonably delayed
or refused, either prior to or subsequent to the issuance of an
award, the full amount of the order, decision, or award shall be
increased by 10 percent. Multiple increases shall not be awarded for
repeated delays in making a series of payments due for the same type
or specie of benefit unless there has been a legally significant
event between the delay and the subsequent delay in payments of the
same type or specie of benefits. The question of delay and the
reasonableness of the cause therefor shall be determined by the
appeals board in accordance with the facts. This delay or refusal
shall constitute good cause under Section 5803 to rescind, alter, or
amend the order, decision, or award for the purpose of making the
increase provided for herein.
SEC. 42. Section 5814 is added to the Labor Code, to read:
5814. (a) When payment of compensation has been unreasonably
delayed or refused, either prior to or subsequent to the issuance of
an award, the amount of the payment unreasonably delayed or refused
may be increased up to 15 percent or up to five hundred dollars
($500), whichever is greater. In proceeding under this section, the
appeals board shall use its discretion to accomplish a fair balance
and substantial justice between the parties.
(b) As a precondition to a claim for penalties under this section,
the employee shall give written notice to the employer of the
claimed unreasonable delay or refusal of payment of compensation.
If, within 20 days from the date of services of this notice, the
employer pays a self-imposed increase of 10 percent of the amount of
payment delayed or refused, in addition to any other self-imposed
increases due under this division, there shall be no further penalty
allowed under this section. If the employer disputes whether the
delay or refusal is unreasonable, and the workers' compensation
administrative law judge determines that the delay or refusal
violates this section, the workers' compensation administrative law
judge shall award the penalty prescribed in subdivision (a). In
determining whether the delay or refusal is unreasonable, the workers'
compensation administrative law judge shall consider only the
specific facts resulting in the delay or refusal of the specific
payment that is the subject of the request for penalties.
(c) The appeals board shall have no jurisdiction to hear a claim
for penalties under subdivision (a), unless the employee files a
claim for a penalty within one year from the date of the alleged
unreasonable delay or refusal to pay benefits. Upon the approval of
a compromise and release by the appeals board, it shall be
conclusively presumed that any existing or potential penalties have
been resolved, unless expressly excluded by the terms of the
compromise and release.
(d) When a penalty is awarded under subdivision (a), the appeals
board may allow a credit for any self-imposed increase under
subdivision (d) of Section 4650 or subdivision (b), in order to
accomplish a fair balance and substantial justice between the
parties.
(e) Nothing in this section shall be construed to create a civil
cause of action.
SEC. 43. Section 5814.5 of the Labor Code is repealed.
5814.5. When the payment of compensation has been unreasonably
delayed or refused subsequent to the issuance of an award by an
employer that has secured the payment of compensation pursuant to
Section 3700, the appeals board shall, in addition to increasing the
order, decision, or award pursuant to Section 5814, award reasonable
attorneys' fees incurred in enforcing the payment of compensation
awarded.
SEC. 44. Section 15 of Chapter 635 of the Statutes of 2003 shall
not become operative.
SEC. 45. Section 27 of Chapter 639 of the Statutes of 2003 shall
not become operative.
SEC. 46. Section 47 of Chapter 639 of the Statutes of 2003 shall
not become operative.
SEC. 47. This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect. The facts constituting the necessity are:
In order to provide relief to the state from the effects of the
current workers' compensation crisis at the earliest possible time,
it is necessary for this act to take effect immediately.