Amended in Senate March 6, 2013

Senate Bill No. 146

Introduced by Senator Lara

January 31, 2013

An act to amend Section 4603.2 of the Labor Code, relating to workers’ compensation.

LEGISLATIVE COUNSEL’S DIGEST

SB 146, as amended, Lara. Workers’ compensation: medical treatment: billing.

Existing law establishes a workers’ compensation system, administered by the Administrative Director of the Division of Workers’ Compensation, to compensate an employee for injuries sustained in the course of his or her employment. Existing law requires an employer to provide all medical services reasonably required to cure or relieve the injured worker from the effects of the injury, and generally provides for the reimbursement of medical providers for services rendered in connection with the treatment of a worker’s injury. begin insert Existing law requires a pharmacy to submit its request for payment with an itemization of services provided and the charge for each service, a copy of all reports showing the services performed, the prescription or referral from the primary treating physician if the services were performed by a person other than the primary treating physician, and any evidence of authorization for the services that may have been received. end insert

This bill would begin delete delete the requirement that a pharmacy submit its request for payment with an itemization of services provided and the charge for each service, a copy of all reports showing the services performed, the prescription or referral from the primary treating physician if the services were performed by a person other than the primary treating physician, and any evidence of authorization for the services that may have been received. The bill would end delete prohibit a copy of the prescription from being required with a request for payment of pharmacy services, begin insert unless otherwise agreed to by the provider of services, end insert and would give any entity 90 days after January 1, 2014, to resubmit pharmacy bills for payment, originally submitted on or after January 1, 2013, where payment was denied because the bill did not include a copy of the prescription from the treating physician. begin insert The bill would also clarify that an employer, insurer, pharmacy benefits manager, or 3rd-party claims administrator would not be precluded from requesting a copy of a prescription during a review of any records of prescription drugs dispensed by a pharmacy. end insert

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 4603.2 of the Labor Code is amended to
read:

4603.2.  

(a) (1) Upon selecting a physician pursuant to Section
4600, the employee or physician shall notify the employer of the
name and address, including the name of the medical group, if
applicable, of the physician. The physician shall submit a report
to the employer within five working days from the date of the
initial examination, as required by Section 6409, and shall submit
periodic reports at intervals that may be prescribed by rules and
regulations adopted by the administrative director.

(2) If the employer objects to the employee’s selection of the
physician on the grounds that the physician is not within the
medical provider network used by the employer, and there is a
final determination that the employee was entitled to select the
physician pursuant to Section 4600, the employee shall be entitled
to continue treatment with that physician at the employer’s expense
in accordance with this division, notwithstanding Section 4616.2.
The employer shall be required to pay from the date of the initial
examination if the physician’s report was submitted within five
working days of the initial examination. If the physician’s report
was submitted more than five working days after the initial
examination, the employer and the employee shall not be required
to pay for any services prior to the date the physician’s report was
submitted.

(3) If the employer objects to the employee’s selection of the
physician on the grounds that the physician is not within the
medical provider network used by the employer, and there is a
final determination that the employee was not entitled to select a
physician outside of the medical provider network, the employer
shall have no liability for treatment provided by or at the direction
of that physician or for any consequences of the treatment obtained
outside the network.

(b) (1) Any provider of services provided pursuant to Section
4600, including, but not limited to, physicians, hospitals,
begin insert pharmacies, end insert interpreters, copy services, transportation services,
and home health care services, shall submit its request for payment
with an itemization of services provided and the charge for each
service, a copy of all reports showing the services performed, the
prescription or referral from the primary treating physician if the
services were performed by a person other than the primary treating
physician, and any evidence of authorization for the services that
may have been received. Nothing in this section shall prohibit an
employer, insurer, or third-party claims administrator from
establishing, through written agreement, an alternative manual or
electronic request for payment with providers for services provided
pursuant to Section 4600.

(A)  begin delete A end delete begin insert Notwithstanding the requirements of this paragraph, a end insert
copy of the prescription shall not be required with a request for
payment for pharmacy services begin insert , unless the provider of services
otherwise agrees to follow the requirements of this paragraph end insert .

(B) Notwithstanding timely billing and payment rules
established by the Division of Workers’ Compensation, any entity
submitting a pharmacy bill for payment, on or after January 1,
2013, and denied payment for not including a copy of the
prescription from the treating physician, shall have 90 days after
January 1, 2014, to resubmit those bills for payment.

begin insert

(C) Nothing in this section shall preclude an employer, insurer,
pharmacy benefits manager, or third-party claims administrator
from requesting a copy of the prescription during a review of any
records of prescription drugs that were dispensed by a pharmacy.

end insert

(2) Except as provided in subdivision (d) of Section 4603.4, or
under contracts authorized under Section 5307.11, payment for
medical treatment provided or prescribed by the treating physician
selected by the employee or designated by the employer shall be
made at reasonable maximum amounts in the official medical fee
schedule, pursuant to Section 5307.1, in effect on the date of
service. Payments shall be made by the employer with an
explanation of review pursuant to Section 4603.3 within 45 days
after receipt of each separate, itemization of medical services
provided, together with any required reports and any written
authorization for services that may have been received by the
physician. If the itemization or a portion thereof is contested,
denied, or considered incomplete, the physician shall be notified,
in the explanation of review, that the itemization is contested,
denied, or considered incomplete, within 30 days after receipt of
the itemization by the employer. An explanation of review that
states an itemization is incomplete shall also state all additional
information required to make a decision. Any properly documented
list of services provided and not paid at the rates then in effect
under Section 5307.1 within the 45-day period shall be paid at the
rates then in effect and increased by 15 percent, together with
interest at the same rate as judgments in civil actions retroactive
to the date of receipt of the itemization, unless the employer does
both of the following:

(A) Pays the provider at the rates in effect within the 45-day
period.

(B) Advises, in an explanation of review pursuant to Section
4603.3, 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 an itemization that includes services
provided by a hospital, outpatient surgery center, or independent
diagnostic facility, advice that a request has been made for an audit
of the itemization shall satisfy the requirements of this paragraph.

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.

(3) Notwithstanding paragraph (1), if the employer is a
governmental entity, payment for medical treatment provided or
prescribed by the treating physician selected by the employee or
designated by the employer shall be made within 60 days after
receipt of each separate itemization, together with any required
reports and any written authorization for services that may have
been received by the physician.

(4) Duplicate submissions of medical services itemizations, for
which an explanation of review was previously provided, shall
require no further or additional notification or objection by the
employer to the medical provider and shall not subject the employer
to any additional penalties or interest pursuant to this section for
failing to respond to the duplicate submission. This paragraph shall
apply only to duplicate submissions and does not apply to any
other penalties or interest that may be applicable to the original
submission.

(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 an itemization
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 itemization by the
physician or medical provider. When an individual or entity
conducting begin delete a end delete begin insert an end insert itemization review determines that additional
information or documentation is necessary to review the
itemization, 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 an itemization of service
submitted by a physician or medical provider shall not alter the
procedure codes listed or recommend reduction of the amount of
the payment unless the documentation submitted by the physician
or medical provider with the itemization of service has been
reviewed by that individual or entity. If the reviewer does not
recommend payment for services as itemized 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 changed other parts
of the itemization and the specific deficiency in the itemization or
documentation that caused the reviewer to conclude that the altered
procedure code or amount recommended for payment more
accurately represents the service performed.

(e) (1) If the provider disputes the amount paid, the provider
may request a second review within 90 days of service of the
explanation of review or an order of the appeals board resolving
the threshold issue as stated in the explanation of review pursuant
to paragraph (5) of subdivision (a) of Section 4603.3. The request
for a second review shall be submitted to the employer on a form
prescribed by the administrative director and shall include all of
the following:

(A) The date of the explanation of review and the claim number
or other unique identifying number provided on the explanation
of review.

(B) The item and amount in dispute.

(C) The additional payment requested and the reason therefor.

(D) The additional information provided in response to a request
in the first explanation of review or any other additional
information provided in support of the additional payment
requested.

(2) If the only dispute is the amount of payment and the provider
does not request a second review within 90 days, the bill shall be
deemed satisfied and neither the employer nor the employee shall
be liable for any further payment.

(3) Within 14 days of a request for second review, the employer
shall respond with a final written determination on each of the
items or amounts in dispute. Payment of any balance not in dispute
shall be made within 21 days of receipt of the request for second
review. This time limit may be extended by mutual written
agreement.

(4) If the provider contests the amount paid, after receipt of the
second review, the provider shall request an independent bill review
as provided for in Section 4603.6.

(f) Except as provided in paragraph (4) of subdivision (e), the
appeals board shall have jurisdiction over disputes arising out of
this subdivision pursuant to Section 5304.