Amended in Assembly August 5, 2013

Amended in Senate May 2, 2013

Amended in Senate April 1, 2013

Senate Bill No. 375

Introduced by Committee on Labor and Industrial Relations (Senators begin delete Lieu end delete begin insert Monning end insert (Chair), Leno, Padilla, Wyland, and Yee)

February 20, 2013

An act to amend Section begin delete 4903.6 end delete begin insert 11435.35 of the Government Code, and to amend Sections 139.2, 139.5, 4061, 4610.5, 4903.4, and 4903.6 end insert of the Labor Code, relating to workers’ compensation.

LEGISLATIVE COUNSEL’S DIGEST

SB 375, as amended, Committee on Labor and Industrial Relations. Workers’ begin delete compensation: liens. end delete begin insert compensation. end insert

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 workers’ compensation law begin delete authorizes the Workers’ Compensation Appeals Board to determine and allow specified expenses as liens against any sum to be paid as compensation end delete begin insert establishes requirements that govern, among other things, the certification of medical examination interpreters, dispute resolution processes for medical and billing disputes, and the allowance of liens against any sum to be paid as compensation end insert .

This bill would correct begin delete an erroneous cross-reference with regard to whether or not a lien claimant is entitled to medical information, as defined end delete begin insert erroneous cross-references and make technical, clarifying, and conforming changes with respect to these provisions 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:

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 11435.35 of the end insert begin insert Government Code end insert begin insert is
amended to read: end insert

11435.35.  

(a) The State Personnel Board shall establish,
maintain, administer, and publish annually, an updated list of
certified medical examination interpreters it has determined meet
the minimum standards in interpreting skills and linguistic abilities
in languages designated pursuant to Section 11435.40.

(b) Court interpreters certified pursuant to Section 68562 and
administrative hearing interpreters certified pursuant to Section
11435.30 shall be deemed certified for purposes of this section.

(c) (1) In addition to the certification procedure provided
pursuant to subdivision (a), the Administrative Director of the
Division of Workers’ Compensation may establish, maintain,
administer, and publish annually an updated list of certified medical
examination interpreters who, based on testing by an independent
organization designated by the administrative director, have been
determined to meet the minimum standards in interpreting skills
and linguistic abilities in languages designated pursuant to Section
11435.40, for purposes of medical examinations conducted
pursuant to proceedings of the Workers’ Compensation Appeals
Board, and medical examinations conducted pursuant to Division
4 (commencing with Section 3200) of the Labor Code. The
independent testing organization shall have no financial interest
in the training of interpreters or in the employment of interpreters
for begin delete administrative hearings end delete begin insert medical examinations end insert .

(2) (A) A fee, as determined by the administrative director,
shall be collected from each interpreter seeking certification. The
fee shall not exceed the reasonable regulatory costs of
administering the testing and certification program and of
publishing the list of certified medical examination interpreters on
the Division of Workers’ Compensation’s Internet Web site.

(B)  The Legislature finds and declares that the services
described in this section are of such a special and unique nature
that they may be contracted out pursuant to paragraph (3) of
subdivision (b) of Section 19130. The Legislature further finds
and declares that the services described in this section are a new
state function pursuant to paragraph (2) of subdivision (b) of
Section 19130.

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 139.2 of the end insert begin insert Labor Code end insert begin insert is amended to read: end insert

139.2.  

(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 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) 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:

(1) Is in compliance with all applicable regulations and
evaluation guidelines adopted by the administrative director.

(2) Has not had more than five of his or her evaluations that
were considered by a workers’ compensation administrative law
judge at a contested hearing rejected by the workers’ compensation
administrative law 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 workers’
compensation administrative law 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 workers’
compensation administrative law 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.

(3) 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.

(4) 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.

If the evaluator does not meet any one of these criteria, 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 its 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 its 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 requested by an employee or employer pursuant
to Section 4062.1, the medical director appointed pursuant to
Section 122 shall assign three-member panels of qualified medical
evaluators within five working days after receiving a request for
a panel. Preference in assigning panels shall be given to cases in
which the employee is not represented. If a panel is not assigned
within 20 working days, the employee shall have the right to obtain
a medical evaluation from any qualified medical evaluator of his
or her choice within a reasonable geographic area. 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 of the type requested by the
employee. 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 promulgate a form that
shall notify the employee of the physicians selected for his or her
panel after a request has been made pursuant to Section 4062.1 or
4062.2. 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 workers’ compensation administrative law 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. An evaluator
shall not conduct qualified medical evaluations at more than 10
locations.

(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 122 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 5307.3, the
administrative director shall adopt regulations concerning the
following issues:

(1) (A) 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 regulations governing the provision of extensions of the
30-day period in both of the following cases:

(i) When the evaluator has not received test results or consulting
physician’s evaluations in time to meet the 30-day deadline.

(ii) 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.

(B) For purposes of subparagraph (A), “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.

(C) The administrative director shall develop timeframes
governing availability of qualified medical evaluators for
unrepresented employees under begin delete Sections 4061 and 4062 end delete begin insert Section
4062.1 end insert . 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.

(2) Procedures to be followed by all physicians in evaluating
the existence and extent of permanent impairment and limitations
resulting from an injury in a manner consistent with begin delete Section 4660 end delete
begin insert Sections 4660 and 4660.1 end insert .

(3) Procedures governing the determination of any disputed
medical treatment issues in a manner consistent with Section
5307.27.

(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. 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) 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:

(1) Has violated any material statutory or administrative duty.

(2) Has failed to follow the medical procedures or qualifications
established pursuant to paragraph (2), (3), (4), or (5) of subdivision
(j).

(3) Has failed to comply with the timeframe standards
established pursuant to subdivision (j).

(4) Has failed to meet the requirements of subdivision (b) or
(c).

(5) Has prepared medical-legal evaluations that fail to meet the
minimum standards for those reports established by the
administrative director or the appeals board.

(6) Has made material misrepresentations or false statements
in an application for appointment or reappointment as a qualified
medical evaluator.

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. 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, and shall
not be used by any other department or agency or for any purpose
other than administration of the programs 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.

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 139.5 of the end insert begin insert Labor Code end insert begin insert is amended to read: end insert

139.5.  

(a) (1) The administrative director shall contract with
one or more independent medical review organizations and one
or more independent bill review organizations to conduct reviews
pursuant to Article 2 (commencing with Section 4600) of Chapter
2 of Part 2 of Division 4. The independent review organizations
shall be independent of any workers’ compensation insurer or
workers’ compensation claims administrator doing business in this
state. The administrative director may establish additional
requirements, including conflict-of-interest standards, consistent
with the purposes of Article 2 (commencing with Section 4600)
of Chapter 2 of Part 2 of Division 4, that an organization shall be
required to meet in order to qualify as an independent review
organization and to assist the division in carrying out its
responsibilities.

(2) To enable the independent review program to go into effect
for injuries occurring on or after January 1, 2013, and until the
administrative director establishes contracts as otherwise specified
by this section, independent review organizations under contract
with the Department of Managed Health Care pursuant to Section
1374.32 of the Health and Safety Code may be designated by the
administrative director to conduct reviews pursuant to Article 2
(commencing with Section 4600) of Chapter 2 of Part 2 of Division
4. The administrative director may use an interagency agreement
to implement the independent review process beginning January
1, 2013. The administrative director may initially contract directly
with the same organizations that are under contract with the
Department of Managed Health Care on substantially the same
terms without competitive bidding until January 1, 2015.

(b) (1) The independent medical review organizations and the
medical professionals retained to conduct reviews shall be deemed
to be consultants for purposes of this section.

(2) There shall be no monetary liability on the part of, and no
cause of action shall arise against, any consultant on account of
any communication by that consultant to the administrative director
or any other officer, employee, agent, contractor, or consultant of
the Division of Workers’ Compensation, or on account of any
communication by that consultant to any person when that
communication is required by the terms of a contract with the
administrative director pursuant to this section and the consultant
does all of the following:

(A) Acts without malice.

(B) Makes a reasonable effort to determine the facts of the
matter communicated.

(C) Acts with a reasonable belief that the communication is
warranted by the facts actually known to the consultant after a
reasonable effort to determine the facts.

(3) The immunities afforded by this section shall not affect the
availability of any other privilege or immunity which may be
afforded by law. Nothing in this section shall be construed to alter
the laws regarding the confidentiality of medical records.

(c) (1) An organization contracted to perform independent
medical review or independent bill review shall be required to
employ a medical director who shall be responsible for advising
the contractor on clinical issues. The medical director shall be a
physician and surgeon licensed by the Medical Board of California
or the California Osteopathic Medical Board.

(2) The independent review organization, any experts it
designates to conduct a review, or any officer, director, or employee
of the independent review organization shall not have any material
professional, familial, or financial affiliation, as determined by the
administrative director, with any of the following:

(A) The employer, insurer or claims administrator, or utilization
review organization.

(B) Any officer, director, employee of the employer, or insurer
or claims administrator.

(C) A physician, the physician’s medical group, the physician’s
independent practice association, or other provider involved in the
medical treatment in dispute.

(D) The facility or institution at which either the proposed health
care service, or the alternative service, if any, recommended by
the employer, would be provided.

(E) The development or manufacture of the principal drug,
device, procedure, or other therapy proposed by the employee
whose treatment is under review, or the alternative therapy, if any,
recommended by the employer.

(F) The employee or the employee’s immediate family, or the
employee’s attorney.

(d) The independent review organizations shall meet all of the
following requirements:

(1) The organization shall not be an affiliate or a subsidiary of,
nor in any way be owned or controlled by, a workers’ compensation
insurer, claims administrator, or a trade association of workers’
compensation insurers or claims administrators. A board member,
director, officer, or employee of the independent review
organization shall not serve as a board member, director, or
employee of a workers’ compensation insurer or claims
administrator. A board member, director, or officer of a workers’
compensation insurer or claims administrator or a trade association
of workers’ compensation insurers or claims administrators shall
not serve as a board member, director, officer, or employee of an
independent review organization.

(2) The organization shall submit to the division the following
information upon initial application to contract under this section
and, except as otherwise provided, annually thereafter upon any
change to any of the following information:

(A) The names of all stockholders and owners of more than 5
percent of any stock or options, if a publicly held organization.

(B) The names of all holders of bonds or notes in excess of one
hundred thousand dollars ($100,000), if any.

(C) The names of all corporations and organizations that the
independent review organization controls or is affiliated with, and
the nature and extent of any ownership or control, including the
affiliated organization’s type of business.

(D) The names and biographical sketches of all directors,
officers, and executives of the independent review organization,
as well as a statement regarding any past or present relationships
the directors, officers, and executives may have with any employer,
workers’ compensation insurer, claims administrator, medical
provider network, managed care organization, provider group, or
board or committee of an employer, workers’ compensation insurer,
claims administrator, medical provider network, managed care
organization, or provider group.

(E) (i) The percentage of revenue the independent review
organization receives from expert reviews, including, but not
limited to, external medical reviews, quality assurance reviews,
utilization reviews, and bill reviews.

(ii) The names of any workers’ compensation insurer, claims
administrator, or provider group for which the independent review
organization provides review services, including, but not limited
to, utilization review, bill review, quality assurance review, and
external medical review. Any change in this information shall be
reported to the department within five business days of the change.

(F) A description of the review process, including, but not
limited to, the method of selecting expert reviewers and matching
the expert reviewers to specific cases.

(G) A description of the system the independent medical review
organization uses to identify and recruit medical professionals to
review treatment and treatment recommendation decisions, the
number of medical professionals credentialed, and the types of
cases and areas of expertise that the medical professionals are
credentialed to review.

(H) A description of how the independent review organization
ensures compliance with the conflict-of-interest requirements of
this section.

(3) The organization shall demonstrate that it has a quality
assurance mechanism in place that does all of the following:

(A) Ensures that any medical professionals retained are
appropriately credentialed and privileged.

(B) Ensures that the reviews provided by the medical
professionals or bill reviewers are timely, clear, and credible, and
that reviews are monitored for quality on an ongoing basis.

(C) Ensures that the method of selecting medical professionals
for individual cases achieves a fair and impartial panel of medical
professionals who are qualified to render recommendations
regarding the clinical conditions and the medical necessity of
treatments or therapies in question.

(D) Ensures the confidentiality of medical records and the
review materials, consistent with the requirements of this section
and applicable state and federal law.

(E) Ensures the independence of the medical professionals or
bill reviewers retained to perform the reviews through
conflict-of-interest policies and prohibitions, and ensures adequate
screening for conflicts of interest, pursuant to paragraph (5).

(4) Medical professionals selected by independent medical
review organizations to review medical treatment decisions shall
be licensed physicians, as defined by Section 3209.3, in good
standing, who meet the following minimum requirements:

(A) The physician shall be a clinician knowledgeable in the
treatment of the employee’s medical condition, knowledgeable
about the proposed treatment, and familiar with guidelines and
protocols in the area of treatment under review.

(B) Notwithstanding any other provision of law, the physician
shall hold a nonrestricted license in any state of the United States,
and for physicians and surgeons holding an M.D. or D.O. degree,
a current certification by a recognized American medical specialty
board in the area or areas appropriate to the condition or treatment
under review. The independent medical review organization shall
give preference to the use of a physician licensed in California as
the reviewer.

(C) The physician shall have no history of disciplinary action
or sanctions, including, but not limited to, loss of staff privileges
or participation restrictions, taken or pending by any hospital,
government, or regulatory body.

(D) Commencing January 1, 2014, the physician shall not hold
an appointment as a qualified medical evaluator pursuant to Section
begin delete 139.32 end delete begin insert 139.2 end insert .

(5) Neither the expert reviewer, nor the independent review
organization, shall have any material professional, material familial,
or material financial affiliation with any of the following:

(A) The employer, workers’ compensation insurer or claims
administrator, or a medical provider network of the insurer or
claims administrator, except that an academic medical center under
contract to the insurer or claims administrator to provide services
to employees may qualify as an independent medical review
organization provided it will not provide the service and provided
the center is not the developer or manufacturer of the proposed
treatment.

(B) Any officer, director, or management employee of the
employer or workers’ compensation insurer or claims administrator.

(C) The physician, the physician’s medical group, or the
independent practice association (IPA) proposing the treatment.

(D) The institution at which the treatment would be provided.

(E) The development or manufacture of the treatment proposed
for the employee whose condition is under review.

(F) The employee or the employee’s immediate family.

(6) For purposes of this subdivision, the following terms shall
have the following meanings:

(A) “Material familial affiliation” means any relationship as a
spouse, child, parent, sibling, spouse’s parent, or child’s spouse.

(B) “Material financial affiliation” means any financial interest
of more than 5 percent of total annual revenue or total annual
income of an independent review organization or individual to
which this subdivision applies. “Material financial affiliation” does
not include payment by the employer to the independent review
organization for the services required by the administrative
director’s contract with the independent review organization, nor
does “material financial affiliation” include an expert’s
participation as a contracting medical provider where the expert
is affiliated with an academic medical center or a National Cancer
Institute-designated clinical cancer research center.

(C) “Material professional affiliation” means any
physician-patient relationship, any partnership or employment
relationship, a shareholder or similar ownership interest in a
professional corporation, or any independent contractor
arrangement that constitutes a material financial affiliation with
any expert or any officer or director of the independent review
organization. “Material professional affiliation” does not include
affiliations that are limited to staff privileges at a health facility.

(e) The division shall provide, upon the request of any interested
person, a copy of all nonproprietary information, as determined
by the administrative director, filed with it by an independent
review organization under contract pursuant to this section. The
division may charge a fee to the interested person for copying the
requested information.

(f) The Legislature finds and declares that the services described
in this section are of such a special and unique nature that they
must be contracted out pursuant to paragraph (3) of subdivision
(b) of Section 19130 of the Government Code. The Legislature
further finds and declares that the services described in this section
are a new state function pursuant to paragraph (2) of subdivision
(b) of Section 19130 of the Government Code.

begin insert

begin insert SEC. 4. end insert   

end insert

begin insert Section 4061 of the end insert begin insert Labor Code end insert begin insert is amended to read: end insert

4061.  

This section shall not apply to the employee’s dispute
of a utilization review decision under Section 4610, nor to the
employee’s dispute of the medical provider network treating
physician’s diagnosis or treatment recommendations under Sections
4616.3 and 4616.4.

(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, 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. 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, whether there is need for future
medical care, and whether an indemnity payment will be deferred
pursuant to paragraph (2) of subdivision (b) of Section 4650.

(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 whether there will be the need for future 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.

(b) If either the employee or employer objects to a medical
determination made by the treating physician concerning the
existence or extent of permanent impairment and limitations or
the need for future medical care, and the employee is represented
by an attorney, a medical evaluation to determine permanent
disability shall be obtained as provided in Section 4062.2.

(c) If either the employee or employer objects to a medical
determination made by the treating physician concerning the
existence or extent of permanent impairment and limitations or
the need for future medical care, and if the employee is not
represented by an attorney, 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. Either party may request a comprehensive medical
evaluation to determine permanent disability or the need for future
medical care, and the evaluation shall be obtained only by the
procedure provided in Section 4062.1.

(d) (1) Within 30 days of receipt of a report from a qualified
medical evaluator who has evaluated an unrepresented employee,
the unrepresented employee or the employer may each request one
supplemental report seeking correction of factual errors in the
report. Any of these requests shall be made in writing. A request
made by the employer shall be provided to the employee, and a
request made by the employee shall be provided to the employer,
insurance carrier, or claims administrator at the time the request
is sent to the evaluator. A request for correction that is made by
the employer shall also inform the employee of the availability of
information and assistance officers to assist him or her in
responding to the request, if necessary.

(2) The permanent disability rating procedure set forth in
subdivision (e) shall not be invoked by the unrepresented employee
or the employer when a request for correction pursuant to paragraph
(1) is pending.

(e) 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 begin insert or 4660.1, as applicable, end insert and serve the rating on
the employee and employer.

(f) 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 and 4664 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.

(g) 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 promulgated under
paragraph (2) or (3) of subdivision (j) of Section 139.2. 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 begin insert or 4660.1, as applicable, end insert and
serve the rating, the comprehensive medical evaluation, and the
summary form on the employee and employer.

(h) (1) 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, except as provided
pursuant to paragraph (2) of subdivision (b) of Section 4650, or
promptly commence proceedings before the appeals board to
resolve the dispute.

(2) 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.

(i) No issue relating to begin insert a dispute over end insert the existence or extent of
permanent impairment and limitations 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
and by either 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 resulting from the injury shall be obtained, except
in accordance with Section 4062.1 or 4062.2. Evaluations obtained
in violation of this prohibition shall not be admissible in any
proceeding before the appeals board.

begin insert

begin insert SEC. 5. end insert   

end insert

begin insert Section 4610.5 of the end insert begin insert Labor Code end insert begin insert is amended to read: end insert

4610.5.  

(a) This section applies to the following disputes:

(1) Any dispute over a utilization review decision regarding
treatment for an injury occurring on or after January 1, 2013.

(2) Any dispute over a utilization review decision if the decision
is communicated to the requesting physician on or after July 1,
2013, regardless of the date of injury.

(b) A dispute described in subdivision (a) shall be resolved only
in accordance with this section.

(c) For purposes of this section and Section 4610.6, the
following definitions apply:

(1) “Disputed medical treatment” means medical treatment that
has been modified, delayed, or denied by a utilization review
decision.

(2) “Medically necessary” and “medical necessity” mean
medical treatment that is reasonably required to cure or relieve the
injured employee of the effects of his or her injury and based on
the following standards, which shall be applied in the order listed,
allowing reliance on a lower ranked standard only if every higher
ranked standard is inapplicable to the employee’s medical
condition:

(A) The guidelines adopted by the administrative director
pursuant to Section 5307.27.

(B) Peer-reviewed scientific and medical evidence regarding
the effectiveness of the disputed service.

(C) Nationally recognized professional standards.

(D) Expert opinion.

(E) Generally accepted standards of medical practice.

(F) Treatments that are likely to provide a benefit to a patient
for conditions for which other treatments are not clinically
efficacious.

(3) “Utilization review decision” means a decision pursuant to
Section 4610 to modify, delay, or deny, based in whole or in part
on medical necessity to cure or relieve, a treatment
recommendation or recommendations by a physician prior to,
retrospectively, or concurrent with the provision of medical
treatment services pursuant to Section 4600 or subdivision (c) of
Section 5402.

(4) Unless otherwise indicated by context, “employer” means
the employer, the insurer of an insured employer, a claims
administrator, or a utilization review organization, or other entity
acting on behalf of any of them.

(d) If a utilization review decision denies, modifies, or delays
a treatment recommendation, the employee may request an
independent medical review as provided by this section.

(e) A utilization review decision may be reviewed or appealed
only by independent medical review pursuant to this section.
Neither the employee nor the employer shall have any liability for
medical treatment furnished without the authorization of the
employer if the treatment is delayed, modified, or denied by a
utilization review decision unless the utilization review decision
is overturned by independent medical review in accordance with
this section.

(f) As part of its notification to the employee regarding an initial
utilization review decision that denies, modifies, or delays a
treatment recommendation, the employer shall provide the
employee with

a one-page form prescribed by the administrative director, and
an addressed envelope, which the employee may return to the
administrative director or the administrative director’s designee
to initiate an independent medical review. The employer shall
include on the form any information required by the administrative
director to facilitate the completion of the independent medical
review. The form shall also include all of the following:

(1) Notice that the utilization review decision is final unless the
employee requests independent medical review.

(2) A statement indicating the employee’s consent to obtain any
necessary medical records from the employer or insurer and from
any medical provider the employee may have consulted on the
matter, to be signed by the employee.

(3) Notice of the employee’s right to provide information or
documentation, either directly or through the employee’s physician,
regarding the following:

(A) The treating physician’s recommendation indicating that
the disputed medical treatment is medically necessary for the
employee’s medical condition.

(B) Medical information or justification that a disputed medical
treatment, on an urgent care or emergency basis, was medically
necessary for the employee’s medical condition.

(C) Reasonable information supporting the employee’s position
that the disputed medical treatment is or was medically necessary
for the employee’s medical condition, including all information
provided to the employee by the employer or by the treating
physician, still in the employee’s possession, concerning the
employer’s or the physician’s decision regarding the disputed
medical treatment, as well as any additional material that the
employee believes is relevant.

(g) The independent medical review process may be terminated
at any time upon the employer’s written authorization of the
disputed medical treatment.

(h) (1) The employee may submit a request for independent
medical review to the division no later than 30 days after the
service of the utilization review decision to the employee.

(2) If at the time of a utilization review decision the employer
is also disputing liability for the treatment for any reason besides
medical necessity, the time for the employee to submit a request
for independent medical review to the administrative director or
administrative director’s designee is extended to 30 days after
service of a notice to the employee showing that the other dispute
of liability has been resolved.

(3) If the employer fails to comply with subdivision begin delete (e) end delete begin insert (f) end insert at
the time of notification of its utilization review decision, the time
limitations for the employee to submit a request for independent
medical review shall not begin to run until the employer provides
the required notice to the employee.

(4) A provider of emergency medical treatment when the
employee faced an imminent and serious threat to his or her health,
including, but not limited to, the potential loss of life, limb, or
other major bodily function, may submit a request for independent
medical review on its own behalf. A request submitted by a
provider pursuant to this paragraph shall be submitted to the
administrative director or administrative director’s designee within
the time limitations applicable for an employee to submit a request
for independent medical review.

(i) An employer shall not engage in any conduct that has the
effect of delaying the independent review process. Engaging in
that conduct or failure of the begin delete plan end delete begin insert employer end insert to promptly comply
with this section is a violation of this section and, in addition to
any other fines, penalties, and other remedies available to the
administrative director, the employer shall be subject to an
administrative penalty in an amount determined pursuant to
regulations to be adopted by the administrative director, not to
exceed five thousand dollars ($5,000) for each day that proper
notification to the employee is delayed. The administrative
penalties shall be paid to the Workers’ Compensation
Administration Revolving Fund.

(j) For purposes of this section, an employee may designate a
parent, guardian, conservator, relative, or other designee of the
employee as an agent to act on his or her behalf. A designation of
an agent executed prior to the utilization review decision shall not
be valid. The requesting physician may join with or otherwise
assist the employee in seeking an independent medical review,
and may advocate on behalf of the employee.

(k) The administrative director or his or her designee shall
expeditiously review requests and immediately notify the employee
and the employer in writing as to whether the request for an
independent medical review has been approved, in whole or in
part, and, if not approved, the reasons therefor. If there appears to
be any medical necessity issue, the dispute shall be resolved
pursuant to an independent medical review, except that, unless the
employer agrees that the case is eligible for independent medical
review, a request for independent medical review shall be deferred
if at the time of a utilization review decision the employer is also
disputing liability for the treatment for any reason besides medical
necessity.

(l) Upon notice from the administrative director that an
independent review organization has been assigned, the employer
shall provide to the independent medical review organization all
of the following documents within 10 days of notice of assignment:

(1) A copy of all of the employee’s medical records in the
possession of the employer or under the control of the employer
relevant to each of the following:

(A) The employee’s current medical condition.

(B) The medical treatment being provided by the employer.

(C) The disputed medical treatment requested by the employee.

(2) A copy of all information provided to the employee by the
employer concerning employer and provider decisions regarding
the disputed treatment.

(3) A copy of any materials the employee or the employee’s
provider submitted to the employer in support of the employee’s
request for the disputed treatment.

(4) A copy of any other relevant documents or information used
by the employer or its utilization review organization in
determining whether the disputed treatment should have been
provided, and any statements by the employer or its utilization
review organization explaining the reasons for the decision to
deny, modify, or delay the recommended treatment on the basis
of medical necessity. The employer shall concurrently provide a
copy of the documents required by this paragraph to the employee
and the requesting physician, except that documents previously
provided to the employee or physician need not be provided again
if a list of those documents is provided.

(m) Any newly developed or discovered relevant medical
records in the possession of the employer after the initial documents
are provided to the independent medical review organization shall
be forwarded immediately to the independent medical review
organization. The employer shall concurrently provide a copy of
medical records required by this subdivision to the employee or
the employee’s treating physician, unless the offer of medical
records is declined or otherwise prohibited by law. The
confidentiality of medical records shall be maintained pursuant to
applicable state and federal laws.

(n) If there is an imminent and serious threat to the health of
the employee, as specified in subdivision (c) of Section 1374.33
of the Health and Safety Code, all necessary information and
documents required by subdivision (l) shall be delivered to the
independent medical review organization within 24 hours of
approval of the request for review.

(o) The employer shall promptly issue a notification to the
employee, after submitting all of the required material to the
independent medical review organization, that lists documents
submitted and includes copies of material not previously provided
to the employee or the employee’s designee.

begin insert

begin insert SEC. 6. end insert   

end insert

begin insert Section 4903.4 of the end insert begin insert Labor Code end insert begin insert is amended to read: end insert

4903.4.  

(a) If a dispute arises concerning a lien for expenses
incurred by or on behalf of the injured employee as provided by
Article 2 (commencing with Section 4600) of Chapter 2 of Part 2,
the appeals board may resolve the dispute in a separate proceeding,
which may include binding arbitration upon agreement of the
employer, lien claimant, and the employee, if the employee remains
a party to the dispute, according to the rules of practice and
procedure.

(b) If the dispute is heard at a separate proceeding it shall be
calendared for hearing or hearings as determined by the appeals
board based upon the resources available to the appeals board and
other considerations as the appeals board deems appropriate and
shall not be subject to Section begin delete 5501 end delete begin insert 5501.5 end insert .

begin delete SECTION 1. end delete
begin insert SEC. 7. end insert   

Section 4903.6 of the Labor Code is amended to read:

4903.6.  

(a) Except as necessary to meet the requirements of
Section 4903.5, a lien claim or application for adjudication shall
not be filed or served under subdivision (b) of Section 4903 until
both of the following have occurred:

(1) Sixty days have elapsed after the date of acceptance or
rejection of liability for the claim, or expiration of the time
provided for investigation of liability pursuant to subdivision (b)
of Section 5402, whichever date is earlier.

(2) Either of the following:

(A) The time provided for payment of medical treatment bills
pursuant to Section 4603.2 has expired and, if the employer
objected to the amount of the bill, the reasonable fee has been
determined pursuant to Section 4603.6, and, if authorization for
the medical treatment has been disputed pursuant to Section 4610,
the medical necessity of the medical treatment has been determined
pursuant to Sections 4610.5 and 4610.6.

(B) The time provided for payment of medical-legal expenses
pursuant to Section 4622 has expired and, if the employer objected
to the amount of the bill, the reasonable fee has been determined
pursuant to Section 4603.6.

(b) All lien claimants under Section 4903 shall notify the
employer and the employer’s representative, if any, and the
employee and his or her representative, if any, and the appeals
board within five working days of obtaining, changing, or
discharging representation by an attorney or nonattorney
representative. The notice shall set forth the legal name, address,
and telephone number of the attorney or nonattorney representative.

(c) A declaration of readiness to proceed shall not be filed for
a lien under subdivision (b) of Section 4903 until the underlying
case has been resolved or where the applicant chooses not to
proceed with his or her case.

(d) With the exception of a lien for services provided by a
physician as defined in Section 3209.3, a lien claimant shall not
be entitled to any medical information, as defined in subdivision
(g) of Section 56.05 of the Civil Code, about an injured worker
without prior written approval of the appeals board. Any order
authorizing disclosure of medical information to a lien claimant
other than a physician shall specify the information to be provided
to the lien claimant and include a finding that the information is
relevant to the proof of the matter for which the information is
sought. The appeals board shall adopt reasonable regulations to
ensure compliance with this section, and shall take any further
steps as may be necessary to enforce the regulations, including,
but not limited to, impositions of sanctions pursuant to Section
5813.

(e) The prohibitions of this section shall not apply to lien claims,
applications for adjudication, or declarations of readiness to
proceed filed by or on behalf of the employee, or to the filings by
or on behalf of the employer.