Amended in Senate August 15, 2016

Amended in Senate August 1, 2016

Amended in Senate June 22, 2016

Amended in Senate May 10, 2016

Amended in Assembly January 26, 2016

Amended in Assembly January 4, 2016

California Legislature—2015–16 Regular Session

Assembly Bill No. 1244

Introduced by Assembly Members Gray and Daly

February 27, 2015

An act to amend Sections begin delete 139.2, 4906, and 5402 end delete begin insert 139.2 and 4906 end insert of, and to add Section 139.21 to, the Labor Code, and to amend Section 14123 of the Welfare and Institutions Code, relating to workers’ compensation.

LEGISLATIVE COUNSEL’S DIGEST

AB 1244, as amended, Gray. Workers’ compensation: providers: suspension: fees and expenses.

Under existing law, the Director of Health Care Services is authorized, for purposes of administering the Medi-Cal program, to suspend a provider of service from further participation under the program for specified reasons, including conviction of any felony or any misdemeanor involving fraud, abuse of the Medi-Cal program or any patient, or otherwise substantially related to the qualifications, functions, or duties of a provider of service. Existing law requires the director, upon receipt of written notification from the Secretary of the United States Department of Health and Human Services that a physician or other individual practitioner has been suspended from participation in the Medicare or Medicaid programs, to promptly suspend the practitioner from participation in the Medi-Cal program.

Existing law establishes a workers’ compensation system, administered by the Administrative Director of the Division of Workers’ Compensation, that generally requires employers to secure the payment of workers’ compensation for injuries incurred by their employees that arise out of, or in the course of, 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.

Existing law authorizes an insurer, employer, or entity that provides physician network services to establish or modify a medical provider network for the provision of medical treatment to injured employees and requires the administrative director to contract with individual physicians or an independent medical review organization to perform medical provider network independent medical reviews. Existing law also requires the administrative director to appoint qualified medical evaluators in each of the respective specialties as required for the evaluation of medical-legal issues. Existing law requires the administrative director to terminate from the list of medical evaluators a physician who has been subject to disciplinary action 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.

This bill would require the administrative director to promptly suspend any physician or practitioner from participating in the workers’ compensation system in any capacity when the individual or entity meets specified criteria, including when that individual has been convicted of any felony or misdemeanor involving fraud or abuse of the Medi-Cal program, Medicare program, or workers’ compensation system, when that individual’s license, certificate, or approval to provide health care has been surrendered or revoked, or when that individual or entity has been suspended, due to fraud or abuse, from participation in the Medicare or Medicaid programs. The bill would require the administrative director to adopt regulations for suspending a physician’s or practitioner’s participation in the workers’ compensation system pursuant to these provisions, as specified, and would require the administrative director to furnish to the physician or practitioner written notice of the right to a hearing regarding the suspension and the procedure to follow to request that hearing. If a physician is a qualified medical examiner, and the division finds that the physician meets the criteria for suspension pursuant to these provisions, the bill would require the administrative director to terminate the physician from the list of medical evaluators. The bill would also require the administrative director to promptly notify the appropriate state licensing, certifying, or registering authority of a physician’s or practitioner’s suspension and to update the division’s databases of qualified medical evaluators and medical provider networks. The bill would prohibit a provider of services from submitting or pursuing claims for payment for services or supplies provided by a physician or practitioner whose participation in the workers’ compensation system has been suspended, unless that claim for payment has been reduced to final judgment or the services or supplies are unrelated to a violation of the laws governing workers’ compensation.

The bill would also require the Director of Health Care Services to notify the administrative director of a suspension of a physician from participation in the Medi-Cal program imposed pursuant to the provisions described above authorizing the director to suspend a provider of services from participation.

Existing law establishes the Workers’ Compensation Appeals Board to exercise all judicial powers vested in it, as specified, including workers’ compensation proceedings for the recovery of compensation, or concerning any right or liability arising out of or incidental to the recovery of compensation. Existing law vests the appeals board with full power, authority, and jurisdiction to try and determine finally those matters, subject only to the review by the courts, as specified. Existing law authorizes the appeals board to determine, and allow as liens against any sum to be paid as compensation, as specified, a reasonable attorney’s fee for legal services and the reasonable expense incurred by or on behalf of the injured employee. Existing law provides that a charge, claim, or agreement for those legal services or disbursements, or that reasonable expense, is not enforceable, valid, or binding in excess of a reasonable amount.

Existing law also requires an attorney to furnish begin insert to end insert the employee a written disclosure form describing the procedures available to the injured employee or his or her dependents and specified information regarding attorney’s fees. Existing law requires that a copy of the disclosure form be signed by the employee and the attorney and sent to the employer, or insurer or 3rd-party administrator, if either is known, by the attorney within 15 days of the employee’s and attorney’s execution of the form. Existing law also requires the employee, the insurer, the employer, and the attorneys for each party to sign and file with the board a statement, signed under penalty of perjury, attesting that the signatories have not violated specified laws prohibiting conflicts of interest.

Existing law authorizes the appeals board, a workers’ compensation judge, or any party to the action or proceeding, as specified, to cause the deposition of witnesses in any investigation or hearing before the appeals board, and provides that the deponent is entitled to receive specified benefits, such as reasonable expenses of transportation, meals, and lodging, as specified.

This bill would prohibit payment for services or expenses incurred under the provisions described above, as specified, prior to the filing of the disclosure form with the appeals board and the sending of that form to the employer, or to the insurer or 3rd-party administrator, if either is known, by the attorney. The bill would require the disclosure form described above to contain a paragraph setting forth the exact location of the district office of the appeals board at which the employee’s case will be filed and to include a specified statement. The bill would impose other requirements regarding the signing and content of the form, including that the form be signed under penalty of perjury by the attorney representing the employee, and would require the form to be filed with the appeals board.

The bill would also require an attorney who subsequently assumes the representation of the employee in the same action or proceeding to complete and sign under penalty of perjury a disclosure form that meets the above-described requirements and the statement attesting that the signatories have not violated specified laws prohibiting conflicts of interest. The bill would require the attorney to file the form and statement with the appeals board, and send them to the employer, or insurer or 3rd-party administrator, if either is known, within 15 days of the employee’s and attorney’s execution of the form and statement.

By expanding the scope of the crime of perjury under these provisions, this bill would impose a state-mandated local program.

begin delete

Existing law requires an employer to authorize the provision of all treatment, as specified, for an alleged injury within one working day after an employee files a specified claim for workers’ compensation and to continue to provide the treatment until the date that liability for the claim is accepted or rejected. Existing law limits liability for medical treatment, until the date that liability for the claim is accepted or rejected, to $10,000.

end delete begin delete

This bill would exclude from that liability limitation claims for occupational disease or cumulative injury filed on or after January 1, 2017, except under specified circumstances, including when the treatment is provided by a physician in a medical provider network established by the employer or when the treatment is provided by the employee’s personal physician, as defined.

end delete

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

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

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

SECTION 1.  

Section 139.2 of the Labor Code is amended to
read:

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 Accreditation Council for 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). A physician whose
full-time practice is limited to the forensic evaluation of disability
shall not 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. 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 shall not 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 ensure 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 Section 4062.1. 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 Sections 4660
and 4660.1.

(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.

A hearing shall not 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 whose 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. The administrative
director shall terminate as a medical evaluator any physician who
is a person described in paragraph (3) of subdivision (b) of Section
139.21. 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) A 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 of the Division of Workers’
Compensation related to the provision of medical treatment to
injured employees.

(o) An evaluator shall 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.

SEC. 2.  

Section 139.21 is added to the Labor Code, immediately following Section 139.2, to read:

139.21.  

(a) (1) The administrative director shall promptly
suspend any physician or practitioner from participating in the
workers’ compensation system in any capacity when the individual
or entity meets any of the following criteria:

(A) The individual has been convicted of any felony or
misdemeanor involving fraud or abuse of the Medi-Cal program,
Medicare program, or workers’ compensation system, or fraud or
abuse of any patient, or otherwise substantially related to the
qualifications, functions, or duties of a provider of services.

(B) The individual or entity has been suspended, due to fraud
or abuse, from the federal Medicare or Medicaid programs.

(C) The individual’s license, certificate, or approval to provide
health care has been surrendered or revoked.

(2) The administrative director shall exercise due diligence to
identify physicians and practitioners who have been suspended as
described in subdivision (a) by accessing the quarterly updates to
the list of suspended and ineligible providers maintained by the
State Department of Health Care Services for the Medi-Cal
program at
https://files.medi-cal.ca.gov/pubsdoco/SandILanding.asp.

(b) (1) The administrative director shall adopt regulations for
suspending a physician’s or practitioner’s participation in the
workers’ compensation system, subject to the notice and hearing
requirements in paragraph (2).

(2) The administrative director shall furnish to the physician or
practitioner written notice of the right to a hearing regarding the
suspension and the procedure to follow to request a hearing. The
notice shall state that the division is required to suspend the
physician or practitioner pursuant to subdivision (a) after 30 days
from the date the notice is mailed unless the physician or
practitioner requests a hearing and, in that hearing, the physician
or practitioner provides proof that paragraph (1) of subdivision (a)
is not applicable. The physician or practitioner may request a
hearing within 10 days from the date the notice is sent by the
administrative director. The request for the hearing shall stay the
suspension. The hearing shall be held within 30 days of the receipt
of the request. Upon the completion of the hearing, if the division
finds that paragraph (1) of subdivision (a) is applicable, the
administrative director shall immediately suspend the physician
or practitioner.

(3) If a physician is a qualified medical examiner, and the
division finds, in accordance with the notice and hearing
requirements of this section, that paragraph (1) of subdivision (a)
is applicable to that physician, the physician shall be terminated
from the list of medical evaluators pursuant to subdivision (m) of
Section 139.2.

(c) The administrative director shall promptly notify the
physician’s or practitioner’s state licensing, certifying, or
registering authority of a suspension imposed pursuant to this
section and shall update the division’s qualified medical evaluator
and medical provider network databases, as appropriate.

(d) A provider of services, whether an individual, clinic, group,
corporation, or other association, may not submit a claim for
payment to, or pursue a claim for payment from, a payor for any
services or supplies provided by a physician or practitioner whose
participation in the workers’ compensation system has been
suspended pursuant to this section, unless that claim for payment
has been reduced to final judgment or the services or supplies are
unrelated to a violation of the laws governing workers’
compensation.

SEC. 3.  

Section 4906 of the Labor Code is amended to read:

4906.  

(a) A charge, claim, or agreement for the legal services
or disbursements mentioned in subdivision (a) of Section 4903,
or for the expense mentioned in subdivision (b) of Section 4903,
is not enforceable, valid, or binding in excess of a reasonable
amount. The appeals board may determine what constitutes a
reasonable amount, but payment pursuant to subdivision (a) or (b)
of Section 4903 or Section 5710 shall not be allowed for any
services or expenses incurred prior to the filing of the disclosure
form described in subdivision (e) with the appeals board and the
sending of that form to the employer, or to the insurer or third-party
administrator, if either is known, by the attorney.

(b) An attorney or agent shall not demand or accept any fee
from an employee or dependent of an employee for the purpose
of representing the employee or dependent of an employee in any
proceeding of the division, appeals board, or any appellate
procedure related thereto until the amount of the fee has been
approved or set by the appeals board.

(c) Any fee agreement shall be submitted to the appeals board
for approval within 10 days after the agreement is made.

(d) In establishing a reasonable attorney’s fee, consideration
shall be given to the responsibility assumed by the attorney, the
care exercised in representing the applicant, the time involved,
and the results obtained.

(e) At the initial consultation, an attorney shall furnish the
employee a written disclosure form promulgated by the
administrative director which shall clearly and prominently
describe the procedures available to the injured employee or his
or her dependents. The disclosure form shall describe this section,
the range of attorney’s fees customarily approved by the appeals
board, and the attorney’s fees provisions of Section 4064 and the
extent to which an employee may receive compensation without
incurring attorney’s fees. The disclosure form shall include the
telephone number of the administrative director together with the
statement that the employee may receive answers at that number
to questions concerning entitlement to compensation or the
procedures to follow to receive compensation. A copy of the
disclosure form shall be signed by the employee and the attorney
and filed with the appeals board and sent to the employer, or insurer
or third-party administrator, if either is known, by the attorney
within 15 days of the employee’s and attorney’s execution thereof.

(f) The disclosure form set forth in subdivision (e) shall contain,
prominently stated, the following statement:

“Any person who makes or causes to be made any knowingly
false or fraudulent material statement or representation for the
purpose of obtaining or denying begin delete worker’s end delete begin insert workers end insert begin insert ’ end insert compensation
benefits or payments is guilty of a felony.”

(g) (1) The disclosure form described in subdivision (e) shall
also contain a paragraph setting forth the exact location of the
district office of the appeals board at which the employee’s case
will be filed. This paragraph shall also contain, prominently
displayed, the following statement:

“The employee has been advised of the district office at which
his or her case will be filed and that he or she may be required to
attend conferences or hearings at this location at his or her own
expense.”

(2) The disclosure form may not be signed by the employee
until he or she has been advised of the location at which his or her
case will be filed, has met with or personally spoken with an
attorney licensed by the State Bar of California who is regularly
employed by the firm by which the employee will be represented,
and has been advised of his or her rights as set forth in subdivision
(e) and the provisions of paragraph (1). The name of this individual
shall be clearly and legibly set forth on the disclosure form.

(3) The disclosure form shall include the actual date the
disclosure form was signed by both the employee and the attorney
and shall be signed under penalty of perjury by the attorney
representing the employee, or an attorney licensed by the State
Bar of California who is regularly employed by his or her firm. A
copy of the disclosure form containing all of the required
information shall be given to the employee when he or she signs
the disclosure form.

(h) In addition to the disclosure form, the employee, the insurer,
the employer, and the attorneys for each party shall sign under
penalty of perjury and file with the board a statement, with the
application or answer, and in addition to the disclosure required
pursuant to subdivision (g), that they have not violated Section
139.3 and that they have not offered, delivered, received, or
accepted any rebate, refund, commission, preference, patronage
dividend, discount, or other consideration, whether in the form of
money or otherwise, as compensation or inducement for any
referred examination or evaluation.

(i) An attorney who subsequently assumes the representation
of the employee in the same action or proceeding shall complete
a disclosure form that meets all of the requirements of this section
and the statement required by subdivision (h). Both the form and
the statement shall be signed under penalty of perjury by the
attorney or an attorney licensed by the State Bar of California who
is regularly employed by his or her firm. Both the disclosure form
and the statement shall be filed with the appeals board and sent to
the employer, or insurer or third-party administrator, if either is
known, by the attorney within 15 days of the employee’s and
attorney’s execution of the form and statement. Payment pursuant
to subdivision (a) or (b) of Section 4903 or Section 5710 shall not
be allowed for any services or expenses incurred prior to the filing
of the disclosure form described in subdivision (e) with the appeals
board and the sending of that form to the employer, or to the insurer
or third-party administrator, if either is known, by the attorney.

begin delete

SEC. 4.  

Section 5402 of the Labor Code is amended to read:

5402.  

(a) Knowledge of an injury, obtained from any source,
on the part of an employer, his or her managing agent,
superintendent, foreman, or other person in authority, or knowledge
of the assertion of a claim of injury sufficient to afford opportunity
to the employer to make an investigation into the facts, is
equivalent to service under Section 5400.

(b) If liability is not rejected within 90 days after the date the
claim form is filed under Section 5401, the injury shall be presumed
compensable under this division. The presumption of this
subdivision is rebuttable only by evidence discovered subsequent
to the 90-day period.

(c) Within one working day after an employee files a claim form
under Section 5401, the employer shall authorize the provision of
all treatment, consistent with Section 5307.27, for the alleged
injury and shall continue to provide the treatment until the date
that liability for the claim is accepted or rejected. Until the date
the claim is accepted or rejected, liability for medical treatment
shall be limited to ten thousand dollars ($10,000).

(d) The liability for payment for medical treatment set forth in
subdivision (c) shall not apply to claims for occupational disease
or cumulative injury filed on or after January 1, 2017, unless one
of the following applies:

(1) A multiemployer Taft-Hartley trust fund, as described in
paragraph (5) of subdivision (c) of Section 186 of Title 29 of the
United States Code, would be liable for payment for the treatment
if the employer was not liable for payment for the treatment.

(2) The treatment is provided by the employee’s personal
physician as defined in subdivision (d) of Section 4600.

(3) The treatment is provided by a physician in a medical
provider network established by the employer pursuant to Section
4616.

(e) Treatment provided under subdivision (c) shall not give rise
to a presumption of liability on the part of the employer.

end delete

begin delete SEC. 5. end delete

begin insert SEC. 4. end insert   

Section 14123 of the Welfare and Institutions Code is
amended to read:

14123.  

Participation in the Medi-Cal program by a provider
of service is subject to suspension in order to protect the health of
the recipients and the funds appropriated to carry out this chapter.

(a) (1) The director may suspend a provider of service from
further participation under the Medi-Cal program for violation of
any provision of this chapter or Chapter 8 (commencing with
Section 14200) or any rule or regulation promulgated by the
director pursuant to those chapters. The suspension may be for an
indefinite or specified period of time and with or without
conditions, or may be imposed with the operation of the suspension
stayed or probation granted. The director shall suspend a provider
of service for conviction of any felony or any misdemeanor
involving fraud, abuse of the Medi-Cal program or any patient, or
otherwise substantially related to the qualifications, functions, or
duties of a provider of service.

(2) If the provider of service is a clinic, group, corporation, or
other association, conviction of any officer, director, or shareholder
with a 10 percent or greater interest in that organization, of a crime
described in paragraph (1) shall result in the suspension of that
organization and the individual convicted if the director believes
that suspension would be in the best interest of the Medi-Cal
program. If the provider of service is a political subdivision of the
state or other government agency, the conviction of the person in
charge of the facility of a crime described in paragraph (1) may
result in the suspension of that facility. The record of conviction
or a certified copy thereof, certified by the clerk of the court or by
the judge in whose court the conviction is had, shall be conclusive
evidence of the fact that the conviction occurred. A plea or verdict
of guilty, or a conviction following a plea of nolo contendere is
deemed to be a conviction within the meaning of this section.

(3) After conviction, but before the time for appeal has elapsed
or the judgment of conviction has been affirmed on appeal, the
director, if he or she believes that suspension would be in the best
interests of the Medi-Cal program, may order the suspension of a
provider of service. When the time for appeal has elapsed, or the
judgment of conviction has been affirmed on appeal or when an
order granting probation is made suspending the imposition of
sentence irrespective of any subsequent order under Section 1203.4
of the Penal Code allowing a person to withdraw his or her plea
of guilty and to enter a plea of not guilty, or setting aside the verdict
of guilty, or dismissing the accusation, information, or indictment,
the director shall order the suspension of a provider of service.
The suspension shall not take effect earlier than the date of the
director’s order. Suspension following a conviction is not subject
to the proceedings required in subdivision (c). However, the
director may grant an informal hearing at the request of the provider
of service to determine in the director’s sole discretion if the
circumstances surrounding the conviction justify rescinding or
otherwise modifying the suspension provided for in this
subdivision.

(4) If the provider of service appeals the conviction and the
conviction is reversed, the provider may apply for reinstatement
to the Medi-Cal program after the conviction is reversed.
Notwithstanding Section 14124.6, the application for reinstatement
shall not be subject to the one-year waiting period for the filing of
a reinstatement petition pursuant to Section 11522 of the
Government Code.

(b) Whenever the director receives written notification from the
Secretary of the United States Department of Health and Human
Services that a physician or other individual practitioner has been
suspended from participation in the Medicare or Medicaid
programs, the director shall promptly suspend the practitioner from
participation in the Medi-Cal program and notify the
Administrative Director of the Division of Workers’ Compensation
of the suspension, in accordance with paragraph (2) of subdivision
(e). This automatic suspension is not subject to the proceedings
required in subdivision (c). No payment from state or federal funds
may be made for any item or service rendered by the practitioner
during the period of suspension.

(c) The proceedings for suspension shall be conducted pursuant
to Section 100171 of the Health and Safety Code. The director
may temporarily suspend any provider of service prior to any
hearing when in his or her opinion that action is necessary to
protect the public welfare or the interests of the Medi-Cal program.
The director shall notify the provider of service of the temporary
suspension and the effective date thereof and at the same time
serve the provider with an accusation. The accusation and all
proceedings thereafter shall be in accordance with Section 100171
of the Health and Safety Code. Upon receipt of a notice of defense
by the provider, the director shall set the matter for hearing within
30 days after receipt of the notice. The temporary suspension shall
remain in effect until such time as the hearing is completed and
the director has made a final determination on the merits. The
temporary suspension shall, however, be deemed vacated if the
director fails to make a final determination on the merits within
60 days after the original hearing has been completed. This
subdivision does not apply where the suspension of a provider is
based upon the conviction of any crime involving fraud, abuse of
the Medi-Cal program, or suspension from the federal Medicare
program. In those instances, suspension shall be automatic.

(d) (1) The suspension by the director of any provider of service
shall preclude the provider from submitting claims for payment,
either personally or through claims submitted by any clinic, group,
corporation, or other association to the Medi-Cal program for any
services or supplies the provider has provided under the program,
except for services or supplies provided prior to the suspension.
No clinic, group, corporation, or other association which is a
provider of service shall submit claims for payment to the Medi-Cal
program for any services or supplies provided by a person within
the organization who has been suspended or revoked by the
director, except for services or supplies provided prior to the
suspension.

(2) If the provisions of this chapter, Chapter 8 (commencing
with Section 14200), or the regulations promulgated by the director
are violated by a provider of service that is a clinic, group,
corporation, or other association, the director may suspend the
organization and any individual person within the organization
who is responsible for the violation.

(e) (1) Notice of the suspension shall be sent by the director to
the provider’s state licensing, certifying, or registering authority,
along with the evidence upon which the suspension was based.

(2) At the same time notice is provided pursuant to paragraph
(1), the director shall provide written notification of the suspension
to the Administrative Director of the Division of Workers’
Compensation, for purposes of Section 139.21 of the Labor Code.

(f) In addition to the bases for suspension contained in
subdivisions (a) and (b), the director may suspend a provider of
service from further participation under the Medi-Cal dental
program for the provision of services that are below or less than
the standard of acceptable quality, as established by the California
Dental Association Guidelines for the Assessment of Clinical
Quality and Professional Performance, Copyright 1995, Third
Edition, as periodically amended. The suspension shall be subject
to the requirements contained in subdivisions (a) to (e), inclusive.

begin delete SEC. 6. end delete

begin insert SEC. 5. end insert   

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.