BILL NUMBER: AB 1244 ENROLLED
BILL TEXT
PASSED THE SENATE AUGUST 23, 2016
PASSED THE ASSEMBLY AUGUST 30, 2016
AMENDED IN SENATE AUGUST 19, 2016
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
INTRODUCED BY Assembly Members Gray and Daly
(Coauthors: Assembly Members Arambula, Brown, Cooley, Cooper,
Dodd, Frazier, Irwin, Low, Medina, Ting, and Wood)
FEBRUARY 27, 2015
An act to amend Section 4906 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, Gray. Workers' compensation.
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.
This bill would require the administrative director to promptly
suspend any physician, practitioner, or provider from participating
in the workers' compensation system if as a physician, practitioner,
or provider the individual or entity meets specified criteria,
including if 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, if that individual'
s license, certificate, or approval to provide health care has been
surrendered or revoked, or if 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,
practitioner, or provider from participating in the workers'
compensation system pursuant to these provisions, as specified, and
would require the administrative director to furnish to the
physician, practitioner, or provider written notice of the right to a
hearing regarding the suspension and the procedure to follow to
request that hearing. The bill would also require the administrative
director to promptly notify the appropriate state licensing,
certifying, or registering authority of a physician's, practitioner'
s, or provider's suspension and to update the division's databases of
qualified medical evaluators and medical provider networks. The bill
would require the administrative director to notify the chief judge
of the division of a suspension under these provisions, as specified,
and post a notice on the department's Internet Web site. The bill
would enact special lien proceedings for the adjudication of any
liens of a physician, practitioner, or provider who has been
suspended pursuant to these provisions because he or she has been
convicted of a felony or misdemeanor that meets specified criteria.
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 service 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
disbursements in connection with those legal services. Existing law
provides that a charge, claim, or agreement for those legal services
or disbursements is not enforceable, valid, or binding in excess of a
reasonable amount.
Existing law also requires an attorney to furnish to 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 legal services or
disbursements in connection with those legal services, or expenses
relating to the deposition of witnesses, 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.
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.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. 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, pursuant to subdivision (b), any physician, practitioner, or
provider from participating in the workers' compensation system as a
physician, practitioner, or provider if the individual or entity
meets any of the following criteria:
(A) The individual has been convicted of any felony or misdemeanor
and that crime comes within any of the following descriptions:
(i) It involves fraud or abuse of the Medi-Cal program, Medicare
program, or workers' compensation system, or fraud or abuse of any
patient.
(ii) It relates to the conduct of the individual's medical
practice as it pertains to patient care.
(iii) It is a financial crime that relates to the Medi-Cal
program, Medicare program, or workers' compensation system.
(iv) It is 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, practitioners, or providers 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, practitioner, or provider from participating
in the workers' compensation system, subject to the notice and
hearing requirements in paragraph (2).
(2) The administrative director shall furnish to the physician,
practitioner, or provider 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 administrative director is
required to suspend the physician, practitioner, or provider pursuant
to subdivision (a) after 30 days from the date the notice is mailed
unless the physician, practitioner, or provider requests a hearing
and, in that hearing, the physician, practitioner, or provider
provides proof that paragraph (1) of subdivision (a) is not
applicable. The physician, practitioner, or provider 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
administrative director finds that paragraph (1) of subdivision (a)
is applicable, the administrative director shall immediately suspend
the physician, practitioner, or provider.
(3) The administrative director shall have power and jurisdiction
to do all things necessary or convenient to conduct the hearings
provided for in paragraph (2). The hearings and investigations may be
conducted by any designated hearing officer appointed by the
administrative director. Any authorized person conducting that
hearing or investigation may administer oaths, subpoena and require
the attendance of witnesses and the production of books or papers,
and cause the depositions of witnesses residing within or without the
state to be taken in the manner prescribed by law for like
depositions in civil cases in the superior court of this state under
Title 4 (commencing with Section 2016.010) of Part 4 of the Code of
Civil Procedure.
(c) The administrative director shall promptly notify the
physician's, practitioner's, or provider'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) Upon suspension of a physician, practitioner, or provider
pursuant to this section, the administrative director shall give
notice of the suspension to the chief judge of the division, and the
chief judge shall promptly thereafter provide written notification of
the suspension to district offices and all workers' compensation
judges. The method of notification to all district offices and to all
workers' compensation judges shall be in a manner determined by the
chief judge in his or her discretion. The administrative director
shall also post notification of the suspension on the department's
Internet Web site.
(e) The following procedures shall apply for the adjudication of
any liens of a physician, practitioner, or provider suspended
pursuant to subparagraph (A) of paragraph (1) of subdivision (a),
including any liens filed by or on behalf of the physician,
practitioner, or provider or any clinic, group or corporation in
which the suspended physician, practitioner, or provider has an
ownership interest.
(1) If the disposition of the criminal proceeding provides for or
requires, whether by plea agreement or by judgment, dismissal of
liens and forfeiture of sums claimed therein, as specified in the
criminal disposition, all of those liens shall be deemed dismissed
with prejudice by operation of law as of the effective date of the
final disposition in the criminal proceeding, and orders notifying of
those dismissals may and shall be entered by workers' compensation
judges.
(2) If the disposition of the criminal proceeding fails to specify
the disposition to be made of lien filings in the workers'
compensation system as set forth in paragraph (1), all liens pending
in any workers' compensation case in any district office within the
state shall be consolidated and adjudicated in a special lien
proceeding as described in subdivisions (f) to (i), inclusive.
(f) After notice of suspension, pursuant to subdivision (d), and
if subdivision (e) applies, the administrative director shall appoint
a special lien proceeding attorney, who shall be an attorney
employed by the division or by the department. The special lien
proceeding attorney shall, based on the information that is
available, identify liens subject to disposition pursuant to
subdivision (e), and workers' compensation cases in which those liens
are pending, and shall notify the chief judge regarding those liens.
Based on this information, the chief judge shall identify a district
office for a consolidated special lien proceeding to adjudicate
those liens, and shall appoint a workers' compensation judge to
preside over that proceeding.
(g) It shall be a presumption affecting the burden of proof that
all liens to be adjudicated in the special lien proceeding, and all
underlying bills for service and claims for compensation asserted
therein, arise from the conduct subjecting the physician,
practitioner, or provider to suspension, and that payment is not due
and should not be made on those liens because they arise from, or are
connected to, criminal, fraudulent, or abusive conduct or activity.
A lien claimant shall not have the right to payment unless he or she
rebuts that presumption by a preponderance of the evidence.
(h) The special lien proceedings shall be governed by the same
laws, regulations, and procedures that govern all other matters
before the appeals board. The administrative director shall
promulgate regulations for the implementation of this section.
(i) If it is determined in a special lien proceeding that a lien
does not arise from the conduct subjecting a physician, practitioner,
or provider to suspension, the workers' compensation judge shall
have the discretion to adjudicate the lien or transfer the lien back
to the district office having venue over the case in which the lien
was filed.
(j) At any time following suspension, a physician, practitioner,
or provider lien claimant may elect to withdraw or to dismiss his or
her lien with prejudice, which shall constitute a final disposition
of the claim for compensation asserted therein.
(k) The provisions of this section shall not affect, amend, alter,
or in any way apply to the provisions of Section 139.2.
SEC. 2. 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) 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 workers' 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
complete 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) 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.
SEC. 3. 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.
SEC. 4. 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.