Amended in Assembly March 29, 2016

California Legislature—2015–16 Regular Session

Assembly Bill No. 2503

Introduced by Assembly Member Obernolte

February 19, 2016

An act to amend Section 4610 of the Labor Code, relating to workers’ compensation.

LEGISLATIVE COUNSEL’S DIGEST

AB 2503, as amended, Obernolte. Workers’ compensation: utilization review.

Existing law establishes a workers’ compensation system, administered by the Administrative Director of the Division of Workers’ Compensation, to compensate an employee for injuries sustained in the course of his or her employment. Existing law requires every employer, for purposes of workers’ compensation, to establish a utilization review process to prospectively, retrospectively, or concurrently review and approve, modify, delay, or deny, based in whole or in part on medical necessity to cure and relieve, treatment recommendations by physicians prior to, retrospectively, or concurrent with the provision of medical treatment services, as provided. Existing law requires prospective or concurrent decisions to be made in a timely fashion that are appropriate for the nature of the employee’s condition. Existing law also requires that decisions to approve, modify, delay, or deny requests by physicians for authorization prior to, or concurrent with, the provision of medical treatment services to employees be communicated to the requesting physician within 24 hours of the decision.

This bill would begin delete clarify that the requirement that prospective or concurrent decisions be made in a timely fashion is in addition to the requirement that decisions to approve, modify, delay, or deny requests by physicians for authorization prior to, or concurrent with, the provision of medical treatment services to employees be communicated to the requesting physician within 24 hours of the decision. end delete begin insert require, when an employee is referred to a physician, an employer, insurer, or other entity that is subject to the provisions governing utilization review to inform the physician treating the employee of the name, address, telephone number, fax number, and email address of the claims administrator or utilization review organization to which the request for authorization for medical treatment shall be sent. end insert The bill would also make technical changes.

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

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

SECTION 1.  

Section 4610 of the Labor Code is amended to
read:

4610.  

(a) For purposes of this section, “utilization review”
means utilization review or utilization management functions that
prospectively, retrospectively, or concurrently review and approve,
modify, delay, or deny, based in whole or in part on medical
necessity to cure and relieve, treatment recommendations by
physicians, as defined in Section 3209.3, prior to, retrospectively,
or concurrent with the provision of medical treatment services
pursuant to Section 4600.

(b) Each employer shall establish a utilization review process
in compliance with this section, either directly or through its insurer
or an entity with which an employer or insurer contracts for these
services.

(c) Each utilization review process shall be governed by written
policies and procedures. These policies and procedures shall ensure
that decisions based on the medical necessity to cure and relieve
of proposed medical treatment services are consistent with the
schedule for medical treatment utilization adopted pursuant to
Section 5307.27. These policies and procedures, and a description
of the utilization process, shall be filed with the administrative
director and shall be disclosed by the employer to employees,
physicians, and the public upon request.

(d)  begin delete If end delete begin insert When an employee is referred to a physician, the employer,
insurer, or other entity subject to this section shall inform the
physician treating the employee of the name, address, telephone
number, fax number, and email address of the claims administrator
or utilization review organization to which the request for
authorization for medical treatment shall be sent. If end insert an employer,
insurer, or other entity subject to this section requests medical
information from a physician in order to determine whether to
approve, modify, delay, or deny requests for authorization, begin delete the
employer end delete begin insert that employer, insurer, or other entity end insert shall request only
the information reasonably necessary to make the determination.
The employer, insurer, or other entity shall employ or designate a
medical director who holds an unrestricted license to practice
medicine in this state issued pursuant to Section 2050 or Section
2450 of the Business and Professions Code. The medical director
shall ensure that the process by which the employer or other entity
reviews and approves, modifies, delays, or denies requests by
physicians prior to, retrospectively, or concurrent with the provision
of medical treatment services, complies with the requirements of
this section. Nothing in this section shall be construed as restricting
the existing authority of the Medical Board of California.

(e) A person other than a licensed physician who is competent
to evaluate the specific clinical issues involved in the medical
treatment services, and where these services are within the scope
of the physician’s practice, requested by the physician shall not
modify, delay, or deny requests for authorization of medical
treatment for reasons of medical necessity to cure and relieve.

(f) The criteria or guidelines used in the utilization review
process to determine whether to approve, modify, delay, or deny
medical treatment services shall be all of the following:

(1) Developed with involvement from actively practicing
physicians.

(2) Consistent with the schedule for medical treatment utilization
adopted pursuant to Section 5307.27.

(3) Evaluated at least annually, and updated if necessary.

(4) Disclosed to the physician and the employee, if used as the
basis of a decision to modify, delay, or deny services in a specified
case under review.

(5) Available to the public upon request. An employer shall
only be required to disclose the criteria or guidelines for the
specific procedures or conditions requested. An employer may
charge members of the public reasonable copying and postage
expenses related to disclosing criteria or guidelines pursuant to
this paragraph. Criteria or guidelines may also be made available
through electronic means. A charge shall not be required for an
employee whose physician’s request for medical treatment services
is under review.

(g) In determining whether to approve, modify, delay, or deny
requests by physicians prior to, retrospectively, or concurrent with
the provisions of medical treatment services to employees all of
the following requirements shall be met:

(1) Prospective or concurrent decisions shall be made in a timely
fashion that are appropriate for the nature of the employee’s
condition, not to exceed five working days from the receipt of the
information reasonably necessary to make the determination, but
in no event more than 14 days from the date of the medical
treatment recommendation by the physician. In cases where the
review is retrospective, a decision resulting in denial of all or part
of the medical treatment service shall be communicated to the
individual who received services, or to the individual’s designee,
within 30 days of receipt of the information that is reasonably
necessary to make this determination. If payment for a medical
treatment service is made within the time prescribed by Section
4603.2, a retrospective decision to approve the service need not
otherwise be communicated.

(2) If the employee’s condition is one where the employee faces
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, or the normal timeframe for the decisionmaking process,
as described in paragraph (1), would be detrimental to the
employee’s life or health or could jeopardize the employee’s ability
to regain maximum function, decisions to approve, modify, delay,
or deny requests by physicians prior to, or concurrent with, the
provision of medical treatment services to employees shall be made
in a timely fashion that is appropriate for the nature of the
employee’s condition, but not to exceed 72 hours after the receipt
of the information reasonably necessary to make the determination.

(3) (A)  begin delete In addition to the requirement that prospective or
concurrent decisions be made in a timely fashion, as set forth in
paragraph (1), decisions end delete begin insert Decisions end insert to approve, modify, delay, or
deny requests by physicians for authorization prior to, or concurrent
with, the provision of medical treatment services to employees
shall be communicated to the requesting physician within 24 hours
of the decision. Decisions resulting in modification, delay, or denial
of all or part of the requested health care service shall be
communicated to physicians initially by telephone or facsimile,
and to the physician and employee in writing within 24 hours for
concurrent review, or within two business days of the decision for
prospective review, as prescribed by the administrative director.
If the request is not approved in full, disputes shall be resolved in
accordance with Section 4610.5, if applicable, or otherwise in
accordance with Section 4062.

(B) In the case of concurrent review, medical care shall not be
discontinued until the employee’s physician has been notified of
the decision and a care plan has been agreed upon by the physician
that is appropriate for the medical needs of the employee. Medical
care provided during a concurrent review shall be care that is
medically necessary to cure and relieve, and an insurer or
self-insured employer shall only be liable for those services
determined medically necessary to cure and relieve. If the insurer
or self-insured employer disputes whether or not one or more
services offered concurrently with a utilization review were
medically necessary to cure and relieve, the dispute shall be
resolved pursuant to Section 4610.5, if applicable, or otherwise
pursuant to Section 4062. A compromise between the parties that
an insurer or self-insured employer believes may result in payment
for services that were not medically necessary to cure and relieve
shall be reported by the insurer or the self-insured employer to the
licensing board of the provider or providers who received the
payments, in a manner set forth by the respective board and in a
way that minimizes reporting costs both to the board and to the
insurer or self-insured employer, for evaluation as to possible
violations of the statutes governing appropriate professional
practices. Fees shall not be levied upon insurers or self-insured
employers making reports required by this section.

(4) Communications regarding decisions to approve requests
by physicians shall specify the specific medical treatment service
approved. Responses regarding decisions to modify, delay, or deny
medical treatment services requested by physicians shall include
a clear and concise explanation of the reasons for the employer’s
decision, a description of the criteria or guidelines used, and the
clinical reasons for the decisions regarding medical necessity. If
a utilization review decision to deny or delay a medical service is
due to incomplete or insufficient information, the decision shall
specify the reason for the decision and specify the information that
is needed.

(5) If the employer, insurer, or other entity cannot make a
decision within the timeframes specified in paragraph (1) or (2)
because the employer or other entity is not in receipt of all of the
information reasonably necessary and requested, because the
employer requires consultation by an expert reviewer, or because
the employer has asked that an additional examination or test be
performed upon the employee that is reasonable and consistent
with good medical practice, the employer shall immediately notify
the physician and the employee, in writing, that the employer
cannot make a decision within the required timeframe, and specify
the information requested but not received, the expert reviewer to
be consulted, or the additional examinations or tests required. The
employer shall also notify the physician and employee of the
anticipated date on which a decision may be rendered. Upon receipt
of all information reasonably necessary and requested by the
employer, the employer shall approve, modify, or deny the request
for authorization within the timeframes specified in paragraph (1)
or (2).

(6) A utilization review decision to modify, delay, or deny a
treatment recommendation shall remain effective for 12 months
from the date of the decision without further action by the employer
with regard to a further recommendation by the same physician
for the same treatment unless the further recommendation is
supported by a documented change in the facts material to the
basis of the utilization review decision.

(7) Utilization review of a treatment recommendation shall not
be required while the employer is disputing liability for injury or
treatment of the condition for which treatment is recommended
pursuant to Section 4062.

(8) If utilization review is deferred pursuant to paragraph (7),
and it is finally determined that the employer is liable for treatment
of the condition for which treatment is recommended, the time for
the employer to conduct retrospective utilization review in
accordance with paragraph (1) shall begin on the date the
determination of the employer’s liability becomes final, and the
time for the employer to conduct prospective utilization review
shall commence from the date of the employer’s receipt of a
treatment recommendation after the determination of the
employer’s liability.

(h) Each employer, insurer, or other entity subject to this section
shall maintain telephone access for physicians to request
authorization for health care services.

(i) If the administrative director determines that the employer,
insurer, or other entity subject to this section has failed to meet
any of the timeframes in this section, or has failed to meet any
other requirement of this section, the administrative director may
assess, by order, administrative penalties for each failure. A
proceeding for the issuance of an order assessing administrative
penalties shall be subject to appropriate notice to, and an
opportunity for a hearing with regard to, the person affected. The
administrative penalties shall not be deemed to be an exclusive
remedy for the administrative director. These penalties shall be
deposited in the Workers’ Compensation Administration Revolving
Fund.