Amended in Senate August 29, 2016

Amended in Senate August 19, 2016

Amended in Assembly April 19, 2016

Amended in Assembly March 29, 2016

California Legislature—2015–16 Regular Session

Assembly BillNo. 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 thatbegin delete areend deletebegin insert isend insert 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 require a physician providing treatment to an injured worker to send any request for authorization for medical treatment, with supporting documentation, to the claims administrator for the employer, insurer, or other entity according to rules adopted by the administrative director. The bill would also make technical changes.

begin insert

This bill would incorporate changes to Section 4610 of the Labor Code proposed by this bill and SB 1160, to be operative if both bills are enacted and this bill is enacted after SB 1160.

end insert

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

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

P2    1

SECTION 1.  

Section 4610 of the Labor Code is amended to
2read:

3

4610.  

(a) For purposes of this section, “utilization review”
4means utilization review or utilization management functions that
5prospectively, retrospectively, or concurrently review and approve,
6modify, delay, or deny, based in whole or in part on medical
7necessity to cure and relieve, treatment recommendations by
8physicians, as defined in Section 3209.3, prior to, retrospectively,
9or concurrent with the provision of medical treatment services
10pursuant to Section 4600.

11(b) Each employer shall establish a utilization review process
12in compliance with this section, either directly or through its insurer
13or an entity with which an employer or insurer contracts for these
14services.

15(c) Each utilization review process shall be governed by written
16policies and procedures. These policies and procedures shall ensure
17that decisions based on the medical necessity to cure and relieve
18of proposed medical treatment services are consistent with the
19schedule for medical treatment utilization adopted pursuant to
20Section 5307.27. These policies and procedures, and a description
21of the utilization process, shall be filed with the administrative
22director and shall be disclosed by the employer to employees,
23physicians, and the public upon request.

P3    1(d) Unless otherwise indicated in this section, a physician
2providing treatment under Section 4600 shall send any request for
3authorization for medical treatment, with supporting
4documentation, to the claims administrator for the employer,
5insurer, or other entity according to rules adopted by the
6administrative director. If an employer, insurer, or other entity
7subject to this section requests medical information from a
8physician in order to determine whether to approve, modify, delay,
9or deny requests for authorization, that employer, insurer, or other
10entity shall request only the information reasonably necessary to
11make the determination. The employer, insurer, or other entity
12shall employ or designate a medical director who holds an
13unrestricted license to practice medicine in this state issued
14pursuant to Section 2050 or 2450 of the Business and Professions
15Code. The medical director shall ensure that the process by which
16the employer or other entity reviews and approves, modifies,
17delays, or denies requests by physicians prior to, retrospectively,
18or concurrent with the provision of medical treatment services,
19 complies with the requirements of this section. Nothing in this
20section shall be construed as restricting the existing authority of
21the Medical Board of California.

22(e) A person other than a licensed physician who is competent
23to evaluate the specific clinical issues involved in the medical
24treatment services, if these services are within the scope of the
25physician’s practice, requested by the physician, shall not modify,
26delay, or deny requests for authorization of medical treatment for
27reasons of medical necessity to cure and relieve.

28(f) The criteria or guidelines used in the utilization review
29process to determine whether to approve, modify, delay, or deny
30medical treatment services shall be all of the following:

31(1) Developed with involvement from actively practicing
32physicians.

33(2) Consistent with the schedule for medical treatment utilization
34adopted pursuant to Section 5307.27.

35(3) Evaluated at least annually, and updated if necessary.

36(4) Disclosed to the physician and the employee, if used as the
37basis of a decision to modify, delay, or deny services in a specified
38case under review.

39(5) Available to the public upon request. An employer shall
40only be required to disclose the criteria or guidelines for the
P4    1specific procedures or conditions requested. An employer may
2charge members of the public reasonable copying and postage
3expenses related to disclosing criteria or guidelines pursuant to
4this paragraph. Criteria or guidelines may also be made available
5through electronic means. A charge shall not be required for an
6employee whose physician’s request for medical treatment services
7is under review.

8(g) In determining whether to approve, modify, delay, or deny
9requests by physicians prior to, retrospectively, or concurrent with
10the provisions of medical treatment services to employees all of
11the following requirements shall be met:

12(1) Prospective or concurrent decisions shall be made in a timely
13fashion thatbegin delete areend deletebegin insert isend insert appropriate for the nature of the employee’s
14condition, not to exceed five working days from the receipt of the
15information reasonably necessary to make the determination, but
16in no event more than 14 days from the date of the medical
17treatment recommendation by the physician. In cases where the
18review is retrospective, a decision resulting in denial of all or part
19of the medical treatment service shall be communicated to the
20individual who received services, or to the individual’s designee,
21within 30 days of receipt of the information that is reasonably
22necessary to make this determination. If payment for a medical
23treatment service is made within the time prescribed by Section
244603.2, a retrospective decision to approve the service need not
25otherwise be communicated.

26(2) If the employee’s condition is one in which the employee
27faces an imminent and serious threat to his or her health, including,
28but not limited to, the potential loss of life, limb, or other major
29bodily function, or the normal timeframe for the decisionmaking
30process, as described in paragraph (1), would be detrimental to the
31employee’s life or health or could jeopardize the employee’s ability
32to regain maximum function, decisions to approve, modify, delay,
33or deny requests by physicians prior to, or concurrent with, the
34provision of medical treatment services to employees shall be made
35in a timely fashion that is appropriate for the nature of the
36employee’s condition, but not to exceed 72 hours after the receipt
37of the information reasonably necessary to make the determination.

38(3) (A) Decisions to approve, modify, delay, or deny requests
39by physicians for authorization prior to, or concurrent with, the
40provision of medical treatment services to employees shall be
P5    1communicated to the requesting physician within 24 hours of the
2decision. Decisions resulting in modification, delay, or denial of
3all or part of the requested health care service shall be
4communicated to physicians initially by telephone or facsimile,
5and to the physician and employee in writing within 24 hours for
6concurrent review, or within two business days of the decision for
7prospective review, as prescribed by the administrative director.
8If the request is not approved in full, disputes shall be resolved in
9accordance with Section 4610.5, if applicable, or otherwise in
10accordance with Section 4062.

11(B) In the case of concurrent review, medical care shall not be
12discontinued until the employee’s physician has been notified of
13the decision and a care plan has been agreed upon by the physician
14that is appropriate for the medical needs of the employee. Medical
15care provided during a concurrent review shall be care that is
16medically necessary to cure and relieve, and an insurer or
17self-insured employer shall only be liable for those services
18determined medically necessary to cure and relieve. If the insurer
19or self-insured employer disputes whether or not one or more
20services offered concurrently with a utilization review were
21medically necessary to cure and relieve, the dispute shall be
22resolved pursuant to Section 4610.5, if applicable, or otherwise
23pursuant to Section 4062. A compromise between the parties that
24an insurer or self-insured employer believes may result in payment
25for services that were not medically necessary to cure and relieve
26shall be reported by the insurer or the self-insured employer to the
27licensing board of the provider or providers who received the
28payments, in a manner set forth by the respective board and in a
29way that minimizes reporting costs both to the board and to the
30insurer or self-insured employer, for evaluation as to possible
31violations of the statutes governing appropriate professional
32practices. Fees shall not be levied upon insurers or self-insured
33employers making reports required by this section.

34(4) Communications regarding decisions to approve requests
35by physicians shall specify the specific medical treatment service
36approved. Responses regarding decisions to modify, delay, or deny
37medical treatment services requested by physicians shall include
38a clear and concise explanation of the reasons for the employer’s
39decision, a description of the criteria or guidelines used, and the
40clinical reasons for the decisions regarding medical necessity. If
P6    1a utilization review decision to deny or delay a medical service is
2due to incomplete or insufficient information, the decision shall
3specify the reason for the decision and specify the information that
4is needed.

5(5) If the employer, insurer, or other entity cannot make a
6decision within the timeframes specified in paragraph (1) or (2)
7because the employer or other entity is not in receipt of all of the
8information reasonably necessary and requested, because the
9employer requires consultation by an expert reviewer, or because
10the employer has asked that an additional examination or test be
11performed upon the employee that is reasonable and consistent
12with good medical practice, the employer shall immediately notify
13the physician and the employee, in writing, that the employer
14cannot make a decision within the required timeframe, and specify
15the information requested but not received, the expert reviewer to
16be consulted, or the additional examinations or tests required. The
17employer shall also notify the physician and employee of the
18anticipated date on which a decision may be rendered. Upon receipt
19of all information reasonably necessary and requested by the
20employer, the employer shall approve, modify, or deny the request
21for authorization within the timeframes specified in paragraph (1)
22or (2).

23(6) A utilization review decision to modify, delay, or deny a
24treatment recommendation shall remain effective for 12 months
25from the date of the decision without further action by the employer
26with regard to a further recommendation by the same physician
27for the same treatment unless the further recommendation is
28supported by a documented change in the facts material to the
29basis of the utilization review decision.

30(7) Utilization review of a treatment recommendation shall not
31be required while the employer is disputing liability for injury or
32 treatment of the condition for which treatment is recommended
33pursuant to Section 4062.

34(8) If utilization review is deferred pursuant to paragraph (7),
35and it is finally determined that the employer is liable for treatment
36of the condition for which treatment is recommended, the time for
37the employer to conduct retrospective utilization review in
38accordance with paragraph (1) shall begin on the date the
39determination of the employer’s liability becomes final, and the
40time for the employer to conduct prospective utilization review
P7    1shall commence from the date of the employer’s receipt of a
2treatment recommendation after the determination of the
3employer’s liability.

4(h) Each employer, insurer, or other entity subject to this section
5shall maintain telephone access for physicians to request
6authorization for health care services.

7(i) If the administrative director determines that the employer,
8insurer, or other entity subject to this section has failed to meet
9any of the timeframes in this section, or has failed to meet any
10other requirement of this section, the administrative director may
11assess, by order, administrative penalties for each failure. A
12proceeding for the issuance of an order assessing administrative
13penalties shall be subject to appropriate notice to, and an
14opportunity for a hearing with regard to, the person affected. The
15administrative penalties shall not be deemed to be an exclusive
16remedy for the administrative director. These penalties shall be
17deposited in the Workers’ Compensation Administration Revolving
18Fund.

19begin insert

begin insertSEC. 1.5.end insert  

end insert

begin insertSection 4610 of the end insertbegin insertLabor Codeend insertbegin insert is amended to read:end insert

20

4610.  

(a) For purposes of this section, “utilization review”
21means utilization review or utilization management functions that
22prospectively, retrospectively, or concurrently review and approve,
23modify,begin delete delay,end delete or deny, based in whole or in part on medical
24necessity to cure and relieve, treatment recommendations by
25physicians, as defined in Section 3209.3, prior to, retrospectively,
26or concurrent with the provision of medical treatment services
27pursuant to Section 4600.

28(b) begin deleteEvery end deletebegin insertEach end insertemployer shall establish a utilization review
29process in compliance with this section, either directly or through
30its insurer or an entity with which an employer or insurer contracts
31for these services.

32(c) Each utilization review process shall be governed by written
33policies and procedures. These policies and procedures shall ensure
34that decisions based on the medical necessity to cure and relieve
35of proposed medical treatment services are consistent with the
36schedule for medical treatment utilization adopted pursuant to
37Section 5307.27. These policies and procedures, and a description
38of the utilization process, shall be filed with the administrative
39director and shall be disclosed by the employer to employees,
40physicians, and the public upon request.

P8    1(d) begin insertUnless otherwise indicated in this section, a physician
2 providing treatment under Section 4600 shall send any request for
3authorization for medical treatment, with supporting
4documentation, to the claims administrator for the employer,
5insurer, or other entity according to rules adopted by the
6administrative director. end insert
If an employer, insurer, or other entity
7subject to this section requests medical information from a
8physician in order to determine whether to approve, modify,begin delete delay,end delete
9 or deny requests for authorization,begin delete the employerend deletebegin insert that employer,
10insurer, or other entityend insert
shall request only the information
11reasonably necessary to make the determination. The employer,
12insurer, or other entity shall employ or designate a medical director
13who holds an unrestricted license to practice medicine in this state
14issued pursuant to Section 2050 orbegin delete Sectionend delete 2450 of the Business
15and Professions Code. The medical director shall ensure that the
16process by which the employer or other entity reviews and
17approves, modifies,begin delete delays,end delete or denies requests by physicians prior
18to, retrospectively, or concurrent with the provision of medical
19treatment services, complies with the requirements of this section.
20Nothing in this section shall be construed as restricting the existing
21authority of the Medical Board of California.

22(e) begin deleteNo end deletebegin insertA end insertperson other than a licensed physician who is
23competent to evaluate the specific clinical issues involved in the
24medical treatment services,begin delete and whereend deletebegin insert ifend insert these services are within
25the scope of the physician’s practice, requested by thebegin delete physician
26may modify, delay,end delete
begin insert physician, shall not modifyend insert or deny requests
27for authorization of medical treatment for reasons of medical
28necessity to cure and relieve.

29(f) The criteria or guidelines used in the utilization review
30process to determine whether to approve, modify,begin delete delay,end delete or deny
31medical treatment services shall be all of the following:

32(1) Developed with involvement from actively practicing
33physicians.

34(2) Consistent with the schedule for medical treatment utilization
35adopted pursuant to Section 5307.27.

36(3) Evaluated at least annually, and updated if necessary.

37(4) Disclosed to the physician and the employee, if used as the
38basis of a decision tobegin delete modify, delay,end deletebegin insert modifyend insert or deny services in a
39specified case under review.

P9    1(5) Available to the public upon request. An employer shall
2only be required to disclose the criteria or guidelines for the
3specific procedures or conditions requested. An employer may
4charge members of the public reasonable copying and postage
5expenses related to disclosing criteria or guidelines pursuant to
6this paragraph. Criteria or guidelines may also be made available
7through electronic means.begin delete Noend deletebegin insert A end insert charge shallbegin insert notend insert be required for
8an employee whose physician’s request for medical treatment
9services is under review.

10(g) In determining whether to approve, modify,begin delete delay,end delete or deny
11requests by physicians prior to, retrospectively, or concurrent with
12the provisions of medical treatment services to employees all of
13the following requirements shall be met:

14(1) Prospective or concurrent decisions shall be made in a timely
15fashion that is appropriate for the nature of the employee’s
16condition, not to exceed five working days from the receipt of the
17information reasonably necessary to make the determination, but
18in no event more than 14 days from the date of the medical
19treatment recommendation by the physician. In cases where the
20review is retrospective, a decision resulting in denial of all or part
21of the medical treatment service shall be communicated to the
22individual who received services, or to the individual’s designee,
23within 30 days of receipt ofbegin insert theend insert information that is reasonably
24necessary to make this determination. If payment for a medical
25treatment service is made within the time prescribed by Section
264603.2, a retrospective decision to approve the service need not
27otherwise be communicated.

28(2) begin deleteWhen end deletebegin insertIf end insertthe employee’s condition isbegin delete such thatend deletebegin insert one in whichend insert
29 the employee faces an imminent and serious threat to his or her
30health, including, but not limited to, the potential loss of life, limb,
31or other major bodily function, or the normal timeframe for the
32 decisionmaking process, as described in paragraph (1), would be
33detrimental to the employee’s life or health or could jeopardize
34the employee’s ability to regain maximum function, decisions to
35approve, modify,begin delete delay,end delete or deny requests by physicians prior to,
36or concurrent with, the provision of medical treatment services to
37employees shall be made in a timely fashion that is appropriate
38for the nature of the employee’s condition, but not to exceed 72
39hours after the receipt of the information reasonably necessary to
40make the determination.

P10   1(3) (A) Decisions to approve, modify,begin delete delay,end delete or deny requests
2by physicians for authorization prior to, or concurrent with, the
3provision of medical treatment services to employees shall be
4communicated to the requesting physician within 24 hours of the
5decision. Decisions resulting inbegin delete modification, delay,end deletebegin insert modificationend insert
6 or denial of all or part of the requested health care service shall be
7communicated to physicians initially by telephone or facsimile,
8and to the physician and employee in writing within 24 hours for
9concurrent review, or within two business days of the decision for
10prospective review, as prescribed by the administrative director.
11If the request is not approved in full, disputes shall be resolved in
12accordance with Section 4610.5, if applicable, or otherwise in
13accordance with Section 4062.

14(B) In the case of concurrent review, medical care shall not be
15discontinued until the employee’s physician has been notified of
16the decision and a care plan has been agreed upon by the physician
17that is appropriate for the medical needs of the employee. Medical
18care provided during a concurrent review shall be care that is
19medically necessary to cure and relieve, and an insurer or
20self-insured employer shall only be liable for those services
21determined medically necessary to cure and relieve. If the insurer
22or self-insured employer disputes whether or not one or more
23services offered concurrently with a utilization review were
24medically necessary to cure and relieve, the dispute shall be
25resolved pursuant to Section 4610.5, if applicable, or otherwise
26pursuant to Section 4062.begin delete Anyend deletebegin insert Aend insert compromise between the parties
27that an insurer or self-insured employer believes may result in
28payment for services that were not medically necessary to cure
29and relieve shall be reported by the insurer or the self-insured
30employer to the licensing board of the provider or providers who
31received the payments, in a manner set forth by the respective
32board and inbegin delete suchend delete a waybegin delete as to minimizeend deletebegin insert that minimizesend insert reporting
33costs both to the board and to the insurer or self-insured employer,
34for evaluation as to possible violations of the statutes governing
35appropriate professional practices.begin delete No feesend deletebegin insert Feesend insert shallbegin insert notend insert be levied
36upon insurers or self-insured employers making reports required
37by this section.

38(4) Communications regarding decisions to approve requests
39by physicians shall specify the specific medical treatment service
40approved. Responses regarding decisions tobegin delete modify, delay,end deletebegin insert modifyend insert
P11   1 or deny medical treatment services requested by physicians shall
2include a clear and concise explanation of the reasons for the
3employer’s decision, a description of the criteria or guidelines
4used, and the clinical reasons for the decisions regarding medical
5necessity. If a utilization review decision to denybegin delete or delayend delete a medical
6service is due to incomplete or insufficient information, the
7decision shall specify the reason for the decision and specify the
8information that is needed.

9(5) If the employer, insurer, or other entity cannot make a
10decision within the timeframes specified in paragraph (1) or (2)
11because the employer or other entity is not in receipt of all of the
12information reasonably necessary and requested, because the
13employer requires consultation by an expert reviewer, or because
14the employer has asked that an additional examination or test be
15performed upon the employee that is reasonable and consistent
16with good medical practice, the employer shall immediately notify
17the physician and the employee, in writing, that the employer
18cannot make a decision within the required timeframe, and specify
19the information requested but not received, the expert reviewer to
20be consulted, or the additional examinations or tests required. The
21employer shall also notify the physician and employee of the
22anticipated date on which a decision may be rendered. Upon receipt
23of all information reasonably necessary and requested by the
24employer, the employer shall approve, modify, or deny the request
25for authorization within the timeframes specified in paragraph (1)
26or (2).

27(6) A utilization review decision tobegin delete modify, delay,end deletebegin insert modifyend insert or
28deny a treatment recommendation shall remain effective for 12
29months from the date of the decision without further action by the
30employer with regard tobegin delete anyend deletebegin insert aend insert further recommendation by the
31same physician for the same treatment unless the further
32recommendation is supported by a documented change in the facts
33material to the basis of the utilization review decision.

34(7) Utilization review of a treatment recommendation shall not
35be required while the employer is disputing liability for injury or
36treatment of the condition for which treatment is recommended
37pursuant to Section 4062.

38(8) If utilization review is deferred pursuant to paragraph (7),
39and it is finally determined that the employer is liable for treatment
40of the condition for which treatment is recommended, the time for
P12   1the employer to conduct retrospective utilization review in
2accordance with paragraph (1) shall begin on the date the
3determination of the employer’s liability becomes final, and the
4time for the employer to conduct prospective utilization review
5shall commence from the date of the employer’s receipt of a
6treatment recommendation after the determination of the
7employer’s liability.

8(h) begin deleteEvery end deletebegin insertEach end insertemployer, insurer, or other entity subject to this
9section shall maintain telephone access for physicians to request
10authorization for health care services.

11(i) If the administrative director determines that the employer,
12insurer, or other entity subject to this section has failed to meet
13any of the timeframes in this section, or has failed to meet any
14other requirement of this section, the administrative director may
15assess, by order, administrative penalties for each failure. A
16proceeding for the issuance of an order assessing administrative
17penalties shall be subject to appropriate notice to, and an
18opportunity for a hearing with regard to, the person affected. The
19administrative penalties shall not be deemed to be an exclusive
20remedy for the administrative director. These penalties shall be
21deposited in the Workers’ Compensation Administration Revolving
22Fund.

begin insert

23
(j) This section shall remain in effect only until January 1, 2018,
24and as of that date is repealed, unless a later enacted statute, that
25is enacted before January 1, 2018, deletes or extends that date.

end insert
26begin insert

begin insertSEC. end insertbegin insert2.end insert  

end insert
begin insert

Section 1.5 of this bill incorporates amendments to
27Section 4610 of the Labor Code proposed by both this bill and
28Senate Bill 1160. It shall only become operative if (1) both bills
29are enacted and become effective on or before January 1, 2017,
30(2) each bill amends Section 4610 of the Labor Code, and (3) this
31bill is enacted after Senate Bill 1160, in which case Section 1 of
32this bill shall not become operative.

end insert


O

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