BILL NUMBER: AB 2503 ENROLLED
BILL TEXT
PASSED THE SENATE AUGUST 31, 2016
PASSED THE ASSEMBLY AUGUST 31, 2016
AMENDED IN SENATE AUGUST 29, 2016
AMENDED IN SENATE AUGUST 19, 2016
AMENDED IN ASSEMBLY APRIL 19, 2016
AMENDED IN ASSEMBLY MARCH 29, 2016
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, 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 is
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.
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.
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) Unless otherwise indicated in this section, a physician
providing treatment under Section 4600 shall 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. If
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, that employer, insurer, or other entity 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 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, if 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 is 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 in which 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) 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 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.
SEC. 1.5. 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, 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) Unless otherwise indicated in this section, a physician
providing treatment under Section 4600 shall 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. If
an employer, insurer, or other entity subject to this section
requests medical information from a physician in order to determine
whether to approve, modify, or deny requests for authorization, that
employer, insurer, or other entity 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 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,
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, if these services are within the scope of the
physician's practice, requested by the physician, shall not modify 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, 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 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, 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 is 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 in which 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, 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) Decisions to approve, modify, 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 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 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 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 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.
(j) This section shall remain in effect only until January 1,
2018, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2018, deletes or extends
that date.
SEC. 2. Section 1.5 of this bill incorporates amendments to
Section 4610 of the Labor Code proposed by both this bill and Senate
Bill 1160. It shall only become operative if (1) both bills are
enacted and become effective on or before January 1, 2017, (2) each
bill amends Section 4610 of the Labor Code, and (3) this bill is
enacted after Senate Bill 1160, in which case Section 1 of this bill
shall not become operative.