BILL NUMBER: SB 542 CHAPTERED
BILL TEXT
CHAPTER 542
FILED WITH SECRETARY OF STATE OCTOBER 6, 2015
APPROVED BY GOVERNOR OCTOBER 6, 2015
PASSED THE SENATE SEPTEMBER 10, 2015
PASSED THE ASSEMBLY AUGUST 31, 2015
AMENDED IN ASSEMBLY AUGUST 27, 2015
AMENDED IN ASSEMBLY JUNE 23, 2015
AMENDED IN ASSEMBLY JUNE 4, 2015
AMENDED IN SENATE APRIL 6, 2015
INTRODUCED BY Senator Mendoza
FEBRUARY 26, 2015
An act to amend Sections 4616, 4616.2, 4616.4, 4616.5, and 5307.8
of the Labor Code, relating to workers' compensation.
LEGISLATIVE COUNSEL'S DIGEST
SB 542, Mendoza. Workers' compensation: medical provider networks:
fee schedules.
(1) 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
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
independent medical reviews.
This bill would clarify that those independent medical reviews are
medical provider network independent medical reviews. The bill would
make related and conforming changes.
(2) Existing law requires every medical provider network to post,
and update quarterly, a roster of treating physicians in the medical
provider network on its Internet Web site.
This bill would require every medical provider network to post on
its Internet Web site information about how to contact the medical
provider network contact and medical access assistants, and also
information about how to obtain a copy of any notification regarding
the medical provider network that is required to be given to an
employee by regulations adopted by the administrative director.
(3) Existing law requires an insurer, employer, or entity that
provides physician network services to submit a plan for the medical
provider network to the administrative director to be approved for a
period of 4 years. Commencing January 1, 2014, existing approved
plans are deemed approved for a period of 4 years from their most
recent application or modification approval date.
This bill would provide that, commencing January 1, 2016, a
modification that updates an entire medical provider network plan to
bring the plan into full compliance with applicable laws would be
deemed approved for a period of 4 years from the modification
approval date. The bill would provide that the expiration of the
medical provider network's current 4-year approval period will not
change if a modification does not update a medical provider network
plan to bring the plan into full compliance with applicable laws.
(4) Existing law requires an insurer, employer, or entity that
provides physician network services to file continuity of care
policies. Existing law requires an insurer, employer, or entity that
provides physician network services to provide completion of
treatment by a terminated provider if at the time of the
employer-employee contract's termination, the injured employee was
receiving services from that provider for various conditions, as
specified.
This bill would instead require medical provider networks to file
continuity of care policies. The bill would require an employer or
its claims administrator to provide for the completion of treatment
by a terminated provider under specified circumstances.
The bill would also define an "entity that provides physician
network services" for the purposes described above to mean a medical
network licensed by a designated government department or a legal
entity that offers medical management and physician network services
within California.
(5) Existing law requires the administrative director to adopt an
official medical fee schedule that establishes reasonable maximum
fees paid for specified medical services related to workers'
compensation. Existing law also requires the administrative director
to adopt a schedule for payment of home health care services that are
not covered by a Medicare fee schedule and are not otherwise covered
by the official medical fee schedule. Existing law requires this fee
schedule to be based on the maximum service hours and fees set forth
in provisions of law governing in-home supportive services.
This bill would authorize, rather than require, the fee schedule
to be based on either the maximum service hours and fees set forth in
provisions of state law governing in-home supportive services or
other state or federal home health care services fee schedules, as
specified.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 4616 of the Labor Code is amended to read:
4616. (a) (1) On or after January 1, 2005, an insurer, employer,
or entity that provides physician network services may establish or
modify a medical provider network for the provision of medical
treatment to injured employees. The network shall include physicians
primarily engaged in the treatment of occupational injuries. The
administrative director shall encourage the integration of
occupational and nonoccupational providers. The number of physicians
in the medical provider network shall be sufficient to enable
treatment for injuries or conditions to be provided in a timely
manner. The provider network shall include an adequate number and
type of physicians, as described in Section 3209.3, or other
providers, as described in Section 3209.5, to treat common injuries
experienced by injured employees based on the type of occupation or
industry in which the employee is engaged, and the geographic area
where the employees are employed.
(2) Medical treatment for injuries shall be readily available at
reasonable times to all employees. To the extent feasible, all
medical treatment for injuries shall be readily accessible to all
employees. With respect to availability and accessibility of
treatment, the administrative director shall consider the needs of
rural areas, specifically those in which health facilities are
located at least 30 miles apart and areas in which there is a health
care shortage.
(3) Commencing January 1, 2014, a treating physician shall be
included in the network only if, at the time of entering into or
renewing an agreement by which the physician would be in the network,
the physician, or an authorized employee of the physician or the
physician's office, provides a separate written acknowledgment in
which the physician affirmatively elects to be a member of the
network. Copies of the written acknowledgment shall be provided to
the administrative director upon the administrative director's
request. This paragraph shall not apply to a physician who is a
shareholder, partner, or employee of a medical group that elects to
be part of the network.
(4) (A) Commencing January 1, 2014, every medical provider network
shall post on its Internet Web site a roster of all treating
physicians in the medical provider network and shall update the
roster at least quarterly. Every network shall provide to the
administrative director the Internet Web site address of the network
and of its roster of treating physicians. The administrative director
shall post, on the division's Internet Web site, the Internet Web
site address of every approved medical provider network.
(B) Commencing January 1, 2016, every medical provider network
shall post on its Internet Web site information about how to contact
the medical provider network contact and medical access assistants,
and information about how to obtain a copy of any notification
regarding the medical provider network that is required to be given
to an employee by regulations adopted by the administrative director.
(5) Commencing January 1, 2014, every medical provider network
shall provide one or more persons within the United States to serve
as medical access assistants to help an injured employee find an
available physician of the employee's choice, and subsequent
physicians if necessary, under Section 4616.3. Medical access
assistants shall have a toll-free telephone number that injured
employees may use and shall be available at least from 7 a.m. to 8
p.m. Pacific Standard Time, Monday through Saturday, inclusive, to
respond to injured employees, contact physicians' offices during
regular business hours, and schedule appointments. The administrative
director shall promulgate regulations on or before July 1, 2013,
governing the provision of medical access assistants.
(b) (1) An insurer, employer, or entity that provides physician
network services shall submit a plan for the medical provider network
to the administrative director for approval. The administrative
director shall approve the plan for a period of four years if he or
she determines that the plan meets the requirements of this section.
If the administrative director does not act on the plan within 60
days of submitting the plan, it shall be deemed approved. Commencing
January 1, 2014, existing approved plans shall be deemed approved for
a period of four years from the approval date of the most recent
application or modification submitted prior to 2014. Plans for
reapproval for medical provider networks shall be submitted at least
six months before the expiration of the four-year approval period.
Commencing January 1, 2016, a modification that updates an entire
medical provider network plan to bring the plan into full compliance
with all current statutes and regulations shall be deemed approved
for a period of four years from the modification approval date. An
approved modification that does not update an entire medical provider
network plan to bring the plan into full compliance with all current
statutes and regulations shall not alter the expiration of the
medical provider network's four-year approval period. Upon a showing
that the medical provider network was approved or deemed approved by
the administrative director, there shall be a conclusive presumption
on the part of the appeals board that the medical provider network
was validly formed.
(2) Every medical provider network shall establish and follow
procedures to continuously review the quality of care, performance of
medical personnel, utilization of services and facilities, and
costs.
(3) Every medical provider network shall submit geocoding of its
network for reapproval to establish that the number and geographic
location of physicians in the network meets the required access
standards.
(4) The administrative director shall at any time have the
discretion to investigate complaints and to conduct random reviews of
approved medical provider networks.
(5) Approval of a plan may be denied, revoked, or suspended if the
medical provider network fails to meet the requirements of this
article. Any person contending that a medical provider network is not
validly constituted may petition the administrative director to
suspend or revoke the approval of the medical provider network. The
administrative director may adopt regulations establishing a schedule
of administrative penalties not to exceed five thousand dollars
($5,000) per violation, or probation, or both, in lieu of revocation
or suspension for less severe violations of the requirements of this
article. Penalties, probation, suspension, or revocation shall be
ordered by the administrative director only after notice and
opportunity to be heard. Unless suspended or revoked by the
administrative director, the administrative director's approval of a
medical provider network shall be binding on all persons and all
courts. A determination of the administrative director may be
reviewed only by an appeal of the determination of the administrative
director filed as an original proceeding before the reconsideration
unit of the workers' compensation appeals board on the same grounds
and within the same time limits after issuance of the determination
as would be applicable to a petition for reconsideration of a
decision of a workers' compensation administrative law judge.
(c) Physician compensation may not be structured in order to
achieve the goal of reducing, delaying, or denying medical treatment
or restricting access to medical treatment.
(d) If the employer or insurer meets the requirements of this
section, the administrative director may not withhold approval or
disapprove an employer's or insurer's medical provider network based
solely on the selection of providers. In developing a medical
provider network, an employer or insurer shall have the exclusive
right to determine the members of their network.
(e) All treatment provided shall be provided in accordance with
the medical treatment utilization schedule established pursuant to
Section 5307.27.
(f) No person other than a licensed physician who is competent to
evaluate the specific clinical issues involved in the medical
treatment services, when these services are within the scope of the
physician's practice, may modify, delay, or deny requests for
authorization of medical treatment.
(g) Commencing January 1, 2013, every contracting agent that
sells, leases, assigns, transfers, or conveys its medical provider
networks and their contracted reimbursement rates to an insurer,
employer, entity that provides physician network services, or another
contracting agent shall, upon entering or renewing a provider
contract, disclose to the provider whether the medical provider
network may be sold, leased, transferred, or conveyed to other
insurers, employers, entities that provide physician network
services, or another contracting agent, and specify whether those
insurers, employers, entities that provide physician network
services, or contracting agents include workers' compensation
insurers.
(h) On or before November 1, 2004, the administrative director, in
consultation with the Department of Managed Health Care, shall adopt
regulations implementing this article. The administrative director
shall develop regulations that establish procedures for purposes of
making medical provider network modifications.
SEC. 2. Section 4616.2 of the Labor Code is amended to read:
4616.2. (a) A medical provider network shall file a written
continuity of care policy with the administrative director.
(b) If approved by the administrative director, the provisions of
the written continuity of care policy shall replace all prior
continuity of care policies. A medical provider network shall file a
revision of the continuity of care policy with the administrative
director if it makes a material change to the policy.
(c) The medical provider network shall provide all employees
entering the workers' compensation system notice of the medical
provider network's written continuity of care policy and information
regarding the process for an employee to request a review under the
policy and, upon request, a copy of the medical provider network's
written continuity of care policy.
(d) (1) At the request of an injured employee, completion of
treatment shall be provided by a terminated provider as set forth in
this section.
(2) The completion of treatment shall be provided by a terminated
provider to an injured employee who, at the time of the contract's
termination, was receiving services from that provider for one of the
conditions described in paragraph (3).
(3) The employer or its claims administrator shall provide for the
completion of treatment for the following conditions subject to
coverage through the workers' compensation system:
(A) An acute condition. An acute condition is a medical condition
that involves a sudden onset of symptoms due to an illness, injury,
or other medical problem that requires prompt medical attention and
that has a limited duration. Completion of treatment shall be
provided for the duration of the acute condition.
(B) A serious chronic condition. A serious chronic condition is a
medical condition due to a disease, illness, or other medical problem
or medical disorder that is serious in nature and that persists
without full cure or worsens over an extended period of time or
requires ongoing treatment to maintain remission or prevent
deterioration. Completion of treatment shall be provided for a period
of time necessary to complete a course of treatment and to arrange
for a safe transfer to another provider, as determined by the
employer or its claims administrator in consultation with the injured
employee and the terminated provider and consistent with good
professional practice. Completion of treatment under this paragraph
shall not exceed 12 months from the contract termination date.
(C) A terminal illness. A terminal illness is an incurable or
irreversible condition that has a high probability of causing death
within one year or less. Completion of treatment shall be provided
for the duration of a terminal illness.
(D) Performance of a surgery or other procedure that is authorized
by the employer or its claims administrator as part of a documented
course of treatment and has been recommended and documented by the
provider to occur within 180 days of the contract's termination date.
(4) (A) The employer or its claims administrator may require the
terminated provider whose services are continued beyond the contract
termination date pursuant to this section to agree in writing to be
subject to the same contractual terms and conditions that were
imposed upon the provider prior to termination. If the terminated
provider does not agree to comply or does not comply with these
contractual terms and conditions, the employer or its claims
administrator is not required to continue the provider's services
beyond the contract termination date.
(B) Unless otherwise agreed by the terminated provider and the
employer or its claims administrator, the services rendered pursuant
to this section shall be compensated at rates and methods of payment
similar to those used by the medical provider network for currently
contracting providers providing similar services who are practicing
in the same or a similar geographic area as the terminated provider.
The employer or its claims administrator is not required to continue
the services of a terminated provider if the provider does not accept
the payment rates provided for in this paragraph.
(5) An employer or its claims administrator shall ensure that the
requirements of this section are met.
(6) This section shall not require an employer or its claims
administrator to provide for completion of treatment by a provider
whose contract with the medical provider network has been terminated
or not renewed for reasons relating to a medical disciplinary cause
or reason, as defined in paragraph (6) of subdivision (a) of Section
805 of the Business and Professions Code, or fraud or other criminal
activity.
(7) Nothing in this section shall preclude an employer or its
claims administrator from providing continuity of care beyond the
requirements of this section.
SEC. 3. Section 4616.4 of the Labor Code is amended to read:
4616.4. (a) (1) The administrative director shall contract with
individual physicians, as described in paragraph (2), or an
independent medical review organization to perform medical provider
network (MPN) independent medical reviews pursuant to this section.
(2) Only physicians licensed pursuant to Chapter 5 (commencing
with Section 2000) of the Business and Professions Code may be MPN
independent medical reviewers.
(3) The administrative director shall ensure that the MPN
independent medical reviewers or those within the review organization
shall do all of the following:
(A) Be appropriately credentialed and privileged.
(B) Ensure that the reviews provided by the medical professionals
are timely, clear, and credible, and that reviews are monitored for
quality on an ongoing basis.
(C) Ensure that the method of selecting medical professionals for
individual cases achieves a fair and impartial panel of medical
professionals who are qualified to render recommendations regarding
the clinical conditions consistent with the medical utilization
schedule established pursuant to Section 5307.27.
(D) Ensure that confidentiality of medical records and the review
materials, consistent with the requirements of this section and
applicable state and federal law.
(E) Ensure the independence of the medical professionals retained
to perform the reviews through conflict-of-interest policies and
prohibitions, and ensure adequate screening for conflicts of
interest.
(4) Medical professionals selected by the administrative director
or the independent medical review organization to review medical
treatment decisions shall be physicians, as specified in paragraph
(2) of subdivision (a), who meet the following minimum requirements:
(A) The medical professional shall be a clinician knowledgeable in
the treatment of the employee's medical condition, knowledgeable
about the proposed treatment, and familiar with guidelines and
protocols in the area of treatment under review.
(B) Notwithstanding any other law, the medical professional shall
hold a nonrestricted license in any state of the United States, and
for physicians, a current certification by a recognized American
medical specialty board in the area or areas appropriate to the
condition or treatment under review.
(C) The medical professional shall have no history of disciplinary
action or sanctions, including, but not limited to, loss of staff
privileges or participation restrictions taken or pending by any
hospital, government, or regulatory body.
(b) If, after the third physician's opinion, the treatment or
diagnostic service remains disputed, the injured employee may request
MPN independent medical review regarding the disputed treatment or
diagnostic service still in dispute after the third physician's
opinion in accordance with Section 4616.3. The standard to be
utilized for MPN independent medical review is identical to that
contained in the medical treatment utilization schedule established
in Section 5307.27, or the American College of Occupational and
Environmental Medicine's Occupational Medicine Practice Guidelines,
as appropriate.
(c) Applications for MPN independent medical review shall be
submitted to the administrative director on a one-page form provided
by the administrative director entitled "MPN Independent Medical
Review Application." The form shall contain a signed release from the
injured employee, or a person authorized pursuant to law to act on
behalf of the injured employee, authorizing the release of medical
and treatment information. The injured employee may provide any
relevant material or documentation with the application. The
administrative director or the independent medical review
organization shall assign the MPN independent medical reviewer.
(d) Following receipt of the application for MPN independent
medical review, the employer or insurer shall provide the MPN
independent medical reviewer, assigned pursuant to subdivision (c),
with all information that was considered in relation to the disputed
treatment or diagnostic service, including both of the following:
(1) A copy of all correspondence from, and received by, any
treating physician who provided a treatment or diagnostic service to
the injured employee in connection with the injury.
(2) A complete and legible copy of all medical records and other
information used by the physicians in making a decision regarding the
disputed treatment or diagnostic service.
(e) Upon receipt of information and documents related to the
application for MPN independent medical review, the MPN independent
medical reviewer shall conduct a physical examination of the injured
employee at the employee's discretion. The MPN independent medical
reviewer may order any diagnostic tests necessary to make his or her
determination regarding medical treatment. Utilizing the medical
treatment utilization schedule established pursuant to Section
5307.27, or the American College of Occupational and Environmental
Medicine's Occupational Medicine Practice Guidelines, as appropriate,
and taking into account any reports and information provided, the
MPN independent medical reviewer shall determine whether the disputed
health care service was consistent with Section 5307.27 or the
American College of Occupational and Environmental Medicine's
Occupational Medicine Practice Guidelines based on the specific
medical needs of the injured employee.
(f) The MPN independent medical reviewer shall issue a report to
the administrative director, in writing, and in layperson's terms to
the maximum extent practicable, containing his or her analysis and
determination whether the disputed health care service was consistent
with the medical treatment utilization schedule established pursuant
to Section 5307.27, or the American College of Occupational and
Environmental Medicine's Occupational Medicine Practice Guidelines,
as appropriate, within 30 days of the examination of the injured
employee, or within less time as prescribed by the administrative
director. If the disputed health care service has not been provided
and the MPN independent medical reviewer certifies in writing that an
imminent and serious threat to the health of the injured employee
may exist, including, but not limited to, serious pain, the potential
loss of life, limb, or major bodily function, or the immediate and
serious deterioration of the injured employee, the report shall be
expedited and rendered within three days of the examination by the
MPN independent medical reviewer. Subject to the approval of the
administrative director, the deadlines for analyses and
determinations involving both regular and expedited reviews may be
extended by the administrative director for up to three days in
extraordinary circumstances or for good cause.
(g) The MPN independent medical reviewer's analysis shall cite the
injured employee's medical condition, the relevant documents in the
record, and the relevant findings associated with the documents or
any other information submitted to the MPN independent medical
reviewer in order to support the determination.
(h) The administrative director shall immediately adopt the
determination of the MPN independent medical reviewer, and shall
promptly issue a written decision to the parties.
(i) If the determination of the MPN independent medical reviewer
finds that the disputed treatment or diagnostic service is consistent
with Section 5307.27 or the American College of Occupational and
Environmental Medicine's Occupational Medicine Practice Guidelines,
the injured employee may seek the disputed treatment or diagnostic
service from a physician of his or her choice from within or outside
the medical provider network. Treatment outside the medical provider
network shall be provided consistent with Section 5307.27 or the
American College of Occupational and Environmental Medicine's
Occupational Practice Guidelines. The employer shall be liable for
the cost of any approved medical treatment in accordance with Section
5307.1 or 5307.11.
SEC. 4. Section 4616.5 of the Labor Code is amended to read:
4616.5. (a) For purposes of this article, "employer" means a
self-insured employer, joint powers authority, or the state.
(b) For purposes of this article, "entity that provides physician
network services" means a medical network licensed by the Department
of Insurance or Department of Managed Health Care, or a third-party
claims adjusting organization licensed by the Department of Insurance
or certified by the Office of Self Insurance Plans, or a legal
entity that offers medical management and physician network services
within California.
SEC. 5. Section 5307.8 of the Labor Code is amended to read:
5307.8. (a) Notwithstanding Section 5307.1, the administrative
director shall adopt, after public hearings, a schedule for payment
of home health care services provided in accordance with Section 4600
that are not covered by a Medicare fee schedule and are not
otherwise covered by the official medical fee schedule adopted
pursuant to Section 5307.1. The schedule shall set forth fees and
requirements for service providers, and may be based upon, but is not
limited to, being based upon, either of the following:
(1) The maximum service hours and fees as set forth in regulations
adopted pursuant to Article 7 (commencing with Section 12300) of
Chapter 3 of Part 3 of Division 9 of the Welfare and Institutions
Code.
(2) A state or federal home health care services fee schedule
other than the schedule described in paragraph (1), including a fee
schedule authorized for purposes of the Medi-Cal program or a fee
schedule administered by the federal Office of Workers' Compensation
Programs.
(b) Fees shall not be provided for any services, including any
services provided by a member of the employee's household, to the
extent the services had been regularly performed in the same manner
and to the same degree prior to the date of injury. If appropriate,
attorney's fees for recovery of home health care services fees under
this section may be awarded in accordance with Section 4906 and any
applicable rules or regulations.