BILL NUMBER: SB 563	AMENDED
	BILL TEXT

	AMENDED IN SENATE  APRIL 30, 2015
	AMENDED IN SENATE  APRIL 13, 2015

INTRODUCED BY   Senator Pan

                        FEBRUARY 26, 2015

   An act to amend Section 4610 of  , and to add Section 4610.2
to,  the Labor Code, relating to workers' compensation.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 563, as amended, Pan. Workers' compensation: utilization
review.
   Existing law requires every employer, for purposes of workers'
compensation, to establish a utilization review process to
prospectively, retrospectively, or concurrently review requests by
physicians for authorization to provide recommended medical treatment
to injured employees. Existing law establishes timeframes for an
employer to make a determination regarding a physician's request.
Existing law requires the utilization review process to be governed
by written policies and procedures, and requires that these policies
and procedures be filed with the Administrative Director of the
Division of Workers' Compensation and disclosed by the employer to
employees, physicians, and the public upon request. 
   This bill would prohibit the use of the utilization review process
for any treatment recommendations made by a physician if specified
conditions are met, including that the treatment recommendation is
solely for the purpose of maintaining an injured employee's current
health care regimen for a preexisting injury and there is no evidence
of a change in the employee's circumstances or condition showing
that the services are no longer reasonably required to cure or
relieve the injured worker from the effects of the industrial injury.
The bill would require the written policies and procedures governing
utilization review to conform to these requirements. 

   The 
    This  bill would  also specifically 
require that the method of  compensation  
compensation,  and any incentive payments contingent upon the
approval, modification, or denial of a  claim 
claim,  for an individual or entity providing services pursuant
to the utilization review process, as specified, be filed with the
administrative director and disclosed by the employer to employees,
physicians, and the public upon request.  The bill would exempt a
request for medical treatment by a physician to cure or relieve an
injured worker from the effect of an industrial injury from these
requirements if the request meets specified conditions, including
that a final award of permanent disability made by the appeals board
specifies the provision of future medical treatment and that the
request for medical treatment is for medical treatment that is
specified by the award. The bill would also include a statement of
legislative intent. 
   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)  (1)   Every 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. 
   (2) The utilization review process shall not be used for any
treatment recommendations made by a physician if all of the following
conditions are met:  
   (A) The treatment recommendation is solely for the purpose of
maintaining an injured employee's current health care regimen for a
preexisting injury.  
   (B) A prior treatment recommendation for the injured employee was
either prospectively, retrospectively, or concurrently reviewed and
approved, or modified, based in whole or in part on medical necessity
and the injured employee's current health care regimen is a result
of that decision.  
   (C) There is no evidence of a change in the employee's
circumstances or condition showing that the services are no longer
reasonably required to cure or relieve the injured worker from the
effects of the industrial injury. 
   (c)  (1)    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 
review  process, including, but not limited to, the method of
 compensation   compensation,  and any
incentive payments contingent upon the approval, modification, or
denial of a  claim   claim,  for an
individual or entity providing services under this section, shall be
filed with the administrative director and shall be disclosed by the
employer to employees, physicians, and the public upon request.

   (2) The written policies and procedures shall conform to the
requirements of paragraph (2) of subdivision (b). 
   (d) 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, the employer 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) No 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 may 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. No charge shall 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 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) When the employee's condition is such that 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. Any
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 such a way as to minimize
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. No fees shall 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 any 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) Every 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. 2.    Section 4610.2 is added to the  
Labor Code   , to read:  
   4610.2.  (a) A request for medical treatment by a physician to
cure or relieve an injured worker from the effect of an industrial
injury is not subject to Section 4610 if all of the following
conditions are met:
   (1) A final award of permanent disability made by the appeals
board specifies the provision of future medical treatment.
   (2) The request is for medical treatment that is specified by the
final award described in paragraph (1).
   (3) The request is for medical treatment that is evidence based.
   (b) (1) If an employer believes that a request for medical
treatment is not evidence based, the employer may conduct an
expedited review as provided in paragraph (1) of subdivision (g) of
Section 4610 and subdivision (d) of Section 4610.6. The employer
shall not modify, delay, or deny the request for medical treatment
during the review.
   (2) If, after conducting the review specified in paragraph (1),
the utilization review decision to modify, delay or deny is upheld by
independent medical review, the employer may request a medical
evaluation under Section 4062.1 to stipulate to the need for a
different or additional treatment. The treatment shall only be
stipulated to if it is evidence based and at least as efficacious as
the prior stipulated medical treatment. The employer shall not
modify, delay, or deny the request for medical treatment prior to
stipulation on the new medical treatment.
   (3) For purposes of this subdivision, the term "evidence based"
has the same meaning as the term "evidence-based" as used in Section
5307.27 with respect to the medical treatment utilization schedule.

   SEC. 3.    It is the intent of the Legislature that
the changes made to law by this act shall not have an impact on or
alter in any way the decision of the court in Patterson v. Oaks Farm
(2014) WL 3952788.