Amended in Assembly June 20, 2016

Amended in Senate April 6, 2016

Amended in Senate March 28, 2016

Senate Bill No. 1160

Introduced by Senator Mendoza

February 18, 2016

An act to amend Sections 138.6, begin delete 3710.1, 4604.5, 4610, and 4610.5 end delete begin insert 4604.5, and 4610 end insert of the Labor Code, relating to workers’ compensation.

LEGISLATIVE COUNSEL’S DIGEST

SB 1160, as amended, Mendoza. 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 the Administrative Director of the Division of Workers’ Compensation of the Department of Industrial Relations to develop a workers’ compensation information system in consultation with the Insurance Commissioner and the Workers’ Compensation Insurance Rating Bureau, with certain data to be collected electronically and to be compatible with the Electronic Data Interchange System of the International Association of Industrial Accident Boards and Commissions. Existing law requires the administrative director to assess an administrative penalty of not more than $5,000 in a single year against a claims administrator for a violation of those data reporting requirements.

This bill would increase that penalty assessment to not more than $10,000. The bill would require the administrative director to post on the Division of Workers’ Compensation begin insert Internet end insert Web site a list of claims administrators who are in violation of the data reporting requirements. The bill would require penalty assessments, commencing January 1, 2019, of not less than $15,000 and not more than $45,000 for those violators if certain criteria are begin delete met, and commencing January 1, 2020, would authorize penalty assessments of not less than $100,000 for violators who engage in a pattern or practice of failing to comply with the data reporting requirements. end delete begin insert met. end insert

begin delete

Existing law requires employers to secure the payment of compensation for injured employees in one or more specified ways. When an employer has failed to secure the payment of compensation as required, existing law requires the administrative director to issue and serve on the employer a stop order, prohibiting the use of employee labor by the employer until the employer’s compliance.

end delete begin delete

This bill would similarly authorize a stop order until the employer complies if the administrative director finds that an employer or claims administrator engages in a pattern or practice of failing to comply with specified data reporting requirements.

end delete

Existing law requires an employer to provide all medical services reasonably required to cure or relieve the injured worker from the effects of the injury. Under existing law, an employee may be treated by a physician of his or her own choice at a facility of his or her choice. Existing law requires the administrative director to adopt guidelines that govern the extent and scope of that medical treatment. Under existing law, an employee is entitled to no more than 24 chiropractic, 24 occupational therapy, and 24 physical therapy visits per industrial injury. Existing law makes these restrictions on visits inapplicable to postsurgical physical medicine and postsurgical rehabilitation services.

This bill would instead make those restrictions on the numbers of visits inapplicable to physical medicine and rehabilitation services. begin delete The bill would provide that for injuries covered by the official utilization schedule, if the specific clinical topic of an injury covered by the official utilization schedule has not been updated in 5 or more years, authorized treatment shall be in accordance with other evidence-based medical treatment guidelines that are recognized generally by the national medical community and scientifically based if the guideline is 5 or less years old. end delete begin insert The bill would require the administrative director to adopt regulations for these purposes, as specified. end insert

Existing law requires every employer to establish a utilization review process, and defines “utilization review” as 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, prior to, retrospectively, or concurrent with providing medical treatment services. Existing law also provides for an independent medical review process to resolve disputes over utilization review decisions, as defined.

This bill would, commencing July 1, 2018, require each utilization review process to be accredited by an independent, nonprofit organization to certify that the utilization review process meets specified criteria, including, but not limited to, timeliness in issuing a utilization review decision, the scope of medical material used in issuing a utilization review decision, and requiring a policy preventing financial incentives to doctors and other providers based on the utilization review decision. The bill would require the administrative director to adopt rules to implement the selection of an independent, nonprofit organization for those certification purposes. The bill would authorize the administrative director to adopt rules to require additional specific criteria for measuring the quality of a utilization review process for purposes of certification.

begin delete

Existing law provides as part of the utilization review process, that the definition of medical treatment provided to employees is that treatment that is reasonably required to cure or relieve the injured employee of the effects of his or her injury and based on specified standards, including, among others, guidelines adopted by the administrative director, as specified.

end delete begin delete

This bill would require the guidelines adopted by the administrative director to be evidence-based medical treatment guidelines that are scientifically based and recognized generally by the national medical community.

end delete

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

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

SECTION 1.  

Section 138.6 of the Labor Code is amended to
read:

138.6.  

(a) The administrative director, in consultation with
the Insurance Commissioner and the Workers’ Compensation
Insurance Rating Bureau, shall develop a cost-efficient workers’
compensation information system, which shall be administered by
the division. The administrative director shall adopt regulations
specifying the data elements to be collected by electronic data
interchange.

(b) The information system shall do the following:

(1) Assist the department to manage the workers’ compensation
system in an effective and efficient manner.

(2) Facilitate the evaluation of the efficiency and effectiveness
of the delivery system.

(3) Assist in measuring how adequately the system indemnifies
injured workers and their dependents.

(4) Provide statistical data for research into specific aspects of
the workers’ compensation program.

(c) The data collected electronically shall be compatible with
the Electronic Data Interchange System of the International
Association of Industrial Accident Boards and Commissions. The
administrative director may adopt regulations authorizing the use
of other nationally recognized data transmission formats in addition
to those set forth in the Electronic Data Interchange System for
the transmission of data required pursuant to this section. The
administrative director shall accept data transmissions in any
authorized format. If the administrative director determines that
any authorized data transmission format is not in general use by
claims administrators, conflicts with the requirements of state or
federal law, or is obsolete, the administrative director may adopt
regulations eliminating that data transmission format from those
authorized pursuant to this subdivision.

(d) (1) The administrative director shall assess an administrative
penalty against a claims administrator for a violation of data
reporting requirements adopted pursuant to this section. The
administrative director shall promulgate a schedule of penalties
providing for an assessment of no more than ten thousand dollars
($10,000) against a claims administrator in any single year,
calculated as follows:

(A) No more than one hundred dollars ($100) multiplied by the
number of violations in that year that resulted in a required data
report not being submitted or not being accepted.

(B) No more than fifty dollars ($50) multiplied by the number
of violations in that year that resulted in a required report being
late or accepted with an error.

(C) Multiple errors in a single report shall be counted as a single
violation.

(D) No penalty shall be assessed pursuant to Section 129.5 for
any violation of data reporting requirements for which a penalty
has been or may be assessed pursuant to this section.

(2) The schedule promulgated by the administrative director
pursuant to paragraph (1) shall establish threshold rates of
violations that shall be excluded from the calculation of the
assessment, as follows:

(A) The threshold rate for reports that are not submitted or are
submitted but not accepted shall not be less than 3 percent of the
number of reports that are required to be filed by or on behalf of
the claims administrator.

(B) The threshold rate for reports that are accepted with an error
shall not be less than 3 percent of the number of reports that are
accepted with an error.

(C) The administrative director shall set higher threshold rates
as appropriate in recognition of the fact that the data necessary for
timely and accurate reporting may not be always available to a
claims administrator or the claims administrator’s agents.

(D) The administrative director may establish higher thresholds
for particular data elements that commonly are not reasonably
available.

(3) The administrative director may estimate the number of
required data reports that are not submitted by comparing a
statistically valid sample of data available to the administrative
director from other sources with the data reported pursuant to this
section.

(4) All penalties assessed pursuant to this section shall be
deposited in the Workers’ Compensation Administration Revolving
Fund.

(5) The administrative director shall publish an annual report
disclosing the compliance rates of claims administrators and post
the report and a list of claims administrators who are in violation
of the data reporting requirements on the begin insert Internet end insert Web site of the
Division of Workers’ Compensation.

(e)  begin delete (1) end delete begin delete   end delete Commencing January 1, 2019, the administrative director
shall assess an additional administrative penalty against a claims
administrator for a violation of data reporting requirements adopted
pursuant to this section of not less than fifteen thousand dollars
($15,000) and not more than forty-five thousand dollars ($45,000)
in any single year if both of the following are applicable:

begin delete

(A)

end delete

begin insert (1) end insert  In the immediate previous year, the claims adjuster was
assessed a penalty of eight thousand dollars ($8,000) or more.

begin delete

(B)

end delete

begin insert (2) end insert  In the current year, the claims adjuster will be assessed a
penalty of eight thousand dollars ($8,000) or more.

begin delete

(2) Commencing January 1, 2020, the administrative director
may assess an additional administrative penalty against a claims
administrator for a pattern or practice of failing to comply with
the data reporting requirements adopted pursuant to this section
of not less than one hundred thousand ($100,000) in any single
year.

end delete

begin delete

SEC. 2.  

Section 3710.1 of the Labor Code is amended to read:

3710.1.  

(a) If an employer has failed to secure the payment of
compensation as required by Section 3700, the director shall issue
and serve on the employer a stop order prohibiting the use of
employee labor by the employer until the employer’s compliance
with the provisions of Section 3700. The stop order shall become
effective immediately upon service. An employee affected by the
work stoppage shall be paid by the employer for time lost, not
exceeding 10 days, pending compliance by the employer. An
employer may protest the stop order by making and filing with the
director a written request for a hearing within 20 days after service
of the stop order. The hearing shall be held within five days from
the date of filing the request. The director shall notify the employer
of the time and place of the hearing by mail. At the conclusion of
the hearing the stop order shall be immediately affirmed or
dismissed, and within 24 hours thereafter the director shall issue
and serve on all parties to the hearing by registered or certified
mail a written notice of findings and findings. A writ of mandate
may be taken from the findings to the appropriate superior court.
A writ shall be taken within 45 days after the mailing of the notice
of findings and findings.

(b) If the administrative director finds that an employer or claims
administrator engages in a pattern or practice of failing to comply
with the data reporting requirements required by Section 138.6,
the director may issue and serve a stop order on that employer
prohibiting the use of employee labor by the employer until the
employer’s compliance with the provisions of Section 138.6. The
stop order shall become effective immediately upon service. An
employee affected by the work stoppage shall be paid by the
employer for time lost, not exceeding 10 days, pending compliance
by the employer. The employer may protest the stop order by
making and filing with the director a written request for a hearing
within 20 days after service of the stop order. The hearing shall
be held within five days from the date of filing the request. The
director shall notify the employer of the time and place of the
hearing by mail. At the conclusion of the hearing the stop order
shall be immediately affirmed or dismissed, and within 24 hours
thereafter the director shall issue and serve on all parties to the
hearing by registered or certified mail a written notice of findings
and findings. A writ of mandate may be taken from the findings
to the appropriate superior court. A writ shall be taken within 45
days after the mailing of the notice of findings and findings.

end delete

begin delete SEC. 3. end delete

begin insert SEC. 2. end insert   

Section 4604.5 of the Labor Code is amended to read:

4604.5.  

(a) The recommended guidelines set forth in the
medical treatment utilization schedule adopted by the
administrative director pursuant to Section 5307.27 shall be
presumptively correct on the issue of extent and scope of medical
treatment. The presumption is rebuttable and may be controverted
by a preponderance of the scientific medical evidence establishing
that a variance from the guidelines reasonably is required to cure
or relieve the injured worker from the effects of his or her injury.
The presumption created is one affecting the burden of proof.

(b) The recommended guidelines set forth in the schedule
adopted pursuant to subdivision (a) shall reflect practices that are
evidence and scientifically based, nationally recognized, and peer
reviewed. The guidelines shall be designed to assist providers by
offering an analytical framework for the evaluation and treatment
of injured workers, and shall constitute care in accordance with
Section 4600 for all injured workers diagnosed with industrial
conditions.

(c) (1) Notwithstanding the medical treatment utilization
schedule, for injuries occurring on and after January 1, 2004, an
employee shall be entitled to no more than 24 chiropractic, 24
occupational therapy, and 24 physical therapy visits per industrial
injury.

(2) (A) Paragraph (1) shall not apply when an employer
authorizes, in writing, additional visits to a health care practitioner
for physical medicine services. Payment or authorization for
treatment beyond the limits set forth in paragraph (1) shall not be
deemed a waiver of the limits set forth by paragraph (1) with
respect to future requests for authorization.

(B) The Legislature finds and declares that the amendments
made to subparagraph (A) by the act adding this subparagraph are
declaratory of existing law.

(3) Paragraph (1) shall not apply to visits for physical medicine
and rehabilitation services provided in compliance with a
rehabilitation treatment utilization schedule established by the
administrative director pursuant to Section 5307.27. The
administrative director shall adopt regulations to effectuate this
paragraph on or before January 1, 2018.

(d)  begin delete (1) end delete begin delete   end delete For all injuries not covered by the official utilization
schedule adopted pursuant to Section 5307.27, authorized treatment
shall be in accordance with other evidence-based medical treatment
guidelines that are recognized generally by the national medical
community and scientifically based.

begin delete

(2) For injuries covered by the official utilization schedule
adopted pursuant to Section 5307.27, if the specific clinical topic
of an injury covered by the official utilization schedule has not
been updated in five or more years, authorized treatment shall be
in accordance with other evidence-based medical treatment
guidelines that are recognized generally by the national medical
community and scientifically based if the guideline is five or less
years old.

end delete

begin delete SEC. 4. end delete

begin insert SEC. 3. end insert   

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) 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.

(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
begin delete of end delete begin insert or end insert 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) 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 begin delete determination, and shall provide
a physician at least 72 hours to respond to any request for medical
information. end delete begin insert determination. end insert 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 begin delete Section end delete 2450 of the Business and
Professions Code. The medical director shall ensure that the process
by which the employer or other entity reviews and approves,
modifies, delays, or denies requests by physicians prior to,
retrospectively, or concurrent with the provision of medical
treatment services, complies with the requirements of this section.
Nothing in this section shall be construed as restricting the existing
authority of the Medical Board of California.

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

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

(1) Developed with involvement from actively practicing
physicians.

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

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

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

(5) Available to the public upon request. An employer shall
only be required to disclose the criteria or guidelines for the
specific procedures or conditions requested. An employer may
charge members of the public reasonable copying and postage
expenses related to disclosing criteria or guidelines pursuant to
this paragraph. Criteria or guidelines may also be made available
through electronic means. 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.

(j) A utilization review process shall be accredited on or before
July 1, 2018, and every three years thereafter, or more frequently
if deemed necessary by the administrative director, by an
independent, nonprofit organization to certify that the utilization
review process meets specified criteria, including, but not limited
to, timeliness in issuing a utilization review decision, the scope of
medical material used in issuing a utilization review decision, and
requiring a policy preventing financial incentives to doctors and
other providers based on the utilization review decision. The
administrative director shall adopt rules to implement the selection
of an independent, nonprofit organization for those certification
purposes. The administrative director may adopt rules to require
additional specific criteria for measuring the quality of a utilization
review process for purposes of certification.

begin delete

SEC. 5.  

Section 4610.5 of the Labor Code is amended to read:

4610.5.  

(a) This section applies to the following disputes:

(1) Any dispute over a utilization review decision regarding
treatment for an injury occurring on or after January 1, 2013.

(2) Any dispute over a utilization review decision if the decision
is communicated to the requesting physician on or after July 1,
2013, regardless of the date of injury.

(b) A dispute described in subdivision (a) shall be resolved only
in accordance with this section.

(c) For purposes of this section and Section 4610.6, the
following definitions apply:

(1) “Disputed medical treatment” means medical treatment that
has been modified, delayed, or denied by a utilization review
decision.

(2) “Medically necessary” and “medical necessity” mean
medical treatment that is reasonably required to cure or relieve the
injured employee of the effects of his or her injury and based on
the following standards, which shall be applied in the order listed,
allowing reliance on a lower ranked standard only if every higher
ranked standard is inapplicable to the employee’s medical
condition:

(A) The guidelines adopted by the administrative director
pursuant to Section 5307.27 or, pursuant to subdivision (d) of
Section 4604.5, evidence-based medical treatment guidelines that
are scientifically based and recognized generally by the national
medical community.

(B) Peer-reviewed scientific and medical evidence regarding
the effectiveness of the disputed service.

(C) Nationally recognized professional standards.

(D) Expert opinion.

(E) Generally accepted standards of medical practice.

(F) Treatments that are likely to provide a benefit to a patient
for conditions for which other treatments are not clinically
efficacious.

(3) “Utilization review decision” means a decision pursuant to
Section 4610 to modify, delay, or deny, based in whole or in part
on medical necessity to cure or relieve, a treatment
recommendation or recommendations by a physician prior to,
retrospectively, or concurrent with, the provision of medical
treatment services pursuant to Section 4600 or subdivision (c) of
Section 5402.

(4) Unless otherwise indicated by context, “employer” means
the employer, the insurer of an insured employer, a claims
administrator, or a utilization review organization, or other entity
acting on behalf of any of them.

(d) If a utilization review decision denies, modifies, or delays
a treatment recommendation, the employee may request an
independent medical review as provided by this section.

(e) A utilization review decision may be reviewed or appealed
only by independent medical review pursuant to this section.
Neither the employee nor the employer shall have any liability for
medical treatment furnished without the authorization of the
employer if the treatment is delayed, modified, or denied by a
utilization review decision unless the utilization review decision
is overturned by independent medical review in accordance with
this section.

(f) As part of its notification to the employee regarding an initial
utilization review decision that denies, modifies, or delays a
treatment recommendation, the employer shall provide the
employee with a form not to exceed two pages, prescribed by the
administrative director, and an addressed envelope, which the
employee may return to the administrative director or the
administrative director’s designee to initiate an independent
medical review. The employer shall include on the form any
information required by the administrative director to facilitate the
completion of the independent medical review. The form shall
also include all of the following:

(1) Notice that the utilization review decision is final unless the
employee requests independent medical review.

(2) A statement indicating the employee’s consent to obtain any
necessary medical records from the employer or insurer and from
any medical provider the employee may have consulted on the
matter, to be signed by the employee.

(3) Notice of the employee’s right to provide information or
documentation, either directly or through the employee’s physician,
regarding the following:

(A) The treating physician’s recommendation indicating that
the disputed medical treatment is medically necessary for the
employee’s medical condition.

(B) Medical information or justification that a disputed medical
treatment, on an urgent care or emergency basis, was medically
necessary for the employee’s medical condition.

(C) Reasonable information supporting the employee’s position
that the disputed medical treatment is or was medically necessary
for the employee’s medical condition, including all information
provided to the employee by the employer or by the treating
physician, still in the employee’s possession, concerning the
employer’s or the physician’s decision regarding the disputed
medical treatment, as well as any additional material that the
employee believes is relevant.

(g) The independent medical review process may be terminated
at any time upon the employer’s written authorization of the
disputed medical treatment.

(h) (1) The employee may submit a request for independent
medical review to the division no later than 30 days after the
service of the utilization review decision to the employee.

(2) If at the time of a utilization review decision the employer
is also disputing liability for the treatment for any reason besides
medical necessity, the time for the employee to submit a request
for independent medical review to the administrative director or
administrative director’s designee is extended to 30 days after
service of a notice to the employee showing that the other dispute
of liability has been resolved.

(3) If the employer fails to comply with subdivision (f) at the
time of notification of its utilization review decision, the time
limitations for the employee to submit a request for independent
medical review shall not begin to run until the employer provides
the required notice to the employee.

(4) A provider of emergency medical treatment when the
employee faced 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, may submit a request for independent
medical review on its own behalf. A request submitted by a
provider pursuant to this paragraph shall be submitted to the
administrative director or administrative director’s designee within
the time limitations applicable for an employee to submit a request
for independent medical review.

(i) An employer shall not engage in any conduct that has the
effect of delaying the independent review process. Engaging in
that conduct or failure of the employer to promptly comply with
this section is a violation of this section and, in addition to any
other fines, penalties, and other remedies available to the
administrative director, the employer shall be subject to an
administrative penalty in an amount determined pursuant to
regulations to be adopted by the administrative director, not to
exceed five thousand dollars ($5,000) for each day that proper
notification to the employee is delayed. The administrative
penalties shall be paid to the Workers’ Compensation
Administration Revolving Fund.

(j) For purposes of this section, an employee may designate a
parent, guardian, conservator, relative, or other designee of the
employee as an agent to act on his or her behalf. A designation of
an agent executed prior to the utilization review decision shall not
be valid. The requesting physician may join with or otherwise
assist the employee in seeking an independent medical review,
and may advocate on behalf of the employee.

(k) The administrative director or his or her designee shall
expeditiously review requests and immediately notify the employee
and the employer in writing as to whether the request for an
independent medical review has been approved, in whole or in
part, and, if not approved, the reasons therefor. If there appears to
be any medical necessity issue, the dispute shall be resolved
pursuant to an independent medical review, except that, unless the
employer agrees that the case is eligible for independent medical
review, a request for independent medical review shall be deferred
if at the time of a utilization review decision the employer is also
disputing liability for the treatment for any reason besides medical
necessity.

(l) Upon notice from the administrative director that an
independent review organization has been assigned, the employer
shall provide to the independent medical review organization all
of the following documents within 10 days of notice of assignment:

(1) A copy of all of the employee’s medical records in the
possession of the employer or under the control of the employer
relevant to each of the following:

(A) The employee’s current medical condition.

(B) The medical treatment being provided by the employer.

(C) The disputed medical treatment requested by the employee.

(2) A copy of all information provided to the employee by the
employer concerning employer and provider decisions regarding
the disputed treatment.

(3) A copy of any materials the employee or the employee’s
provider submitted to the employer in support of the employee’s
request for the disputed treatment.

(4) A copy of any other relevant documents or information used
by the employer or its utilization review organization in
determining whether the disputed treatment should have been
provided, and any statements by the employer or its utilization
review organization explaining the reasons for the decision to
deny, modify, or delay the recommended treatment on the basis
of medical necessity. The employer shall concurrently provide a
copy of the documents required by this paragraph to the employee
and the requesting physician, except that documents previously
provided to the employee or physician need not be provided again
if a list of those documents is provided.

(m) Any newly developed or discovered relevant medical
records in the possession of the employer after the initial documents
are provided to the independent medical review organization shall
be forwarded immediately to the independent medical review
organization. The employer shall concurrently provide a copy of
medical records required by this subdivision to the employee or
the employee’s treating physician, unless the offer of medical
records is declined or otherwise prohibited by law. The
confidentiality of medical records shall be maintained pursuant to
applicable state and federal laws.

(n) If there is an imminent and serious threat to the health of
the employee, as specified in subdivision (c) of Section 1374.33
of the Health and Safety Code, all necessary information and
documents required by subdivision (l) shall be delivered to the
independent medical review organization within 24 hours of
approval of the request for review.

(o) The employer shall promptly issue a notification to the
employee, after submitting all of the required material to the
independent medical review organization, that lists documents
submitted and includes copies of material not previously provided
to the employee or the employee’s designee.

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