BILL NUMBER: SB 1160	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  JUNE 20, 2016
	AMENDED IN SENATE  APRIL 6, 2016
	AMENDED IN SENATE  MARCH 28, 2016

INTRODUCED BY   Senator Mendoza

                        FEBRUARY 18, 2016

   An act to amend Sections 138.6,  3710.1, 4604.5, 4610, and
4610.5   4604.5, and 4610  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  Internet  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 
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.   met.  
   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.
 
   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.

   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.
 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.
  The bill would require the administrative director to
adopt regulations for these purposes, as specified. 
   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. 
   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.  
   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. 
   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  Internet  Web site
of the Division of Workers' Compensation.
   (e)  (1)    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: 
   (A) 
    (1)  In the immediate previous year, the claims adjuster
was assessed a penalty of eight thousand dollars ($8,000) or more.

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

   (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.
 
  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. 
   SEC. 3.   SEC. 2.   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)  (1)    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. 
   (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.

   SEC. 4.   SEC. 3.   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
 of   or  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  determination, and shall
provide a physician at least 72 hours to respond to any request for
medical information.   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) 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. 
  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.