Amended in Assembly August 29, 2016

Amended in Assembly August 18, 2016

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

(Principal coauthor: Senator Pan)

February 18, 2016

An act to amend Sections 138.4, 138.6, 4610.5, 4610.6, 4903.05, 4903.8, 5307.27, 5710, 5811, and 6409 of, to amend, repeal, and add Section 4610 of, and to add Section 4615 to, the Labor Code, relating to workers’ compensation.

LEGISLATIVE COUNSEL’S DIGEST

SB 1160, as amended, Mendoza. Workers’ compensation.

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 to develop and make available informational material written in plain language that describes the overall workers’ compensation claims process, as specified.

This bill would require the administrative director to adopt regulations to provide employees with notice regarding access to medical treatment following the denial of a claim under the workers’ compensation system.

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.

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 revise and recast provisions relating to utilization review, as specified, with regard to injuries occurring on or after January 1, 2018. Among other things, the bill would set forth the medical treatment services that would be subject to prospective utilization review under these provisions, as provided. The bill would authorize retrospective utilization review for treatment provided under these provisions under limited circumstances, as specified. The bill would establish procedures for prospective and retrospective utilization reviews and set forth provisions for removal of a physician or provider under designated circumstances. On and after January 1, 2018, the bill would establish new procedures for reviewing determinations regarding the medical necessity of medication prescribed pursuant to the drug formulary adopted by the administrative director, as provided. The bill would make conforming changes to related provisions to implement these changes.

The 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 accreditation purposes, begin delete and end delete as specified. 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 accreditation and provide for certain exemptions. The bill would require the administrative director to develop a system for electronic reporting of documents related to utilization review performed by each employer, to be administered by the division. begin insert The bill would require the administrative director, on or after March 1, 2019, to contract with an outside independent research organization to evaluate and report on the impact of provision of medical treatment within the first 30 days after a claim is filed, for claims filed on or after January 1, 2017, to January 1, 2019. The bill would require the report to be completed before January 1, 2020, and to be distributed to the administrative director, the Senate Committee on Labor and Industrial Relations, and the Assembly Committee on Insurance. end insert

Existing law requires every lien claimant to file its lien with the appeals board in writing upon a form approved by the appeals board. Existing law requires a lien to be accompanied by a full statement or itemized voucher supporting the lien and justifying the right to reimbursement, as specified.

This bill would require certain lien claimants that file a lien under these provisions to do so by filing a declaration, under penalty of perjury, that includes specified information. The bill would require current lien claimants to also file the declaration by a specified date. The bill would make a failure to file a declaration under these provisions grounds for dismissal of a lien. Because the bill would expand the crime of perjury, the bill would impose a state-mandated local program.

The bill would also automatically stay any physician or provider lien upon the filing of criminal charges against that person or entity for specified offenses involving medical fraud, as provided. The bill would authorize the administrative director to adopt regulations to implement that provision. begin insert The bill would state findings and declarations of the Legislature in connection with these provisions. end insert

Existing law prohibits the assignment of a lien under these provisions, except under limited circumstances, as specified.

This bill would, for liens filed after January 1, 2017, invalidate any assignment of a lien made in violation of these provisions, by operation of law.

Existing law requires the administrative director, in consultation with the Commission on Health and Safety and Workers’ Compensation, to adopt, after public hearings, a medical treatment utilization begin delete schedule, end delete begin insert schedule end insert to incorporate evidence-based, peer-reviewed, nationally recognized standards of care recommended by the commission, as specified.

This bill would authorize the administrative director to make updates to the utilization schedule by order, which would not be subject to the Administrative Procedure Act, as specified. The bill would require any order adopted pursuant to these provisions to be published on the Internet Web site of the division.

Existing law requires a deponent to receive certain expenses and reimbursements if an employer or insurance carrier requests a deposition to be taken of an injured employee, or any person claiming benefits as a dependent of an injured employee. Existing law authorizes the deponent to begin insert receive end insert a reasonable allowance for attorney’s fees, if represented by an attorney licensed in this state.

This bill would authorize the administrative director to determine the range of reasonable fees to be paid to a deponent.

Existing law provides that it is the responsibility of any party producing a witness requiring an interpreter to arrange for the presence of a qualified interpreter. Existing law sets forth the qualifications of a qualified interpreter for these purposes, and provides for the settings under which a qualified interpreter may render services.

This bill would require the administrative director to promulgate regulations establishing criteria to verify the identity and credentials of individuals that provide interpreter services under these provisions.

Existing law requires physicians, as defined, who attend to injured or ill employees to file reports with specific information prescribed by law.

This bill would revise those reporting requirements, as prescribed.

begin insert

This bill would incorporate changes to Section 4610 of the Labor Code proposed by AB 2503, to be operative as specified if both bills are enacted.

end insert

Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.

This bill would make legislative findings to that effect.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

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

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

SECTION 1.  

Section 138.4 of the Labor Code is amended to
read:

138.4.  

(a) For the purpose of this section, “claims
administrator” means a self-administered workers’ compensation
insurer; or a self-administered self-insured employer; or a
self-administered legally uninsured employer; or a
self-administered joint powers authority; or a third-party claims
administrator for an insurer, a self-insured employer, a legally
uninsured employer, or a joint powers authority.

(b) With respect to injuries resulting in lost time beyond the
employee’s work shift at the time of injury or medical treatment
beyond first aid:

(1) If the claims administrator obtains knowledge that the
employer has not provided a claim form or a notice of potential
eligibility for benefits to the employee, it shall provide the form
and notice to the employee within three working days of its
knowledge that the form or notice was not provided.

(2) If the claims administrator cannot determine if the employer
has provided a claim form and notice of potential eligibility for
benefits to the employee, the claims administrator shall provide
the form and notice to the employee within 30 days of the
administrator’s date of knowledge of the claim.

(c) The administrative director, in consultation with the
Commission on Health and Safety and Workers’ Compensation,
shall prescribe reasonable rules and regulations, including notice
of the right to consult with an attorney, where appropriate, for
serving on the employee (or employee’s dependents, in the case
of death), the following:

(1) Notices dealing with the payment, nonpayment, or delay in
payment of temporary disability, permanent disability,
supplemental job displacement, and death benefits.

(2) Notices of any change in the amount or type of benefits
being provided, the termination of benefits, the rejection of any
liability for compensation, and an accounting of benefits paid.

(3) Notices of rights to select the primary treating physician,
written continuity of care policies, requests for a comprehensive
medical evaluation, and offers of regular, modified, or alternative
work.

(d) The administrative director, in consultation with the
Commission on Health and Safety and Workers’ Compensation,
shall develop, make fully accessible on the department’s Internet
Web site, and make available at district offices informational
material written in plain language that describes the overall
workers’ compensation claims process, including the rights and
obligations of employees and employers at every stage of a claim
when a notice is required.

(e) Each notice prescribed by the administrative director shall
be written in plain language, shall reference the informational
material described in subdivision (d) to enable employees to
understand the context of the notices, and shall clearly state the
Internet Web site address and contact information that an employee
may use to access the informational material.

(f) On or before January 1, 2018, the administrative director
shall adopt regulations to provide employees with notice that they
may access medical treatment outside of the workers’ compensation
system following the denial of their claim.

SEC. 2.  

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.

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, 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 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, 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 2450 of the Business and
Professions Code. The medical director shall ensure that the process
by which the employer or other entity reviews and approves,
modifies, or denies requests by physicians prior to, retrospectively,
or concurrent with the provision of medical treatment services,
complies with the requirements of this section. Nothing in this
section shall be construed as restricting the existing authority of
the Medical Board of California.

(e) 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
or deny requests for authorization of medical treatment for reasons
of medical necessity to cure and relieve.

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

(1) Developed with involvement from actively practicing
physicians.

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

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

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

(5) Available to the public upon request. An employer shall
only be required to disclose the criteria or guidelines for the
specific procedures or conditions requested. An employer may
charge members of the public reasonable copying and postage
expenses related to disclosing criteria or guidelines pursuant to
this paragraph. Criteria or guidelines may also be made available
through electronic means. 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, 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, or
deny requests by physicians prior to, or concurrent with, the
provision of medical treatment services to employees shall be made
in a timely fashion that is appropriate for the nature of the
employee’s condition, but not to exceed 72 hours after the receipt
of the information reasonably necessary to make the determination.

(3) (A) Decisions to approve, modify, or deny requests by
physicians for authorization prior to, or concurrent with, the
provision of medical treatment services to employees shall be
communicated to the requesting physician within 24 hours of the
decision. Decisions resulting in modification or denial of all or
part of the requested health care service shall be communicated to
physicians initially by telephone or facsimile, and to the physician
and employee in writing within 24 hours for concurrent review,
or within two business days of the decision for prospective review,
as prescribed by the administrative director. If the request is not
approved in full, disputes shall be resolved in accordance with
Section 4610.5, if applicable, or otherwise in accordance with
Section 4062.

(B) In the case of concurrent review, medical care shall not be
discontinued until the employee’s physician has been notified of
the decision and a care plan has been agreed upon by the physician
that is appropriate for the medical needs of the employee. Medical
care provided during a concurrent review shall be care that is
medically necessary to cure and relieve, and an insurer or
self-insured employer shall only be liable for those services
determined medically necessary to cure and relieve. If the insurer
or self-insured employer disputes whether or not one or more
services offered concurrently with a utilization review were
medically necessary to cure and relieve, the dispute shall be
resolved pursuant to Section 4610.5, if applicable, or otherwise
pursuant to Section 4062. 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 or deny
medical treatment services requested by physicians shall include
a clear and concise explanation of the reasons for the employer’s
decision, a description of the criteria or guidelines used, and the
clinical reasons for the decisions regarding medical necessity. If
a utilization review decision to deny a medical service is due to
incomplete or insufficient information, the decision shall specify
the reason for the decision and specify the information that is
needed.

(5) If the employer, insurer, or other entity cannot make a
decision within the timeframes specified in paragraph (1) or (2)
because the employer or other entity is not in receipt of all of the
information reasonably necessary and requested, because the
employer requires consultation by an expert reviewer, or because
the employer has asked that an additional examination or test be
performed upon the employee that is reasonable and consistent
with good medical practice, the employer shall immediately notify
the physician and the employee, in writing, that the employer
cannot make a decision within the required timeframe, and specify
the information requested but not received, the expert reviewer to
be consulted, or the additional examinations or tests required. The
employer shall also notify the physician and employee of the
anticipated date on which a decision may be rendered. Upon receipt
of all information reasonably necessary and requested by the
employer, the employer shall approve, modify, or deny the request
for authorization within the timeframes specified in paragraph (1)
or (2).

(6) A utilization review decision to modify or deny a treatment
recommendation shall remain effective for 12 months from the
date of the decision without further action by the employer with
regard to 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) This section shall remain in effect only until January 1, 2018,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2018, deletes or extends that date.

begin insert

begin insert SEC. 3.5. end insert   

end insert

begin insert Section 4610 of the end insert begin insert Labor Code end insert begin insert is amended to read: end insert

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, begin delete delay, end delete 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)  begin delete Every end delete begin insert Each end insert employer shall establish a utilization review
process in compliance with this section, either directly or through
its insurer or an entity with which an employer or insurer contracts
for these services.

(c) Each utilization review process shall be governed by written
policies and procedures. These policies and procedures shall ensure
that decisions based on the medical necessity to cure and relieve
of proposed medical treatment services are consistent with the
schedule for medical treatment utilization adopted pursuant to
Section 5307.27. These policies and procedures, and a description
of the utilization process, shall be filed with the administrative
director and shall be disclosed by the employer to employees,
physicians, and the public upon request.

(d)  begin insert Unless otherwise indicated in this section, a physician
providing treatment under Section 4600 shall send any request for
authorization for medical treatment, with supporting
documentation, to the claims administrator for the employer,
insurer, or other entity according to rules adopted by the
administrative director. end insert 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, begin delete delay, end delete
or deny requests for authorization, begin delete the employer end delete begin insert that employer,
insurer, or other entity end insert 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 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, begin delete delays, end delete 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)  begin delete No end delete begin insert A end insert person other than a licensed physician who is
competent to evaluate the specific clinical issues involved in the
medical treatment services, begin delete and where end delete begin insert if end insert these services are within
the scope of the physician’s practice, requested by the begin delete physician
may modify, delay, end delete begin insert physician, shall not modify end insert 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, begin delete delay, end delete 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 begin delete modify, delay, end delete begin insert modify end insert 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. begin delete No end delete begin insert A end insert charge shall begin insert not end insert be required for
an employee whose physician’s request for medical treatment
services is under review.

(g) In determining whether to approve, modify, begin delete delay, end delete 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 begin insert the end insert 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)  begin delete When end delete begin insert If end insert the employee’s condition is begin delete such that end delete begin insert one in which end insert
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, begin delete delay, end delete 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, begin delete delay, end delete 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 begin delete modification, delay, end delete begin insert modification end insert
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. begin delete Any end delete begin insert A end insert 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 begin delete such end delete a way begin delete as to minimize end delete begin insert that minimizes end insert 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. begin delete No fees end delete begin insert Fees end insert shall begin insert not end insert 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 begin delete modify, delay, end delete begin insert modify end insert
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 begin delete or delay end delete 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 begin delete modify, delay, end delete begin insert modify end insert 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 begin delete any end delete begin insert a end insert 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)  begin delete Every end delete begin insert Each end insert 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.

begin insert

(j) This section shall remain in effect only until January 1, 2018,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2018, deletes or extends that date.

end insert

SEC. 4.  

Section 4610 is added to the Labor Code, to read:

4610.  

(a) For purposes of this section, “utilization review”
means utilization review or utilization management functions that
prospectively, retrospectively, or concurrently review and approve,
modify, or deny, based in whole or in part on medical necessity
to cure and relieve, treatment recommendations by physicians, as
defined in Section 3209.3, prior to, retrospectively, or concurrent
with the provision of medical treatment services pursuant to Section
4600.

(b) For all dates of injury occurring on or after January 1, 2018,
emergency treatment services and medical treatment rendered for
a body part or condition begin insert that is end insert accepted as compensable by the
begin delete employer, end delete begin insert employer and is addressed by the medical treatment
utilization schedule adopted pursuant to Section 5307.7, end insert by a
member of the medical provider network or health care
organization, or by a physician predesignated pursuant to
subdivision (d) of Section 4600, within the 30 days following the
initial date of injury, shall be authorized without prospective
utilization review, except as provided in subdivision (c). begin insert The
services rendered under this subdivision shall be consistent with
the medical treatment utilization schedule. end insert In the event that the
employee is not subject to treatment with a medical provider
network, health care organization, or predesignated physician
pursuant to subdivision (d) of Section 4600, the employee shall
be eligible for treatment under this section within 30 days following
the initial date of injury if the treatment is rendered by a physician
or facility selected by the employer. For treatment rendered by a
medical provider network physician, health care organization
physician, a physician predesignated pursuant to subdivision (d)
of Section 4600, or an employer-selected physician, the report
required under Section 6409 and a complete request for
authorization shall be submitted by the physician within five days
following the employee’s initial visit and evaluation.

(c) Unless authorized by the employer or rendered as emergency
medical treatment, the following medical treatment services, as
defined in rules adopted by the administrative director, that are
rendered through a member of the medical provider network or
health care organization, a predesignated physician, an
employer-selected physician, or an employer-selected facility,
within the 30 days following the initial date of injury, shall be
subject to prospective utilization review under this section:

begin delete

(1) Services provided for a condition or occupational injury or
illness that is not addressed or allowed for in the medical treatment
utilization schedule guidelines adopted pursuant to Section
5307.27.

end delete begin delete

(2)

end delete

begin insert (1) end insert  Pharmaceuticals, to the extent they are neither expressly
exempted from prospective review nor authorized by the drug
formulary adopted pursuant to Section 5307.27.

begin delete

(3) Non-emergency

end delete

begin insert (2) end insert begin insert   end insert begin insert Nonemergency end insert inpatient and outpatient surgery, including
all presurgical and postsurgical services.

begin delete

(4)

end delete

begin insert (3) end insert  Psychological treatment services.

begin delete

(5)

end delete

begin insert (4) end insert  Home health care services.

begin delete

(6)

end delete

begin insert (5) end insert  Imaging and radiology services, excluding X-rays.

begin delete

(7)

end delete

begin insert (6) end insert  All durable medical equipment, whose combined total value
exceeds two hundred fifty dollars ($250), as determined by the
official medical fee schedule.

begin delete

(8)

end delete

begin insert (7) end insert  Electrodiagnostic medicine, including, but not limited to,
electromyography and nerve conduction studies.

begin delete

(9)

end delete

begin insert (8 end insert begin insert ) end insert  Any other service designated and defined through rules
adopted by the administrative director.

(d) Any request for payment for treatment provided under
subdivision (b) shall comply with Section 4603.2 and be submitted
to the employer, or its insurer or claims administrator, within 30
days of the date the service was provided.

(e) If a physician fails to submit the report required under
Section 6409 and a complete request for authorization, as described
in subdivision (b), an employer may remove the physician’s ability
under this subdivision to provide further medical treatment to the
employee that is exempt from prospective utilization review.

(f) An employer may perform retrospective utilization review
for any treatment provided pursuant to subdivision (b) solely for
the purpose of determining if the physician is prescribing treatment
consistent with the schedule for medical treatment utilization,
including, but not limited to, the drug formulary adopted pursuant
to Section 5307.27.

(1) If it is found after retrospective utilization reviews that there
is a pattern and practice of the physician or provider failing to
render treatment consistent with the schedule for medical treatment
utilization, including the drug formulary, the employer may remove
the ability of the predesignated physician, employer-selected
physician, or the member of the medical provider network or health
care organization under this subdivision to provide further medical
treatment to any employee that is exempt from prospective
utilization review. The employer shall notify the physician or
provider of the results of the retrospective utilization review and
the requirement for prospective utilization review for all subsequent
medical treatment.

(2) The results of retrospective utilization review may constitute
a showing of good cause for an employer’s petition requesting a
change of physician or provider pursuant to Section 4603 and may
serve as grounds for termination of the physician or provider from
the medical provider network or health care organization.

(g) 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.

(1) Each utilization review process that modifies or denies
requests for authorization of medical treatment 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, including the
drug formulary, adopted pursuant to Section 5307.27.

(2) 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, 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.

(3) (A) 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 or deny requests for authorization of medical treatment
for reasons of medical necessity to cure and relieve or due to
incomplete or insufficient information under subdivisions (i) and
(j).

(B) (i) The employer, or any entity conducting utilization review
on behalf of the employer, shall neither offer nor provide any
financial incentive or consideration to a physician based on the
number of begin delete modifications, delays, end delete begin insert modifications end insert or denials made
by the physician under this section.

(ii) An insurer or third-party administrator shall not refer
utilization review services conducted on behalf of an employer
under this section to an entity in which the insurer or third-party
administrator has a financial interest as defined under Section
139.32. This prohibition does not apply if the insurer or third-party
administrator provides the employer and the administrative director
with prior written disclosure of both of the following:

(I) The entity conducting the utilization review services.

(II) The insurer or third-party administrator’s financial interest
in the entity.

(C) The administrative director has authority pursuant to this
section to review any compensation agreement, payment schedule,
or contract between the employer, or any entity conducting
utilization review on behalf of the employer, and the utilization
review physician. Any information disclosed to the administrative
director pursuant to this paragraph shall be considered confidential
information and not subject to disclosure pursuant to the California
Public Records Act (Chapter 3.5 (commencing with Section 6250)
of Division 7 of Title 1 of the Government Code). Disclosure of
the information to the administrative director pursuant to this
subdivision shall not waive the provisions of the Evidence Code
relating to privilege.

(4) A utilization review process that modifies or denies requests
for authorization of medical treatment shall be accredited on or
before July 1, 2018, and shall retain active accreditation while
providing utilization review services, 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, peer-to-peer consultation,
internal appeal procedure, 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 accreditation purposes. Until those rules are
adopted, the administrative director shall designate URAC as the
accrediting organization. The administrative director may adopt
rules to do any of the following:

(A) Require additional specific criteria for measuring the quality
of a utilization review process for purposes of accreditation.

(B) Exempt nonprofit, public sector internal utilization review
programs from the accreditation requirement pursuant to this
section, if the administrative director has adopted minimum
standards applicable to nonprofit, public sector internal utilization
review programs that meet or exceed the accreditation standards
developed pursuant to this section.

(5) On or before July 1, 2018, each employer, either directly or
through its insurer or an entity with which an employer or insurer
contracts for utilization review services, shall submit a description
of the utilization review process that modifies or denies requests
for authorization of medical treatment and the written policies and
procedures to the administrative director for approval. Approved
utilization review process descriptions and the accompanying
written policies and procedures shall be disclosed by the employer
to employees and physicians and made available to the public by
posting on the employer’s, claims administrator’s, or utilization
review organization’s Internet Web site.

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

(1) Developed with involvement from actively practicing
physicians.

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

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

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

(5) Available to the public upon request. An employer shall
only be required to disclose the criteria or guidelines for the
specific procedures or conditions requested. An employer may
charge members of the public reasonable copying and postage
expenses related to disclosing criteria or guidelines pursuant to
this paragraph. Criteria or guidelines may also be made available
through electronic means. No charge shall be required for an
employee whose physician’s request for medical treatment services
is under review.

(i) In determining whether to approve, modify, or deny requests
by physicians prior to, retrospectively, or concurrent with the
provisions of medical treatment services to employees, all of the
following requirements shall be met:

(1) Except for treatment requests made pursuant to the
formulary, 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 a
request for authorization for medical treatment and supporting
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. Prospective decisions
regarding requests for treatment covered by the formulary shall
be made no more than five begin insert working end insert days from the date of begin delete the
medical treatment request. end delete begin insert receipt of the request for authorization
for medical treatment. end insert The request for authorization and supporting
documentation may be submitted electronically under rules adopted
by the administrative director.

(2) 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.

(3) 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, 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.

(4) (A) Final decisions to approve, modify, or deny requests
by physicians for authorization prior to, or concurrent with, the
provision of medical treatment services to employees shall be
communicated to the requesting physician within 24 hours of the
decision by telephone, facsimile, or, if agreed to by the parties,
secure email.

(B) Decisions resulting in modification or denial of all or part
of the requested health care service shall be communicated in
writing to the employee, and to the physician if the initial
communication under subparagraph (A) was by telephone, 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 modified or denied, disputes shall be
resolved in accordance with Section 4610.5, if applicable, or
otherwise in accordance with Section 4062.

(C) 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.

(5) Communications regarding decisions to approve requests
by physicians shall specify the specific medical treatment service
approved. Responses regarding decisions to modify or deny
medical treatment services requested by physicians shall include
a clear and concise explanation of the reasons for the employer’s
decision, a description of the criteria or guidelines used, and the
clinical reasons for the decisions regarding medical necessity. If
a utilization review decision to deny a medical service is due to
incomplete or insufficient information, the decision shall specify
all of the following:

(A) The reason for the decision.

(B) A specific description of the information that is needed.

(C) The date(s) and time(s) of attempts made to contact the
physician to obtain the necessary information.

(D) A description of the manner in which the request was
communicated.

(j) (1) If an employer, insurer, or other entity subject to this
section requests medical information from a physician in order to
determine whether to approve, modify, or deny requests for
authorization, the employer shall request only the information
reasonably necessary to make the determination.

(2) If the employer, insurer, or other entity cannot make a
decision within the timeframes specified in paragraph (1), (2), or
(3) of subdivision (i) because the employer or other entity is not
in receipt of, or in possession of, all of the information reasonably
necessary to make a determination, 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 that must be provided by the physician for a
determination to be made. 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), (2), or (3) of subdivision
(i).

(k) A utilization review decision to modify, begin delete delay, end delete 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,
or another physician within the requesting physician’s practice
group, 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.

(l) 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.

(m) If utilization review is deferred pursuant to subdivision (l),
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 (2) of subdivision (i) 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.

(n) Every employer, insurer, or other entity subject to this section
shall maintain telephone access during California business hours
for physicians to request authorization for health care services and
to conduct peer-to-peer discussions regarding issues, including the
appropriateness of a requested treatment, modification of a
treatment request, or obtaining additional information needed to
make a medical necessity decision.

(o) The administrative director shall develop a system for the
mandatory electronic reporting of documents related to every
utilization review performed by each employer, which shall be
administered by the Division of Workers’ Compensation. The
administrative director shall adopt regulations specifying the
documents to be submitted by the employer and the authorized
transmission format and timeframe for their submission. For
purposes of this subdivision, “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.

(p) 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.

begin insert

(q) The administrative director shall contract with an outside,
independent research organization on or after March 1, 2019, to
evaluate the impact of the provision of medical treatment within
the first 30 days after a claim is filed, for a claim filed on or after
January 1, 2017, and before January 1, 2019. The report shall be
provided to the administrative director, the Senate Committee on
Labor and Industrial Relations, and the Assembly Committee on
Insurance before January 1, 2020.

end insert begin delete

(q)

end delete

begin insert (r) end insert  This section shall become operative on January 1, 2018.

begin insert

begin insert SEC. 4.5. end insert   

end insert

begin insert Section 4610 is added to the end insert begin insert Labor Code end insert begin insert , to read: end insert

begin insert

begin insert 4610. end insert   

(a) For purposes of this section, “utilization review”
means utilization review or utilization management functions that
prospectively, retrospectively, or concurrently review and approve,
modify, or deny, based in whole or in part on medical necessity to
cure and relieve, treatment recommendations by physicians, as
defined in Section 3209.3, prior to, retrospectively, or concurrent
with the provision of medical treatment services pursuant to Section
4600.

(b) For all dates of injury occurring on or after January 1, 2018,
emergency treatment services and medical treatment rendered for
a body part or condition that is accepted as compensable by the
employer and is addressed by the medical treatment utilization
schedule adopted pursuant to Section 5307.7, by a member of the
medical provider network or health care organization, or by a
physician predesignated pursuant to subdivision (d) of Section
4600, within the 30 days following the initial date of injury, shall
be authorized without prospective utilization review, except as
provided in subdivision (c). The services rendered under this
subdivision shall be consistent with the medical treatment
utilization schedule. In the event that the employee is not subject
to treatment with a medical provider network, health care
organization, or predesignated physician pursuant to subdivision
(d) of Section 4600, the employee shall be eligible for treatment
under this section within 30 days following the initial date of injury
if the treatment is rendered by a physician or facility selected by
the employer. For treatment rendered by a medical provider
network physician, health care organization physician, a physician
predesignated pursuant to subdivision (d) of Section 4600, or an
employer-selected physician, the report required under Section
6409 and a complete request for authorization shall be submitted
by the physician within five days following the employee’s initial
visit and evaluation.

(c) Unless authorized by the employer or rendered as emergency
medical treatment, the following medical treatment services, as
defined in rules adopted by the administrative director, that are
rendered through a member of the medical provider network or
health care organization, a predesignated physician, an
employer-selected physician, or an employer-selected facility,
within the 30 days following the initial date of injury, shall be
subject to prospective utilization review under this section:

(1) Pharmaceuticals, to the extent they are neither expressly
exempted from prospective review nor authorized by the drug
formulary adopted pursuant to Section 5307.27.

(2) Nonemergency inpatient and outpatient surgery, including
all presurgical and postsurgical services.

(3) Psychological treatment services.

(4) Home health care services.

(5) Imaging and radiology services, excluding X-rays.

(6) All durable medical equipment, whose combined total value
exceeds two hundred fifty dollars ($250), as determined by the
official medical fee schedule.

(7) Electrodiagnostic medicine, including, but not limited to,
electromyography and nerve conduction studies.

(8) Any other service designated and defined through rules
adopted by the administrative director.

(d) Any request for payment for treatment provided under
subdivision (b) shall comply with Section 4603.2 and be submitted
to the employer, or its insurer or claims administrator, within 30
days of the date the service was provided.

(e) If a physician fails to submit the report required under
Section 6409 and a complete request for authorization, as
described in subdivision (b), an employer may remove the
physician’s ability under this subdivision to provide further medical
treatment to the employee that is exempt from prospective
utilization review.

(f) An employer may perform retrospective utilization review
for any treatment provided pursuant to subdivision (b) solely for
the purpose of determining if the physician is prescribing treatment
consistent with the schedule for medical treatment utilization,
including, but not limited to, the drug formulary adopted pursuant
to Section 5307.27.

(1) If it is found after retrospective utilization reviews that there
is a pattern and practice of the physician or provider failing to
render treatment consistent with the schedule for medical treatment
utilization, including the drug formulary, the employer may remove
the ability of the predesignated physician, employer-selected
physician, or the member of the medical provider network or health
care organization under this subdivision to provide further medical
treatment to any employee that is exempt from prospective
utilization review. The employer shall notify the physician or
provider of the results of the retrospective utilization review and
the requirement for prospective utilization review for all subsequent
medical treatment.

(2) The results of retrospective utilization review may constitute
a showing of good cause for an employer’s petition requesting a
change of physician or provider pursuant to Section 4603 and may
serve as grounds for termination of the physician or provider from
the medical provider network or health care organization.

(g) Each employer shall establish a utilization review process
in compliance with this section, either directly or through its
insurer or an entity with which an employer or insurer contracts
for these services.

(1) Each utilization review process that modifies or denies
requests for authorization of medical treatment 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, including the
drug formulary, adopted pursuant to Section 5307.27.

(2) Unless otherwise indicated in this section, a physician
providing treatment under Section 4600 shall send any request for
authorization for medical treatment, with supporting
documentation, to the claims administrator for the employer,
insurer, or other entity according to rules adopted by the
administrative director. The employer, insurer, or other entity
shall employ or designate a medical director who holds an
unrestricted license to practice medicine in this state issued
pursuant to Section 2050 or 2450 of the Business and Professions
Code. The medical director shall ensure that the process by which
the employer or other entity reviews and approves, modifies, or
denies requests by physicians prior to, retrospectively, or
concurrent with the provision of medical treatment services
complies with the requirements of this section. Nothing in this
section shall be construed as restricting the existing authority of
the Medical Board of California.

(3) (A) A person other than a licensed physician who is
competent to evaluate the specific clinical issues involved in the
medical treatment services, if these services are within the scope
of the physician’s practice, requested by the physician, shall not
modify or deny requests for authorization of medical treatment for
reasons of medical necessity to cure and relieve or due to
incomplete or insufficient information under subdivisions (i) and
(j).

(B) (i) The employer, or any entity conducting utilization review
on behalf of the employer, shall neither offer nor provide any
financial incentive or consideration to a physician based on the
number of modifications or denials made by the physician under
this section.

(ii) An insurer or third-party administrator shall not refer
utilization review services conducted on behalf of an employer
under this section to an entity in which the insurer or third-party
administrator has a financial interest as defined under Section
139.32. This prohibition does not apply if the insurer or third-party
administrator provides the employer and the administrative
director with prior written disclosure of both of the following:

(I) The entity conducting the utilization review services.

(II) The insurer or third-party administrator’s financial interest
in the entity.

(C) The administrative director has authority pursuant to this
section to review any compensation agreement, payment schedule,
or contract between the employer, or any entity conducting
utilization review on behalf of the employer, and the utilization
review physician. Any information disclosed to the administrative
director pursuant to this paragraph shall be considered
confidential information and not subject to disclosure pursuant to
the California Public Records Act (Chapter 3.5 (commencing with
Section 6250) of Division 7 of Title 1 of the Government Code).
Disclosure of the information to the administrative director
pursuant to this subdivision shall not waive the provisions of the
Evidence Code relating to privilege.

(4) A utilization review process that modifies or denies requests
for authorization of medical treatment shall be accredited on or
before July 1, 2018, and shall retain active accreditation while
providing utilization review services, 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, peer-to-peer consultation,
internal appeal procedure, 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 accreditation purposes. Until those rules
are adopted, the administrative director shall designate URAC as
the accrediting organization. The administrative director may
adopt rules to do any of the following:

(A) Require additional specific criteria for measuring the quality
of a utilization review process for purposes of accreditation.

(B) Exempt nonprofit, public sector internal utilization review
programs from the accreditation requirement pursuant to this
section, if the administrative director has adopted minimum
standards applicable to nonprofit, public sector internal utilization
review programs that meet or exceed the accreditation standards
developed pursuant to this section.

(5) On or before July 1, 2018, each employer, either directly
or through its insurer or an entity with which an employer or
insurer contracts for utilization review services, shall submit a
description of the utilization review process that modifies or denies
requests for authorization of medical treatment and the written
policies and procedures to the administrative director for approval.
Approved utilization review process descriptions and the
accompanying written policies and procedures shall be disclosed
by the employer to employees and physicians and made available
to the public by posting on the employer’s, claims administrator’s,
or utilization review organization’s Internet Web site.

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

(1) Developed with involvement from actively practicing
physicians.

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

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

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

(5) Available to the public upon request. An employer shall only
be required to disclose the criteria or guidelines for the specific
procedures or conditions requested. An employer may charge
members of the public reasonable copying and postage expenses
related to disclosing criteria or guidelines pursuant to this
paragraph. Criteria or guidelines may also be made available
through electronic means. A charge shall not be required for an
employee whose physician’s request for medical treatment services
is under review.

(i) In determining whether to approve, modify, or deny requests
by physicians prior to, retrospectively, or concurrent with the
provisions of medical treatment services to employees, all of the
following requirements shall be met:

(1) Except for treatment requests made pursuant to the
formulary, 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 a
request for authorization for medical treatment and supporting
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. Prospective decisions
regarding requests for treatment covered by the formulary shall
be made no more than five working days from the date of receipt
of the medical treatment request. The request for authorization
and supporting documentation may be submitted electronically
under rules adopted by the administrative director.

(2) 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 the receipt of the
information that is reasonably necessary to make this
determination. If payment for a medical treatment service is made
within the time prescribed by Section 4603.2, a retrospective
decision to approve the service need not otherwise be
communicated.

(3) If the employee’s condition is one in which the employee
faces an imminent and serious threat to his or her health, including,
but not limited to, the potential loss of life, limb, or other major
bodily function, or the normal timeframe for the decisionmaking
process, as described in paragraph (1), would be detrimental to
the employee’s life or health or could jeopardize the employee’s
ability to regain maximum function, decisions to approve, modify,
or deny requests by physicians prior to, or concurrent with, the
provision of medical treatment services to employees shall be made
in a timely fashion that is appropriate for the nature of the
employee’s condition, but not to exceed 72 hours after the receipt
of the information reasonably necessary to make the determination.

(4) (A) Final decisions to approve, modify, or deny requests
by physicians for authorization prior to, or concurrent with, the
provision of medical treatment services to employees shall be
communicated to the requesting physician within 24 hours of the
decision by telephone, facsimile, or, if agreed to by the parties,
secure email.

(B) Decisions resulting in modification or denial of all or part
of the requested health care service shall be communicated in
writing to the employee, and to the physician if the initial
communication under subparagraph (A) was by telephone, 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 modified or denied, disputes shall be
resolved in accordance with Section 4610.5, if applicable, or
otherwise in accordance with Section 4062.

(C) In the case of concurrent review, medical care shall not be
discontinued until the employee’s physician has been notified of
the decision and a care plan has been agreed upon by the physician
that is appropriate for the medical needs of the employee. Medical
care provided during a concurrent review shall be care that is
medically necessary to cure and relieve, and an insurer or
self-insured employer shall only be liable for those services
determined medically necessary to cure and relieve. If the insurer
or self-insured employer disputes whether or not one or more
services offered concurrently with a utilization review were
medically necessary to cure and relieve, the dispute shall be
resolved pursuant to Section 4610.5, if applicable, or otherwise
pursuant to Section 4062. A compromise between the parties that
an insurer or self-insured employer believes may result in payment
for services that were not medically necessary to cure and relieve
shall be reported by the insurer or the self-insured employer to
the licensing board of the provider or providers who received the
payments, in a manner set forth by the respective board and in a
way that minimizes reporting costs both to the board and to the
insurer or self-insured employer, for evaluation as to possible
violations of the statutes governing appropriate professional
practices. Fees shall not be levied upon insurers or self-insured
employers making reports required by this section.

(5) Communications regarding decisions to approve requests
by physicians shall specify the specific medical treatment service
approved. Responses regarding decisions to modify or deny
medical treatment services requested by physicians shall include
a clear and concise explanation of the reasons for the employer’s
decision, a description of the criteria or guidelines used, and the
clinical reasons for the decisions regarding medical necessity. If
a utilization review decision to deny a medical service is due to
incomplete or insufficient information, the decision shall specify
all of the following:

(A) The reason for the decision.

(B) A specific description of the information that is needed.

(C) The date(s) and time(s) of attempts made to contact the
physician to obtain the necessary information.

(D) A description of the manner in which the request was
communicated.

(j) (1) Unless otherwise indicated in this section, a physician
providing treatment under Section 4600 shall send any request for
authorization for medical treatment, with supporting
documentation, to the claims administrator for the employer,
insurer, or other entity according to rules adopted by the
administrative director. If an employer, insurer, or other entity
subject to this section requests medical information from a
physician in order to determine whether to approve, modify, or
deny requests for authorization, that employer, insurer, or other
entity shall request only the information reasonably necessary to
make the determination.

(2) If the employer, insurer, or other entity cannot make a
decision within the timeframes specified in paragraph (1), (2), or
(3) of subdivision (i) because the employer or other entity is not
in receipt of, or in possession of, all of the information reasonably
necessary to make a determination, 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 that must be provided by the physician for a
determination to be made. 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), (2), or (3) of subdivision
(i).

(k) A utilization review decision to modify or deny a treatment
recommendation shall remain effective for 12 months from the
date of the decision without further action by the employer with
regard to a further recommendation by the same physician, or
another physician within the requesting physician’s practice group,
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.

(l) 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.

(m) If utilization review is deferred pursuant to subdivision (l),
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 (2) of subdivision (i) 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.

(n) Each employer, insurer, or other entity subject to this section
shall maintain telephone access during California business hours
for physicians to request authorization for health care services
and to conduct peer-to-peer discussions regarding issues, including
the appropriateness of a requested treatment, modification of a
treatment request, or obtaining additional information needed to
make a medical necessity decision.

(o) The administrative director shall develop a system for the
mandatory electronic reporting of documents related to every
utilization review performed by each employer, which shall be
administered by the Division of Workers’ Compensation. The
administrative director shall adopt regulations specifying the
documents to be submitted by the employer and the authorized
transmission format and timeframe for their submission. For
purposes of this subdivision, “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.

(p) 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.

(q) The administrative director shall contract with an outside,
independent research organization on or after March 1, 2019, to
evaluate the impact of the provision of medical treatment within
the first 30 days after a claim is filed, for a claim filed on or after
January 1, 2017, and before January 1, 2019. The report shall be
provided to the administrative director, the Senate Committee on
Labor and Industrial Relations, and the Assembly Committee on
Insurance before January 1, 2020.

(r) This section shall become operative on January 1, 2018.

end insert

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.

(3) Any dispute occurring on or after January 1, 2018, over
medication prescribed pursuant to the drug formulary adopted
pursuant to Section 5307.27.

(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 or denied by a utilization review decision on
the basis of medical necessity.

(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 as set forth in the
medical treatment utilization schedule, including the drug
formulary, adopted by the administrative director pursuant to
Section 5307.27:

(A) The guidelines, including the drug formulary, adopted by
the administrative director pursuant to Section 5307.27.

(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 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.
“Utilization review decision” may also mean a determination,
occurring on or after January 1, 2018, by a physician regarding
the medical necessity of medication prescribed pursuant to the
drug formulary adopted pursuant to Section 5307.27.

(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 or modifies a treatment
recommendation based on medical necessity, 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 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 based on medical necessity that denies
or modifies a treatment recommendation, the employer shall
provide the employee with a one-page form 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 employee may also request independent
medical review electronically under rules adopted by the
administrative director. 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. Notice of the authorization, any
settlement or award that may resolve the medical treatment dispute,
or the requesting physician withdrawing the request for treatment,
shall be communicated to the independent medical review
organization by the employer within five days.

(h) (1) The employee may submit a request for independent
medical review to the division. The request may be made
electronically under rules adopted by the administrative director.
The request shall be made no later than as follows:

(A) For formulary disputes, 10 days after the service of the
utilization review decision to the employee.

(B) For all other medical treatment disputes, 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 electronically provide to the independent medical review
organization under rules adopted by the administrative director a
copy and list of 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 request for authorization and utilization review decision.

(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
or modify 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.

(p) The claims administrator who issued the utilization review
decision in dispute shall notify the independent medical review
organization if there is a change in the claims administrator
responsible for the claim. Notice shall be given to the independent
medical review organization within five working days of the
change in administrator taking effect.

SEC. 6.  

Section 4610.6 of the Labor Code is amended to read:

4610.6.  

(a) Upon receipt of a case pursuant to Section 4610.5,
an independent medical review organization shall conduct the
review in accordance with this article and any regulations or orders
of the administrative director. The organization’s review shall be
limited to an examination of the medical necessity of the disputed
medical treatment.

(b) Upon receipt of information and documents related to a case,
the medical reviewer or reviewers selected to conduct the review
by the independent medical review organization shall promptly
review all pertinent medical records of the employee, provider
reports, and any other information submitted to the organization
or requested from any of the parties to the dispute by the reviewers.
If the reviewers request information from any of the parties, a copy
of the request and the response shall be provided to all of the
parties. The reviewer or reviewers shall also review relevant
information related to the criteria set forth in subdivision (c).

(c) Following its review, the reviewer or reviewers shall
determine whether the disputed health care service was medically
necessary based on the specific medical needs of the employee
and the standards of medical necessity as defined in subdivision
(c) of Section 4610.5.

(d) (1) The organization shall complete its review and make
its determination in writing, and in layperson’s terms to the
maximum extent practicable, and the determination shall be issued,
as follows:

(A) For a dispute over medication prescribed pursuant to the
drug formulary submitted under subdivision (h) of Section 4610.5,
within five working days from the date of receipt of the request
for review and supporting documentation, or within less time as
prescribed by the administrative director.

(B) For all other medical treatment disputes submitted for review
under subdivision (h) of Section 4610.5, within 30 days of receipt
of the request for review and supporting documentation, or within
less time as prescribed by the administrative director.

(C) If the disputed medical treatment has not been provided and
the employee’s provider or the administrative director certifies in
writing that an imminent and serious threat to the health of the
employee may exist, including, but not limited to, serious pain,
the potential loss of life, limb, or major bodily function, or the
immediate and serious deterioration of the health of the employee,
the analyses and determinations of the reviewers shall be expedited
and rendered within three days of the receipt of the information.

(2) Subject to the approval of the administrative director, the
deadlines for analyses and determinations involving both regular
and expedited reviews may be extended for up to three days in
extraordinary circumstances or for good cause.

(e) The medical professionals’ analyses and determinations shall
state whether the disputed health care service is medically
necessary. Each analysis shall cite the employee’s medical
condition, the relevant documents in the record, and the relevant
findings associated with the provisions of subdivision (c) to support
the determination. If more than one medical professional reviews
the case, the recommendation of the majority shall prevail. If the
medical professionals reviewing the case are evenly split as to
whether the disputed health care service should be provided, the
decision shall be in favor of providing the service.

(f) The independent medical review organization shall provide
the administrative director, the employer, the employee, and the
employee’s provider with the analyses and determinations of the
medical professionals reviewing the case, and a description of the
qualifications of the medical professionals. The independent
medical review organization shall keep the names of the reviewers
confidential in all communications with entities or individuals
outside the independent medical review organization. If more than
one medical professional reviewed the case and the result was
differing determinations, the independent medical review
organization shall provide each of the separate reviewer’s analyses
and determinations.

(g) The determination of the independent medical review
organization shall be deemed to be the determination of the
administrative director and shall be binding on all parties.

(h) A determination of the administrative director pursuant to
this section may be reviewed only by a verified appeal from the
medical review determination of the administrative director, filed
with the appeals board for hearing pursuant to Chapter 3
(commencing with Section 5500) of Part 4 and served on all
interested parties within 30 days of the date of mailing of the
determination to the aggrieved employee or the aggrieved
employer. The determination of the administrative director shall
be presumed to be correct and shall be set aside only upon proof
by clear and convincing evidence of one or more of the following
grounds for appeal:

(1) The administrative director acted without or in excess of the
administrative director’s powers.

(2) The determination of the administrative director was
procured by fraud.

(3) The independent medical reviewer was subject to a material
conflict of interest that is in violation of Section 139.5.

(4) The determination was the result of bias on the basis of race,
national origin, ethnic group identification, religion, age, sex,
sexual orientation, color, or disability.

(5) The determination was the result of a plainly erroneous
express or implied finding of fact, provided that the mistake of
fact is a matter of ordinary knowledge based on the information
submitted for review pursuant to Section 4610.5 and not a matter
that is subject to expert opinion.

(i) If the determination of the administrative director is reversed,
the dispute shall be remanded to the administrative director to
submit the dispute to independent medical review by a different
independent review organization. In the event that a different
independent medical review organization is not available after
remand, the administrative director shall submit the dispute to the
original medical review organization for review by a different
reviewer in the organization. In no event shall a workers’
compensation administrative law judge, the appeals board, or any
higher court make a determination of medical necessity contrary
to the determination of the independent medical review
organization.

(j) Upon receiving the determination of the administrative
director that a disputed health care service is medically necessary,
the employer shall promptly implement the decision as provided
by this section unless the employer has also disputed liability for
any reason besides medical necessity. In the case of reimbursement
for services already rendered, the employer shall reimburse the
provider or employee, whichever applies, within 20 days, subject
to resolution of any remaining issue of the amount of payment
pursuant to Sections 4603.2 to 4603.6, inclusive. In the case of
services not yet rendered, the employer shall authorize the services
within five working days of receipt of the written determination
from the independent medical review organization, or sooner if
appropriate for the nature of the employee’s medical condition,
and shall inform the employee and provider of the authorization.

(k) Failure to pay for services already provided or to authorize
services not yet rendered within the time prescribed by subdivision
(l) 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 the decision is not implemented. The
administrative penalties shall be paid to the Workers’
Compensation Administration Revolving Fund.

(l) The costs of independent medical review and the
administration of the independent medical review system shall be
borne by employers through a fee system established by the
administrative director. After considering any relevant information
on program costs, the administrative director shall establish a
reasonable, per-case reimbursement schedule to pay the costs of
independent medical review organization reviews and the cost of
administering the independent medical review system, which may
vary depending on the type of medical condition under review and
on other relevant factors.

(m) The administrative director may publish the results of
independent medical review determinations after removing
individually identifiable information.

(n) If any provision of this section, or the application thereof to
any person or circumstances, is held invalid, the remainder of the
section, and the application of its provisions to other persons or
circumstances, shall not be affected thereby.

SEC. 7.  

Section 4615 is added to the Labor Code, to read:

4615.  

begin insert (a) end insert begin insert   end insert Any lien filed by or on behalf of a physician or
provider of medical treatment services under Section 4600 or
medical-legal services under Section begin delete 4060, end delete begin insert 4621, end insert and any accrual
of interest related to the lien, shall be automatically stayed upon
the filing of criminal charges against that physician or provider
for an offense involving fraud against the workers’ compensation
system, medical billing fraud, insurance fraud, or fraud against the
Medicare or Medi-Cal programs. The stay shall be in effect from
the time of the filing of the charges until the disposition of the
criminal proceedings. The administrative director may promulgate
rules for the implementation of this section.

begin insert

(b) The administrative director shall promptly post on the
division’s Internet Web site the names of any physician or provider
of medical treatment services whose liens were stayed pursuant
to this section.

end insert

SEC. 8.  

Section 4903.05 of the Labor Code is amended to read:

4903.05.  

(a) Every lien claimant shall file its lien with the
appeals board in writing upon a form approved by the appeals
board. The lien shall be accompanied by a full statement or
itemized voucher supporting the lien and justifying the right to
reimbursement and proof of service upon the injured worker or,
if deceased, upon the worker’s dependents, the employer, the
insurer, and the respective attorneys or other agents of record. begin insert For
liens filed on or after January 1, 2017, the lien shall also be
accompanied by an original bill in addition to either the full
statement or itemized voucher supporting the lien. end insert Medical records
shall be filed only if they are relevant to the issues being raised by
the lien.

(b) Any lien claim for expenses under subdivision (b) of Section
4903 or for claims of costs shall be filed with the appeals board
electronically using the form approved by the appeals board. The
lien shall be accompanied by a proof of service and any other
documents that may be required by the appeals board. The service
requirements for Section 4603.2 are not modified by this section.

(c) (1) For liens filed on or after January 1, 2017, any lien claim
for expenses under subdivision (b) of Section 4903 that is subject
to a filing fee under this section shall be accompanied at the time
of filing by a declaration stating, under penalty of perjury, that the
dispute is not subject to an independent bill review begin insert and independent
medical review end insert under begin delete Section end delete begin insert Sections end insert 4603.6 and begin insert 4610.5,
respectively, end insert that the lien claimant satisfies one of the following:

(A) Is the employee’s treating physician providing care through
a medical provider network.

(B) Is the agreed medical evaluator or qualified medical
evaluator.

(C) Has provided treatment authorized by the employer or claims
administrator under Section 4610.

(D) Has made a diligent search and determined that the employer
does not have a medical provider network in place.

(E) Has documentation that medical treatment has been
neglected or unreasonably refused to the begin delete employee. end delete begin insert employee as
provided by Section 4600. end insert

(F) Can show that the expense was incurred for an emergency
medical condition, as defined by subdivision (b) of Section 1317.1
of the Health and Safety Code.

begin insert

(G) Is a certified interpreter rendering services during a
medical-legal examination, a copy service providing medical-legal
services, or has an expense allowed as a lien under rules adopted
by the administrative director.

end insert begin delete

(2) For all liens filed prior to January 1, 2017, lien claimants
shall have until July 1, 2017, to file the declaration provided under
paragraph (1).

end delete begin insert

(2) Lien claimants shall have until July 1, 2017, to file a
declaration pursuant to paragraph (1) for any lien claim filed
before January 1, 2017, for expenses pursuant to subdivision (b)
of Section 4903 that is subject to a filing fee under this section.

end insert

(3) The failure to file a signed declaration under this subdivision
shall result in the dismissal of the lien with prejudice by operation
of law. Filing of a false declaration shall be grounds for dismissal
with prejudice after notice.

(d) All liens filed on or after January 1, 2013, for expenses under
subdivision (b) of Section 4903 or for claims of costs shall be
subject to a filing fee as provided by this subdivision.

(1) The lien claimant shall pay a filing fee of one hundred fifty
dollars ($150) to the Division of Workers’ Compensation prior to
filing a lien and shall include proof that the filing fee has been
paid. The fee shall be collected through an electronic payment
system that accepts major credit cards and any additional forms
of electronic payment selected by the administrative director. If
the administrative director contracts with a service provider for
the processing of electronic payments, any processing fee shall be
absorbed by the division and not added to the fee charged to the
lien filer.

(2) On or after January 1, 2013, a lien submitted for filing that
does not comply with paragraph (1) shall be invalid, even if lodged
with the appeals board, and shall not operate to preserve or extend
any time limit for filing of the lien.

(3) The claims of two or more providers of goods or services
shall not be merged into a single lien.

(4) The filing fee shall be collected by the administrative
director. All fees shall be deposited in the Workers’ Compensation
Administration Revolving Fund and applied for the purposes of
that fund.

(5) The administrative director shall adopt reasonable rules and
regulations governing the procedure for the collection of the filing
fee, including emergency regulations as necessary to implement
this section.

(6) Any lien filed for goods or services that are not the proper
subject of a lien may be dismissed upon request of a party by
verified petition or on the appeals board’s own motion. If the lien
is dismissed, the lien claimant will not be entitled to reimbursement
of the filing fee.

(7) No filing fee shall be required for a lien filed by a health
care service plan licensed pursuant to Section 1349 of the Health
and Safety Code, a group disability insurer under a policy issued
in this state pursuant to the provisions of Section 10270.5 of the
Insurance Code, a self-insured employee welfare benefit plan, as
defined in Section 10121 of the Insurance Code, that is issued in
this state, a Taft-Hartley health and welfare fund, or a publicly
funded program providing medical benefits on a nonindustrial
basis.

SEC. 9.  

Section 4903.8 of the Labor Code is amended to read:

4903.8.  

(a) (1) Any order or award for payment of a lien filed
pursuant to subdivision (b) of Section 4903 shall be made for
payment only to the person who was entitled to payment for the
expenses as provided in subdivision (b) of Section 4903 at the time
the expenses were incurred, who is the lien owner, and not to an
assignee unless the person has ceased doing business in the capacity
held at the time the expenses were incurred and has assigned all
right, title, and interest in the remaining accounts receivable to the
assignee.

(2) All liens filed pursuant to subdivision (b) of Section 4903
shall be filed in the name of the lien owner only, and no payment
shall be made to any lien claimant without evidence that he or she
is the owner of that lien.

(3) Paragraph (1) does not apply to an assignment that was
completed prior to January 1, 2013, or that was required by a
contract that became enforceable and irrevocable prior to January
1, 2013. This paragraph is declarative of existing law.

(4) For liens filed after January 1, 2017, the lien shall not be
assigned unless the person has ceased doing business in the
capacity held at the time the expenses were incurred and has
assigned all right, title, and interest in the remaining accounts
receivable to the assignee. The assignment of a lien, in violation
of this paragraph is invalid by operation of law.

(b) If there has been an assignment of a lien, either as an
assignment of all right, title, and interest in the accounts receivable
or as an assignment for collection, a true and correct copy of the
assignment shall be filed and served.

(1) If the lien is filed on or after January 1, 2013, and the
assignment occurs before the filing of the lien, the copy of the
assignment shall be served at the time the lien is filed.

(2) If the lien is filed on or after January 1, 2013, and the
assignment occurs after the filing of the lien, the copy of the
assignment shall be served within 20 days of the date of the
assignment.

(3) If the lien is filed before January 1, 2013, the copy of the
assignment shall be served by January 1, 2014, or with the filing
of a declaration of readiness or at the time of a lien hearing,
whichever is earliest.

(c) If there has been more than one assignment of the same
receivable or bill, the appeals board may set the matter for hearing
on whether the multiple assignments constitute bad-faith actions
or tactics that are frivolous, harassing, or intended to cause
unnecessary delay or expense. If so found by the appeals board,
appropriate sanctions, including costs and attorney’s fees, may be
awarded against the assignor, assignee, and their respective
attorneys.

(d) At the time of filing of a lien on or after January 1, 2013, or
in the case of a lien filed before January 1, 2013, at the earliest of
the filing of a declaration of readiness, a lien hearing, or January
1, 2014, supporting documentation shall be filed including one or
more declarations under penalty of perjury by a natural person or
persons competent to testify to the facts stated, declaring both of
the following:

(1) The services or products described in the bill for services
or products were actually provided to the injured employee.

(2) The billing statement attached to the lien truly and accurately
describes the services or products that were provided to the injured
employee.

(e) A lien submitted for filing on or after January 1, 2013, for
expenses provided in subdivision (b) of Section 4903, that does
not comply with the requirements of this section shall be deemed
to be invalid, whether or not accepted for filing by the appeals
board, and shall not operate to preserve or extend any time limit
for filing of the lien.

(f) This section shall take effect without regulatory action. The
appeals board and the administrative director may promulgate
regulations and forms for the implementation of this section.

SEC. 10.  

Section 5307.27 of the Labor Code is amended to
read:

5307.27.  

(a) The administrative director, in consultation with
the Commission on Health and Safety and Workers’ Compensation,
shall adopt, after public hearings, a medical treatment utilization
schedule, that shall incorporate the evidence-based, peer-reviewed,
nationally recognized standards of care recommended by the
commission pursuant to Section 77.5, and that shall address, at a
minimum, the frequency, duration, intensity, and appropriateness
of all treatment procedures and modalities commonly performed
in workers’ compensation cases. Evidence-based updates to the
utilization schedule shall be made through an order exempt from
Sections 5307.3 and 5307.4, and the rulemaking provisions of the
Administrative Procedure Act (Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code), but the administrative director shall allow at least a 30-day
period for public comment and a public hearing. The administrative
director shall provide responses to submitted comments prior to
the effective date of the updates. All orders issued pursuant to this
subdivision shall be published on the Internet Web site of the
Division of Workers’ Compensation.

(b) On or before July 1, 2017, the medical treatment utilization
schedule adopted by the administrative director shall include a
drug formulary using evidence-based medicine. Nothing in this
section shall prohibit the authorization of medications that are not
in the formulary when the variance is demonstrated, consistent
with subdivision (a) of Section 4604.5.

(c) The drug formulary shall include a phased implementation
for workers injured prior to July 1, 2017, in order to ensure injured
workers safely transition to medications pursuant to the formulary.

(d) This section shall apply to all prescribers and dispensers of
medications serving injured workers under the workers’
compensation system.

SEC. 11.  

Section 5710 of the Labor Code is amended to read:

5710.  

(a) The appeals board, a workers’ compensation judge,
or any party to the action or proceeding, may, in any investigation
or hearing before the appeals board, cause the deposition of
witnesses residing within or without the state to be taken in the
manner prescribed by law for like depositions in civil actions in
the superior courts of this state under Title 4 (commencing with
Section 2016.010) of Part 4 of the Code of Civil Procedure. To
that end the attendance of witnesses and the production of records
may be required. Depositions may be taken outside the state before
any officer authorized to administer oaths. The appeals board or
a workers’ compensation judge in any proceeding before the
appeals board may cause evidence to be taken in other jurisdictions
before the agency authorized to hear workers’ compensation
matters in those other jurisdictions.

(b) If the employer or insurance carrier requests a deposition to
be taken of an injured employee, or any person claiming benefits
as a dependent of an injured employee, the deponent is entitled to
receive in addition to all other benefits:

(1) All reasonable expenses of transportation, meals, and lodging
incident to the deposition.

(2) Reimbursement for any loss of wages incurred during
attendance at the deposition.

(3) One copy of the transcript of the deposition, without cost.

(4) A reasonable allowance for attorney’s fees for the deponent,
if represented by an attorney licensed by the State Bar of this state.
The fee shall be discretionary with, and, if allowed, shall be set
by, the appeals board, but shall be paid by the employer or his or
her insurer. The administrative director begin delete shall end delete begin insert shall, on or before
July 1, 2018, end insert determine the range of reasonable fees to be paid.

(5) If interpretation services are required because the injured
employee or deponent does not proficiently speak or understand
the English language, upon a request from either, the employer
shall pay for the services of a language interpreter certified or
deemed certified pursuant to Article 8 (commencing with Section
11435.05) of Chapter 4.5 of Part 1 of Division 3 of Title 2 of, or
Section 68566 of, the Government Code. The fee to be paid by the
employer shall be in accordance with the fee schedule adopted by
the administrative director and shall include any other
deposition-related events as permitted by the administrative
director.

SEC. 12.  

Section 5811 of the Labor Code is amended to read:

5811.  

(a) No fees shall be charged by the clerk of any court
for the performance of any official service required by this division,
except for the docketing of awards as judgments and for certified
copies of transcripts thereof. In all proceedings under this division
before the appeals board, costs as between the parties may be
allowed by the appeals board.

(b) (1) It shall be the responsibility of any party producing a
witness requiring an interpreter to arrange for the presence of a
qualified interpreter.

(2) A qualified interpreter is a language interpreter who is
certified, or deemed certified, pursuant to Article 8 (commencing
with Section 11435.05) of Chapter 4.5 of Part 1 of Division 3 of
Title 2 of, or Section 68566 of, the Government Code. The duty
of an interpreter is to accurately and impartially translate oral
communications and transliterate written materials, and not to act
as an agent or advocate. An interpreter shall not disclose to any
person who is not an immediate participant in the communications
the content of the conversations or documents that the interpreter
has interpreted or transliterated unless the disclosure is compelled
by court order. An attempt by any party or attorney to obtain
disclosure is a bad faith tactic that is subject to Section 5813.

Interpreter fees that are reasonably, actually, and necessarily
incurred shall be paid by the employer under this section, provided
they are in accordance with the fee schedule adopted by the
administrative director.

A qualified interpreter may render services during the following:

(A) A deposition.

(B) An appeals board hearing.

(C) A medical treatment appointment or medical-legal
examination.

(D) During those settings which the administrative director
determines are reasonably necessary to ascertain the validity or
extent of injury to an employee who does not proficiently speak
or understand the English language.

(c) The administrative director shall promulgate regulations
establishing criteria to verify the identity and credentials of
individuals who provide interpreter services in all necessary
settings and proceedings within the workers’ compensation system.
Those regulations shall be adopted no later than January 1, 2018.

SEC. 13.  

Section 6409 of the Labor Code is amended to read:

6409.  

(a) Every physician as defined in Section 3209.3 who
attends any injured employee shall file a complete report of that
occupational injury or occupational illness in a manner prescribed
by the administrative director of the Division of Workers’
Compensation. The report shall include a diagnosis, the injured
employee’s description of how the injury or illness occurred, any
treatment rendered at the time of the examination, any work
restrictions resulting from the injury or illness, a treatment plan,
and other content as prescribed by the administrative director. The
form shall be filed electronically with the Division of Workers’
Compensation and the employer, or if insured, with the employer’s
insurer, within five days of the initial examination. If the treatment
is for pesticide poisoning or a condition suspected to be pesticide
poisoning, the physician shall also, within 24 hours of the initial
examination, file a complete report with the local health officer
by facsimile transmission or other means. If the treatment is for
pesticide poisoning or a condition suspected to be pesticide
poisoning, the physician shall not be compensated for the initial
diagnosis and treatment unless the report is filed with the Division
of Workers’ Compensation, the employer, or if insured, with the
employer’s insurer, and includes or is accompanied by a signed
affidavit which certifies that a copy of the report was filed with
the local health officer pursuant to this section.

(b) As used in this section, “occupational illness” means any
abnormal condition or disorder caused by exposure to
environmental factors associated with employment, including acute
and chronic illnesses or diseases which may be caused by
inhalation, absorption, ingestion, or direct contact.

SEC. 14.  

The Legislature finds and declares that begin delete Section 4 end delete
begin insert Sections 4 and 4.5 end insert of this act, which begin delete adds end delete begin insert add end insert Section 4610 to the
Labor Code, begin delete imposes end delete begin insert impose end insert a limitation on the public’s right of
access to the meetings of public bodies or the writings of public
officials and agencies within the meaning of Section 3 of Article
I of the California Constitution. Pursuant to that constitutional
provision, the Legislature makes the following findings to
demonstrate the interest protected by this limitation and the need
for protecting that interest:

The limitations on the people’s rights of access set forth in this
act are necessary to protect the privacy and integrity of information
submitted to the Administrative Director of the Division of
Workers’ Compensation pursuant to begin delete subparagraph (C) of paragraph
(3) of subdivision (g) of end delete Section 4610 of the Labor Code.

SEC. 15.  

The amendment of begin insert paragraphs (1) and (2) of end insert
subdivision (a) of Section 4903.8 of the Labor Code made by this
act does not constitute a change in, but is declaratory of, existing
law.

begin insert

begin insert SEC. 16. end insert   

end insert

begin insert The Legislature finds and declares the following: end insert

begin insert

(a) Section 4 of Article XIV of the California Constitution vests
the Legislature with plenary power to create and to enforce a
complete system of workers’ compensation by appropriate
legislation, and that plenary power includes, without limitation,
the power and authority to make full provision for the manner and
means by which any lien for compensation for those services may
be filed or enforced within the workers’ compensation system.

end insert begin insert

(b) Despite prior legislative action to reform the lien filing and
recovery process within the workers’ compensation system,
including Senate Bill 863 in 2012, there continues to be abuse of
the lien process within the workers’ compensation system by some
providers of medical treatment and other medical-legal services
who have engaged in fraud or other criminal conduct within the
workers’ compensation system, or who have engaged in medical
billing fraud, insurance fraud, or fraud against the federal
Medicare or Medi-Cal systems.

end insert begin insert

(c) Notwithstanding fraudulent and criminal conduct by some
providers of medical treatment or other medical-legal services,
those providers have continued to file and to collect on liens within
the workers’ compensation system while criminal charges alleging
fraud within the workers’ compensation system, or medical billing
or insurance fraud, or fraud within the federal Medicare or
Medi-Cal systems, are pending against those providers.

end insert begin insert

(d) The ability of providers of medical treatment or other
medical-legal services to continue to file and to collect on liens,
while criminal charges are pending against the provider, including
through the use of lien or collection assignments, has created
excessive and unnecessary administrative burdens for the workers’
compensation system, has resulted in pressure on employers and
insurers to settle liens that may in fact have arisen from prior or
ongoing criminal conduct, has threatened the health and safety of
workers who may be referred for or receive medical treatment or
other medical-legal services that not reasonable and necessary,
has allowed continued funding of fraudulent practices through
ongoing lien collections during the pendency of criminal
proceedings, and has undermined public confidence in the workers’
compensation system.

end insert begin insert

(e) Therefore, in order to ensure the efficient, just, and orderly
administration of the workers’ compensation system, and to
accomplish substantial justice in all cases, the Legislature declares
that it is necessary to enact legislation to provide that any lien
filed by, or for recovery of compensation for services rendered by,
any provider of medical treatment or other medical-legal services
shall be automatically stayed upon the filing of criminal charges
against that provider for an offense involving fraud against the
workers’ compensation system, medical billing fraud, insurance
fraud, or fraud against the federal Medicare or Medi-Cal
programs, and that the stay shall remain in effect until the
resolution of the criminal proceedings.

end insert

begin insert

begin insert SEC. 17. end insert   

end insert begin insert

(a) Section 3.5 of this bill incorporates amendments
to Section 4610 of the Labor Code proposed by both this bill and
Assembly Bill 2503. It shall only become operative if (1) both bills
are enacted and become effective on or before January 1, 2017,
(2) each bill amends Section 4610 of the Labor Code, and (3) this
bill is enacted after Assembly Bill 2503, in which case Section 3
of this bill shall not become operative.

end insert begin insert

(b) Section 4.5 of this bill incorporates, in Section 4610 of the
Labor Code as proposed to be added by this bill, amendments to
Section 4610 of the Labor Code that are proposed by Assembly
Bill 2503. It shall only become operative if (1) both bills are
enacted on or before January 1, 2017, (2) Assembly Bill 2503
amends Section 4610 of the Labor Code, and (3) this bill adds
Section 4610 to the Labor Code, in which case, regardless of the
order in which this bill and Assembly Bill 2503 are enacted, Section
4 of this bill shall not become operative.

end insert

begin delete SEC. 16. end delete

begin insert SEC. 18 end insert begin insert . end insert   

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.