BILL NUMBER: SB 1160 ENROLLED
BILL TEXT
PASSED THE SENATE AUGUST 31, 2016
PASSED THE ASSEMBLY AUGUST 30, 2016
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
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, 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, 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. 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.
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. The bill would state
findings and declarations of the Legislature in connection with these
provisions.
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
schedule 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 receive 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.
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.
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.
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.
SEC. 3.5. 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) 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.
(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) 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. 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) 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.
(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. A charge shall not 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 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.
(2) 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.
(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. 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.
(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 a
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) Each 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.
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 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) 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 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. 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
working days from the date of receipt of the request for
authorization for medical treatment. 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, 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.
(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.
SEC. 4.5. 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 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.
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. (a) 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 4621, 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.
(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.
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. 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. 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 and independent medical review under Sections 4603.6 and
4610.5, respectively, 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 employee as provided by Section 4600.
(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.
(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.
(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.
(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 shall, on or before July
1, 2018, 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 Sections 4 and
4.5 of this act, which add Section 4610 to the Labor Code, impose 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 Section 4610 of the Labor Code.
SEC. 15. The amendment of paragraphs (1) and (2) of 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.
SEC. 16. The Legislature finds and declares the following:
(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.
(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.
(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.
(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.
(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.
SEC. 17. (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.
(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.
SEC. 18. 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.