BILL ANALYSIS �
AB 584
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ASSEMBLY THIRD READING
AB 584 (Fong)
As Amended April 6, 2011
Majority vote
INSURANCE 8-4
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|Ayes:|Solorio, Charles | | |
| |Calderon, Carter, Feuer, | | |
| |Hayashi, Skinner, Torres, | | |
| |Wieckowski | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Hagman, Grove, Miller, | | |
| |Olsen | | |
| | | | |
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SUMMARY : Requires that a physician who is conducting
utilization review be licensed in California. Specifically,
this bill:
1)Requires that a "physician," as defined in the workers'
compensation law, who is conducting utilization review of the
proposed treatment for an injured worker, be licensed in
California.
2)Makes a technical change in the definition of "psychologist"
for purposes of the workers' compensation law.
3)Conforms the law that governs disability determinations by the
Employment Development Department (EDD) for purposes of the
State Disability Insurance Program (SDI) to the changes being
made to the workers' compensation law.
EXISTING LAW :
1)Provides for a comprehensive system of workers' compensation
benefits for workers injured on the job, including medical
benefits.
2)Requires medical treatment to be provided in most cases
consistent with the American College of Occupational and
Environmental Medicine (ACOEM) Guidelines, subject to certain
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exceptions.
3)Authorizes employers or insurers to conduct "utilization
review" of proposed medical treatment in order to determine
the appropriateness of that treatment and its compliance with
the applicable guidelines.
4)Specifies that "�n]o person other than a licensed physician
who is competent to evaluate the specific clinical issues
involved . . . may modify, delay or deny requests" for medical
treatment. By regulation, this has been interpreted to mean a
physician licensed in any state.
FISCAL EFFECT : Undetermined
COMMENTS :
Purpose : Proponents of the bill believe that out-of-state
utilization review physicians are making inappropriate decisions
at least in part because there is no regulatory structure to
hold them accountable. The bill is intended to ensure that
there is a regulatory oversight body - the California Medical
Board - that can discipline a utilization physician in the event
the physician violates practice standards.
Support : Supporters offer several arguments in favor of the
bill. First, some argue that requiring a California license
will make it easier for the reviewing doctor and treating doctor
to communicate, thereby enhancing the chances of a re-evaluation
of any decision to deny or modify treatment requests. Many
treating physicians have complained about the difficulty of
communicating with reviewers three time zones away, and
supporters believe this bill will improve the situation
(although it should be noted that an East Coast-based physician
can hold a California license). Supporters also believe that
having reviewing physicians regulated by the California Medical
Board will provide appropriate oversight and quality control
that is not available for non-California licensed physicians.
Supporters also point out that many utilization review companies
already employ only California-licensed physicians, and assert
that there is no shortage of these physicians.
Medical Board authority and priorities : According to the
Medical Board (Board), a decision to delay, modify or deny a
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medical treatment constitutes the practice of medicine, and the
Board would have jurisdiction over this act. However, the
Business and Professions Code (Section 2220.05) establishes an
order of priority for the use of the Board's resources, and the
five listed priorities do not include any language that would
refer to violations of professional standards in the conduct of
utilization review. In addition, the Board's enforcement
capacity, according to public interest groups that monitor the
Board, is less than ideal. The Board suffers an inability to
retain its investigators on a long-term basis, and thus it
struggles to handle even priority cases. As a result, the
bill's premise that an in-state license ensures regulatory
oversight may face practical impediments.
Do current regulations violate California statute ? Because the
California Medical Board deems the performance of utilization
review to be the practice of medicine, and because the treatment
at issue is to be provided (in most cases) to a California
resident, many people have argued that by operation of the
Medical Practice Act only a California-licensed physician can
lawfully perform the utilization review function. The
Administrative Director (AD) of the Division of Workers'
Compensation declined to adopt this interpretation of the law
when she adopted the regulations to implement the utilization
review statute. Because there is logic to this analysis, it
must be inferred that the AD concluded that the new Labor Code
provision constituted a statutory exception to the general
Medical Practice Act rule. That issue has never been litigated,
but many supporters believe there was no intent in the 2004
workers' compensation reforms to modify the general rules
governing the practice of medicine. In this light, they argue
that this bill is clarifying existing statutory law that has
been misconstrued by a regulation.
Opposition : Opponents point out that utilization review was one
of the most important provisions for employers in the 2004
workers' compensation reform. They believe that this bill
undermines their ability to effectively conduct utilization
review, by causing delays and increasing costs. They argue that
the medical treatment issues are not unique to California in law
or practice, as the ACOEM Guidelines have been used in many
states for far longer than they have been used in California.
Thus, there is no reason to think that non-California physicians
are less able to review California treatment, and some reason to
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expect out of state physicians may be more experienced with the
ACOEM Guidelines.
Opponents further argue that the requirement that the physician
be competent to evaluate the specific clinical issues involved
in the case is sufficient. They argue that there is no specific
knowledge that is unique to California-licensed physicians, and
to limit utilization reviews to these physicians would only have
the effect of limiting the number of available reviewing
physicians, which would drive up the cost.
SDI disability determinations . The law governing disability
determinations by EDD for the SDI program requires the applicant
to establish disability with evidence from a medical
practitioner. The scope of who may perform this function is
defined by a cross reference to the workers' compensation
provision being amended by this bill. Because the "must be
licensed in California" requirement does not work for EDD's
purposes, that law is being amended to retain the authority for
out of state "physicians" to continue to perform that function.
Prior legislation . AB 2969 (Lieber) of 2008 and AB 933 (Fong)
of 2010 proposed the same rule being proposed by this bill.
Each bill was passed by the Legislature, but vetoed by Governor
Schwarzenegger. The veto message for AB 2969 (Lieber) follows:
"I am returning Assembly Bill 2969 without my signature.
This bill would require a physician conducting utilization
review in the workers' compensation system to be licensed
in California. Such a requirement would be inconsistent
with how utilization review is conducted in other areas of
medicine in and not in line with best practices nationwide.
The proponents of this measure have not demonstrated a
need for this disparity in treatment."
Analysis Prepared by : Mark Rakich / INS. / (916) 319-2086
FN: 0000286
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