BILL ANALYSIS �
SENATE JUDICIARY COMMITTEE
Senator Noreen Evans, Chair
2011-2012 Regular Session
AB 1687 (Fong)
As Amended June 18, 2012
Hearing Date: June 26, 2012
Fiscal: Yes
Urgency: No
TW
SUBJECT
Workers' Compensation: Utilization Review
DESCRIPTION
This bill would require notice to an employee of the options
available to object to a decision made pursuant to a workers'
compensation utilization review process that would modify,
delay, or deny medical treatment. This bill also would
authorize an award of attorney's fees to an injured employee,
who successfully challenges an employer's workers' compensation
utilization review determination.
BACKGROUND
Since 1911, California has developed a comprehensive system to
provide protection for injured workers through the workers'
compensation program. As part of the workers' compensation
program, existing law requires certain notices to be provided
to employees regarding worker's compensation benefits. In
addition to workers' compensation notices, existing law
provides injured employees with the ability to challenge the
award or denial of workers' compensation benefits. If an
employee successfully challenges the denial of workers'
compensation benefits, the employee may be awarded attorney's
fees and costs associated with enforcing the employee's right
to such benefits. The workers' compensation program also
requires employers to establish a utilization review process
to prospectively, retrospectively, or concurrently review and
approve, modify, delay, or deny, medical treatment services
provided to an injured employee.
(more)
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This bill, sponsored by the California Professional
Firefighters, would require a disclosure regarding the
utilization review process to be provided to employees and
authorize an award of attorney's fees to an injured employee who
successfully challenges an employer's workers' compensation
utilization review determination.
This bill was approved by the Senate Labor and Industrial
Relations Committee on June 13, 2012, by a vote of 6-0.
CHANGES TO EXISTING LAW
1. Existing law requires the Administrative Director of the
Division of Workers' Compensation, in consultation with the
Commission on Health and Safety and Workers' Compensation, to
prescribe reasonable rules and regulations for providing an
employee with the following notices:
a notice of the right to consult with an attorney;
notices dealing with the payment, nonpayment, or delay
in payment of temporary disability, permanent disability,
supplemental job displacement, and death benefits;
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; and
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. (Lab. Code Sec.
138.4.)
This bill would also require disclosure to an employee of
explanations of the options available to object to a
utilization review process decision to modify, delay, or deny
medical treatment.
2. Existing law requires an employer to provide medical
treatment services, as defined, to an injured employee. (Lab.
Code Sec. 4600.)
Existing law requires every employer to establish a
utilization review process, as specified. (Lab. Code Sec.
4610(b).) "Utilization review" means utilization review or
utilization management functions that prospectively,
retrospectively, or concurrently review and approve, modify,
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delay, or deny, based in whole or in part, on medical
necessity to cure and relieve, treatment recommendations by
physicians, as defined, prior to, retrospectively, or
concurrent with the provision of medical treatment services
provided to an injured employee. (Lab. Code Sec. 4610(a).)
Existing law provides that, where a party to an action
institutes proceedings to terminate a workers' compensation
award made by the Workers' Compensation Appeals Board (Board)
to an applicant for continuing medical treatment and is
unsuccessful in such proceedings, the Board may determine the
amount of attorney's fees reasonably incurred by the applicant
in resisting the proceeding to terminate the medical
treatment, and may assess such reasonable attorney's fees as a
cost upon the party instituting the proceedings to terminate
the award of the Board. (Lab. Code Sec. 4607.)
This bill would provide that, if an award made by the Board
specifies the provision of future medical treatment and a
dispute arises in the course of a utilization review in
connection with the enforcement of this award, and the
applicant employs an attorney for purposes of enforcing the
award and prevails, the Board may award attorney's fees
reasonably incurred by the applicant in connection with
enforcement of the award.
COMMENT
1. Stated need for the bill
The author writes:
Workers' compensation treatment services are ultimately
approved or denied by the employer's insurance pursuant to UR
�utilization review] guidelines. Current labor laws establish
that communications between an injured worker and his or her
employer's insurance company detailing a decision to approve a
request by a physician for a worker's medical treatment shall
specify the specific medical treatment service approved.
Should medical treatment be modified, delayed, or denied the
decision must state clear and concise reasons for the
employer's decision, a description of the criteria reviewed,
and the clinical reasons for the decisions regarding medical
necessity.
However, because of a loophole in current law, after being
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denied care, many injured California workers are not being
informed by the employer's insurance company as to what their
options are for objecting to such denial or modification of
medical treatment and therefore, are unaware of what, if any,
options are available to them.
Additionally, a worker who has received a workers compensation
award for future medical treatment may experience a denial,
modification or delay of some prescribed medical treatment
that occurs many years after the claim has been closed and
finds themselves without representation to assist in
navigating the process for appealing such denial.
The California Professional Firefighters, the sponsor of this
bill, writes:
Unfortunately, all too often injured California workers are
told by their employer's third party insurance administrator
that their treatment has been denied, without any clear
notification of what options may be available to them in light
of said denial. It is most appropriate for available options
to be prominently disclosed and displayed to those workers who
have received a denial notification so they can make the most
informed decision possible when considering their "next
steps."
Furthermore, current law does not allow for the Workers
Compensation Appeals Board (WCAB) to award attorney's fees to
the injured worker in the case where enforcement of a medical
award is required. This prevents injured workers who are
denied medical treatment under these awards from securing
legal counsel when navigating the workers compensation appeal
system as well as being properly represented before the WCAB.
AB 1687 ultimately protects and strengthens an injured
worker's right to receive medical treatment that is necessary
to cure and relieve a work-caused injury under a settled,
closed claim.
2. Disclosure of employee options regarding a utilization review
denial
Under existing law, the Administrative Director of the Division
of Workers' Compensation, in consultation with the Commission on
Health and Safety and Workers' Compensation, is required to
prescribe reasonable rules and regulations for providing an
employee with the following notices:
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a notice of the right to consult with an attorney;
notices dealing with the payment, nonpayment, or delay in
payment of temporary disability, permanent disability,
supplemental job displacement, and death benefits;
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; and
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. (Lab. Code Sec. 138.4.)
This bill would also require the employee to receive a notice
explaining the options available to object to a decision made
pursuant to the utilization review process to modify, delay, or
deny medical treatment. Voters Injured at Work, in support,
asserts that "the information requirement in the bill will
provide crucial relief to injured workers by ensuring that they
are fully informed of all their options for recourse if and when
there is a delay, denial, or modification of their medical
treatment because of utilization review. It is critical that
injured workers have all the necessary information in order to
make educated decisions."
The California Chiropractic Association, also in support, states
that it "supports measures that assist injured workers'
understanding of their options in a system that can be
complicated and confusing. Ensuring an injured worker is able
to address modifications, delays or denials of treatment in a
timely fashion aids in reducing the timeframe in which treatment
is accessed by the injured worker and promotes faster recovery
and earlier return to work." Arguably, adding an additional
notice, which would assist injured employees navigate through
the utilization review process, to the list of other workers'
compensation notices is a modest measure that may provide
substantial assistance to injured employees.
3. Award of attorney's fees
Existing law provides an award of attorney's fees to an employee
who successfully challenges a request to terminate workers'
compensation benefits awarded by the Worker's Compensation
Appeals Board. This bill would provide an award of attorney's
fees to an injured employee who successfully disputes an
employer's modification or denial of future medical treatment
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made in connection with the employer's utilization review
process.
The proposed award of attorney's fees in this bill seeks to
address issues raised in a recent California Supreme Court case
involving disputes over future treatment of two injured workers.
In Smith v. Workers' Compensation Appeals Board, et al. (2009)
46 Cal.4th 272, two injured employees appealed the denials of
medical treatment that had been awarded to them several years
prior to the subsequent denial of treatment. One of the
employees, Dwight Smith, had sustained injuries from cumulative
trauma to his right shoulder, neck, and psyche during his
employment. He was awarded partial permanent disability
indemnity and future medical treatment. Eight years later, the
employee was refused epidural injections to his back. The
employee sought his original attorney's help in getting his
treatment reinstated, and the attorney requested a utilization
review, which ultimately resulted in the approval, without a
formal hearing, by the employer of the injections. The employee
sought attorney's fees in connection with his enforcement of
specific medical treatment under his award of future medical
treatment.
The other employee, David Amar, was awarded future medical
treatment for injuries sustained to his foot, and the insurer
for his employer subsequently denied specified treatment. After
a utilization review and subsequent judicial determination that
the treatment was medically necessary to treat the injury, Amar
sought attorney's fees for the enforcement of his future medical
treatment award. The court held that, although existing law
authorizes an award of attorney fees when a party institutes
termination proceedings in order to challenge the continuing
necessity of a future treatment award, existing law does not
provide for an award of attorney's fees to an employee for
successfully challenging an employer's or insurer's denial of a
specific request for medical treatment. (Smith v. Workers'
Compensation Appeals Board, et al. (2009) 46 Cal.4th at p. 277.)
The author argues that this bill proposes "to provide a more
equal playing field for those injured workers who have already
been given a lifetime award of medical treatment who now must go
through �an] additional adjudication process to contest a UR
denial of treatment." Arguably, extending the authority to
award attorney's fees to an injured employee, who has validated
the necessity for medical treatment as part of the original
future medical treatment award, affirms the Legislature's intent
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when it enacted the existing attorney's fee award relating to an
employer's termination of medical treatment of the employee.
4. Opposition concerns
Opponents to this bill assert that it is unnecessary,
superfluous, and would increase system costs. The California
Chamber of Commerce argues that this bill "incentivizes
litigation and drives up frictional costs where medical denials
are appropriately made on the nationally recognized and
peer-reviewed American College of Occupational and Environmental
Medicine Guidelines." In response, the author notes that this
bill would only authorize an award of attorney's fees if the
employee hires an attorney for purposes of enforcing the final
permanent disability award and prevails. In other words, if the
employer's utilization review determination was found by the
Workers' Compensation Appeals Board to be incorrect, and
therefore not "appropriately" made, the employee could receive
attorney's fees for the enforcement of the original medical
treatment award.
The California Association of Joint Powers Authorities (CAJPA)
argues in opposition that "UR denials most often occur for
specific reasons. Most often, these are either because the
treatment is Medically Inappropriate or that there is
Insufficient Medical Information available to make a decision."
The author argues in response that, although CAJPA's main
concern with this bill is a potential increase in costs to
public entities, CAJPA argues that most utilization review
denials of treatment are based on legitimate reasons, so the
proportion of instances of non-legitimate denials should be
relatively low.
Support : California Labor Federation; California School
Employees Association; California Society of Industrial Medicine
and Surgery; California Society of Physical Medicine and
Rehabilitation; Glendale City Employees Association;
Organization of SMUD Employees; San Bernardino Public Employees
Association; San Luis Obispo County Employees Association; Santa
Rosa City Employees Association; Union of American Physicians
and Dentists/AFSCME-Local 206; Voters Injured at Work
Opposition : Acclamation Insurance Management Services; Allied
Managed Care; ALPHA Fund; American Insurance Association;
California Association of Joint Powers Authorities; California
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Chamber of Commerce; California Coalition on Workers
Compensation; California Special Districts Association;
California State Association of Counties; Kern County
Superintendent of Schools; League of California Cities; Los
Angeles County Board of Supervisors; Regional Council of Rural
Counties
HISTORY
Source : California Professional Firefighters
Related Pending Legislation : None Known
Prior Legislation : AB 335 (Solorio, Ch. 544, Stats. 2011)
provided additional workers' compensation benefit notice
requirements.
Prior Vote :
Senate Committee on Labor and Industrial Relations (Ayes 6, Noes
0)
Assembly Floor (Ayes 47, Noes 24)
Assembly Committee on Appropriations (Ayes 12, Noes 5)
Assembly Committee on Insurance (Ayes 12, Noes 3)
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