P R E S E N T E D B Y : T H O M A S M. R O B I N S O N, E S Q.

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P R E S E N T E D B Y : T H O M A S M . R O B I N S O N , E S Q . J O H N J . W A T E R S , J R . , E S Q . W A T E R S & R O B I N S O N , L L P S C O T T Y L . B E N T O N , A R E A V I C E R E S I D E N T , C O R V E L C O R P O R A T I O N

WORKERS’ COMP

SB 863

(2)

MEET THE PRESENTERS

THOMAS M. ROBINSON

• Partner in defense firm, Waters & Robinson, LLP

• Certified Specialist in Workers’ Comp with the California State Bar

• Former Adjuster

JOHN J. WATERS, JR.

• Partner in defense firm, Waters & Robinson, LLP • Former applicant’s attorney

• Lecturer, UC Irvine, Workers’ Compensation

SCOTTY L. BENTON

• Area Vice President CorVel Corporation

• 24 Years California Workers’ Compensation Experience • Former Adjuster, Fraud Investigator, Supervisor, Manager

(3)

INTRODUCTION

Senate Bill 863 was passed on Aug. 31, 2012 and was signed into law by Governor Brown on Sept. 18, 2012.

The bill makes wide-ranging changes to California’s workers’ compensation system, including increased benefits to injured workers and cost-saving efficiencies. The bill took effect on Jan. 1, 2013, although not all of its provisions will be effective immediately.

(4)

INTRODUCTION

SB863

As long as legislation is signed by the governor 90 days before January 1 (GC 9600), then new laws take effect at the beginning of the following calendar year. This is what occurred with SB 863 which took effect on January 1, 2013.

(5)

INTRODUCTION

SB863

While several provisions do not take effect unless it is a claim filed on January 1, 2013 or thereafter, procedural changes in the law take effect for all cases regardless of the date of injury.

The only exception to this would be when there is a final order for the issue in question.

(6)

Under

SB 863

, there are FOUR

classifications for the changes.

(7)

2. Laws taking effect January 1, 2013 but requiring administrative action first

1. Laws taking effect January 1, 2013 for all dates of injury

3. Laws taking effect for dates of injury on or after January 1, 2013

4. Laws taking effect on January 1, 2014 for all dates of injury

(8)

Permanent Disability

Payments. LC 4650(b)(2).

Payments of permanent

disability (PD) not required without an award if applicant has returned to work under certain conditions.

LAWS TAKING EFFECT JANUARY

1,2013

FOR ALL DATES OF INJURY

(9)

15% PD “Bump-up” and 15% PD “Bump-down”

applies for 2005 PDRS cases within 60 days of MMI/P&S by first treating or evaluating physician and no offer of

regular, modified or alternative work by employer.

1,2013

(10)

Supplemental Job Displacement Benefits – LC § 4658.5

DOI prior to January 1, 2013:

Provided if employer does not offer regular, modified or alternative work within 60 days of any treating or evaluating physician who indicates IW is a QIW.

1,2013

(11)

Supplemental Job Displacement Benefits – LC § 4658.5 o PD less than 15% = $4.000.00 o PD 15%-25% = $6,000.00 o PD 26% - 49% = $8,000.00 o PD greater than 50% = $10,000.00

o May change if AME or PQME raises or lowers

PD rating

1,2013

(12)

Supplemental Job Displacement Benefits – LC § 4658.5

If IW receives voucher on or after January 1, 2013

regardless of the date of injury:

o Voucher expires 2 years from its issuance date or 5 years from the DOI, whichever is later

o Voucher CANNOT be settled for a lump sum payment of cash

1,2013

(13)

1,2013

(14)

1,2013

BUT REQUIRING ADMINISTRATIVE ACTION FIRST

Permanent Disability. LC 4660.1. 2013

schedule to be developed; age and occupation modifiers from the 2005 schedule will be used until then.

(15)

1,2013

BUT REQUIRING ADMINISTRATIVE ACTION FIRST

Return-to-Work Program. LC 139.48. Agency established and managed by administrative director to distribute $120 million dollars per year to injured workers lacking fair permanent disability compensation.

(16)

LAWS TAKING EFFECT FOR DATES OF INJURY ON OR AFTER JANUARY 1, 2013

Death Benefits. LC 4701(a)(3). Burial expenses raised to $10,000.

(17)

LAWS TAKING EFFECT FOR DATES OF INJURY ON OR AFTER JANUARY 1, 2013 Permanent Disability. LC 4453(b)(8) and LC 4453(b)(9). There will be an increase in the weekly benefit, both minimum and

(18)

AMA Guides 5th Edition still applies for DOI on or after January 1, 2013

SB 863 eliminates DFEC adjustment factors Ranks 1 through 8

A standard 1.4 “adjustment factor” will now be used for each WPI rating for each part of body injured

(19)

The rating string is now calculated as follows:

xx.xx.xx.xx – WPI – [WPI x 1.4] – OCC – AGE = __% PD

(20)

The Administrative Director may adopt new modifiers for occupational variants and age adjustments that promote uniformity, objectivity and consistency but new modifiers are not mandatory. This remains to be seen whether and when this occurs

(21)

In the meantime, when calculating ratings we are to use occupational variants and age adjustments in the 2005 PDRS.

1997, 2005 and 2013 PDRS can be rebutted.

For DOI on or after January 1, 2013 the number of weeks for payment are calculated by using the 2006 “money chart” however, the maximum rates for payment have increased.

(22)

For DOI on or after January 1, 2013 the number of weeks for payment are calculated

by using the 2006 “money chart” however, the

maximum rates for payment have increased.

(23)

Permanent Disability

Minimum Rates Increased

Prior to 1/1/2013: $130 per week On or after 1/1/2013: $160 per week

(24)

Previously, there were three tiers of PD payments, 1-54%, 55-69% and 70-99%. Currently, there are three:

For dates of injury on or after January 1, 2013:

0 – 54% PD = Maximum PD is $230.00 per week

55%-69% PD = Maximum PD is $270.00 per week

70% - 99% PD = Maximum PD is $290.00 per week

LC 4453(b)(8)

(25)

Permanent Disability Schedule

2012 DOI 60% PD = 351.25 weeks at $230 = $80,787.50 2013 DOI 60% PD = 351.25 weeks at $270 = $94,837.50 2014 DOI 60% PD = 351.25 weeks at $290 = $101,962.50

(26)

For Injuries On or After 1/1/2014, there will be one tier of PD payments regardless of the percent of disability.

(27)

When PD is paid if the IW is working on the date of MMI

o Applies to all dates of injury

o If earnings at MMI with same employer is 85% wages on DOI, or

(28)

o If earnings at MMI with different employer is 100% or greater than wages on DOI then no permanent disability advances are paid

o PD is paid only when there is an F&A or Stip Award

o PD is paid retroactively to end of TTD payment or MMI date, whichever is earlier

(29)

Return to Work Fund – LC § 139.48

o Applies to DOI on or after January 1, 2013.

o May apply to any DOI but DFEC accounts for this already for cases falling under 2005 PDRS.

(30)

Permanent Disability. LC 4658(e). Fifteen percent bump removed for all DOI on or after January 1, 2013.

(31)

Permanent Disability. LC 4660.1(c)(1). Permanent

disability add-ons for sleep dysfunction, sexual dysfunction and psychiatric disorders disallowed for most cases arising out of a compensable physical injury.

(32)

Nothing in the section limits the ability of an injured employee to obtain treatment for sleep dysfunction, sexual dysfunction or psychiatric disorder, if any, that are a consequence of an industrial injury.

(33)

The exceptions are if the psychiatric injury resulted from either being the victim of a violent act or direct exposure to a significant violent act within the meaning of LC § 3208.3

(34)

Voucher. LC 4658.7(b). New standards for what precipitates employer’s time limit to offer work to

applicant to avoid liability for voucher.

Voucher. LC 4658.7(c). Employer has 20 days from new 60-day period to provide offer of voucher.

Voucher. LC 4658.7(d). $6,000.00 SJDB voucher

(35)

Voucher. LC 4658.7(e). Expanded list of services for which a voucher may be used.

Payment for education-related retraining or skill enhancement, or both.

Payment for occupational licensing or professional certification fees, related exam fees, and exam preparation course fees.

(36)

Payment for the services of licensed placement agencies, vocational or RTW counseling, and resume preparation, all up to a combined limit of 10 percent of the amount of the voucher.

Purchase of tools required by a training or educational program in which the employee is enrolled.

Purchase of computer equipment up to one thousand dollars ($1,000.00).

(37)

Five hundred dollar ($500.00) “no questions asked” cash advance.

The voucher shall expire two years after the date the voucher is furnished to the employee, or five years after the date of injury, whichever is later.

Voucher. LC 4658.7(g). Voucher may not be settled or commuted.

(38)

MEDICAL TREATMENT

LC 4604.5(c) continues to allow a maximum of 24 chiropractic visits, 24 occupational therapy visits, and 24 PT visits per industrial injury.

• Can be exceeded where the employer authorizes additional visits in writing (LC 4605.5(c)(2)).

(39)

Now LC 4604.5(c)(2) clarifies that

payment or authorization beyond 24

visits will not be deemed a waiver of

future authorization.

(40)

LIMITS ON CHIRO AS PTP

LC 4600(c) A chiro shall not be the PTP after the injured worker has

received the 24 maximum chiro visits (LC 4604.5(c)). This is meant to discourage

chiros from being the PTP in the first place!

(41)

LIMITATIONS ON HOME HEALTH CARE

LC 4600(h) - Home health care will be provided as medical treatment only if reasonable and necessary to cure or relieve the injured employee from the effects of the industrial injury. Employer will not be liable for home health care services that were provided more than 14 days before the employer received the physician's prescription.

This provision will probably apply to all claims for home health care if there is no final order on the issue before 1/1/2013.

(42)

LC 4603.2(b)(1) is amended to require home health care providers be subject to the same reporting requirements as other medical providers if they want to be paid.

The home health care provider must also submit an itemization for the services rendered and the charge for each service performed along with the prescription for such services or referral for home care services from the PTP.

(43)

LC 5307.8 requires the administrative

director to adopt a schedule for payment of

home health care services not covered by the

official medical fee schedule.

(44)

LC 5307.8 establishes that no fees will be paid for any services, including those provided by a member of the employee's household, if they had been performed regularly in the same manner to the same degree before the date of injury.

Cooking for a spouse-performed regularly and in the same manner, to the same degree. This will be very difficult to prove.

(45)

MPN

SB 863 strengthens the employer's

ability to enforce treatment within their

(46)

SB 863 specifically provides that

employers are not liable for

payment for treatment

impermissibly obtained

(47)

Also employers are not liable

for any consequences of

treatment obtained outside of

the MPN.

(48)

EXAMPLE:

Injured worker with back injury injures neck

while treating with a chiro outside the MPN.

Defendant will not be responsible for the

consequential injury to the neck.

(49)

PREDESIGNATION

LC 4600(d) An injured worker can still treat outside the MPN if he/she properly predesignates a personal physician in writing prior to the industrial injury.

(50)

LC 4600(d) is amended to allow treatment with the injured worker's personal physician only if the employee has health care coverage for non-industrial injuries or illnesses in a plan, policy, or fund, as described in LC 4616.7.

Previously, predesignation was allowed only if the employer provided the health care insurance.

This appears to now allow for predesignation where the non-industrial medical insurance is with a spouse's insurance.

(51)

CHANGES IN THE MPN REQUIREMENTS

AND APPROVAL PROCESS

SB 863 amended some of the requirements to establish, or modify an MPN, and approval of an MPN.

Per LC 4616(h) regulations to implement these changes are to be enacted by November 1, 2014. Most of the regs are "emergency" regs at this point and may change. Many of the regs are yet to be adopted.

(52)

The requirement that an MPN physician practice must consist of treatment of at least 25% non-occupational cases has been eliminated (LC 4616(a)(1)).

Not sure if that

requirement was ever actually enforced?

(53)

LC 4616(a)(3) requires that a physician will be included in the MPN only if at the time of agreeing or renewing an agreement to be an MPN, the physician or an authorized employee of the physician provides written acknowledgement that the physician elects to be included in the MPN.

This was done to address situations where MPN physician refused to provide treatment, or claim not to be a member of the MPN.

(54)

LC 4616(a)(4) provides that

MPN ASSISTANCE

every MPN must post on its website a roster of all physicians within the MPN. This code section also requires that the list of participating physicians be updated quarterly.

(55)

Beginning 1/1/2014 every MPN must provide the Administrative Director the website address of the MPN and its list of treating physicians. The AD will post the web address of every approved MPN on the DIR's website (i.e., a website of websites). LC 4616(a)(4)

(56)

Also beginning 1/1/2014, every MPN must

provide one or more individuals within the

United States to serve as a medical access

assistant to help IW's find an available MPN

physician, and subsequent MPN physicians

if necessary or requested (LC 4616(a)(5)).

(57)

This new medical access assistant must

be available from 7:00 a.m. to 8:00

p.m. Monday through Saturday with a

toll-free telephone number.

(58)

MPN NOTIFICATION REQUIREMENTS

The employers MPN notice requirements have

been amended (LC 4616.3(b)).

(59)

"The employer shall notify the employee of the existence of the medical provider network established pursuant to this article, the employee's rights to change treating physicians within the network after the first visit, and the method by which the list of participating providers may be accessed by the employee".

(60)

More importantly, the employer's failure to

provide notice as provided by this subdivision,

or failure to post the notice as required by LC

3550, shall not be a basis for the employee to

treat outside of the employer's MPN, unless it is

shown that failure to provide notice resulted in

a denial of medical care.

(61)

QUESTIONS TO CONSIDER…

Does the SB 863 overturn the

Knight case?

Is failure to provide notice a denial

of medical care?

(62)

Before SB 863, the

leading case in this area

was the WCAB en banc

decision in Knight v.

(63)

In Knight, the WCAB held that an

employer's failure to provide the required

notices (notice at hire, again at time of

injury, and posting in the workplace) of

rights under the MPN is equivalent to a

refusal to provide reasonable medical

treatment and renders the employer liable

for self-procured treatment outside of the

MPN.

(64)

RECOMMENDATION:

Better to have notices at the hearing than to fight over the issue of whether failure to provide notice equates to a denial of treatment/care.

(65)

EXPEDITED HEARING

LC 5502(b) now allows for an expedited

hearing regarding MPN issues.

(66)

An expedited hearing is not an MSC, it

is not a status conference. You do not

list your exhibits and witnesses for trial

and return for trial at a later date.

(67)

If there is an

adjudication of the issue of entitlement to treat outside of the MPN in favor of the employee, the employee shall be

entitled to continued treatment with “that

physician” at the employer's expense.

(68)

This is a significant change. Previously an

employer could transfer an employee into

the MPN by issuing the appropriate notices.

Now it appears that if an employee is found

to be able to treat outside the MPN, he can

forever treat outside the MPN (LC 4603.2).

(69)

LC 4603.2(a)(2) does, however,

appear to limit the employee to

treatment with "that physician".

(70)

IMR

(INDEPENDENT MEDICAL REVIEW)

IMR is only available to the

injured worker.

(71)

"If the employee objects to a decision made pursuant to Utilization Review to modify, delay, or deny a request for authorization of a medical treatment recommendation made by a treating physician, the objection shall be resolved only in accordance with the independent medial review process established in LC 4610.5".

(72)

"If the employee objects to the diagnosis or recommendation for medical treatment by a physician within the employer's medical provider

network established pursuant to Section 4616, the

objection shall be resolved only in accordance with the independent medial review process established in Section 4616.3 and 4616.4.

(73)

Thus, it appears that there are two IMR

processes, one for UR IMR and the other

for MPN IMR.

(74)

(75)

MPN IMR

For medical determinations made by

physicians within the MPN regarding

diagnosis, medical treatment

recommendations.

(76)

Disputes that arise from the UR review and

decision to modify, delay or deny medical

treatment will no longer be subject to the

medical-legal process of LC 4062, LC 4062.1

and LC 4062.2 (i.e., PQME/AME).

(77)

IMR created by SB 863 is a new

per Government Code 19130(b)(2).

(78)

Essentially the IMR review process is where

the treatment recommendation dispute

submitted to a third party pre-selected by

the State of California.

(79)

The stated purpose of IMR is to reduce the

cost and delays associated with medical

treatment disputes.

(80)

APPLICATION OF IMR

IMR applies to:

1) All injuries occurring on or after

1/1/2013.

2) All

utilization

review

decision

communicated

to

the

requesting

physician, on or after July 1, 2013,

regardless of the date of injury.

(81)

"If a utilization review decision denies, modifies, or delays a medical treatment recommendation, the employee may request an independent medical review as provided by this section”.

(82)

Notice LC 4610.5(f):

Describes that when an employer notifies an employee that UR has modified, delayed, or denied a medical treatment recommendation, the employer must also provide the employee with the one-page form prescribed by the Administrative Director, and an envelope which the employee may return to the Administrative Director to initiate the IMR process.

(83)

TIME LIMITS PER LC 4610.5(h) (1)

The employee must request IMR within 30 days of service of the UR decision.

Does the five-day mailbox rule apply?

(84)

The 30-day time limit does not start until the employer provides the requisite notice. LC 4610.5 (h)(3)

(85)

The statute does not specify what happens if

an employee does not timely request IMR.

Presumably the UR decision stands and is

effective for 12 months per LC 4610(g)(6).

(86)

EMERGENCY MEDICAL TREATMENT

There are different time limits and provisions for situations involving emergency medical treatment, including but not limited to potential loss of life or limb.

(87)

USE THE “ROBINSON RULE”

USE COMMON SENSE

(88)

THE IMR PROCESS

First step is for the employee to submit the one-page IMR request form to the AD.

The AD is required to expeditiously review all requests per LC 4610.5(k) and notify the employee and the employer in writing as to whether the request has been approved.

Per LC 4610(g)(6) A UR decision to delay, modify, or deny a treatment recommendation shall remain in effect for 12 months and an employer is not required to take any action if the same doctor recommends the same treatment previously denied, delayed or modified by utilization review.

(89)

An employer is required to undertake UR of the same treatment recommendation only if the same doctor's recommendation is now supported by a documented “change of facts”.

(90)

What constitutes a "change of facts” is not

specified.

New or different objective findings would

be more likely to constitute a "change of

facts" than a change in the applicant's

subjective complaints.

(91)

UTILIZATION REVIEW IN A DENIED CLAIM OR DISPUTED BODY PART

LC 4610(g)(7) was added to address whether

UR is required in a denied claim or whether

request for treatment is received for disputed

parts of body.

(92)

"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.”

(93)

What if the claim later becomes accepted or the body part disputed becomes accepted?

LC 4610(g)(8) adds, "If utilization review is deferred pursuant to paragraph (7), and it is later determined that the employer is liable for treatment of the condition for which treatment is recommended,

1) the time for the employer to conduct retrospective UR in accordance with paragraph (1) shall begin on the date the determination of the employer's liability became final, and 2) 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".

(94)

PENALTIES FOR DELAYING THE

INDEPENDENT MEDICAL REVIEW PROCESS

LC 4610.5(i) specifically prohibits an employer from engaging in any conduct that has the effect of delaying the independent review process. It establishes penalties that may be imposed on an employer who violates the provisions of LC 4610.

(95)

If the employer violates LC 4610.5 it will

be subject to an administrative penalty

in an amount to be determined by

regulations to be adopted by the AD, but

not to exceed $5,000 for each day the

proper notification to the employee is

delayed!

(96)

The administrative penalties are to be paid to

the Workers' Compensation Administration

revolving fund, not to the injured worker.

Is an applicant’s attorney going to be ultra

aggressive in pursuing a penalty on behalf of the

revolving fund?

(97)

If IMR approves a disputed treatment and the employer fails to timely pay for services, or authorized services following an IMR determination, it faces penalties.

Per LC 4610.6(k) in addition to any other fines, penalties and other remedies available to the Administrative Director, the employer will be subject to an administrative penalty in an amount determined by regulations to be adopted by the Administrative Director. This penalty may not exceed $5,000 for each day the decision is not implemented!

(98)

Again, administrative penalties are paid to the

Workers' Compensation Administration

(99)

IMR DOCUMENTATION/ COMMUNICATION PROCESS

After the Administrative Director has given notice to the parties that an independent medical review organization has been assigned, LC 4610.5(l) requires the employer to provide documents to the review organization within 10 days of notice of the assignment.

(100)

1.) A copy of all the employee’s medical records in the employer's possession or under the control of the employer relevant to:

A. The employee's current medical condition. B. The medical treatment being provided by

the employer.

C. The disputed medical treatment requested by the employee.

The employers are required to provide:

(101)

2.) A copy of all information provided to the employee by the employer concerning employer’s decisions about the disputed treatment.

(102)

3.) A copy of any material the employee or the employee's provider submitted to the employer in support of his or her request for the disputed treatment and a copy of any other relevant documents or information used by the employer or its UR organization in determining whether the disputed treatment should have been provided, and any statements by the employer or its UR organization explaining the reason for the decision to delay, modify, or deny the recommended treatment on the basis of medical necessity.

(103)

1.) The treating physician's recommendation that the disputed medical treatment is necessary for the employee's medical condition.

2.) The medical information or justification that a disputed urgent care or emergency treatment was necessary for the employee's medical condition, or

3.) Reasonable information supporting the employee's position that the disputed treatment is or was necessary for the employee's medical condition, including all information provided to him or her by the employer or by the treating physician, still in his or her possession, concerning the employer's or physician's decision regarding the disputed treatment, as well as any additional material the employee believes is relevant.

The employee is also allowed to provide information or documents to the IMR review organization, either directly or through his or her physician regarding:

(104)

This is extremely

broad language

allowing the

injured worker to

provide almost

anything the

employee feels is

relevant.

(105)

Next, LC 4610.5(j) allows the employee to designate a parent, guardian, conservator, relative, or "other designee" as an agent to act on his or her behalf.

Most likely this will be an applicant's attorney.

(106)

The statute provides, however, that the

designation must come after the utilization

review decision, as the language specifies that a

designation before the decision will not be

valid.

(107)

Also, LC 4610.5(j) allows the requesting

physician to join with or otherwise assist the

employee in seeking independent medical

review. The requesting physician may advocate

on the employee's behalf.

(108)

Altogether, it appears that the statutory

scheme was to get anything the applicant

wishes, either documentation, opinion or

advocacy to the IMR reviewer.

(109)

From the employer's perspective, the key is to provide all of the relevant medical records concerning the dispute treatment to the IMR reviewer within 10 days of notice of the assignment.

(110)

IMR REVIEW

The IMR organization selected is

required to utilize reviewers for a

case who do not have a conflict of

interest with the parties or physician

involved in the medical dispute.

(111)

The independent medical reviewer or

reviewers selected must examine all the

submitted medical records and any other

information submitted to the IMR.

(112)

If the IMR reviewer

requests additional

information from

any party, a copy of

the request and the

response must be

provided to all

(113)

Following review of the records, the reviewer

must determine whether the disputed health

care service is necessary based on specific

medical needs of the employee and the

standards of medical necessity as defined in LC

4610.5(c).

(114)

A.) The guidance adopted by the Administrative Director pursuant to LC 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 likely to provide a benefit to the patient for conditions for which other treatments are not clinically effective

This statute allows the IMR reviewer to rely on the following except that reliance on a lower rank standard is allowed only if the higher ranked standard is inapplicable to the employee's medical condition:

(115)

The IMR organization selected must complete

its review within 30 days of receipt of the

request for review and supporting documents,

or within less time if prescribed by the

Administrative Director.

(116)

The IMR decision is to use "lay persons terms to the maximum extent practicable" and the decision must state whether the disputed medical treatment is medically necessary and cite the relevant documents to support its decision.

(117)

If more than one professional reviews the case, the recommendation of the majority will prevail. If the medical reviewers are evenly split on whether the treatment should be provided, the statute provides that this decision will favor providing the services (tie goes to the injured worker).

(118)

The independent medical review organization must provide the Administrative Director, the parties, and the medical provider with the analysis and determination of each of the medical

professionals who reviewed the case and a description of their qualifications; however, their names are to be kept confidential.

(119)

APPEAL OF THE IMR DETERMINATION

An IMR determinations is deemed to be the

determination of the Administrative Director,

and is binding on all parties (LC 4610.6(g)).

(120)

LC 4610.6(g) provides that the parties may

appeal a determination only by filing a

verified appeal for hearing with the Appeals

Board within 30 days of the date of mailing

the determination.

(121)

1.) The Administrative Director acted without or in excess of the Administrative Director’s powers.

2.) The determination was procured by fraud (pretty much impossible to prove).

3.) Independent medical reviewer was subject to a material conflict of interest that is in violation of LC 139.5 (impossible to prove since the identity of the IMR reviewer is confidential).

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 and/or

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

The determination of the IMR/Administrative Director is presumed to be correct and must be set aside only upon proof by clear and convincing evidence that:

(122)

EMPLOYER’S ACTION IN FOLLOWING A

DETERMINATION IN FAVOR OF TREATMENT

Upon receiving the determination that a disputed

health care service is medically necessary, the employer must implement the decision promptly unless it has disputed liability for any reason besides medical necessity.

(123)

In the case of reimbursement for services already rendered, the employer must reimburse the provider or employee, whichever applies, within 20 days, subject to resolution of any remaining issue of amount of payment.

(124)

In the case of services not yet rendered, the employer must authorize services within 5 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.

The employer is also required to inform the employee and provider of the authorization.

(125)

COST OF THE IMR REVIEW PROCESS

LC 4610.6(1) requires that the costs for administration of the IMR review process are to be borne by the employers through a fee system established by the Administrative Director.

(126)

NO PENALTY FOR DELAY OF TREATMENT BY UTILIZATION OF THE IMR PROCESS

An employee is not entitled to an increase in compensation under LC 5814 for unreasonable delay in the provision of medical treatment for the time necessary to complete the UR process.

(127)

LIENS

SB 863 made a number of changes to deal with liens within the Workers' Compensation system.

 A lien filing fee of $150 was implemented for liens

filed on or after 1/1/2013.

 A lien activation fee is required for liens filed before

(128)

FILING REQUIREMENTS

A lien claimant must still file a lien with the Appeals Board in the form approved by the board.

The lien must also be accompanied by a full statement or itemization supporting the lien and justifying the right to reimbursement and proof of service.

Liens for medical treatment must be filed electronically or with an optical recognition form.

(129)

There is an exception for liens for

very low expenses, child support

and living expenses and "claims for

cost".

(130)

It appears that

interpreters fees are now

going to be considered "claims for cost"

and will be exempt from the $150 filing

fee.

(131)

It does not seem fair to make an interpreter

file a $150 filing fee to recover a $165 fee.

(132)

A lien claimant is required to pay $150 filing fee to the DWC before filing a lien.

The lien claimant must include proof that the filing fee has been paid.

The fee will be collected through an electronic payment system that accepts major credit cards and other forms of electronic payment selected by the AD.

(133)

The AD is authorized to contract with a

service

provider

for

providing

and

processing electronic payments.

(134)

Statute requires that the claim of two or

more providers may not be merged into a

single lien. Each provider is required to file

a separate lien, and pay a separate filing fee.

(135)

Lien claims filed before 1/1/2013 must

file the lien activation fee of $100 to the

DWC on or before 1/1/2014.

(136)

This creates an incentive for existing

lien claimants with liens filed prior to

1/1/2013 to resolve their liens within

the next year.

(137)

Also anticipate that liens with very small

balances, not much more than $100, will

not be pursued.

(138)

PROVIDERS EXPLICITLY EXEMPT FROM THE FILING FEE

1.) A health care service plan licensed per Health and Safety Code 1349.

2.) A group disability insurer under a policy issued in California per Insurance Code 10270.5.

3.) A self-insured employee welfare benefit plan issued in California as defined by Insurance Code 10121.

4.) A Taft-Hartley Health and Welfare Fund.

5.) A publicly funded program providing medical benefits on a non-industrial basis.

(139)

LC 4903.06(a)(5) provides that a lien

filed before 1/1/2013 for which a filing

fee or activation fee has not been paid by

1/1/2014 will be dismissed by operation

of law.

(140)

REIMBURSEMENT OF THE LIEN FILING FEE AND ACTIVATION FEE

1.) The lien claimant made written demand for settlement of the lien for a clearly stated sum inclusive of all claims of debt, interest, penalties, or other claims potentially recoverable on the lien not fewer than 30 days before filing the lien for which the filing fee was paid, or filing the DOR for which the lien activation fee was paid.

2.) Defendant failed to accept the settlement demand in writing within 20 days of receiving it, or within any additional time granted by the demand.

3.) A final award is made in favor of the lien claimant of a specified sum equal to or greater than the amount of the settlement demand after submission of the lien dispute to the Appeals Board or an arbitrator. The amount of the interest and filing fee or lien activation fee will not be considered in determining whether the award is equal to or greater than the demand.

LC 4903.07 allows for reimbursement of the lien filing fee and/or activation fee under limited circumstances. A lien claimant may be reimbursed, along with interest, at the rate allowed by civil judgments, only if all of the three following conditions are satisfied:

(141)

LC 4903.07(b) allows the parties to agree on a

lien disposition that includes reimbursement of

the lien fling fee and/or activation fee.

(142)

STATUE OF LIMITATIONS

A lien for medical expenses must be

filed no more than three years after the

date of services were provided.

(143)

For medical services provided on or after

July 1, 2013, a lien may be filed no more

than 18 months after the date services were

provided.

(144)

A lien may not be filed or served until 60

days after the claim has been accepted or

denied, or 60 days after the 90-day

investigation period under LC 5402 has

expired, whichever is earlier.

(145)

RESTRICTION ON PROVIDING MEDICAL

INFORMATION TO LIEN CLAIMANTS

LC 4903.6(d) was added to restrict the

disclosure of medical information to

non-physician lien claimants.

(146)

INDEPENDENT BILL REVIEW (IBR)

Historically, the reasonable amount owed for medical services has been a major source of contention within the Workers' Compensation system despite the official medical fee schedule.

Defendants and lien claimants argue over what is reasonable and how a case applies to the schedule. Some disputes involve whether the services were properly coded, others involve the appropriate value for a given service.

(147)

Formerly if the dispute could not be resolved, defendants and the lien claimant were forced to try the issue before Workers' Compensation judges, who were often ill-prepared to adjudicate such issues.

(148)

The legislature stated, "Existing law does not provide for medical billing and payments experts to resolve billing disputes and billing issues are frequently submitted to Workers' Compensation judges without the benefit of independent and unbiased claims on these issues".

SB 863 establishes a new independent bill review process. The intention is to eliminate litigation at the Appeals Board over billing disputes.

(149)

The new IBR process was designed to resolve disputes over medical billing quickly and relieve the WCAJs of making decisions about disputes and gives that authority to independently contracted expert bill reviewers, whose decisions are intended to be the last word on the amount to be paid for a medical procedure.

(150)

STATUTORY AUTHORITY FOR IBR

LC 139.5(a) provides that the Administrative Director must contract with one or more independent bill review organizations to conduct reviews and also establishes the criteria for IBR organizations.

(151)

Now, a provider of medical services must submit:

 A copy of all reports showing the services performed;  The prescription or referral from the primary treating

physician if services were rendered by someone other than the PTP;

 and any evidence of authorization for the services that may have been received.

 It’s request for payment, with an itemization of services provided and the charge for each service,

(152)

Changes to the time limits for payments LC 4603.2(b)(2) shortens the period for an employer to make payments. Payments shall be made by the employer with explanation of review pursuant to Section 4603.3 within 45 days after receipt of each separate itemization of medical services provided.

(153)

LC 4603.4(d) was amended to require

an employer to attach an explanation of

review with a payment.

(154)

1.) A statement of the items or procedures billed and the amount requested by the provider to be paid.

2.) The amount paid.

3.) The basis for any adjustment, change or denial of the item or procedure billed.

4.) The additional information required to make a decision for an incomplete itemization.

5.) The reason for the denial of payment if it's not a fee dispute.

6.) Information on whom to contact on behalf of the employer if a dispute arises over the payment of billing.

4603.3(a) provides that on payment, adjustment or denial of a complete or incomplete itemization of medical services, an employer must provide an explanation or review in a manner prescribed by the Administrative Director that includes:

(155)

The explanation of review must inform the medical provider of the time limit to raise any objection regarding the item or procedure paid or disputed, and how to obtain independent review of the medical bill per LC 4603.6.

(156)

Thus, to comply with the requirements

of LC 4603.3 employers need to

establish

new

forms

for

their

explanation of review.

(157)

DUPLICATE SUBMISSION OF

MEDICAL SERVICES

If an employer has issued an explanation of

review explaining why the medical provider

was not paid, or was only partially paid, the

employer is not required to take additional

action for a duplicate submission.

(158)

REQUEST FOR SECOND REVIEW (A PREREQUISITE TO IBR)

A provider who disagrees with the amount paid by the employer must request that the employer re-consider its findings, or “Second Review”.

The request must be made within 90 days of service of the explanation of review, or an order of the Appeals Board resolving the threshold issue as stated in the explanation of review (e.g., a bill denial based on the claim having been denied).

(159)

 90 days of an explanation of review or

 90 days of an order from the Appeals Board

resolving a threshold issue stated in the explanation of review.

A medical provider must request a

second review within:

(160)

FAILURE TO REQUEST A SECOND REVIEW

If the only dispute is the amount of payment

and the provider does not request a second

review within 90 days, the bill shall be

deemed satisfied and neither the employer

nor the employee shall be liable for any

further payment (LC 4602.3(e)(2).

(161)

EMPLOYER’S RESPONSE TO SECOND REVIEW REQUEST

Employer must respond promptly to a request for second review. The employer is required to respond with a final written determination on each of the items or amounts in dispute within 14 days of a request for second review.

In addition, payment of any balance not in dispute must be made within 21 days of receipt of the request for

second review.

If after receipt of the second review, the medical provider still contests the amount paid, the provider may request independent bill review under LC 4603.6.

(162)

SECOND REVIEW REQUEST FORM

7.) The date of the explanation of review and the claim number or other unique identifying number on the explanation of review.

8.) The item and amount in dispute.

9.) The additional payment requested and the reason for it. 10.) The additional information provided in response to a

request in the first explanation of review or any other additional information provided in support of the

additional payment request.

The request for second review is to be submitted by the employer on a form prescribed by the Administrative Director. The form shall include:

(163)

EMPLOYERS RESPONSE TO REQUEST FOR SECOND REVIEW

An employer is required to respond with a

final written determination of the item or

amount in dispute within 14 days of the

request for second review.

(164)

LC 4603.6(a) provides that if the only dispute is the amount of payment and the provider has received a second review that did not resolve the dispute, the provider may request IBR within 30 days of service of the employer's second review.

(165)

If the provider fails to request IBR within 30

days, the bill would be deemed satisfied.

-

90 days to request second review

(166)

IBR AND DISPUTED CLAIMS

"If the employer has contested liability for any issue other than the reasonable amount payable for services, that issue shall be resolved prior to filing a request for independent bill review, and the time limit for request of an independent bill review shall not begin to run until the resolution of that issue becomes final, except as provided in Section 4622".

(167)

FORM FOR REQUESTING INDEPENDENT BILL REVIEW

A medical provider who remains dissatisfied after a second review may request IBR and pay an IBR filing fee.

(168)

FORM FOR REQUESTING IBR

A request for IBR will be made on a form prescribed by the Administrative Director. The request must include:

1.) A copy of the original billing itemization.

2.) Any supporting documents that were furnished with

the original billing.

3.) The explanation of review.

4.) The request for second review together with any

supporting documentation submitted with it.

(169)

Note, only the request form and proof of payment of the fee must be filed with the AD. On notice of assignment of the matter to an independent bill reviewer, the requesting party must submit all the required documents to the reviewer within 10 days.

(170)

INDEPENDENT BILL REVIEW FEES

LC 4603.6(c) requires the provider to pay a

fee to the Administrative Director when

seeking IBR.

(171)

The Administrative Director must determine

what these fees will be. They are not to be

excessive. They are only to be enough to

cover the reasonable estimated cost of IBR

and the administration of the review process.

(172)

The AD may prescribe different fees

depending on the number of items in the bill

or other criteria determined by regulation

adopted by the AD.

(173)

If any additional payment is found owing by

the employer to the medical provider after IBR,

the employer must reimburse the provider for

the fee in addition to the amount found owing.

This deters the employer.

(174)

The fees described in LC 4603.6(c) are

"all or nothing".

(175)

If a provider seeks an additional payment of

$10,000 through IBR and IBR issues a

finding allowing an additional payment of

only $50, the employer pays the IBR fee.

(176)

IBR PROCESS AND DETERMINATION

On receipt of request for IBR and the

required fee, the AD or the AD's

designee must assign the request to an

independent bill reviewer within 30 days

and notify the medical provider and the

employer of the reviewer assigned.

(177)

There are no secrets as to the identity

of the IBR as with IMR reviewer.

(178)

The independent bill reviewer must

review the materials submitted by the

parties and make a written determination

of any additional payment to be paid to

the medical provider, and state the reason

for the determination.

(179)

If necessary, the IBR reviewer may

request additional documents from the

medical provider or employer.

(180)

The employer has no obligation to serve

medical reports on the provider unless

the reports are requested by the reviewer.

(181)

If additional documents are requested,

the parties must respond and provide

them within 30 days and must provide

the other party with a copy of any

documents submitted to the IBR

reviewer.

(182)

At this point there is nothing that restricts

ex parte communications with the IBR

reviewer, perhaps this will change with

additional regulations.

(183)

The independent reviewer must make a written determination of any additional amounts to be paid to the medical provider and state the reasons for the determination within 60 days of receipt of the Administrative Director's assignment (perhaps longer if additional information is requested by the IBR reviewer).

(184)

The written determination of the reviewer must

be sent to the AD and provided to both the

medical provider and the employer.

(185)

As with IMR, appeal of an IBR decision may be made only under certain limited circumstances.

The aggrieved party may file with the Appeals Board a verified appeal from the medical bill review determination. This appeal must be filed within 20 days of service of the determination.

(186)

 The AD acted without or in excess of his powers.

 The determination of the AD was procured by fraud.

 The IBR reviewer was subject to a material conflict of

interest.

 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.

 The determination was a result of plainly erroneous

express or implied finding of fact, provided that the mistake was a matter of ordinary knowledge based on the information submitted for the review and not a matter subject to expert opinion.

The IBR review determination is presumed correct and may be set aside only on clear and convincing evidence of one or more of these grounds for appeal:

(187)

The IBR decision was designed to be the

last word on the reasonable amount for

medical services and thus the grounds for

appeal are very limited.

(188)

A showing of "clear and convincing

evidence" is a higher standard than the

usual "preponderance of the evidence"

standard required in other Workers'

Compensation issues.

(189)

If the determination of the AD is reversed on appeal, the matter and dispute must be remanded back to the Administrative Director to submit the dispute to IBR by a different independent bill review organization, or a different reviewer within the original bill review organization.