Passing Scores Save UROs From Paying Most Penalties for 2018 Audit Violations

Originally published by WorkCompCentral, authored by Greg Jones


Passing Scores Save UROs From Paying Most Penalties for 2018 Audit Violations


Five utilization review organizations audited this year all scored passing grades, resulting in the Division of Workers’ Compensation waiving most of the penalties they faced for violations uncovered during the inspections.

Although the violations found in the 2018 audits weren’t as egregious as past findings — such as people without a medical license making a decision to deny treatment — some system users questioned whether the division should be waiving fines in the first place.

The most common violation was failure to make and communicate a decision within five days of receiving necessary information, which accounted for 23 of the violations uncovered and carries a potential fine of up to $100 per occurrence.

The DWC also found one instance each in which a URO failed to provide timely notice to all parties of the need to extend the decision date, and failed to issue a retrospective decision within 30 days. These violations also carry a penalty of up to $100.

The division cited one URO for failing to document its efforts to obtain information, which carries a $100 penalty.

And it identified two cases in which a URO failed to respond to a request for standard prospective review, which carries a penalty of $2,000 for each violation. Of the $4,600 in total fines assessable for violations, the DWC collected $2,000.

Because all the audit subjects passed, the division waived all the $100 penalties, pursuant to California Code of Regulation 9792.12(b). The regulation requires the division to waive penalties for audit subjects that score at least an 85% or agree to abide by a written abatement plan.

Erika Monterroza, a spokeswoman for the DWC, said the regulation was adopted in 2007 and was based on the existing Audit Unit penalty structure. She said it’s a two-tiered structure, with some penalties that are assessed regardless of the performance score, and some that are waived if the subject has a sufficient score.

She said the regulatory language isn’t mandated by the Labor Code but was based on Audit Unit experience and a desire to ensure that penalties are proportionate to the nature, severity, frequency and duration of a violation.

“It was thought when the regulation was adopted that good performance should be rewarded allowing for a small margin of error,” she said.  

System users questioned whether waiving fines is congruent with the desire to ensure compliance with UR requirements.

Diane Worley, director of policy implementation for the California Applicants’ Attorneys Association, said the DWC should enforce all available penalties for compliance violations.

“The problems with UR are too significant to ignore, as noted by the concurring opinion in the recent decision in the King case,” she said.

Worley was referring to California Supreme Court Justice Goodwin Liu, who wrote a separate opinion in the King v. CompPartners case the high court decided last month. Liu agreed with the rest of the court that workers’ compensation was the exclusive remedy for Kirk King to seek redress for injuries he suffered after he stopped taking an antipsychotic drug that was deemed medically unnecessary.

But the justice said the seizures King suffered raised a question about whether the comp system providers the proper incentives for “competent and careful utilization review.”

Steve Cattolica, director of governmental relations for the California Workers’ Compensation Services Association, said he doesn’t feel that audits are the most effective incentive for good behavior.

“Mistakes are bound to happen, but to use a specific score, after which fines can be waived, is to set that score as the high bar,” he said. “It's a compliment to those UR programs that score above that mark.”

Cattolica said he thinks it is more important to understand what the DWC is doing to enforce the requirement that UR programs obtain accreditation by URAC.

Senate Bill 1160 required companies reviewing requests for authorization to be accredited by July 1. The bill also requires that utilization review companies maintain certification for as long as they’re operating in California. The DWC Is currently drafting rules to implement the requirement.

The certification process is significant because companies can lose their accreditation, and therefore the ability to operate in California, if they don’t comply with nationally accepted standards.

Applicants' attorney Alan Gurvey, managing partner of Rowen, Gurvey & Win in Sherman Oaks, said untimely UR decisions can benefit the injured worker.

When lawmakers created the independent medical review process in SB 863, they removed the ability of workers’ compensation judges to decide questions of medical necessity. The bill said IMR was the only avenue to challenge a valid UR decision.

The Workers’ Compensation Appeals Board said in the 2014 en banc decision Dubon v. World Restoration Inc. that it had the authority to overturn a UR decision only if it was untimely. In a 2014 significant panel decision, Bodam v. San Bernardino County, the WCAB said UR decisions must be made within the time frames specified by law, and also communicated to the injured worker within those time frames.

Gurvey said that when UR decisions are late, injured workers have the opportunity to present medical evidence to judges, who can make the decision of whether a treatment is medically necessary.

“There is no doubt that injured workers and their representatives would much rather have access to the WCAB to present their positions for denied treatment than simply defer to UR and ultimately independent medical review,” he said.

However, litigating late UR decisions can be burdensome. There are sometimes disputes over date stamps and when the reviewing agency received a request for authorization, Gurvey said. Applicants’ attorneys don’t always have evidence needed to address timeliness.

Gurvey said he thinks treatment should be authorized if a UR decision isn’t communicated in time. In contrast to penalties that might be waived, he said, forcing employers to pay for treatment if they blow deadlines for UR would be more effective at changing behavior.

“Sometimes you get the idea that these type of fines are just implemented to try to make it look like someone is actually policing these transgressions,” Gurvey said. “The only answer is to ensure the injured worker gets a fair shot at receiving the treatment, and utilization review and independent medical review as it stands today does not give that fair shot for the most part.”

Mitchell International Inc., which passed its 2018 audit with a score of 97.7%, was required to pay $2,000 in penalties for two violations of failing to respond to a request for authorization. The DWC waived penalties for four violations of requirement to communicate a decision within five days.

Coventry Health Care Workers’ Compensation Inc. passed the audit with a score of 91%. As a result, the DWC waived $2,100 in potential penalties for not meeting timeliness requirements.

EK Health Services scored a 99.4%, and the $100 penalty for failing to document efforts to obtain information before denying a request, was waived.

MedReview and the County of Riverside both passed their audits with no violations and perfect 100% scores.