Number of Accredited UR Firms Grows; Attorneys Eager to See Enabling Regs

Originally Published by WorkCompCentral on October 25, 2018 authored by Greg Jones

As the number of utilization review organizations complying with California's accreditation mandate slowly increases, attorneys who represent injured workers in California are eagerly awaiting rules they hope will offer some guidance for dealing with decisions that may not be valid.

About 30% of utilization review companies are still not accredited, according to information provided by the Division of Workers’ Compensation, even though all of them were supposed to be July 1.

Peter Melton, a spokesman for the division, said in an email Wednesday that 43 of the 58 active UR companies are accredited. Only 38 were accredited as of July 6.

Melton said three additional utilization review organizations that operate in California do not need to be accredited because they perform only approvals.

Senate Bill 1160, signed into law in 2016, required accreditation by July 1 for any utilization review process that modifies or denies treatment requests. The bill directed the DWC to adopt rules for selecting an accrediting agency, but said URAC will perform that function until rules are in place.

The bill says the point of accreditation is to ensure that utilization review companies issue timely decisions, are reviewing all pertinent medical records, have peer-to-peer and internal appeal procedures, and have adopted policies prohibiting financial incentives for doctors making decisions.

SB 1160 also authorized the division to adopt rules specifying that additional criteria be considered as part of the accreditation process, and to exempt nonprofit public sector internal UR programs from the accreditation requirement.

The DWC has already drafted rules to implement the accreditation requirement, but Administrative Director George Parisotto said last month that they were still under review. He told members of the Commission on Health and Safety and Workers’ Compensation that a question surfaced during a recent meeting of the formulary advisory committee regarding the need for providers to submit requests for authorization when a treatment is exempt from UR.

Certain formulary drugs are designated as exempt from prospective utilization review, and SB 1160 includes a provision that exempts from UR emergency medical services performed by a network provider in the first 30 days following an injury.

During the Pharmacy and Therapeutics Committee’s first meeting last month, providers said they didn’t think they have to submit an RFA if a service or drug is exempt from review. Payers said they need the RFA to know to run a retrospective review to determine if the prescription or service was provided in accordance with recommendations in the Medical Treatment Utilization Schedule.

The division has yet to promulgate the proposed rules, and Melton was out of the office Wednesday and not able to provide any update on a time line for when rules may be released.

Diane Worley, director of policy implementation for the California Applicants’ Attorneys Association, said she thinks rules to implement both the URAC accreditation requirement as well as the UR fast-track procedures “are essential and seriously overdue, as the URAC accreditation mandate went into effect July 1.”

Worley said a “strange twist” regarding accreditation is that some of the bigger companies that have already gone through the URAC process are subcontracting to smaller companies that are not accredited. She said this has become an issue that should be prohibited by regulation.

She said another important question is what weight a UR denial holds if it was made by a company that wasn’t accredited by July 1. It seems that the UR would be invalid and that the Workers’ Compensation Appeals Board would regain jurisdiction to decide if the treatment was medically necessary, Worley said.

But there are no rules to govern that process or to say, for example, that the administrative director needs a determination regarding the validity of a decision before it could go to the WCAB.

Worley said she has also heard about treatments that should be exempt, either under SB 1160 or the formulary rules, that are still being denied by UR. A similar complaint was raised during the Pharmacy and Therapeutics Committee meeting in September.

Worley provided an example from one case in which utilization review denied a prescription for Voltaren gel, despite it being marked as exempt from UR on the formulary drug list.

The UR decision said there was insufficient documentation of objective clinical findings to support the need for the drug. The same decision references the formulary when it concludes that Tylenol #3, a mixture that includes codeine and is not exempt, wasn’t necessary, nor was a generic equivalent.

Worley said the UR decision was appealed through independent medical review, which determined the Voltaren gel was medically appropriate. But two subsequent prescriptions were deemed medically unnecessary through UR.

“The AD is charged with providing oversight of UROs but I’m not seeing much in the way of oversight these days, nor is this being made a priority as evidenced by the delay in the public rule-making,” she said. “Injured workers really have gotten the short end of the stick in the priorities with this administration.”

Alan Gurvey, managing partner of applicants’ firm Rowen, Gurvey & Win, in Sherman Oaks, said it would be nice to see the accreditation requirement and deadlines be taken seriously, “thereby eliminating utilization review organizations who were not compliant and accredited.”

He called it a “blemish on the system as a whole” that people handling claims can operate “without scrutiny and without penalty.”

He also said the accreditation directive appears to be a veiled attempt by the Legislature to appease certain interest groups at the time, but that it lacks teeth.

He said it’s not unusual for some provisions in legislation to take a long time to be implemented or to not be implemented at all. The Permanent Disability Rating Schedule that the DWC never increased under the previous administration is a perfect example, he said.

“We have seen that there has been legislation that had some fanfare at the time, but then just becomes another complex situation that we cannot possibly continually monitor,” he said.

Gurvey said he doesn’t know whether SB 1160 has been scrutinized by any court, but attorneys have become so inundated with details relating to UR and independent medical review that he doesn’t have time to focus on anything else.

“Frankly, I’m not sure the judges would know what to do, either, as they seem to be in the dark on a lot of this minutiae as well,” he said. “It seems that the more legislation that comes into play, the less effective the system becomes, and the attorneys, especially, are handcuffed because their attention is drawn in so many different directions and there is only so much time that can be put in on handling each case.”

Barry Hinden, senior partner and founder of applicants’ firm Hinden & Breslavsky, said last week that he was anxious to see what the division would do with the UR accreditation rules.

He said he assumes lawmakers required accreditation to ensure that UR companies aren’t offering incentives to doctors for denying authorization.

Hinden said he though that the language was related to comments made by former DIR Director Christine Baker, who reportedly told attendees of the 2016 CAAA Summer Convention that the administration was aware that some UR doctors received commissions or incentives based on savings for denying medical care.