SB 1160 Data Unsurprising, but More Time Needed to Address Issues, Stakeholders Say

Originally published on Authored by Mark Powell. on July 9, 2021

A recent analysis that found Senate Bill 1160’s utilization review provision didn’t lead to increased use of medical services wasn’t surprising, but more studies and stronger legislation could be needed to understand and address related issues within California’s workers’ comp system, some stakeholders said.

 “When SB 1160 was passed, many of us saw this as a non-event and did not expect much change based on the limited provisions of the bill,” said applicants’ attorney Alan Gurvey, managing partner of Rowen, Gurvey & Win in Sherman Oaks. “We often see that bills that get passed are a watered-down version of strong intentions that may have a real impact on the system.”

Following a multi-year data review on SB 1160, actuaries from the Workers’ Compensation Insurance Rating Bureau last month said they saw no indication that the reform law led to greater use of medical services or any impact on pure premium.

California lawmakers approved SB 1160 in 2016. Among other aspects, the law prohibits prospective UR within the first 30 days following an injury for most medical treatments provided by physicians who are part of a comp carrier’s medical provider network. 

The UR exemption went into effect in 2018 and doesn't apply to services such as imaging and radiology, durable medical equipment of more than $250, surgery, psychological treatment or home health care. SB 1160 also requires providers to submit bills for emergency treatments within 30 days of service.

After WCIRB researchers examined medical transaction data on claims with accident dates between January 2017 and December 2020, the bureau said there was no evidence that SB 1160 significantly changed the cost of medical services within six months after the date of injury. 

Actuaries, who gave significant weight to cumulative changes in the first two years of the UR provision, also said any increases in medical severity were likely driven by updated fee schedules.

The number of physical therapy visits within 30 days of an injury did increase, but use of those services dropped within months of the accident date, the WCIRB said. The data excluded any claims related to COVID-19.

Gurvey said he wasn’t surprised because provisions such as the one found in SB 1160 rarely have impacts on the workers’ comp system as a whole.

“In this particular situation, there are reasons why prospective UR in the first 30 days causes little change one way or another,” he said. “First of all, we find that treatment is often authorized in the first 30 days, and it is generally not as extensive as we may see later on down the road, with the exception of catastrophic cases.”

On the other hand, there still are many confused, injured workers who spend the first 30 days following an injury simply trying to navigate the system and secure treatment, Gurvey said.

The WCIRB didn’t need to extensively study SB 1160’s UR provision, in part because the law is obviously limited and likely won’t produce any major shifts, he said.

“The reality is to look at how limited the bill is, and you simply wouldn't expect major changes one way or another in terms of costs for medical services,” Gurvey said. “Sometimes bills are passed just to provide an appearance that workers' compensation issues are being addressed in the Legislature. More often than not, the real issues that cause the most concern for the system are too contentious for effective legislation to be passed.” 

The WCIRB’s data set also might be too small to make any significant findings about the UR provision’s impact, said Clay A. Jackson, president and chief legal counsel for self-insurer consultant Affinity Group Administrators.

“We believe that reviewing the data from only two years is not enough to make a conclusive determination on the overall success of SB 1160 for the same reason that an (experience modification factor) looks back over a four-year period to determine a company’s claim experience,” said Jackson, who is also the immediate past president of the California Alliance of Self-Insured Groups. “Here, taking the years that were analyzed by the WCIRB and excluding 2020 because of COVID-19 doesn’t allow a complete analysis that would give a definitive scorecard on whether or not the UR provisions of SB 1160 worked or not. It’s just too little time to make an accurate conclusion from.”

Despite the relatively small data window, however, Jackson said he is encouraged to see that physical therapy visits increased during the first month studied, which probably lowered the need for services over the latter months.

“Also, the fact that medical treaters within an MPN do not need to go through the UR process seems to have sped up the process — as intended — since it makes little sense to have utilization review of a medical provider on an MPN panel just to disallow treatment during utilization review of that provider’s treatment,” he said.

The limited data may also point to employers being able to provide injured workers with medical treatment much sooner, which can lessen the need for additional services later on in the life of a claim, Jackson said.

“If this continues to be the case, then SB 1160’s revisions to the utilization review process will be a success,” he said.

Diane Worley, executive director for the California Applicants’ Attorneys Association, also said that one positive takeaway from the WCIRB’s analysis is that physical therapy visits were approved earlier thanks to changes brought on by SB 1160.

Delays in years past have been costly to employers and “undoubtedly increased permanent disability and other medical costs,” she said.

A separate study released by WCIRB in January 2020 found that workers who saw physical therapists within 30 days of injury were less likely to have claims that included opioid prescriptions.

“Generally, I think a lesson may be learned from this in that timely, early authorization of medical treatment for injured workers leads to better outcomes down the road for that worker, which will also benefit the employer by decreasing overall costs from delays and denial of treatment,” she said.

Dr. Jacob Rosenberg, president of the California Society of Industrial Medicine and Surgery, also said the WCIRB’s analysis isn’t shocking because most insurance companies have been able to authorize basic care for occupational injuries within 30 days after an injury.

SB 1160 represented “a little tinkering around the edges,” Rosenberg said.

“It was a fine bill, but it really didn’t do a lot,” he said. “The intent was good: See if you can get people back on their feet and back to work. There was a positive effect that was congruent with what changed, which wasn’t a whole lot.”

Discussion around SB 1160 and utilization review, however, could lead to better changes in the system, especially when it comes to insurers and doctor groups working together, Rosenberg said.

“No one has gotten payers and providers together to fix things,” he said. “We need to recognize that the complaints each side is making are valid, and we need to figure out a way to address those concerns and improve things for everybody.”