DIR Working on Legislative Fixes for UR and Lien

Published on 08/03/2016 by WorkCompCentral, authored by Greg Jones

draft of proposed legislation by the California Department of Industrial Relations shows that the department might put the brakes on utilization review for network doctors in the first 30 days after injury and is considering adding another layer of review for medical treatment disputes.

DIR Director Christine Baker and Division of Workers’ Compensation Acting Administrative Director George Parisotto held meetings Tuesday, and more are scheduled for Wednesday to present the proposal to system users and were not available to answer questions from WorkCompCentral. DIR spokeswoman Erika Monterroza said on Tuesday the director noted the “draft is changing as we speak” and is not a finished product.

Some of the proposals in a draft obtained by WorkCompCentral were:

§  A prohibition on any utilization review within 30 days of an injury for most treatments provided by network doctors.

§  A separate review process for treatment disputes that would be used before an injured worker requests independent medical review.

§  Limiting the situations under which liens could be filed.

§  Stopping interest from accruing on liens if a provider is charged with fraud, and prohibiting recovery on a lien or any other bill if the provider is convicted of insurance fraud.

Under changes proposed in the draft, most emergency treatment and medical treatment for accepted body parts or conditions provided within 30 days of an injury by a physician in an employer’s medical provider network or health care organization, or predesignated as the treating physician by the injured worker, would have to be authorized without prospective utilization review. 

The proposal would still require payers to perform utilization review for treatment related to conditions or injuries that are not addressed in the Medical Treatment Utilization Schedule, pharmaceuticals, surgery and post-surgical services, psychological treatment, home health care, imaging — excluding X-rays — and radiology and durable medical equipment costing more than $250.

The first physician treating an injured worker would be required to file within five days a complete report including diagnosis, the worker’s description of how the injury happened, treatment rendered, restrictions and a treatment plan. Failure to file that report would be grounds for an employer to revoke the physician’s ability to provide further treatment that is exempt from UR.

The proposal would also add to the Labor Code language authorizing employers to perform retrospective UR on treatment provided during the 30-day period to determine whether those services were in accordance with treatment guidelines. If retrospective review finds a pattern and practice of treatment outside the guidelines, the employer could also prohibit the doctor from providing additional treatment that would be exempt from prospective UR.

Furthermore, results of a retrospective review “may constitute a showing of good cause” for an employer to request a change of physician or provider, and could be used to remove a provider from an employer’s network under the proposal.

The DIR is also considering an internal second review process that would allow injured workers to challenge a UR denial without applying for independent medical review. Second review would be optional for denials based on medical necessity, and mandatory for any denial caused by the reviewing physician not having all the information needed to make a decision.

In medical necessity cases, the injured worker would have to request second review within 10 calendar days, under the proposal. In optional and mandatory second review situations, the employer would have to issue a decision within 10 calendar days of receiving the request.

If the employer does not issue a timely decision, or the injured worker disputes the second review decision, the dispute would be eligible for independent medical review.

An injured worker who has applied for independent medical review would not be allowed to concurrently request a second review. And if a worker requests a second review, only that second review decision can be challenged through IMR under the proposal.

The proposal also shows how the DIR might address IMR for prescription drug requests after it launches its closed drug formulary. The Legislature in 2015 ordered the administration to adopt a work comp formulary, or list of drugs that are approved for treating injured workers, by July 1, 2017.

Under the DIR’s legislative proposal, an employer that determines a drug prescribed in accordance with the formulary is not medically necessary would be required to immediately request IMR. IMR decisions regarding formulary disputes would have to be issued within 10 days under the DIR’s proposed changes to the Labor Code. 

In addition to changing the rules for UR, the DIR is also exploring changes that could make it harder to file liens.

The proposal would require a filing with any lien a declaration that the claimant is the treating physician providing care through an MPN, is an agreed medical evaluator or qualified medical evaluator, or otherwise authorized to provide treatment. A non-network or unauthorized doctor would have to file a declaration that the employer had no network or that medical treatment was “unreasonably delayed or refused.”

Failure to file the signed declaration, or filing a false declaration, would be grounds for automatic dismissal of the lien.

Another proposal would prohibit providers from pursuing recovery for any medical treatment bill, lien or bill for medical-legal expenses if the doctor pleaded guilty to or is convicted of work comp fraud, medical billing fraud, insurance fraud, or Medicare or Medi-Cal fraud. Another proposal would automatically stay any lien and stop the accrual of interest from the time criminal charges are filed against a provider until the case is completed.

Diane Worley, director of policy for the California Applicants’ Attorneys Association, said Tuesday that the period during which prospective UR is prohibited should be extended to 90 days. This would be consistent with Labor Code Section 5402, which gives employers 90 days to dispute liability for an injury, she said. Businesses would still be protected during the longer period without UR because of the list of services that would still need to be reviewed under the department’s proposal.

Worley also said the proposed second review of a denial will need to involve a real peer-to-peer discussion between the treating physician and the UR provider.

“The UR reviewer should also suggest ways to make the request compliant with the MTUS if it is not, so necessary treatment may be authorized,” she said. “This should also happen in the initial UR review so the second review isn’t even needed.”

She said CAAA also believes the proposal should be revised to allow a provider to file a lien if treatment was denied, regardless of whether the denial was “unreasonable.” Providers likely can’t gather evidence to substantiate a claim that treatment was unreasonably delayed or denied, she said.

“Simply that the treatment was delayed or denied is sufficient as the intent appears to be that the lien provider must document that the worker could not get care within the MPN, and therefore had to go elsewhere to get treatment,” Worley said.

Alan Gurvey, managing attorney of applicants’ firm Rowen, Gurvey & Win, said he found a lot of the proposals to be confusing, and said they are likely to lead to more litigation and disputes.

Prohibiting UR for most services within the first 30 days is really just a band-aid, he said. Most of the time, Gurvey said, he can’t get an MPN doctor authorized to treat in the first 30 days following an injury.

“Now, it typically takes a few weeks just to be able to get the insurer or (third-party administrator) to authorize a medical appointment,” he said. “The only medical appointments that we see typically authorized in the first 30 days come from industrial clinics where the insurance company sent the injured worker prior to our involvement. Most of the important treatment decisions occur after 30 days, anyway.”

Gurvey said a second review process might be helpful, but he’s not sure exactly how it would actually work. And the proposal that would send second reviews to IMR if the employer doesn’t issue a timely decision “seems to be the situation now, just with a little bit more lag time and more steps,” he said.

Finally, he said the proposal that would require IMR decisions involving formulary disputes to be issued within 10 days is likely moot in light of recent court decisions.

The California 2nd District Court of Appeal in June ruled that the 30-day deadline to issue IMR decisions in medical treatment disputes is discretionary because there are no consequences for missing it in the Labor Code.

It was not clear on Tuesday if the DIR is drafting legislation to be introduced next year, or if it will ask state lawmakers to make changes by waiving legislative rules and amending other workers' compensation bills that can be passed in the final month of the legislative session.

One possible vehicle for an 11th-hour law change would be Senate Bill 1160, by Sen Tony Mendoza, D-Artesia.

The bill currently proposes to increase penalties for claims administrators who don’t report data to the Workers’ Compensation Information System and would require accreditation of UR programs, starting in 2018.

However, California Professional Firefighters lobbyist Christy Bouma told the Assembly Insurance Committee in June that the bill her client is sponsoring may not be ready until the closing days of the 2016 legislative session. Lawmakers are scheduled to adjourn Aug. 31.

The Assembly Appropriations Committee is scheduled to hold a hearing on SB 1160 at 9 a.m. on Wednesday.

The proposal could also be amended into AB 1244, by Assemblyman Adam Gray, D-Merced, which would require the DWC to revoke authorization for providers to treat injured workers if they’ve been convicted of billing or insurance fraud.

The Senate Appropriations Committee was scheduled to hear AB 1244 on Monday, but postponed deliberation on the measure.

The appropriations committees have until Aug. 12 to pass bills. Aug. 19 is the last day that bills can be amended this year, but Assembly and Senate leaders can allow lawmakers to make changes after this date.