Workers' Compensation

A “Sea Change” in California: Regulatory Implementation of the SB 863 Reforms

AD says IMR gets 30 days to issue a decision after receipt of records, but doesn’t address Arredondo noteworthy panel decision

Roger Rabb, J.D., Special Correspondent for the LexisNexis Workers’ Compensation eNewsletter

In 2012, California passed into law Senate Bill 863 implementing wide-ranging changes to the state’s workers’ compensation system designed to make that system less expensive and more efficient, while also expediting the provision of medical treatment for injured workers and increasing permanent disability benefits. The changes mandated by that law have been phased in annually since January 2013, and in a recent Keenan & Associates Webinar, “Sea Change in Workers’ Compensation,” Destie Overpeck, Administrative Director of the Division of Workers’ Compensation, and Dr. Rupali Das, the Division’s Executive Medical Director, discussed the Division’s current efforts to implement these changes. A few noteworthy tidbits are summarized below.

Highlights of the Division’s new regulations and some early impact numbers include:

> A new ambulatory surgery center regulation is saving $80 million per year.

> A new spinal implant inpatient fees schedule that reduced a duplicate payment that had been taking place is saving $110 million per year.

> A new interpreter certification regulation has been added to assist implementation of the statutory requirement that injured workers who are not proficient in English are entitled to an interpreter if they are receiving medical treatment. In addition, a draft of an interpreter fee schedule has been created and posted for review on the Division’s web site.

> Although pending lawsuits have delayed full implementation of the lien filing fees, the Division is currently receiving the $150 lien-filing fee required under SB 863, which so far has saved $690 million per year.

> New regulations for both the Independent Bill Review (IBR) and Independent Medical Review (IMR) programs have been adopted, as well as regulations for Qualified Medical Evaluators (QMEs). Under the new regulations, treatment disputes proceed to IMR evaluators rather than to QMEs.

> The regulations governing the Supplemental Job Displacement Benefit (SJDB) have been amended to reflect the change in benefit from a tiered amount to a flat $6,000 benefit amount.

> A new physician fee schedule has been adopted, transitioning the prior California-specific fee schedule to a new Medicare Resource-Based Relative Value System (RBRVS). Under the new fee schedule, among other changes, expect to see fees for services provided by occupational medicine doctors and evaluation and management services increase, while fees for specialty doctors such as surgeons and radiologists should decline.

> Regulatory changes now reflect the new requirement that chiropractors may not serve as the primary treating physician beyond a 24-visit limit.

> In implementing changes to Medical Provider Networks (MPNs), regulations provide for the creation of Medical Access Assistants (MAAs) to act as contact persons for injured workers and to assist workers in making appointments with physicians appropriate for their particular injury. Under these regulatory changes, MPNs are also required to update their physician listings to eliminate retired and deceased physicians, and the Division may now impose a penalty on an MPN that fails to update their listings within 45 days of being notified that a change is needed.

> A new copy service fee schedule has been adopted, under which copy services will now get paid up to $180 for a set of records up to 500 pages, and 10 cents a page for every additional page beyond that amount.

> A draft of a home health care fee schedule has been posted to the Division’s web site for review.

> Benefit notice regulations governing notices that injured workers get during the course of their claim providing information about available benefits are being finalized.

Return-To-Work Supplemental Benefit

Regulations have also been adopted by the Department of Industrial Relations governing the Return-to-Work Supplemental Program, which provides a $5,000 benefit to some injured workers who received a voucher under the SJDB program. This benefit is paid from a $120 million fund established with assessments paid by employers. Workers who have received a SJDB voucher can apply for this additional benefit within a year of receiving their voucher, or within a year from the April 13, 2015, effective date of the relevant regulations, by going online or using a kiosk at the Division’s district offices. The Department has 60 days to review an application and, once approved, payment to the injured worker should be made within 25 days. Administrative Director Overpeck admitted that applications for the benefit have not been plentiful, which may be in part because attorneys do not receive any percentage of the benefit and are often uninvolved, but she expressed optimism that applications would increase as employee knowledge of the benefit increases.

Medical Treatment Utilization Schedule

The webinar speakers also discussed pending changes to the Medical Treatment Utilization Schedule (MTUS), the evidence-based treatment guidelines followed by physicians who treat patients under the California workers’ compensation system, which includes guidance for treating physicians when determining whether a specific treatment is appropriate and medically necessary. The MTUS, while not covering all medical conditions, focuses on common work-related injuries and illnesses, as well as treatment topics such as acupuncture, chronic pain treatment, and the use of opioids. The first changes to the MTUS will soon be submitted for public comment, with other changes being submitted later in the year.

One area, the use of opioids, was highlighted due to the nationwide epidemic in unintentional deaths caused by the use of prescription drugs, which now far outnumber deaths caused by traffic accidents. To address this issue, because so many injured workers are being treated with opioids unnecessarily, the MTUS will provide a separate guideline for opioid treatment, which previously was subsumed under the chronic pain guideline. Dr. Das stressed that while opioids are useful and appropriate in limited doses and durations in the immediate aftermath of severe pain-inducing injuries, such as a bone fracture or crush injury, other treatments options should be utilized as well and all opioid use should be closely monitored and discontinued as quickly as possible.

Independent Medical Review

Administrative Director Overpeck explained the timeline for IMR requests. Once a UR determination is issued, the aggrieved party has 30 days to send in an application for IMR. Once Maximus receives the IMR request, they will send a letter to the claims administrator to notify them of the IMR application and to request the relevant records to do their review. The records are due within 15 days. Once Maximus receives the records, they will assign a medical reviewer to perform the medical review. They have 30 days to complete that medical review. The determination is then issued. Dr. Das also reiterated that IMR decisions are issued less than 30 days after receipt of complete medical records. Neither the AD nor the Medical Director addressed the grounds for appealing an IMR decision or the Arredondo noteworthy panel decision, which was issued two days before their webinar presentation.

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