Reforms to Workers’ Comp System Awaiting Action by Governor
September 15, 2016
Following several months of stakeholder meetings and negotiations with the author and Administration, Senate Bill 1160, by Senator Tony Mendoza, now awaits action by Governor Brown. The bill would make substantial changes to the workers’ compensation utilization review process and purports to modernize data collection while making it more difficult to file fraudulent liens.
Current law requires all employers in California to create a utilization review (UR) process, which is the review process for medical treatments by physicians to determine if the treatment is medically necessary.
Responding to concerns that the UR process is causing unnecessary delays and denials and the opinion that the implementation of system-wide best practices would improve this issue, Senator Mendoza amended SB 1160 last month to, among other things:
- Prohibit prospective UR within the first 30 days of treatment
for treatment provided through a medical provider network (MPN).
- Makes exceptions for surgery, medications not covered by the workers’ compensation drug formulary (to be implemented July 1, 2017), psychological treatment, most durable medical equipment and home health services.
- Allows for retrospective UR to ensure a doctor is complying with the Medical Treatment Utilization Schedule (MTUS) and if a pattern develops of a doctor failing to do so, an employer can remove the doctor from their MPN.
- Requires any UR organization to obtain accreditation from an accrediting entity specified by the Division of Workers’ Compensation (DWC).
- Requires the DWC Administrative Director to develop a mandatory electronic system for sharing documents necessary to conduct UR.
- Provides that the MTUS may be updated with evidence-based medicine standards by an expedited process.
- After hearing system-wide complaints and a report from the Commission on Health and Safety and Workers’ Compensation (CHSWC) regarding the pervasive problem of fraudulent liens for medical treatment being filed, SB 1160 additionally, among other provisions:
- Requires a lien filer to specify in the lien filing the basis upon which the lien is authorized.
- Prohibits the assignment of liens unless a person has ceased doing business in the capacity held at the time the expenses were incurred and has assigned all right, title, and interest in the remaining accounts receivable to the assignee. The assignment of a lien, in violation of this paragraph is invalid by operation of law.
The Governor has until September 30 to take action on SB 1160. It is assumed he will sign it into law, and CSAC will be engaged in the regulatory process that guides its implementation.