From the Desk Of: Scott M. Tilley, Esq.
Managing Attorney, San Bernardino
Certified Specialist, Workers' Compensation Law,
The State Bar of California, Board of Legal Specialization
The California Legislation has brought presents to the workers’ compensation system early this year with the passing of Senate Bills 1175 and 1160. These bills provide changes to our system in the areas of medical bills, liens, Utilization Review, Independent Medical Review and, to a lesser extent, deposition fees for applicant attorney, and the regulation of interpreters. This article will provide a summary of each of these Senate Bills.
Senate Bill 1175 (Mendoza)
Senate Bill 1175 was approved by the Governor on August 26, 2016. SB 1175 deals with submission of bills for both medical services and medical–legal services in the workers’ compensation system. The provisions of SB 1175 are effective for all bills for dates of service on or after January 1, 2017. SB 1175 amends Labor Code sections 4603.2, 4603.4 and 4625.
Labor Code section 4603.2 will now require that bills for medical services provided on or after January 1, 2017, be submitted within 12 months of the date of service or payment will be barred. The change in Labor Code section 4603.2 will affect service providers such as physicians, hospitals, pharmacies, interpreters, copy services, transportation services and home health care services.
Further, Labor Code section 4603.2 will now require that bill submissions include the following:
An itemization of services provided;
A charge for each service;
A prescription or referral from the primary treating physician (if services were performed by a person other than the primary treating physician); and
Any evidence of authorization for services that may have been received.
The Administrative Director is to adopt specific rules to define circumstances that would constitute good cause for an exception to the 12-month submission rule. One such exception would include circumstances where a non-occupational injury or illness is later found to be a compensable injury. This exception is to address situations where it’s not initially known that the injury is work-related and the applicant receives treatment from a provider. It’s felt that those providers should not later be barred from submitting their bills when the injury is later found to be compensable.
The bottom line of SB 1175 is that providers will no longer be able to sit on their bills and then expect payment long after their dates of service. Unless an exception applies, providers who do not submit their detailed bills within 12 months of the date of service will be barred from receiving payment.
Senate Bill 1160 (Mendoza)
Senate Bill 1160 was approved by the Governor on September 30, 2016. SB 1160 amends several different Labor Code sections. Some of the changes are simple and easy to grasp, while others are far more extensive and change our system in a much more profound way.
Labor Code section 4610
The biggest change found in SB 1160 seems to relate to Labor Code section 4610. Effective January 1, 2018, Labor Code section 4610 will be repealed and replaced. The new Labor Code section 4610 provides that prospective Utilization Review will not be required within the first 30 days of the initial injury if the treatment is emergency treatment or medical treatment rendered for a body part or condition that is accepted. Said treatment must be included in MTUS, and said treatment must be provided by an MPN doctor or predesignated physician. Please note that there are exclusions where prospective authorization (Utilization Review) is required and these exclusions include:
Nonemergency inpatient/outpatient surgery,
Home health care,
Imaging and radiology services (excluding x-rays),
Durable medical equipment with combined total value exceeding $250,
Electrodiagnostic medicine, and
Any other service designated by the Administrative Director.
Further, per the “new” Labor Code section 4610, RFA’s are required within 5 days following the initial visit and evaluation. Also, request for payment for services is due within 30 months. There is a prohibition against financial incentives to the Utilization Review physician based on the number of modifications or denials made by the physician, and insurers/TPAs are not allowed to refer Utilization Review to entities in which the insurer/TPA has a financial interest except with prior written disclosures.
Labor Code section 4903.5
Another major change found in SB 1160 relates to Labor Code section 4903.5. Effective January 1, 2017, all new liens are to be accompanied, at the time of filing, with a declaration stating, under penalty of perjury, that the disputes (i.e., the dates of service which make up the lien) are not subject to IBR and IMR and that the lien claimant satisfies one of the following:
Is a treating physician providing care through the MPN;
Is the AME or QME;
Provided treatment authorized by the employer or claims administrator under LC 4610 (approved RFA);
Lien claimant has determined the employer does not have an MPN;
Lien claimant has documented that medical treatment has been neglected or unreasonably refused to the employee;
Can show that the expense was incurred for an emergency medical condition;
Is a certified interpreter rendering services during a med-legal exam, a copy service providing med-legal services, or has an expense allowed as a lien under the rules adopted by the Administrative Director;
Labor Code section 4903.5 provides that existing lien claimants have until July 1, 2017 to file a declaration subject to the requirements noted above for new liens.
Labor Code section 5710
Labor Code section 5710 is to be amended to read, on or before January 1, 2018, the Administrative Director is to create a range of “reasonable fees” to be paid to applicant’s attorneys for deposition services. It’s not entirely clear what this range of fees will look like, but we are hoping it will be a fee schedule of sorts relating to the fees an applicant’s attorney can collect for depositions of injured workers.
Some of the less extensive changes to be brought by SB 1160 include the following:
Labor Code section 138.4 is amended to read that on or before January 1, 2018 the Administrative Director is to adopt regulations to provide notice to employees that they may treat outside of the workers’ compensation system if their claim is denied.
Labor Code section 138.6 is to be amended to provide for an increase in WCIS penalties (no more than $10,000 in any single year) for failing to report data.
Labor Code section 4610 will be changed effective January 1, 2017 to remove the term “delay” from Utilization Review (currently 4610 indicates that Utilization Review is to approve, modify, delay or deny treatment). Note that section 4610 will be completely replaced effective January 1, 2018 (see changes noted above).
Labor Code section 4610.5 will be amended to add medication formulary disputes to the IMR process effective January 1, 2018. Where there are formulary disputes, a request for IMR must be made no later than 10 days after service of the Utilization Review decision (the IMR request must be within 30 days for all other medical treatment dispute).
Labor Code section 4610.6 will be clarified effective January 1, 2017 to note that IMR decisions are due in 5 working days for formulary medication disputes and 30 calendar days for all other medical treatment disputes.
Labor Code section 4615 will be amended to provide that, effective January 1, 2017, physician liens will be stayed upon the filing of criminal charges against the physician. This means that once a physician has had criminal charges filed against them for fraud, the Board will take no action on their liens.
Labor Code section 4903.8 will be clarified to note that, effective January 1, 2017, no payment is to be made to a lien claimant without evidence that they are the owner of the lien.
Labor Code section 5307.27 provides that, effective January 1, 2017, the Administrative Director may provide updates to the MTUS by way of “order” following a period for public comment and hearings.
Labor Code section 5811 will be amended to indicate that, on or before January 1, 2018, the Administrative Director is to provide criteria to verify the identity and credentials of individuals providing interpreting services within the workers’ compensation system. This is to ensure that interpreters are properly credentialed when they are providing services.
Labor Code section 6409 will be amended, effective January 1, 2017, to require every physician to file a Doctor’s First Report of Occupational Injury or Illness electronically with the DWC and the employer/carrier within 5 days of the initial examination.
While the above changes will not have the sweeping effects of prior legislation, they do promise to tidy up portions of the Labor Code while striking a balance between benefits provided to the injured worker and stemming the tide of costs to the employer. Should you need any information regarding these changes, please feel free to contact our office. We would be happy to provide an in-house, no cost presentation of these changes to any of our clients or prospective clients.
The original text for SB 1175 can be found here: https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201520160SB1175
The original text for SB 1160 can be found here: https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201520160SB1160,