California Governor Signs Senate Bill 1160 Aimed at Reforming Utilization Review and Liens
Waiting to the last day that he could sign or veto legislation, Governor Jerry Brown signed important workers' compensation legislation. SB 1160 had been initiated by the Department of Industrial Relations in coordination with various workers' compensation stakeholder groups. The measure passed with overwhelming support by both Houses of the legislature. The principal changes are with utilization review and liens.
With respect to utilization review, employees who have an injury on or after January 1, 2018, most emergency treatment services and medical treatment for an accepted body part or condition that are provided by a member of the medical provider network, a physician pre-designated, or an employer selected physician are to be authorized without prospective utilization review. All treatment services rendered must be consistent with the medical treatment utilization schedule.
There are some treatment exclusions to in this 30 day no utilization review period. These include home health care services, imaging and radiology services excluding x-rays; all durable medical equipment whose combined total value exceeds $250; electro-diagnostic medicine; psychological treatment; and some pharmaceuticals.
Employers are provided a protection tool from suspected overuse by medical professionals for treatment during this 30 day period. Employers, at their option, may perform retrospective utilization review for any treatment provided within the 30 day period to determine if the prescribing medical treatment is consistent with medical treatment utilization schedule.
If it is found that a physician or provider has a pattern and practice of failing to render treatment consistent with the medical treatment utilization schedule, then the physician or provider may be prevented from treating within the 30 days without utilization review. Certainly regulations will provide details for the implementation of these statutory provisions.
The key intent behind this legislation was to minimize utilization review for standard treatments so that quality medical care could be delivered to injured workers without the the delay of utilization review.
The other significant part of this legislation is that an important step in curbing phony liens has been enacted.
Any lien filed after January 1, 2017 must be accompanied by a declaration under penalty of perjury that includes information concerning, among other things, that the lien claimant has provided treatment authorized by the employer or claims administrator; the they have made a diligent search and determined that the employer does not have a medical provider network; and that they provide documentation that medical treatment has been neglected or unreasonably refused to the employee. While seemingly burdensome, these are clear statements that the lien is on its face valid. The number of liens that have clogged the WCAB has been astronomical.
For all other liens (pre 1/1/17), a declaration must be filed no later than July 1, 2017. Failure to file the declarations under penalty of perjury will be a significant ground for dismissal of the lien. The declaration requirement has also been strengthened by an expansion of the crime of perjury.
In addition, any liens filed after January 1, 2017 may not be assigned to third party unless the lien holder is out of business.
Lastly, the legislature provided that there can be an automatic stay for any lien filed by a physician or provider for whom there has been a filing of specified criminal charges including medical fraud.
Extensive regulations will be created to implement the entire new Code provisions in a timely and phased manner. The initial focus of the Division of Worker's Compensation will be on the lien requirements that will take place within three months. They will have more time to detail the processes with respect to the January 1, 2018 implementation of the new utilization review procedures. We will keep you up to date as these new regulations are proposed and adopted.