Bill Full Text
Home
-
Bills
-
Bill
-
Authors
-
Dates
-
Locations
-
Analyses
-
Organizations
<?xml version="1.0" ?>
<ns0:MeasureDoc xmlns:html="http://www.w3.org/1999/xhtml" xmlns:ns0="http://lc.ca.gov/legalservices/schemas/caml.1#" xmlns:ns3="http://www.w3.org/1999/xlink" xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance" version="1.0" xsi:schemaLocation="http://lc.ca.gov/legalservices/schemas/caml.1# xca.1.xsd">
<ns0:Description>
<ns0:Id>20250AB__104895AMD</ns0:Id>
<ns0:VersionNum>95</ns0:VersionNum>
<ns0:History>
<ns0:Action>
<ns0:ActionText>INTRODUCED</ns0:ActionText>
<ns0:ActionDate>2025-02-20</ns0:ActionDate>
</ns0:Action>
<ns0:Action>
<ns0:ActionText>AMENDED_ASSEMBLY</ns0:ActionText>
<ns0:ActionDate>2025-03-24</ns0:ActionDate>
</ns0:Action>
<ns0:Action>
<ns0:ActionText>AMENDED_ASSEMBLY</ns0:ActionText>
<ns0:ActionDate>2025-04-10</ns0:ActionDate>
</ns0:Action>
<ns0:Action>
<ns0:ActionText>AMENDED_SENATE</ns0:ActionText>
<ns0:ActionDate>2025-09-05</ns0:ActionDate>
</ns0:Action>
<ns0:Action>
<ns0:ActionText>AMENDED_SENATE</ns0:ActionText>
<ns0:ActionDate>2026-01-22</ns0:ActionDate>
</ns0:Action>
</ns0:History>
<ns0:LegislativeInfo>
<ns0:SessionYear>2025</ns0:SessionYear>
<ns0:SessionNum>0</ns0:SessionNum>
<ns0:MeasureType>AB</ns0:MeasureType>
<ns0:MeasureNum>1048</ns0:MeasureNum>
<ns0:MeasureState>AMD</ns0:MeasureState>
</ns0:LegislativeInfo>
<ns0:AuthorText authorType="LEAD_AUTHOR">Introduced by Assembly Member Chen</ns0:AuthorText>
<ns0:Authors>
<ns0:Legislator>
<ns0:Contribution>LEAD_AUTHOR</ns0:Contribution>
<ns0:House>ASSEMBLY</ns0:House>
<ns0:Name>Chen</ns0:Name>
</ns0:Legislator>
</ns0:Authors>
<ns0:Title> An act to amend Sections 4603.2, 4603.3, and 4610 of the Labor Code, relating to workers’ compensation. </ns0:Title>
<ns0:RelatingClause>workers’ compensation</ns0:RelatingClause>
<ns0:GeneralSubject>
<ns0:Subject>Workers’ compensation.</ns0:Subject>
</ns0:GeneralSubject>
<ns0:DigestText>
<html:p>Existing law establishes a workers’ compensation system, administered by the Administrative Director of the Division of Workers’ Compensation, to compensate an employee for injuries sustained in the course of employment. Existing law requires an employer to provide medical, surgical, chiropractic, acupuncture, and hospital treatment that is reasonably required to cure or relieve the injured worker from the effects of the injury. Upon payment, adjustment, or denial of a complete or incomplete itemization of medical services, existing law requires an employer to provide an explanation of review that includes, among other information, the amount paid and the basis for any adjustment, change, or denial of the item or procedure billed. </html:p>
<html:p>This bill would, when the basis for any adjustment, change, or denial of an item or procedure is a contract,
require the explanation of review to include information on that underlying contract, including whom the rendering medical provider may contact to seek a copy of the underlying contract. The bill would state that disclosure of a medical provider network does not satisfy this requirement and would state that if the contract is not sent to the rendering provider or their agent within 30 business days of the provider’s request, the bill shall be reprocessed and paid, as specified.</html:p>
<html:p>Existing law requires each employer to establish a utilization review process to review and approve, modify, or deny treatment recommendations and establishes an independent medical review process to resolve disputes over a utilization review decision. Existing law requires various requirements to be met in determining whether to approve, modify, or deny requests by a physician for medical services.</html:p>
<html:p>This bill would require a request for authorization of medical services by a physician to be signed by that physician, and would authorize a request to be sent via mail, fax, or electronic methods, as specified. The bill would make other conforming changes.</html:p>
</ns0:DigestText>
<ns0:DigestKey>
<ns0:VoteRequired>MAJORITY</ns0:VoteRequired>
<ns0:Appropriation>NO</ns0:Appropriation>
<ns0:FiscalCommittee>YES</ns0:FiscalCommittee>
<ns0:LocalProgram>NO</ns0:LocalProgram>
</ns0:DigestKey>
<ns0:MeasureIndicators>
<ns0:ImmediateEffect>NO</ns0:ImmediateEffect>
<ns0:ImmediateEffectFlags>
<ns0:Urgency>NO</ns0:Urgency>
<ns0:TaxLevy>NO</ns0:TaxLevy>
<ns0:Election>NO</ns0:Election>
<ns0:UsualCurrentExpenses>NO</ns0:UsualCurrentExpenses>
<ns0:BudgetBill>NO</ns0:BudgetBill>
<ns0:Prop25TrailerBill>NO</ns0:Prop25TrailerBill>
</ns0:ImmediateEffectFlags>
</ns0:MeasureIndicators>
</ns0:Description>
<ns0:Bill id="bill">
<ns0:Preamble>The people of the State of California do enact as follows:</ns0:Preamble>
<ns0:BillSection id="id_D3074A44-02F3-466C-BBD7-E226E220AFF3">
<ns0:Num>SECTION 1.</ns0:Num>
<ns0:ActionLine action="IS_AMENDED" ns3:href="urn:caml:codes:LAB:caml#xpointer(%2Fcaml%3ALawDoc%2Fcaml%3ACode%2Fcaml%3ALawHeading%5B%40type%3D'DIVISION'%20and%20caml%3ANum%3D'4.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'PART'%20and%20caml%3ANum%3D'2.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'CHAPTER'%20and%20caml%3ANum%3D'2.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'ARTICLE'%20and%20caml%3ANum%3D'2.'%5D%2Fcaml%3ALawSection%5Bcaml%3ANum%3D'4603.2.'%5D)" ns3:label="fractionType: LAW_SECTION" ns3:type="locator">
Section 4603.2 of the
<ns0:DocName>Labor Code</ns0:DocName>
is amended to read:
</ns0:ActionLine>
<ns0:Fragment>
<ns0:LawSection id="id_447C393C-1AC9-4A7E-91EE-AD13682851E6">
<ns0:Num>4603.2.</ns0:Num>
<ns0:LawSectionVersion id="id_FAF786A2-C94C-493E-B015-82AEA448010A">
<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
Upon selecting a physician pursuant to Section 4600, the employee or physician shall notify the employer of the name and address, including the name of the medical group, if applicable, of the physician. The physician shall submit a report to the employer within five working days from the date of the initial examination, as required by Section 6409, and shall submit periodic reports at intervals that may be prescribed by rules and regulations adopted by the administrative director.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
If the employer objects to the employee’s selection of the physician on the grounds that the physician is not within the medical provider network used by the employer, and there is a final determination that the employee was entitled to select the
physician pursuant to Section 4600, the employee shall be entitled to continue treatment with that physician at the employer’s expense in accordance with this division, notwithstanding Section 4616.2. The employer shall be required to pay from the date of the initial examination if the physician’s report was submitted within five working days of the initial examination. If the physician’s report was submitted more than five working days after the initial examination, the employer and the employee shall not be required to pay for any services prior to the date the physician’s report was submitted.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
If the employer objects to the employee’s selection of the physician on the grounds that the physician is not within the medical provider network used by the employer, and there is a final determination that the employee was not entitled to select a physician outside of the medical provider network, the employer is not liable for treatment provided
by or at the direction of that physician or for any consequences of the treatment obtained outside the network.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
A provider of services provided pursuant to Section 4600, including, but not limited to, physicians, hospitals, pharmacies, interpreters, copy services, transportation services, and home health care services, shall submit its request for payment with an itemization of services provided and the charge for each service, a copy of all reports showing the services performed, the prescription or referral from the primary treating physician if the services were performed by a person other than the primary treating physician, and any evidence of authorization for the services that may have been received. This section does not prohibit an employer, insurer, or third-party claims administrator from establishing, through written agreement, an alternative manual or electronic request for
payment with providers for services provided pursuant to Section 4600.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
Effective for services provided on or after January 1, 2017, the request for payment with an itemization of services provided and the charge for each service shall be submitted to the employer within 12 months of the date of service or within 12 months of the date of discharge for inpatient facility services. The administrative director shall adopt rules to implement the 12-month limitation period. The rules shall define circumstances that constitute good cause for an exception to the 12-month period, including provisions to address the circumstances of a nonoccupational injury or illness later found to be a compensable injury or illness. The request for payment is barred unless timely submitted.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
The request for payment with an itemization of services provided and the charge for each service shall be
submitted to the employer with the national provider identifier (NPI) number for the physician or provider who provided the service for which payment is sought in accordance with rules adopted by the administrative director pursuant to Section 4603.4. Failure to include the physician’s or provider’s NPI shall result in the request for payment being barred until the physician’s or provider’s NPI is submitted with the request for payment. This subparagraph does not preclude an employer, insurer, pharmacy benefit manager, or third-party claims administrator from requiring the physician’s or provider’s NPI at an earlier date. This subparagraph is declaratory of existing law.
</html:p>
<html:p>
(D)
<html:span class="EnSpace"/>
Notwithstanding the requirements of this paragraph, a copy of the prescription shall not be required with a request for payment for pharmacy services, unless the provider of services has entered into a written agreement, as provided in this paragraph, that requires a copy
of a prescription for a pharmacy service.
</html:p>
<html:p>
(E)
<html:span class="EnSpace"/>
This section does not preclude an employer, insurer, pharmacy benefits manager, or third-party claims administrator from requesting a copy of the prescription during a review of any records of prescription drugs that were dispensed by a pharmacy.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Except as provided in subdivision (d) of Section 4603.4, or under contracts authorized under Section 5307.11, payment for medical treatment provided or prescribed by the treating physician selected by the employee or designated by the employer shall be made at reasonable maximum amounts in the official medical fee schedule, pursuant to Section 5307.1, in effect on the date of service. Payments shall be made by the employer with an explanation of review pursuant to Section 4603.3 within 45 days after receipt of each separate itemization of medical services provided, together with any
required reports and any written authorization for services that may have been received by the physician. If the itemization or a portion thereof is contested, denied, or considered incomplete, the physician shall be notified, in the explanation of review, that the itemization is contested, denied, or considered incomplete, within 30 days after receipt of the itemization by the employer. An explanation of review that states an itemization is incomplete shall also state all additional information required to make a decision. A properly documented list of services provided and not paid at the rates then in effect under Section 5307.1 within the 45-day period shall be paid at the rates then in effect and increased by 15 percent, together with interest at the same rate as judgments in civil actions retroactive to the date of receipt of the itemization, unless the employer does both of the following:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
Pays the provider at the rates in effect
within the 45-day period.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
Advises, in an explanation of review pursuant to Section 4603.3, the physician, or another provider of the items being contested, the reasons for contesting these items, and the remedies available to the physician or the other provider if the physician or provider disagrees. In the case of an itemization that includes services provided by a hospital, outpatient surgery center, or independent diagnostic facility, advice that a request has been made for an audit of the itemization shall satisfy the requirements of this paragraph.
</html:p>
<html:p>An employer’s liability to a physician or another provider under this section for delayed payments shall not affect its liability to an employee under Section 5814 or any other provision of this division.</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
Notwithstanding paragraph (1), if the employer is a governmental entity,
payment for medical treatment provided or prescribed by the treating physician selected by the employee or designated by the employer shall be made within 60 days after receipt of each separate itemization, together with any required reports and any written authorization for services that may have been received by the physician.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
Duplicate submissions of medical services itemizations, for which an explanation of review was previously provided, shall require no further or additional notification or objection by the employer to the medical provider and shall not subject the employer to any additional penalties or interest pursuant to this section for failing to respond to the duplicate submission. This paragraph applies only to duplicate submissions and does not apply to any other penalties or interest that may be applicable to the original submission.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
An employer may defer objecting to or paying any bill submitted by, or on behalf of, a provider whose liens are stayed pursuant to Section 4615, and the time limits for taking any action prescribed by paragraphs (2) and (3) shall not commence until the stay is lifted pursuant to Section 4615.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
An employer may object to any bill submitted by, or on behalf of, a provider who has been suspended pursuant to Section 139.21.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
Interest or an increase in compensation paid by an insurer pursuant to this section shall be treated in the same manner as an increase in compensation under subdivision (d) of Section 4650 for the purposes of any classification of risks and premium rates, and any system of merit rating approved or issued pursuant to Article 2 (commencing with Section 11730) of Chapter 3 of Part 3 of Division 2 of the Insurance Code.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
Whenever an employer or insurer employs an individual or contracts with an entity to conduct a review of an itemization submitted by a physician or medical provider, the employer or insurer shall make available to that individual or entity all documentation submitted together with that itemization by the physician or medical provider. When an individual or entity conducting an itemization review determines that additional information or documentation is necessary to review the itemization, the individual or entity shall contact the claims administrator or insurer to obtain the necessary information or documentation that was submitted by the physician or medical provider pursuant to subdivision (b).
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
An individual or entity reviewing an itemization of service submitted by a physician or medical provider, including a medical
provider network, an entity that provides ancillary services, as defined in Section 4616.5, or an entity providing services for or on behalf of the medical provider network or its providers, shall not alter the procedure codes listed or recommend reduction of the amount of the payment unless the documentation submitted by the physician or medical provider with the itemization of service has been reviewed by that individual or entity. If the reviewer does not recommend payment for services as itemized by the physician or medical provider, the explanation of review shall provide the physician or medical provider with a specific explanation as to why the reviewer altered the procedure code or changed other parts of the itemization and the specific deficiency in the itemization or documentation that caused the reviewer to conclude that the altered procedure code or amount recommended for payment more accurately represents the service performed.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
The amendments to subparagraph (A) made by the act adding this subparagraph are declaratory of existing law.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
If the provider disputes the amount paid, the provider may request a second review within 90 days of service of the explanation of review or an order of the appeals board resolving the threshold issue as stated in the explanation of review pursuant to paragraph (6) of subdivision (a) of Section 4603.3. The request for a second review shall be submitted to the employer on a form prescribed by the administrative director and shall include all of the following:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
The date of the explanation of review and the claim number or other unique
identifying number provided on the explanation of review.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
The item and amount in dispute.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
The additional payment requested and the reason therefor.
</html:p>
<html:p>
(D)
<html:span class="EnSpace"/>
The additional information provided in response to a request in the first explanation of review or any other additional information provided in support of the additional payment requested.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
If the only dispute is the amount of payment and the provider does not request a second review within 90 days, the bill shall be deemed satisfied and neither the employer nor the employee shall be liable for any further payment.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
Within 14 days of a request for second review, the employer shall respond with a final written determination on
each of the items or amounts in dispute. Payment of any balance not in dispute shall be made within 21 days of receipt of the request for second review. This time limit may be extended by mutual written agreement.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
If the provider contests the amount paid, after receipt of the second review, the provider shall request an independent bill review as provided for in Section 4603.6.
</html:p>
<html:p>
(f)
<html:span class="EnSpace"/>
Except as provided in paragraph (4) of subdivision (e), the appeals board shall have jurisdiction over disputes arising out of this section pursuant to Section 5304.
</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
</ns0:Fragment>
</ns0:BillSection>
<ns0:BillSection id="id_71AC9D24-2D81-4241-AF00-6BB4587257D4">
<ns0:Num>SEC. 2.</ns0:Num>
<ns0:ActionLine action="IS_AMENDED" ns3:href="urn:caml:codes:LAB:caml#xpointer(%2Fcaml%3ALawDoc%2Fcaml%3ACode%2Fcaml%3ALawHeading%5B%40type%3D'DIVISION'%20and%20caml%3ANum%3D'4.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'PART'%20and%20caml%3ANum%3D'2.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'CHAPTER'%20and%20caml%3ANum%3D'2.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'ARTICLE'%20and%20caml%3ANum%3D'2.'%5D%2Fcaml%3ALawSection%5Bcaml%3ANum%3D'4603.3.'%5D)" ns3:label="fractionType: LAW_SECTION" ns3:type="locator">
Section 4603.3 of the
<ns0:DocName>Labor Code</ns0:DocName>
is amended to read:
</ns0:ActionLine>
<ns0:Fragment>
<ns0:LawSection id="id_36953B24-C1F7-4FBE-BDCE-627134EDC5FB">
<ns0:Num>4603.3.</ns0:Num>
<ns0:LawSectionVersion id="id_0DC1CB68-E538-400F-B0A5-09CB579CB5C0">
<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
Upon payment, adjustment, or denial of a complete or incomplete itemization of medical services, an employer shall provide an explanation of review in the manner prescribed by the administrative director that shall include all of the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
A statement of the items or procedures billed and the amounts requested by the provider to be paid.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
The amount paid.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
The state assigned medical provider network identification number applicable to the bill.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
The basis for any adjustment, change, or denial of the item or procedure billed.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
If the adjustment, change, or denial is based on a contract, then the explanation of review shall include specific information on the underlying contract that was relied upon to justify the discount and contact information, including an address and email address for whom the rendering medical provider may contact to receive a copy of the
underlying contract.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
For the purposes of this section, the “underlying contract” is the contract associated with the tax identification number of the rendering medical provider and the medical provider network listed on the explanation of review.
</html:p>
<html:p>
(D)
<html:span class="EnSpace"/>
Disclosure of a medical provider network does not satisfy this requirement.
</html:p>
<html:p>
(E)
<html:span class="EnSpace"/>
Only the rendering provider or their agent shall be provided a copy of the underlying contract within a 365-day period.
</html:p>
<html:p>
(F)
<html:span class="EnSpace"/>
If the contract is not sent to the rendering provider or their agent within 30 business days of the provider’s request, the bill shall be automatically reprocessed and paid at rates mandated by the official medical fee schedule.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
The additional information required to make a decision for an incomplete itemization.
</html:p>
<html:p>
(6)
<html:span class="EnSpace"/>
If a denial of payment is for some reason other than a fee
dispute, the reason for the denial.
</html:p>
<html:p>
(7)
<html:span class="EnSpace"/>
Information on whom to contact on behalf of the employer if a dispute arises over the payment of the billing. The explanation of review shall inform the medical provider of the time limit to raise any objection regarding the items or procedures paid or disputed and how to obtain an independent review of the medical bill pursuant to Section 4603.6.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
The administrative director may adopt regulations as necessary to implement and make specific the provisions of this section,
including, but not limited to, a requirement to use electronic explanations of review.
</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
</ns0:Fragment>
</ns0:BillSection>
<ns0:BillSection id="id_A6FC3966-125B-4A32-99E1-4E8ED4233061">
<ns0:Num>SEC. 3.</ns0:Num>
<ns0:ActionLine action="IS_AMENDED" ns3:href="urn:caml:codes:LAB:caml#xpointer(%2Fcaml%3ALawDoc%2Fcaml%3ACode%2Fcaml%3ALawHeading%5B%40type%3D'DIVISION'%20and%20caml%3ANum%3D'4.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'PART'%20and%20caml%3ANum%3D'2.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'CHAPTER'%20and%20caml%3ANum%3D'2.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'ARTICLE'%20and%20caml%3ANum%3D'2.'%5D%2Fcaml%3ALawSection%5Bcaml%3ANum%3D'4610.'%5D)" ns3:label="fractionType: LAW_SECTION" ns3:type="locator">
Section 4610 of the
<ns0:DocName>Labor Code</ns0:DocName>
is amended to read:
</ns0:ActionLine>
<ns0:Fragment>
<ns0:LawSection id="id_94F82F25-7279-4DA3-A200-121890BA57CC">
<ns0:Num>4610.</ns0:Num>
<ns0:LawSectionVersion id="id_AEC6D3FC-78EF-4FF5-9A68-AF4543A860AD">
<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
For purposes of this section, “utilization review” means utilization review or utilization management functions that prospectively, retrospectively, or concurrently review and approve, modify, or deny, based in whole or in part on medical necessity to cure and relieve, treatment recommendations by physicians, as defined in Section 3209.3, prior to, retrospectively, or concurrent with the provision of medical treatment services pursuant to Section 4600.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
For all dates of injury occurring on or after January 1, 2018, emergency treatment services and medical treatment rendered for a body part or condition that is accepted as compensable by the employer and is addressed by the medical treatment utilization schedule adopted pursuant to Section 5307.27, by a
member of the medical provider network or health care organization, or by a physician predesignated pursuant to subdivision (d) of Section 4600, within the 30 days following the initial date of injury, shall be authorized without prospective utilization review, except as provided in subdivision (c). The services rendered under this subdivision shall be consistent with the medical treatment utilization schedule. In the event that the employee is not subject to treatment with a medical provider network, health care organization, or predesignated physician pursuant to subdivision (d) of Section 4600, the employee shall be eligible for treatment under this section within 30 days following the initial date of injury if the treatment is rendered by a physician or facility selected by the employer. For treatment rendered by a medical provider network physician, health care organization physician, a physician predesignated pursuant to subdivision (d) of Section 4600, or an employer-selected physician, the report
required under Section 6409 and a complete request for authorization shall be submitted by the physician within five days following the employee’s initial visit and evaluation.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
Unless authorized by the employer or rendered as emergency medical treatment, the following medical treatment services, as defined in rules adopted by the administrative director, that are rendered through a member of the medical provider network or health care organization, a predesignated physician, an employer-selected physician, or an employer-selected facility, within the 30 days following the initial date of injury, shall be subject to prospective utilization review under this section:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
Pharmaceuticals, to the extent they are neither expressly exempted from prospective review nor authorized by the drug formulary adopted pursuant to Section 5307.27.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Nonemergency inpatient and outpatient surgery, including all presurgical and postsurgical services.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
Psychological treatment services.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
Home health care services.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
Imaging and radiology services, excluding x-rays.
</html:p>
<html:p>
(6)
<html:span class="EnSpace"/>
All durable medical equipment, whose combined total value exceeds two hundred fifty dollars ($250), as determined by the official medical fee schedule.
</html:p>
<html:p>
(7)
<html:span class="EnSpace"/>
Electrodiagnostic medicine, including, but not limited to, electromyography and nerve conduction studies.
</html:p>
<html:p>
(8)
<html:span class="EnSpace"/>
Any other service designated and defined through rules adopted by the
administrative director.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
Except for emergency treatment services, any request for payment for treatment provided under subdivision (b) shall comply with Section 4603.2 and be submitted to the employer, or its insurer or claims administrator, within 30 days of the date the service was provided.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
In the case of emergency treatment services, any request for payment for treatment provided under subdivision (b) shall comply with Section 4603.2 and be submitted to the employer, or its insurer or claims administrator, within 180 days of the date the service was provided.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
For the purposes of this subdivision, “emergency treatment services” means treatment for an emergency medical condition defined in subdivision (b) of Section 1317.1 of the Health and Safety Code
and provided in a licensed general acute care hospital, as defined in Section 1250 of the Health and Safety Code.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
If a physician fails to submit the report required under Section 6409 and a complete request for authorization, as described in subdivision (b), an employer may remove the physician’s ability under this subdivision to provide further medical treatment to the employee that is exempt from prospective utilization review.
</html:p>
<html:p>
(f)
<html:span class="EnSpace"/>
An employer may perform retrospective utilization review for any treatment provided pursuant to subdivision (b) solely for the purpose of determining if the physician is prescribing treatment consistent with the schedule for medical treatment utilization, including, but not limited to, the drug formulary adopted pursuant to Section 5307.27.
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
If it is found after retrospective
utilization reviews that there is a pattern and practice of the physician or provider failing to render treatment consistent with the schedule for medical treatment utilization, including the drug formulary, the employer may remove the ability of the predesignated physician, employer-selected physician, or the member of the medical provider network or health care organization under this subdivision to provide further medical treatment to any employee that is exempt from prospective utilization review. The employer shall notify the physician or provider of the results of the retrospective utilization review and the requirement for prospective utilization review for all subsequent medical treatment.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
The results of retrospective utilization review may constitute a showing of good cause for an employer’s petition requesting a change of physician or provider pursuant to Section 4603 and may serve as grounds for termination of the physician or
provider from the medical provider network or health care organization.
</html:p>
<html:p>
(g)
<html:span class="EnSpace"/>
Each employer shall establish a utilization review process in compliance with this section, either directly or through its insurer or an entity with which an employer or insurer contracts for these services.
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
Each utilization review process that modifies or denies requests for authorization of medical treatment shall be governed by written policies and procedures. These policies and procedures shall ensure that decisions based on the medical necessity to cure and relieve of proposed medical treatment services are consistent with the schedule for medical treatment utilization, including the drug formulary, adopted pursuant to Section 5307.27.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
Unless otherwise indicated in this section, a physician providing
treatment under Section 4600 shall send any request for authorization for medical treatment, with supporting documentation, to the claims administrator for the employer, insurer, or other entity. The request for authorization shall be signed by the treating physician and may be mailed, faxed, or sent electronically through the use of a secure email system or via electronic data interchange to the address, fax number, email address, or clearinghouse designated by the claims administrator. The employer, insurer, or other entity shall employ or designate a medical director who holds an unrestricted license to practice medicine in this state issued pursuant to Section 2050 or 2450 of the Business and Professions Code. The medical director shall ensure that
the process by which the employer or other entity reviews and approves, modifies, or denies requests by physicians prior to, retrospectively, or concurrent with the provision of medical treatment services complies with the requirements of this section. This section does not limit the existing authority of the Medical Board of California.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
A request for authorization, including its supporting documentation, shall not be altered or amended by any entity other than the requesting physician or provider prior to the submission of the request to the claims administrator in accordance with subparagraph (A). This subparagraph is declaratory of existing law.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
A person other than a licensed physician who is competent to evaluate the specific clinical issues involved in the medical treatment services, if these services are within the scope of the physician’s
practice, requested by the physician, shall not modify or deny requests for authorization of medical treatment for reasons of medical necessity to cure and relieve or due to incomplete or insufficient information under subdivisions (i) and (j).
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
(i)
<html:span class="EnSpace"/>
The employer, or any entity conducting utilization review on behalf of the employer, shall neither offer nor provide any financial incentive or consideration to a physician based on the number of modifications or denials made by the physician under this section.
</html:p>
<html:p>
(ii)
<html:span class="EnSpace"/>
An insurer or third-party administrator shall not refer utilization review services conducted on behalf of an employer under this section to an entity in which the insurer or third-party administrator has a financial interest as defined under Section 139.32. This prohibition does not apply if the insurer or third-party administrator provides the
employer and the administrative director with prior written disclosure of both of the following:
</html:p>
<html:p>
(I)
<html:span class="EnSpace"/>
The entity conducting the utilization review services.
</html:p>
<html:p>
(II)
<html:span class="EnSpace"/>
The insurer or third-party administrator’s financial interest in the entity.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
The administrative director has authority pursuant to this section to review any compensation agreement, payment schedule, or contract between the employer, or any entity conducting utilization review on behalf of the employer, and the utilization review physician. Any information disclosed to the administrative director pursuant to this paragraph shall be considered confidential information and not subject to disclosure pursuant to the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code). Disclosure of the information
to the administrative director pursuant to this subdivision shall not waive the provisions of the Evidence Code relating to privilege.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
A utilization review process that modifies or denies requests for authorization of medical treatment shall be accredited on or before July 1, 2018, and shall retain active accreditation while providing utilization review services, by an independent, nonprofit organization to certify that the utilization review process meets specified criteria, including, but not limited to, timeliness in issuing a utilization review decision, the scope of medical material used in issuing a utilization review decision, peer-to-peer consultation, internal appeal procedure, and requiring a policy preventing financial incentives to doctors and other providers based on the utilization review decision. The administrative director shall adopt rules to implement the selection of an independent, nonprofit organization for those
accreditation purposes. Until those rules are adopted, the administrative director shall designate URAC as the accrediting organization. The administrative director may adopt rules to do any of the following:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
Require additional specific criteria for measuring the quality of a utilization review process for purposes of accreditation.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
Exempt nonprofit, public sector internal utilization review programs from the accreditation requirement pursuant to this section, if the administrative director has adopted minimum standards applicable to nonprofit, public sector internal utilization review programs that meet or exceed the accreditation standards developed pursuant to this section.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
On or before July 1, 2018, each employer, either directly or through its insurer or an entity with which an employer or insurer
contracts for utilization review services, shall submit a description of the utilization review process that modifies or denies requests for authorization of medical treatment and the written policies and procedures to the administrative director for approval. Approved utilization review process descriptions and the accompanying written policies and procedures shall be disclosed by the employer to employees and physicians and made available to the public by posting on the employer’s, claims administrator’s, or utilization review organization’s internet website.
</html:p>
<html:p>
(h)
<html:span class="EnSpace"/>
The criteria or guidelines used in the utilization review process to determine whether to approve, modify, or deny medical treatment services shall be all of the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
Developed with involvement from actively practicing physicians.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Consistent
with the schedule for medical treatment utilization, including the drug formulary, adopted pursuant to Section 5307.27.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
Evaluated at least annually, and updated if necessary.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
Disclosed to the physician and the employee, if used as the basis of a decision to modify or deny services in a specified case under review.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
Available to the public upon request. An employer shall only be required to disclose the criteria or guidelines for the specific procedures or conditions requested. An employer may charge members of the public reasonable copying and postage expenses related to disclosing criteria or guidelines pursuant to this paragraph. Criteria or guidelines may also be made available through electronic means. A charge shall not be required for an employee whose physician’s request for medical treatment
services is under review.
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
In determining whether to approve, modify, or deny requests by physicians prior to, retrospectively, or concurrent with the provisions of medical treatment services to employees, all of the following requirements shall be met:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
Except for treatment requests made pursuant to the formulary, prospective or concurrent decisions shall be made in a timely fashion that is appropriate for the nature of the employee’s condition, not to exceed five normal business days from the receipt of a request for authorization for medical treatment and supporting information reasonably necessary to make the determination, but in no event more than 14 days from the date of the medical treatment recommendation by the physician. Prospective decisions regarding requests for treatment covered by the formulary shall be made no more than five normal business days from the
date of receipt of the medical treatment request. The request for authorization and supporting documentation may be submitted electronically under rules adopted by the administrative director.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
In cases where the review is retrospective, a decision resulting in denial of all or part of the medical treatment service shall be communicated to the individual who received services, or to the individual’s designee, within 30 days of the receipt of the information that is reasonably necessary to make this determination. If payment for a medical treatment service is made within the time prescribed by Section 4603.2, a retrospective decision to approve the service need not otherwise be communicated.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
If the employee’s condition is one in which the employee faces an imminent and serious threat to the employee’s health, including, but not limited to, the potential loss of life, limb,
or other major bodily function, or the normal timeframe for the decisionmaking process, as described in paragraph (1), would be detrimental to the employee’s life or health or could jeopardize the employee’s ability to regain maximum function, decisions to approve, modify, or deny requests by physicians prior to, or concurrent with, the provision of medical treatment services to employees shall be made in a timely fashion that is appropriate for the nature of the employee’s condition, but not to exceed 72 hours after the receipt of the information reasonably necessary to make the determination.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
Final decisions to approve, modify, or deny requests by physicians for authorization prior to, or concurrent with, the provision of medical treatment services to employees shall be communicated to the requesting physician within 24 hours of the decision by telephone, facsimile, or, if agreed to by the parties, secure
email.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
Decisions resulting in modification or denial of all or part of the requested health care service shall be communicated in writing to the employee, and to the physician if the initial communication under subparagraph (A) was by telephone, within 24 hours for concurrent review, or within two normal business days of the decision for prospective review, as prescribed by the administrative director. If the request is modified or denied, disputes shall be resolved in accordance with Section 4610.5, if applicable, or otherwise in accordance with Section 4062.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
In the case of concurrent review, medical care shall not be discontinued until the employee’s physician has been notified of the decision and a care plan has been agreed upon by the physician that is appropriate for the medical needs of the employee. Medical care provided during a concurrent review shall be care that
is medically necessary to cure and relieve, and an insurer or self-insured employer shall only be liable for those services determined medically necessary to cure and relieve. If the insurer or self-insured employer disputes whether or not one or more services offered concurrently with a utilization review were medically necessary to cure and relieve, the dispute shall be resolved pursuant to Section 4610.5, if applicable, or otherwise pursuant to Section 4062. A compromise between the parties that an insurer or self-insured employer believes may result in payment for services that were not medically necessary to cure and relieve shall be reported by the insurer or the self-insured employer to the licensing board of the provider or providers who received the payments, in a manner set forth by the respective board and in a way that minimizes reporting costs both to the board and to the insurer or self-insured employer, for evaluation as to possible violations of the statutes governing appropriate professional
practices. Fees shall not be levied upon insurers or self-insured employers making reports required by this section.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
Communications regarding decisions to approve requests by physicians shall specify the specific medical treatment service approved. Responses regarding decisions to modify or deny medical treatment services requested by physicians shall include a clear and concise explanation of the reasons for the employer’s decision, a description of the criteria or guidelines used, and the clinical reasons for the decisions regarding medical necessity. If a utilization review decision to deny a medical service is due to incomplete or insufficient information, the decision shall specify all of the following:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
The reason for the decision.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
A specific description of the information that is needed.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
The date and time of attempts made to contact the physician to obtain the necessary information.
</html:p>
<html:p>
(D)
<html:span class="EnSpace"/>
A description of the manner in which the request was communicated.
</html:p>
<html:p>
(j)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
Unless otherwise indicated in this section, a physician providing treatment under Section 4600 shall send any request for authorization for medical treatment, with supporting documentation, to the claims administrator for the employer, insurer, or other entity according to rules adopted by the administrative director. If an employer, insurer, or other entity subject to this section requests medical information from a physician in order to determine whether to approve, modify, or deny requests for authorization, that employer, insurer, or other entity shall request only the information reasonably necessary to make the
determination.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
If the employer, insurer, or other entity cannot make a decision within the timeframes specified in paragraph (1), (2), or (3) of subdivision (i) because the employer or other entity is not in receipt of, or in possession of, all of the information reasonably necessary to make a determination, the employer shall immediately notify the physician and the employee, in writing, that the employer cannot make a decision within the required timeframe, and specify the information that must be provided by the physician for a determination to be made. Upon receipt of all information reasonably necessary and requested by the employer, the employer shall approve, modify, or deny the request for authorization within the timeframes specified in paragraph (1), (2), or (3) of subdivision (i).
</html:p>
<html:p>
(k)
<html:span class="EnSpace"/>
A utilization review decision to modify or deny a treatment recommendation shall
remain effective for 12 months from the date of the decision without further action by the employer with regard to a further recommendation by the same physician, or another physician within the requesting physician’s practice group, for the same treatment unless the further recommendation is supported by a documented change in the facts material to the basis of the utilization review decision.
</html:p>
<html:p>
(
<html:i>l</html:i>
)
<html:span class="EnSpace"/>
Utilization review of a treatment recommendation shall not be required while the employer is disputing liability for injury or treatment of the condition for which treatment is recommended pursuant to Section 4062.
</html:p>
<html:p>
(m)
<html:span class="EnSpace"/>
If utilization review is deferred pursuant to subdivision (l), and it is finally determined that the employer is liable for treatment of the condition for which treatment is recommended, the time for the employer to conduct retrospective utilization review in
accordance with paragraph (2) of subdivision (i) shall begin on the date the determination of the employer’s liability becomes final, and the time for the employer to conduct prospective utilization review shall commence from the date of the employer’s receipt of a treatment recommendation after the determination of the employer’s liability.
</html:p>
<html:p>
(n)
<html:span class="EnSpace"/>
Each employer, insurer, or other entity subject to this section shall maintain telephone access during California business hours for physicians to request authorization for health care services and to conduct peer-to-peer discussions regarding issues, including the appropriateness of a requested treatment, modification of a treatment request, or obtaining additional information needed to make a medical necessity decision.
</html:p>
<html:p>
(o)
<html:span class="EnSpace"/>
The administrative director shall develop a system for the mandatory electronic reporting of documents related to
every utilization review performed by each employer, which shall be administered by the Division of Workers’ Compensation. The administrative director shall adopt regulations specifying the documents to be submitted by the employer and the authorized transmission format and timeframe for their submission. For purposes of this subdivision, “employer” means the employer, the insurer of an insured employer, a claims administrator, or a utilization review organization, or other entity acting on behalf of any of them.
</html:p>
<html:p>
(p)
<html:span class="EnSpace"/>
If the administrative director determines that the employer, insurer, or other entity subject to this section has failed to meet any of the timeframes in this section, or has failed to meet any other requirement of this section, the administrative director may assess, by order, administrative penalties for each failure. A proceeding for the issuance of an order assessing administrative penalties shall be subject to appropriate
notice to, and an opportunity for a hearing with regard to, the person affected. The administrative penalties shall not be deemed to be an exclusive remedy for the administrative director. These penalties shall be deposited in the Workers’ Compensation Administration Revolving Fund.
</html:p>
<html:p>
(q)
<html:span class="EnSpace"/>
The administrative director shall contract with an outside, independent research organization to evaluate the impact of the provision of medical treatment within the first 30 days after a claim is filed, for a claim filed on or after January 1, 2017, and before January 1, 2021. The report shall be provided to the administrative director, the Senate Committee on Labor and Industrial Relations, and the Assembly Committee on Insurance, pursuant to Section 9795 of the Government Code, before July 1, 2023.
</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
</ns0:Fragment>
</ns0:BillSection>
</ns0:Bill>
</ns0:MeasureDoc>