The Department of Industrial Relations and its Division of Workers Compensation (DIR/DWC) announced new regulations implementing provisions of Senate Bill 863, California’s landmark workers’ compensation reform signed last year by Governor Edmund G. Brown Jr. to save businesses millions of dollars in unnecessary costs while boosting worker protections. “We are on track to implement the wide-ranging reform which was the result of extensive input by workers and employers,” said DIR Director Christine Baker. “These reforms are engineered to reduce unnecessary costs while redirecting some of the savings to increase benefits for disabled workers.”
Key components of Senate Bill 863, which became law on January 1, 2013, include a 30 percent increase in permanent disability indemnity rates for workers phased in over two years. Other aspects of the bill, including those designed to cut costs for businesses, will now be implemented through regulatory action. Today’s new regulations launch that full rulemaking process with public hearings scheduled to take place by March.
The new regulations, approved on an interim basis by the Office of Administrative Law, improve workers’ compensation by creating an independent medical panel to review injuries, streamlining billing disputes and curbing unnecessary liens. Details of these new regulations include:
Utilization Review, Independent Medical Review – For injuries on or after Jan. 1, 2013, and effective July 1, 2013 for all dates of injury, medical treatment disputes will be resolved by physicians through an efficient process known as independent medical review (IMR), rather than through the often cumbersome and costly adjudication system. If utilization review denies, delays or modifies a treating physician’s request for a specific course of medical treatment for the reason that the treatment is not medically necessary, the injured employee will have the right to request a review of that decision by IMR conducted by a physician. The physician review will be expeditious and based upon evidence-based standards to ensure that injured employees receive timely and appropriate medical treatment.
Qualified Medical Evaluator Regulations and PDRS – The new regulations amend existing rules to clarify that independent medical review is the sole process for resolving disputes regarding ongoing medical treatment issues; limits the number of offices from which a Qualified Medical Evaluator (QME) may conduct evaluations; streamlines the application process for chiropractors; allows for factual corrections of a comprehensive medical-legal report from a QME panel; and amends a number of forms.
Independent Bill Review– Medical service billing disputes for dates of service on or after Jan. 1, 2013, will be resolved through a non-judicial process of independent bill review (IBR). The IBR applies to any medical service bill where the fee is determined by a fee schedule adopted by the DWC. If the medical provider disagrees with the amount paid by a claims administrator on a properly documented bill following a second review, he or she can request an IBR. This regulation will eliminate unnecessary, costly litigation.
Electronic document filing and lien filing fee – Any lien for reasonable medical expenses incurred by or on behalf of the injured employee (except disputes subject to independent medical review or independent bill review) and filed on or after Jan. 1, 2013, is subject to a lien filing fee of $150. For those liens filed before Jan. 1, 2013, there will be a $100 activation fee which must be paid prior to Jan. 1, 2014, or the lien will be subject to dismissal by operation of law.
Self-Insurance and Annual Actuarial Reports – These new regulations will implement SB 863’s requirement for all private self-insured employers and groups to obtain an actuarial report to more accurately establish the organization’s California workers’ compensation liability exposure. The regulations will further define new methods in how the OSIP establishes security deposit collateral requirements based on this additional information.
Interpreter Services – SB 863 amended Labor Code section 4600(g) to state that an injured worker is entitled to the services of a “qualified interpreter” at medical appointments if the injured worker is not proficient in English. These regulations define the “qualified interpreter for purposes of medical treatment appointments” as “an interpreter who has a documented and demonstrated proficiency in both English and the other language; a fundamental knowledge in both languages of health care terminology and concepts relevant to health care delivery systems; and education and training in interpreting ethics, conduct and confidentiality” so that employers can furnish, and non-English-speaking injured employees can receive, interpreter services at medical treatment in accordance with the statute.
Supplemental Job Displacement Benefits – Makes modifications reflecting regulatory changes regarding offers of work, notifications and vouchers for retraining workers injured on the job.
Hospital outpatient departments and ambulatory surgical centers fee schedule – The statute also amended the official medical fee schedule for hospital outpatient departments and ambulatory surgical centers, reducing the facility fee for ambulatory surgical center services to 80 percent of what Medicare bills for the same services in a hospital outpatient. This change will save an estimated $62 million plus additional savings in system costs. The regulation is effective Jan. 1, 2013.
Extensive information on workers’ rights and employers’ responsibilities as well as information for small business owners can be found on DIR’s website. DIR’s rulemaking web page includes a quick overview of regulations and is updated regularly.