California workers’ compensation reforms enacted in 2003 and 2004 introduced a new process for approving medical services for injured workers, including the adoption of mandatory utilization review (UR) using evidence-based medicine guidelines.

Nearly a decade later, state lawmakers included reforms in SB 863 that added a new element to the medical service approval process, mandating the use of independent medical review (IMR) to resolve disputes over medical necessity.

The California Workers’ Compensation Institute’s latest study of California’s medical benefit delivery process expands on earlier analyses to determine the proportion of requested and/or delivered care that is approved versus denied after UR and IMR by service category.

Results show that 94.1 percent of services performed or requested from January 1, 2018 to October 31, 2018 were either approved (92.5 percent) or approved with modifications (1.6 percent), and 5.9 percent were denied, though outcomes varied by service category.

Evaluation and management services (e.g., office and emergency department visits, consultations) represented 29 .1 percent of the medical services in the 2018 data set and had an approval rate of 99.7 percent.

Surgery services were approved with or without modifications 94.9 percent of the time, while 89.4 percent of physical medicine services (physical therapy, chiropractic manipulation, and acupuncture) were approved with or without modifications.

The study also examines the impact of the UR provisions of 2016 legislation (SB 1160), which effective Janua1y 1, 2018, exempted certain services from prospective UR.

One goal of SB 1160 was to speed delivery of medical care, and while the study does find that the proportion of physical medicine services performed in the first 30 days increased from 2017 to 2018, there was no meaningful change in the delivery of other services. At the same time, the total volume of services performed in the first 60 days from injury did not increase and the denial rate for these services remained very low in both periods, ranging from 0.0 to 4.8 percent.

For the first time, the authors were able to estimate the proportion of UR denials and modifications that underwent IMR and found that an estimated 29 percent of UR modification and denial decisions were appealed and reviewed by an IMR physician.

However, an examination of the top law firms identified in the UR data reveals that the IMR referral rates by applicant attorneys varied greatly. Some attorneys submitted nearly all of their clients’ treatment modifications and denials to IMR, while others sent none.

The last section of the study continues the Institute’s monitoring of IMR volumes and results. After a 7 percent increase in volume from 2017 to 2018, IMR volume for the first half of 2019 appears to be dropping back toward 2017 levels.

As in 2018, IMR reviewers have upheld UR decisions 88 percent of the time through the first half of 2019. In addition, a small number of physicians continue to drive a disproportionate share of the IMR volume, with the top 1 percent associated with 44 percent of the IMR decisions.