Governor Gavin Newsom signed SB 537 which was passed this year without any “no” votes by legislators. The law mostly effects the operation of Medical Provider Networks, and some of the timing and reporting issues. The provisions of the law will phase in at various times up to January 2014. Thus the industry will have ample time to adopt the new provisions when they become effective.

SB 537 is the product of several reform efforts spearheaded by a variety of stakeholders. Broadly speaking, the main thrust of SB 537 can be seen in two areas: reducing medical disputes and improving the operation of medical provider networks (MPNs).

New law requires the DWC administrative director to issue a report to the Legislature, on or before January 1, 2023, comparing potential payment alternatives for providers to the official medical fee schedule.

The bill would also require, on or before January 1, 2024, and annually thereafter, the administrative director to publish on the division’s internet website provider utilization data for physicians, who treated 10 or more injured workers during the 12 months before July 1 of the previous year, including the number of injured workers treated by the physician and the number of utilization review decisions that resulted in a modification or denial of a request for authorization of medical treatment based upon a determination of medical necessity.

This new law would revise the definition of a normal business day for these purposes to specifically exclude every Saturday, Sunday, and specified other holidays. The bill would also make technical changes.

This law would, commencing July 1, 2021, require every medical provider network to post on its internet website a roster of participating providers and to provide to the administrative director the internet website address of the network and of its roster of participating providers.

The law would revise the authority of the administrative director by giving the administrative director authority and discretion to investigate complaints, conduct random reviews, and take enforcement action against medical provider networks, an entity that provides ancillary services, as defined, or an entity providing services for or on behalf of the medical provider network or its providers, regarding noncompliance with, among others, the internet address and roster requirements imposed on those networks.

This new law would prohibit an entity other than the requesting physician or provider from altering or amending a request for authorization for medical treatment prior to the submission of the request to the claims administrator, and would state that this provision is declaratory of existing law. The bill would require an itemized request for payment for services to be submitted to an employer with the physician’s or provider’s national provider identifier number.

This law, on and after July 1, 2021, would require an entity that provides physician or ancillary network service to provide a payor with a written disclosure of the reimbursement amount paid to the provider with a rate sheet if a contracted reimbursement rate is more than 20% below the official medical fee schedule, as specified.

The bill would authorize an entity that provides physician or ancillary network services to require a payor to sign a nondisclosure agreement before providing that disclosure.