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SB-537 Workers’ compensation: treatment and disability.(2019-2020)

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Date Published: 04/11/2019 09:00 PM
SB537:v97#DOCUMENT

Amended  IN  Senate  April 11, 2019
Amended  IN  Senate  March 27, 2019

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Senate Bill No. 537


Introduced by Senator Hill

February 21, 2019


An act to amend Sections 138.7, 4600.4, 4616, 4663, and 5307.11 of, and to add Sections 127.1, 138.8, 4610.7 and 4610.8 to, the Labor Code, relating to workers’ compensation.


LEGISLATIVE COUNSEL'S DIGEST


SB 537, as amended, Hill. Workers’ compensation: treatment and disability.
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 the 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. Existing law requires the administrative director to adopt and revise periodically an official medical fee schedule establishing reasonable maximum fees paid for medical services other than physician services, drugs and pharmacy services, health care facility fees, home health care, and all other treatment, care, services, and goods.
Existing law defines a “physician” for purposes of the workers’ compensation laws to include physicians and surgeons, psychologists, acupuncturists, optometrists, dentists, podiatrists, and chiropractic practitioners licensed by state law and within the scope of their practice.
Existing law also requires the administrative director to post certain information on the division’s internet website.
This bill would require the 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, 2023, and annually thereafter, the administrative director to publish on the division’s internet website provider utilization data for physicians, as defined above, 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.
Existing law prohibits a person or public or private entity not a party to a claim for workers’ compensation benefits from obtaining individually identifiable information obtained or maintained by the division regarding that claim, except as provided. Existing law requires the administrative director to develop a cost-efficient workers’ compensation information system and authorizes the administrative director to use individually identifiable information for purposes of creating and maintaining that system.
This bill would require the administrative director to use individually identifiable information for purposes of creating provider medical utilization data as described above.
Existing law requires a workers’ compensation insurer, third-party administrator, or other entity that requires, or pursuant to regulation requires, a treating physician to obtain either utilization review or prior authorization in order to diagnose or treat injuries or diseases compensable pursuant to specified law, to ensure the availability of those services from 9 a.m. to 5:30 p.m. Pacific standard time of each normal business day. Existing law defines a normal business day for these purposes to exclude Saturdays, under specified circumstances, Sundays, and certain holidays, as described.
This bill 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.

Existing law makes an employer liable only for the percentage of permanent disability directly caused by the injury arising out of and occurring in the course of employment. Existing law also requires that apportionment of permanent disability be based on causation, and requires the physician to determine the approximate percentage of the permanent disability that was caused by the direct result of injury arising out of and occurring in the course of employment and the approximate percentage of the permanent disability that was caused by other factors both before and subsequent to the industrial injury, including prior industrial injuries. Existing law requires a physician who prepares a report addressing the issue of permanent disability due to a claimed industrial injury to address in that report the issue of causation of the permanent disability.

This bill would prohibit a physician from using race, gender, or national origin in determining the percentage of permanent disability that was caused by other factors before and subsequent to the industrial injury.

Existing law authorizes an insurer, employer, or entity that provides physician network services to establish or modify a medical provider network for providing medical treatment to injured employees and imposes various duties upon the insurer, employer, or entity in connection with the network. Existing law requires every medical provider network to post on its internet website a roster of all treating physicians in the medical provider network and requires every network to provide to the administrative director the internet website address of the network and of its roster of treating physicians.
Existing law requires the administrative director to adopt a medical treatment utilization schedule. Existing law authorizes the administrative director to investigate complaints and to conduct random reviews of approved medical provider networks.
This bill would require every medical provider network to post on its internet website a roster of all participating providers in the medical provider network and to provide to the administrative director the internet website address of the network and of its roster of participating providers. The bill would prohibit a medical provider network from altering the treatment plan established by a physician and surgeon and physical therapist that complies with the medical treatment utilization schedule. The bill would also prohibit a medical provider network from altering, adding, or deleting common procedure terminology billing codes related to a claim for service, unless authorized by the health care provider. The bill would revise the authority of the administrative director by giving the administrative director discretion to investigate complaints and take enforcement action against medical provider networks regarding noncompliance with, among others, the internet address and roster requirements imposed on those networks.
Existing law requires the administrative director to adopt a schedule for payment of home health care services that are not covered by a Medicare fee schedule and are not otherwise covered by the official medical fee schedule described above. Existing law authorizes a health care provider or licensed health facility and a contracting agent, employer, or carrier to contract for reimbursement rates different from those in the fee schedule.
This bill would limit that authority by prohibiting those contracted rates from being less than the applicable Medicare fee schedule payment.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 127.1 is added to the Labor Code, to read:

127.1.
 (a) The administrative director, with input from the Commission on Health and Safety and Workers’ Compensation, shall issue a report to the Legislature, on or before January 1, 2023, comparing potential payment alternatives for providers to the official medical fee schedule, including, but not limited to, capitation, bundled payments, quality incentives, and value-based payment systems.
(b) The report shall address advantages and disadvantages of each alternative payment system to the official medical fee schedule and make recommendations to the Legislature on alternative payment pilot programs.
(c) The report shall be submitted in compliance with Section 9795 of the Government Code. The requirement for submitting a report imposed by this section shall be inoperative on January 1, 2024, pursuant to Section 10231.5 of the Government Code.

SEC. 2.

 Section 138.7 of the Labor Code is amended to read:

138.7.
 (a) Except as expressly permitted in subdivision (b), a person or public or private entity not a party to a claim for workers’ compensation benefits shall not obtain individually identifiable information obtained or maintained by the division regarding that claim. For purposes of this section, “individually identifiable information” means any data concerning an injury or claim that is linked to a uniquely identifiable employee, employer, claims administrator, or any other person or entity.
(b) (1) (A) The administrative director, or a statistical agent designated by the administrative director, may use individually identifiable information for purposes of creating and maintaining the workers’ compensation information system as specified in Section 138.6.
(B) The administrative director may publish the identity of claims administrators in the annual report disclosing the compliance rates of claims administrators pursuant to subdivision (d) of Section 138.6.
(C) The administrative director shall use individually identifiable information for purposes of creating provider medical utilization data as specified in Section 138.8.
(2) (A) The State Department of Public Health may use individually identifiable information for purposes of establishing and maintaining a program on occupational health and occupational disease prevention as specified in Section 105175 of the Health and Safety Code.
(B) (i) The State Department of Health Care Services may use individually identifiable information for purposes of seeking recovery of Medi-Cal costs incurred by the state for treatment provided to injured workers that should have been incurred by employers and insurance carriers pursuant to Article 3.5 (commencing with Section 14124.70) of Chapter 7 of Part 3 of Division 9 of the Welfare and Institutions Code.
(ii) The Department of Industrial Relations shall furnish individually identifiable information to the State Department of Health Care Services, and the State Department of Health Care Services may furnish the information to its designated agent, provided that the individually identifiable information shall not be disclosed for use other than the purposes described in clause (i). The administrative director may adopt regulations solely for the purpose of governing access by the State Department of Health Care Services or its designated agents to the individually identifiable information as defined in subdivision (a).
(3) (A) Individually identifiable information may be used by the Division of Workers’ Compensation and the Division of Occupational Safety and Health as necessary to carry out their duties. The administrative director shall adopt regulations governing the access to the information described in this subdivision by these divisions. Any regulations adopted pursuant to this subdivision shall set forth the specific uses for which this information may be obtained.
(B) Individually identifiable information maintained in the workers’ compensation information system and the Division of Workers’ Compensation may be used by researchers employed by or under contract to the Commission on Health and Safety and Workers’ Compensation as necessary to carry out the commission’s research. The administrative director shall adopt regulations governing the access to the information described in this subdivision by commission researchers. These regulations shall set forth the specific uses for which this information may be obtained and include provisions guaranteeing the confidentiality of individually identifiable information. Individually identifiable information obtained under this subdivision shall not be disclosed to commission members. Individually identifiable information obtained by researchers under contract to the commission pursuant to this subparagraph may not be disclosed to any other person or entity, public or private, for a use other than that research project for which the information was obtained. Within a reasonable period of time after the research for which the information was obtained has been completed, the data collected shall be modified in a manner so that the subjects cannot be identified, directly or through identifiers linked to the subjects.
(C) Individually identifiable information may be used by the Office of Self-Insurance Plans of the Department of Industrial Relations as necessary to carry out its duties, including evaluating the costs of administration, workers’ compensation benefit expenditures, and solvency and performance of the public self-insured employers’ workers compensation programs.
(4) The administrative director shall adopt regulations allowing reasonable access to individually identifiable information by other persons or public or private entities for the purpose of bona fide statistical research. This research shall not divulge individually identifiable information concerning a particular employee, employer, claims administrator, or any other person or entity. The regulations adopted pursuant to this paragraph shall include provisions guaranteeing the confidentiality of individually identifiable information. Within a reasonable period of time after the research for which the information was obtained has been completed, the data collected shall be modified in a manner so that the subjects cannot be identified, directly or through identifiers linked to the subjects.
(5) (A) This section shall not operate to exempt from disclosure any information that is considered to be a public record pursuant to the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code) contained in an individual’s file once an application for adjudication has been filed pursuant to Section 5501.5.
(B) Individually identifiable information shall not be provided to any person or public or private entity who is not a party to the claim unless that person self-identifies or that public or private entity identifies itself and states the reason for making the request. The administrative director may require the person or public or private entity making the request to produce information to verify that the name and address of the requester is valid and correct. If the purpose of the request is related to preemployment screening, the administrative director shall notify the person about whom the information is requested that the information was provided and shall include the following in 12-point type:

“IT MAY BE A VIOLATION OF FEDERAL AND STATE LAW TO DISCRIMINATE AGAINST A JOB APPLICANT BECAUSE THE APPLICANT HAS FILED A CLAIM FOR WORKERS’ COMPENSATION BENEFITS.”

(C) Any residence address is confidential and shall not be disclosed to any person or public or private entity except to a party to the claim, a law enforcement agency, an office of a district attorney, any person for a journalistic purpose, or other governmental agency.
(D) This paragraph does not prohibit the use of individually identifiable information for purposes of identifying bona fide lien claimants.
(c) Except as provided in subdivision (b), individually identifiable information obtained by the division is privileged and is not subject to subpoena in a civil proceeding unless, after reasonable notice to the division and a hearing, a court determines that the public interest and the intent of this section will not be jeopardized by disclosure of the information. This section shall not operate to restrict access to information by any law enforcement agency or district attorney’s office or to limit admissibility of that information in a criminal proceeding.
(d) It is unlawful for any person who has received individually identifiable information from the division pursuant to this section to provide that information to any person who is not entitled to it under this section.

SEC. 3.

 Section 138.8 is added to the Labor Code, to read:

138.8.
 (a) On or before January 1, 2023, and annually thereafter, the administrative director shall 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. The provider utilization data shall include all of the following:
(1) The physician’s first and last name.
(2) The physician’s specialty.
(3) The physician’s National Provider Identifier.
(4) The number of injured workers treated by the physician.
(5) The International Statistical Classification of Diseases and Related Health Problems, 10th revision (ICD-10) codes by both diagnosis and procedure.
(6) A short description of the ICD-10 codes used by the physician.
(7) The number of utilization review decisions that resulted in a modification or denial of a request for authorization of medical treatment.
(8) The number of independent medical review decisions requested due to a utilization review decision that resulted in a modification or denial and the number of independent review decisions that resulted in the utilization review modification or denial being overturned.
(9) Any additional data as determined by the administrative director.
(b) For purposes of this section, “physician” has the same meaning as set forth in Section 3209.3.

SEC. 4.

 Section 4600.4 of the Labor Code is amended to read:

4600.4.
 (a) A workers’ compensation insurer, third-party administrator, or other entity that requires, or pursuant to regulation requires, a treating physician to obtain either utilization review or prior authorization in order to diagnose or treat injuries or diseases compensable under this article, shall ensure the availability of those services from 9 a.m. to 5:30 p.m. Pacific standard time of each normal business day.
(b) For purposes of this section, “normal business day” does not include Saturday, Sunday, or any day that is not a business day as described in Section 9 of the Civil Code.

SEC. 5.

 Section 4610.7 is added to the Labor Code, to read:

4610.7.
 A medical provider network shall not alter the treatment plan established by a physician and surgeon and physical therapist that complies with the medical treatment utilization schedule.

SEC. 6.

 Section 4610.8 is added to the Labor Code, to read:

4610.8.
 Notwithstanding any other law, a medical provider network shall not alter, add, or delete common procedure codes related to a claim for service, unless authorized by the health care provider.

SEC. 7.

 Section 4616 of the Labor Code is amended to read:

4616.
 (a) (1) An insurer, employer, or entity that provides physician network services may establish or modify a medical provider network for the provision of medical treatment to injured employees. The network shall include physicians primarily engaged in the treatment of occupational injuries. The administrative director shall encourage the integration of occupational and nonoccupational providers. The number of physicians in the medical provider network shall be sufficient to enable treatment for injuries or conditions to be provided in a timely manner. The provider network shall include an adequate number and type of physicians, as described in Section 3209.3, or other providers, as described in Section 3209.5, to treat common injuries experienced by injured employees based on the type of occupation or industry in which the employee is engaged, and the geographic area where the employees are employed.
(2) Medical treatment for injuries shall be readily available at reasonable times to all employees. To the extent feasible, all medical treatment for injuries shall be readily accessible to all employees. With respect to availability and accessibility of treatment, the administrative director shall consider the needs of rural areas, specifically those in which health facilities are located at least 30 miles apart and areas in which there is a health care shortage.
(3) A treating physician shall be included in the network only if, at the time of entering into or renewing an agreement by which the physician would be in the network, the physician, or an authorized employee of the physician or the physician’s office, provides a separate written acknowledgment in which the physician affirmatively elects to be a member of the network. Copies of the written acknowledgment shall be provided to the administrative director upon the administrative director’s request. This paragraph shall not apply to a physician who is a shareholder, partner, or employee of a medical group that elects to be part of the network.
(4) (A) (i) Every medical provider network shall post on its internet website a roster of all treating physicians in the medical provider network and shall update the roster at least quarterly. Every network shall provide to the administrative director the internet website address of the network and of its roster of treating physicians.
(ii) Commencing July 1, 2020, every medical provider network shall post on its internet website a roster of all participating providers in the medical provider network and shall update the roster at least quarterly. Every network shall provide to the administrative director the internet website address of the network and of its roster of participating providers. The roster of participating providers shall include, at a minimum, the name, address, and telephone number of all participating providers.
(iii) The administrative director shall post, on the division’s internet website, the internet website address of every approved medical provider network.
(B) Every medical provider network shall post on its internet website information about how to contact the medical provider network contact and medical access assistants, and information about how to obtain a copy of any notification regarding the medical provider network that is required to be given to an employee by regulations adopted by the administrative director.
(5) Every medical provider network shall provide one or more persons within the United States to serve as medical access assistants to help an injured employee find an available physician of the employee’s choice, and subsequent physicians if necessary, under Section 4616.3. Medical access assistants shall have a toll-free telephone number that injured employees may use and shall be available at least from 7 a.m. to 8 p.m. Pacific Standard Time, Monday through Saturday, inclusive, to respond to injured employees, contact physicians’ offices during regular business hours, and schedule appointments. The administrative director shall promulgate regulations governing the provision of medical access assistants.
(b) (1) An insurer, employer, or entity that provides physician network services shall submit a plan for the medical provider network to the administrative director for approval. The administrative director shall approve the plan for a period of four years if the administrative director determines that the plan meets the requirements of this section. If the administrative director does not act on the plan within 60 days of submitting the plan, it shall be deemed approved. Commencing January 1, 2014, existing approved plans shall be deemed approved for a period of four years from the approval date of the most recent application or modification submitted prior to 2014. Plans for reapproval for medical provider networks shall be submitted at least six months before the expiration of the four-year approval period. Commencing January 1, 2016, a modification that updates an entire medical provider network plan to bring the plan into full compliance with all current statutes and regulations shall be deemed approved for a period of four years from the modification approval date. An approved modification that does not update an entire medical provider network plan to bring the plan into full compliance with all current statutes and regulations shall not alter the expiration of the medical provider network’s four-year approval period. Upon a showing that the medical provider network was approved or deemed approved by the administrative director, there shall be a conclusive presumption on the part of the appeals board that the medical provider network was validly formed.
(2) Every medical provider network shall establish and follow procedures to continuously review the quality of care, performance of medical personnel, utilization of services and facilities, and costs.
(3) Every medical provider network shall submit geocoding of its network for reapproval to establish that the number and geographic location of physicians in the network meets the required access standards.
(4) Approval of a plan may be denied, revoked, or suspended if the medical provider network fails to meet the requirements of this article. Any person contending that a medical provider network is not validly constituted may petition the administrative director to suspend or revoke the approval of the medical provider network. The administrative director may adopt regulations establishing a schedule of administrative penalties not to exceed five thousand dollars ($5,000) per violation, or probation, or both, in lieu of revocation or suspension for less severe violations of the requirements of this article. Penalties, probation, suspension, or revocation shall be ordered by the administrative director only after notice and opportunity to be heard. Unless suspended or revoked by the administrative director, the administrative director’s approval of a medical provider network shall be binding on all persons and all courts. A determination of the administrative director may be reviewed only by an appeal of the determination of the administrative director filed as an original proceeding before the reconsideration unit of the workers’ compensation appeals board on the same grounds and within the same time limits after issuance of the determination as would be applicable to a petition for reconsideration of a decision of a workers’ compensation administrative law judge.
(c) Physician compensation may not be structured in order to achieve the goal of reducing, delaying, or denying medical treatment or restricting access to medical treatment.
(d) If the employer or insurer meets the requirements of this section, the administrative director may not withhold approval or disapprove an employer’s or insurer’s medical provider network based solely on the selection of providers. In developing a medical provider network, an employer or insurer shall have the exclusive right to determine the members of their network.
(e) All treatment provided shall be provided in accordance with the medical treatment utilization schedule established pursuant to Section 5307.27.
(f) Only a licensed physician who is competent to evaluate the specific clinical issues involved in the medical treatment services, when these services are within the scope of the physician’s practice, may modify, delay, or deny requests for authorization of medical treatment.
(g) Every contracting agent that sells, leases, assigns, transfers, or conveys its medical provider networks and their contracted reimbursement rates to an insurer, employer, entity that provides physician network services, or another contracting agent shall, upon entering or renewing a provider contract, disclose to the provider whether the medical provider network may be sold, leased, transferred, or conveyed to other insurers, employers, entities that provide physician network services, or another contracting agent, and specify whether those insurers, employers, entities that provide physician network services, or contracting agents include workers’ compensation insurers.
(h) On or before November 1, 2004, the administrative director, in consultation with the Department of Managed Health Care, shall adopt regulations implementing this article. The administrative director shall develop regulations that establish procedures for purposes of making medical provider network modifications.
(i) The administrative director has the discretion to investigate complaints and take enforcement action against medical provider networks regarding noncompliance with the requirements of this section.

SEC. 8.Section 4663 of the Labor Code is amended to read:
4663.

(a)Apportionment of permanent disability shall be based on causation.

(b)A physician who prepares a report addressing the issue of permanent disability due to a claimed industrial injury shall address in that report the issue of causation of the permanent disability.

(c)In order for a physician’s report to be considered complete on the issue of permanent disability, the report shall include an apportionment determination. A physician shall make an apportionment determination by finding the approximate percentage of the permanent disability that was caused by the direct result of injury arising out of and occurring in the course of employment and the approximate percentage of the permanent disability that was caused by other factors both before and subsequent to the industrial injury, including prior industrial injuries, but excluding race, gender, and national origin. If the physician is unable to include an apportionment determination in the report, the physician shall state the specific reasons why the physician could not make a determination of the effect of that prior condition on the permanent disability arising from the injury. The physician shall then consult with other physicians or refer the employee to another physician from whom the employee is authorized to seek treatment or evaluation in accordance with this division in order to make the final determination.

(d)An employee who claims an industrial injury shall, upon request, disclose all previous permanent disabilities or physical impairments.

(e)Subdivisions (a), (b), and (c) do not apply to injuries or illnesses covered under Sections 3212, 3212.1, 3212.2, 3212.3, 3212.4, 3212.5, 3212.6, 3212.7, 3212.8, 3212.85, 3212.9, 3212.10, 3212.11, 3212.12, 3213, and 3213.2.

SEC. 9.SEC. 8.

 Section 5307.11 of the Labor Code is amended to read:

5307.11.
 A health care provider or health facility licensed pursuant to Section 1250 of the Health and Safety Code, and a contracting agent, employer, or carrier may contract for reimbursement rates different from those in the fee schedule adopted and revised pursuant to Section 5307.1, but the contracted rates shall not be less than the applicable Medicare fee schedule payment. If a health care provider or health facility licensed pursuant to Section 1250 of the Health and Safety Code, and a contracting agent, employer, or carrier contract for reimbursement rates different from those in the fee schedule, the medical fee schedule for that health care provider or health facility licensed pursuant to Section 1250 of the Health and Safety Code does not apply to the contracted reimbursement rates, except that the contracted reimbursement rates shall not be less than the applicable Medicare fee schedule payment. Except as provided in subdivision (b) of Section 5307.1, the official medical fee schedule shall establish maximum reimbursement rates for all medical services for injuries subject to this division provided by a health care provider or health care facility licensed pursuant to Section 1250 of the Health and Safety Code other than those specified in contracts subject to this section.