Fresno, Bakersfield, Stockton, Bishop,
Oakland, Sacramento, Salinas, San Jose,
San Luis Obispo, Santa Barbara
SENATE BILL 1160/LIEN ANTI-FRAUD PROVISIONS AND UTILIZATION REVIEW CHANGES
By W. Rod McClelland, Jr.
Senate Bill 1160 was signed into law by Governor Brown on September 30, 2016. The bill sought to address concerns of defendants concerning workers’ compensation liens and fraud. The bill also sought to address concerns of applicant’s attorney’s relating to utilization review.
Labor Code section 4903.8 codifies Chorn v. Workers’ Compensation Appeals Board 245 Cal. App. 4th 1370(216), 80 CCC 637. Labor Code section 4903.8 prohibits the assignment of any lien, unless the provider has gone out of business. In fact, if there has been more than one assignment of the same receivable or bill, the Appeals Board may set the matter for hearing on whether the multiple assignments constitute bad faith actions or tactics that are frivolous, harassing or intended to cause unnecessary delay or expense. If so found by the Appeals Board, appropriate sanctions, including costs and attorney’s fees can issue against the assignee and their respective attorneys.
Section (f) of Labor Code section 4610 has been added to read as follows:
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 Labor Code section 5307.27. This means that a third-party administrator or self-insured employer, can go back and re-review requested treatment, even if previously authorized, and non-certify it under certain circumstances.
UTILIZATION REVIEW FOR TREATMENT REQUESTS WITHIN THE FIRST 30 DAYS
For dates of injury on or after 01/01/18, Senate Bill 1160 no longer requires a Request for Authorization, or utilization review during the first 30 days of treatment, provided that:
Exceptions include surgery, medications not covered in the upcoming prescription formulary, imaging, other than X-rays, medical equipment expenses over $250.00, psychological treatment, and home healthcare. Absent any exception, treatment requests during the first 30 days must be authorized. The treatment must still be reported to the claims administrator, and a provider may be placed through retroactive utilization review. The provider may also be removed from the medical provider network if a pattern is discovered showing treatment outside of evidence based medical standards.
Although, Labor Code section 4615(b) requires the administrative director to post a list of stayed liens, defendants should not rely on that information alone. It is more important than ever for each defendant to keep track of indicted providers, and medical providers that have been charged with any type of insurance fraud. The stay only provides to formal charges, not allegations. The California Department of Industrial Relations recently wrote an article indicating that in January 2016, 200,000 liens before the Workers’ Compensation Appeals Board had been stayed. The total face value of these exceeds one billion dollars. These liens are associated with 75 medical providers facing criminal charges.
It is also important to keep track of how much treatment doctors provide in the Medical Provider Network, from this point forward. This information will be crucial to determining which medical providers defendants want to keep in their MPNs. The reason for this, is because as was discussed previously, beginning on January 1, 2018, treatment within the first 30 days of an injury, with some exceptions, will no longer be subject to utilization review.
Lastly, MPN notices have become even more important with these new changes. MPN notices must be sent to limit the ability of a lien claimant or physician to declare there is no MPN. Maintaining medical control early on in any industrial injury claim is the best strategy to return the injured worker back to work, and timely close the industrial injury claim.
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