139.5
. (a) (1) The administrative director shall contract with one
or more independent medical review organizations and one or more
independent bill review organizations to conduct reviews pursuant to
Article 2 (commencing with Section 4600) of Chapter 2 of Part 2 of
Division 4. The independent review organizations shall be independent
of any workers' compensation insurer or workers' compensation claims
administrator doing business in this state. The administrative
director may establish additional requirements, including
conflict-of-interest standards, consistent with the purposes of
Article 2 (commencing with Section 4600) of Chapter 2 of Part 2 of
Division 4, that an organization shall be required to meet in order
to qualify as an independent review organization and to assist the
division in carrying out its responsibilities.
(2) To enable the independent review program to go into effect for
injuries occurring on or after January 1, 2013, and until the
administrative director establishes contracts as otherwise specified
by this section, independent review organizations under contract with
the Department of Managed Health Care pursuant to Section 1374.32 of
the Health and Safety Code may be designated by the administrative
director to conduct reviews pursuant to Article 2 (commencing with
Section 4600) of Chapter 2 of Part 2 of Division 4. The
administrative director may use an interagency agreement to implement
the independent review process beginning January 1, 2013. The
administrative director may initially contract directly with the same
organizations that are under contract with the Department of Managed
Health Care on substantially the same terms without competitive
bidding until January 1, 2015.
(b) (1) The independent medical review organizations and the
medical professionals retained to conduct reviews shall be deemed to
be consultants for purposes of this section.
(2) There shall be no monetary liability on the part of, and no
cause of action shall arise against, any consultant on account of any
communication by that consultant to the administrative director or
any other officer, employee, agent, contractor, or consultant of the
Division of Workers' Compensation, or on account of any communication
by that consultant to any person when that communication is required
by the terms of a contract with the administrative director pursuant
to this section and the consultant does all of the following:
(A) Acts without malice.
(B) Makes a reasonable effort to determine the facts of the matter
communicated.
(C) Acts with a reasonable belief that the communication is
warranted by the facts actually known to the consultant after a
reasonable effort to determine the facts.
(3) The immunities afforded by this section shall not affect the
availability of any other privilege or immunity which may be afforded
by law. This section shall not be construed to alter the laws
regarding the confidentiality of medical records.
(c) (1) An organization contracted to perform independent medical
review or independent bill review shall be required to employ a
medical director who shall be responsible for advising the contractor
on clinical issues. The medical director shall be a physician and
surgeon licensed by the Medical Board of California or the
Osteopathic Medical Board of California.
(2) The independent review organization, any experts it designates
to conduct a review, or any officer, director, or employee of the
independent review organization shall not have any material
professional, familial, or financial affiliation, as determined by
the administrative director, with any of the following:
(A) The employer, insurer or claims administrator, or utilization
review organization.
(B) Any officer, director, employee of the employer, or insurer or
claims administrator.
(C) A physician, the physician's medical group, the physician's
independent practice association, or other provider involved in the
medical treatment in dispute.
(D) The facility or institution at which either the proposed
health care service, or the alternative service, if any, recommended
by the employer, would be provided.
(E) The development or manufacture of the principal drug, device,
procedure, or other therapy proposed by the employee whose treatment
is under review, or the alternative therapy, if any, recommended by
the employer.
(F) The employee or the employee's immediate family, or the
employee's attorney.
(d) The independent review organizations shall meet all of the
following requirements:
(1) The organization shall not be an affiliate or a subsidiary of,
nor in any way be owned or controlled by, a workers' compensation
insurer, claims administrator, or a trade association of workers'
compensation insurers or claims administrators. A board member,
director, officer, or employee of the independent review organization
shall not serve as a board member, director, or employee of a
workers' compensation insurer or claims administrator. A board
member, director, or officer of a workers' compensation insurer or
claims administrator or a trade association of workers' compensation
insurers or claims administrators shall not serve as a board member,
director, officer, or employee of an independent review organization.
(2) The organization shall submit to the division the following
information upon initial application to contract under this section
and, except as otherwise provided, annually thereafter upon any
change to any of the following information:
(A) The names of all stockholders and owners of more than 5
percent of any stock or options, if a publicly held organization.
(B) The names of all holders of bonds or notes in excess of one
hundred thousand dollars ($100,000), if any.
(C) The names of all corporations and organizations that the
independent review organization controls or is affiliated with, and
the nature and extent of any ownership or control, including the
affiliated organization's type of business.
(D) The names and biographical sketches of all directors,
officers, and executives of the independent review organization, as
well as a statement regarding any past or present relationships the
directors, officers, and executives may have with any employer,
workers' compensation insurer, claims administrator, medical provider
network, managed care organization, provider group, or board or
committee of an employer, workers' compensation insurer, claims
administrator, medical provider network, managed care organization,
or provider group.
(E) (i) The percentage of revenue the independent review
organization receives from expert reviews, including, but not limited
to, external medical reviews, quality assurance reviews, utilization
reviews, and bill reviews.
(ii) The names of any workers' compensation insurer, claims
administrator, or provider group for which the independent review
organization provides review services, including, but not limited to,
utilization review, bill review, quality assurance review, and
external medical review. Any change in this information shall be
reported to the department within five business days of the change.
(F) A description of the review process, including, but not
limited to, the method of selecting expert reviewers and matching the
expert reviewers to specific cases.
(G) A description of the system the independent medical review
organization uses to identify and recruit medical professionals to
review treatment and treatment recommendation decisions, the number
of medical professionals credentialed, and the types of cases and
areas of expertise that the medical professionals are credentialed to
review.
(H) A description of how the independent review organization
ensures compliance with the conflict-of-interest requirements of this
section.
(3) The organization shall demonstrate that it has a quality
assurance mechanism in place that does all of the following:
(A) Ensures that any medical professionals retained are
appropriately credentialed and privileged.
(B) Ensures that the reviews provided by the medical professionals
or bill reviewers are timely, clear, and credible, and that reviews
are monitored for quality on an ongoing basis.
(C) Ensures that the method of selecting medical professionals for
individual cases achieves a fair and impartial panel of medical
professionals who are qualified to render recommendations regarding
the clinical conditions and the medical necessity of treatments or
therapies in question.
(D) Ensures the confidentiality of medical records and the review
materials, consistent with the requirements of this section and
applicable state and federal law.
(E) Ensures the independence of the medical professionals or bill
reviewers retained to perform the reviews through
conflict-of-interest policies and prohibitions, and ensures adequate
screening for conflicts of interest, pursuant to paragraph (5).
(4) Medical professionals selected by independent medical review
organizations to review medical treatment decisions shall be licensed
physicians, as defined by Section 3209.3, in good standing, who meet
the following minimum requirements:
(A) The physician shall be a clinician knowledgeable in the
treatment of the employee's medical condition, knowledgeable about
the proposed treatment, and familiar with guidelines and protocols in
the area of treatment under review.
(B) Notwithstanding any other law, the physician shall hold a
nonrestricted license in any state of the United States, and for
physicians and surgeons holding an M.D. or D.O. degree, a current
certification by a recognized American medical specialty board in the
area or areas appropriate to the condition or treatment under
review. The independent medical review organization shall give
preference to the use of a physician licensed in California as the
reviewer.
(C) The physician shall have no history of disciplinary action or
sanctions, including, but not limited to, loss of staff privileges or
participation restrictions, taken or pending by any hospital,
government, or regulatory body.
(D) Commencing January 1, 2014, the physician shall not hold an
appointment as a qualified medical evaluator pursuant to Section
139.2.
(5) Neither the expert reviewer, nor the independent review
organization, shall have any material professional, material
familial, or material financial affiliation with any of the
following:
(A) The employer, workers' compensation insurer or claims
administrator, or a medical provider network of the insurer or claims
administrator, except that an academic medical center under contract
to the insurer or claims administrator to provide services to
employees may qualify as an independent medical review organization
provided it will not provide the service and provided the center is
not the developer or manufacturer of the proposed treatment.
(B) Any officer, director, or management employee of the employer
or workers' compensation insurer or claims administrator.
(C) The physician, the physician's medical group, or the
independent practice association proposing the treatment.
(D) The institution at which the treatment would be provided.
(E) The development or manufacture of the treatment proposed for
the employee whose condition is under review.
(F) The employee or the employee's immediate family.
(6) For purposes of this subdivision, the following terms shall
have the following meanings:
(A) "Material familial affiliation" means any relationship as a
spouse, child, parent, sibling, spouse's parent, or child's spouse.
(B) "Material financial affiliation" means any financial interest
of more than 5 percent of total annual revenue or total annual income
of an independent review organization or individual to which this
subdivision applies. "Material financial affiliation" does not
include payment by the employer to the independent review
organization for the services required by the administrative director'
s contract with the independent review organization, nor does
"material financial affiliation" include an expert's participation as
a contracting medical provider where the expert is affiliated with
an academic medical center or a National Cancer Institute-designated
clinical cancer research center.
(C) "Material professional affiliation" means any
physician-patient relationship, any partnership or employment
relationship, a shareholder or similar ownership interest in a
professional corporation, or any independent contractor arrangement
that constitutes a material financial affiliation with any expert or
any officer or director of the independent review organization.
"Material professional affiliation" does not include affiliations
that are limited to staff privileges at a health facility.
(e) The division shall provide, upon the request of any interested
person, a copy of all nonproprietary information, as determined by
the administrative director, filed with it by an independent review
organization under contract pursuant to this section. The division
may charge a fee to the interested person for copying the requested
information.
(f) The Legislature finds and declares that the services described
in this section are of such a special and unique nature that they
must be contracted out pursuant to paragraph (3) of subdivision (b)
of Section 19130 of the Government Code. The Legislature further
finds and declares that the services described in this section are a
new state function pursuant to paragraph (2) of subdivision (b) of
Section 19130 of the Government Code.