Article 2. Medical And Hospital Treatment of California Labor Code >> Division 4. >> Part 2. >> Chapter 2. >> Article 2.
(a) Medical, surgical, chiropractic, acupuncture, and
hospital treatment, including nursing, medicines, medical and
surgical supplies, crutches, and apparatuses, including orthotic and
prosthetic devices and services, that is reasonably required to cure
or relieve the injured worker from the effects of his or her injury
shall be provided by the employer. In the case of his or her neglect
or refusal reasonably to do so, the employer is liable for the
reasonable expense incurred by or on behalf of the employee in
providing treatment.
(b) As used in this division and notwithstanding any other law,
medical treatment that is reasonably required to cure or relieve the
injured worker from the effects of his or her injury means treatment
that is based upon the guidelines adopted by the administrative
director pursuant to Section 5307.27.
(c) Unless the employer or the employer's insurer has established
or contracted with a medical provider network as provided for in
Section 4616, after 30 days from the date the injury is reported, the
employee may be treated by a physician of his or her own choice or
at a facility of his or her own choice within a reasonable geographic
area. A chiropractor shall not be a treating physician after the
employee has received the maximum number of chiropractic visits
allowed by subdivision (c) of Section 4604.5.
(d) (1) If an employee has notified his or her employer in writing
prior to the date of injury that he or she has a personal physician,
the employee shall have the right to be treated by that physician
from the date of injury if the employee has health care coverage for
nonoccupational injuries or illnesses on the date of injury in a
plan, policy, or fund as described in subdivisions (b), (c), and (d)
of Section 4616.7.
(2) For purposes of paragraph (1), a personal physician shall meet
all of the following conditions:
(A) Be the employee's regular physician and surgeon, licensed
pursuant to Chapter 5 (commencing with Section 2000) of Division 2 of
the Business and Professions Code.
(B) Be the employee's primary care physician and has previously
directed the medical treatment of the employee, and who retains the
employee's medical records, including his or her medical history.
"Personal physician" includes a medical group, if the medical group
is a single corporation or partnership composed of licensed doctors
of medicine or osteopathy, which operates an integrated
multispecialty medical group providing comprehensive medical services
predominantly for nonoccupational illnesses and injuries.
(C) The physician agrees to be predesignated.
(3) If the employee has health care coverage for nonoccupational
injuries or illnesses on the date of injury in a health care service
plan licensed pursuant to Chapter 2.2 (commencing with Section 1340)
of Division 2 of the Health and Safety Code, and the employer is
notified pursuant to paragraph (1), all medical treatment,
utilization review of medical treatment, access to medical treatment,
and other medical treatment issues shall be governed by Chapter 2.2
(commencing with Section 1340) of Division 2 of the Health and Safety
Code. Disputes regarding the provision of medical treatment shall be
resolved pursuant to Article 5.55 (commencing with Section 1374.30)
of Chapter 2.2 of Division 2 of the Health and Safety Code.
(4) If the employee has health care coverage for nonoccupational
injuries or illnesses on the date of injury in a group health
insurance policy as described in Section 4616.7, all medical
treatment, utilization review of medical treatment, access to medical
treatment, and other medical treatment issues shall be governed by
the applicable provisions of the Insurance Code.
(5) The insurer may require prior authorization of any
nonemergency treatment or diagnostic service and may conduct
reasonably necessary utilization review pursuant to Section 4610.
(6) An employee shall be entitled to all medically appropriate
referrals by the personal physician to other physicians or medical
providers within the nonoccupational health care plan. An employee
shall be entitled to treatment by physicians or other medical
providers outside of the nonoccupational health care plan pursuant to
standards established in Article 5 (commencing with Section 1367) of
Chapter 2.2 of Division 2 of the Health and Safety Code.
(e) (1) When at the request of the employer, the employer's
insurer, the administrative director, the appeals board, or a workers'
compensation administrative law judge, the employee submits to
examination by a physician, he or she shall be entitled to receive,
in addition to all other benefits herein provided, all reasonable
expenses of transportation, meals, and lodging incident to reporting
for the examination, together with one day of temporary disability
indemnity for each day of wages lost in submitting to the
examination.
(2) Regardless of the date of injury, "reasonable expenses of
transportation" includes mileage fees from the employee's home to the
place of the examination and back at the rate of twenty-one cents
($0.21) a mile or the mileage rate adopted by the Director of Human
Resources pursuant to Section 19820 of the Government Code, whichever
is higher, plus any bridge tolls. The mileage and tolls shall be
paid to the employee at the time he or she is given notification of
the time and place of the examination.
(f) When at the request of the employer, the employer's insurer,
the administrative director, the appeals board, or a workers'
compensation administrative law judge, an employee submits to
examination by a physician and the employee does not proficiently
speak or understand the English language, he or she shall be entitled
to the services of a qualified interpreter in accordance with
conditions and a fee schedule prescribed by the administrative
director. These services shall be provided by the employer. For
purposes of this section, "qualified interpreter" means a language
interpreter certified, or deemed certified, pursuant to Article 8
(commencing with Section 11435.05) of Chapter 4.5 of Part 1 of
Division 3 of Title 2 of, or Section 68566 of, the Government Code.
(g) If the injured employee cannot effectively communicate with
his or her treating physician because he or she cannot proficiently
speak or understand the English language, the injured employee is
entitled to the services of a qualified interpreter during medical
treatment appointments. To be a qualified interpreter for purposes of
medical treatment appointments, an interpreter is not required to
meet the requirements of subdivision (f), but shall meet any
requirements established by rule by the administrative director that
are substantially similar to the requirements set forth in Section
1367.04 of the Health and Safety Code. The administrative director
shall adopt a fee schedule for qualified interpreter fees in
accordance with this section. Upon request of the injured employee,
the employer or insurance carrier shall pay for interpreter services.
An employer shall not be required to pay for the services of an
interpreter who is not certified or is provisionally certified by the
person conducting the medical treatment or examination unless either
the employer consents in advance to the selection of the individual
who provides the interpreting service or the injured worker requires
interpreting service in a language other than the languages
designated pursuant to Section 11435.40 of the Government Code.
(h) Home health care services shall be provided as medical
treatment only if reasonably required to cure or relieve the injured
employee from the effects of his or her injury and prescribed by a
physician and surgeon licensed pursuant to Chapter 5 (commencing with
Section 2000) of Division 2 of the Business and Professions Code,
and subject to Section 5307.1 or 5703.8. The employer shall not be
liable for home health care services that are provided more than 14
days prior to the date of the employer's receipt of the physician's
prescription.
(a) Subject to subdivision (b), any person or entity that
dispenses medicines and medical supplies, as required by Section
4600, shall dispense the generic drug equivalent.
(b) A person or entity is not required to dispense a generic drug
equivalent under either of the following circumstances:
(1) When a generic drug equivalent is unavailable.
(2) When the prescribing physician specifically provides in
writing that a nongeneric drug must be dispensed.
(c) For purposes of this section, "dispense" has the same meaning
as the definition contained in Section 4024 of the Business and
Professions Code.
(d) Nothing in this section shall be construed to preclude a
prescribing physician, who is also the dispensing physician, from
dispensing a generic drug equivalent.
(e) This section shall only apply to medicines dispensed prior to
the operative date of the drug formulary adopted pursuant to Section
5307.27.
(a) Notwithstanding Section 4600, if a self-insured
employer, group of self-insured employers, insurer of an employer, or
group of insurers contracts with a pharmacy, group of pharmacies, or
pharmacy benefit network to provide medicines and medical supplies
required by this article to be provided to injured employees, those
injured employees that are subject to the contract shall be provided
medicines and medical supplies in the manner prescribed in the
contract for as long as medicines or medical supplies are reasonably
required to cure or relieve the injured employee from the effects of
the injury. Medicines provided pursuant to the contract shall be
subject to the drug formulary adopted by the administrative director
pursuant to Section 5307.27, and such contracts may not limit the
availability of medications otherwise prescribed pursuant to the
formulary based on whether the pharmacy services are provided within
or outside a medical provider network.
(b) Nothing in this section shall affect the ability of
employee-selected physicians to continue to prescribe and have the
employer provide medicines subject to the drug formulary and medical
supplies that the physicians deem reasonably required to cure or
relieve the injured employee from the effects of the injury.
(c) Each contract described in subdivision (a) shall comply with
standards adopted by the administrative director. In adopting those
standards, the administrative director shall seek to reduce
pharmaceutical costs and may consult any relevant studies or
practices in other states. The standards shall provide for access to
a pharmacy within a reasonable geographic distance from an injured
employee's residence.
(a) (1) Notwithstanding Section 4600, when a self-insured
employer, group of self-insured employers, or the insurer of an
employer contracts with a health care organization certified pursuant
to Section 4600.5 for health care services required by this article
to be provided to injured employees, those employees who are subject
to the contract shall receive medical services in the manner
prescribed in the contract, providing that the employee may choose to
be treated by a personal physician, personal chiropractor, or
personal acupuncturist that he or she has designated prior to the
injury, in which case the employee shall not be treated by the health
care organization. Every employee shall be given an affirmative
choice at the time of employment and at least annually thereafter to
designate or change the designation of a health care organization or
a personal physician, personal chiropractor, or personal
acupuncturist. The choice shall be memorialized in writing and
maintained in the employee's personnel records. The employee who has
designated a personal physician, personal chiropractor, or personal
acupuncturist may change their designated caregiver at any time prior
to the injury. Any employee who fails to designate a personal
physician, personal chiropractor, or personal acupuncturist shall be
treated by the health care organization selected by the employer. If
the health care organization offered by the employer is the workers'
compensation insurer that covers the employee or is an entity that
controls or is controlled by that insurer, as defined by Section 1215
of the Insurance Code, this information shall be included in the
notice of contract with a health care organization.
(2) Each contract described in paragraph (1) shall comply with the
certification standards provided in Section 4600.5, and shall
provide all medical, surgical, chiropractic, acupuncture, and
hospital treatment, including nursing, medicines, medical and
surgical supplies, crutches, and apparatus, including artificial
members, that is reasonably required to cure or relieve the effects
of the injury, as required by this division, without any payment by
the employee of deductibles, copayments, or any share of the premium.
However, an employee may receive immediate emergency medical
treatment that is compensable from a medical service or health care
provider who is not a member of the health care organization.
(3) Insured employers, a group of self-insured employers, or
self-insured employers who contract with a health care organization
for medical services shall give notice to employees of eligible
medical service providers and any other information regarding the
contract and manner of receiving medical services as the
administrative director may prescribe. Employees shall be duly
notified that if they choose to receive care from the health care
organization they must receive treatment for all occupational
injuries and illnesses as prescribed by this section.
(b) Notwithstanding subdivision (a), no employer which is required
to bargain with an exclusive or certified bargaining agent which
represents employees of the employer in accordance with state or
federal employer-employee relations law shall contract with a health
care organization for purposes of Section 4600.5 with regard to
employees whom the bargaining agent is recognized or certified to
represent for collective bargaining purposes pursuant to state or
federal employer-employee relations law unless authorized to do so by
mutual agreement between the bargaining agent and the employer. If
the collective bargaining agreement is subject to the National Labor
Relations Act, the employer may contract with a health care
organization for purposes of Section 4600.5 at any time when the
employer and bargaining agent have bargained to impasse to the extent
required by federal law.
(c) (1) When an employee is not receiving or is not eligible to
receive health care coverage for nonoccupational injuries or
illnesses provided by the employer, if 90 days from the date the
injury is reported the employee who has been receiving treatment from
a health care organization or his or her physician, chiropractor,
acupuncturist, or other agent notifies his or her employer in writing
that he or she desires to stop treatment by the health care
organization, he or she shall have the right to be treated by a
physician, chiropractor, or acupuncturist or at a facility of his or
her own choosing within a reasonable geographic area.
(2) When an employee is receiving or is eligible to receive health
care coverage for nonoccupational injuries or illnesses provided by
the employer, and has agreed to receive care for occupational
injuries and illnesses from a health care organization provided by
the employer, the employee may be treated for occupational injuries
and diseases by a physician, chiropractor, or acupuncturist of his or
her own choice or at a facility of his or her own choice within a
reasonable geographic area if the employee or his or her physician,
chiropractor, acupuncturist, or other agent notifies his or her
employer in writing only after 180 days from the date the injury was
reported, or upon the date of contract renewal or open enrollment of
the health care organization, whichever occurs first, but in no case
until 90 days from the date the injury was reported.
(3) For purposes of this subdivision, an employer shall be deemed
to provide health care coverage for nonoccupational injuries and
illnesses if the employer pays more than one-half the costs of the
coverage, or if the plan is established pursuant to collective
bargaining.
(d) An employee and employer may agree to other forms of therapy
pursuant to Section 3209.7.
(e) An employee enrolled in a health care organization shall have
the right to no less than one change of physician on request, and
shall be given a choice of physicians affiliated with the health care
organization. The health care organization shall provide the
employee a choice of participating physicians within five days of
receiving a request. In addition, the employee shall have the right
to a second opinion from a participating physician on a matter
pertaining to diagnosis or treatment from a participating physician.
(f) Nothing in this section or Section 4600.5 shall be construed
to prohibit a self-insured employer, a group of self-insured
employers, or insurer from engaging in any activities permitted by
Section 4600.
(g) Notwithstanding subdivision (c), in the event that the
employer, group of employers, or the employer's workers' compensation
insurer no longer contracts with the health care organization that
has been treating an injured employee, the employee may continue
treatment provided or arranged by the health care organization. If
the employee does not choose to continue treatment by the health care
organization, the employer may control the employee's treatment for
30 days from the date the injury was reported. After that period, the
employee may be treated by a physician of his or her own choice or
at a facility of his or her own choice within a reasonable geographic
area.
Any entity seeking to reimburse health care providers for
health care services rendered to injured workers on a capitated, or
per person per month basis, shall be licensed pursuant to the
Knox-Keene Health Care Service Plan Act of 1975 (Chapter 2.2
(commencing with Section 1340) of Division 2 of the Health and Safety
Code).
(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 coast time of each normal business day.
(b) For purposes of this section "normal business day" means a
business day as defined in Section 9 of the Civil Code.
(a) Any health care service plan licensed pursuant to the
Knox-Keene Health Care Service Plan Act, a disability insurer
licensed by the Department of Insurance, or any entity, including,
but not limited to, workers' compensation insurers and third-party
administrators authorized by the administrative director under
subdivision (e), may make written application to the administrative
director to become certified as a health care organization to provide
health care to injured employees for injuries and diseases
compensable under this article.
(b) Each application for certification shall be accompanied by a
reasonable fee prescribed by the administrative director, sufficient
to cover the actual cost of processing the application. A certificate
is valid for the period that the director may prescribe unless
sooner revoked or suspended.
(c) If the health care organization is a health care service plan
licensed pursuant to the Knox-Keene Health Care Service Plan Act, and
has provided the Managed Care Unit of the Division of Workers'
Compensation with the necessary documentation to comply with this
subdivision, that organization shall be deemed to be a health care
organization able to provide health care pursuant to Section 4600.3,
without further application duplicating the documentation already
filed with the Department of Managed Health Care. These plans shall
be required to remain in good standing with the Department of Managed
Health Care, and shall meet the following additional requirements:
(1) Proposes to provide all medical and health care services that
may be required by this article.
(2) Provides a program involving cooperative efforts by the
employees, the employer, and the health plan to promote workplace
health and safety, consultative and other services, and early return
to work for injured employees.
(3) Proposes a timely and accurate method to meet the requirements
set forth by the administrative director for all carriers of workers'
compensation coverage to report necessary information regarding
medical and health care service cost and utilization, rates of return
to work, average time in medical treatment, and other measures as
determined by the administrative director to enable the director to
determine the effectiveness of the plan.
(4) Agrees to provide the administrative director with
information, reports, and records prepared and submitted to the
Department of Managed Health Care in compliance with the Knox-Keene
Health Care Service Plan Act, relating to financial solvency,
provider accessibility, peer review, utilization review, and quality
assurance, upon request, if the administrative director determines
the information is necessary to verify that the plan is providing
medical treatment to injured employees in compliance with the
requirements of this code.
Disclosure of peer review proceedings and records to the
administrative director shall not alter the status of the proceedings
or records as privileged and confidential communications pursuant to
Sections 1370 and 1370.1 of the Health and Safety Code.
(5) Demonstrates the capability to provide occupational medicine
and related disciplines.
(6) Complies with any other requirement the administrative
director determines is necessary to provide medical services to
injured employees consistent with the intent of this article,
including, but not limited to, a written patient grievance policy.
(d) If the health care organization is a disability insurer
licensed by the Department of Insurance, and is in compliance with
subdivision (d) of Sections 10133 and 10133.5 of the Insurance Code,
the administrative director shall certify the organization to provide
health care pursuant to Section 4600.3 if the director finds that
the plan is in good standing with the Department of Insurance and
meets the following additional requirements:
(1) Proposes to provide all medical and health care services that
may be required by this article.
(2) Provides a program involving cooperative efforts by the
employees, the employer, and the health plan to promote workplace
health and safety, consultative and other services, and early return
to work for injured employees.
(3) Proposes a timely and accurate method to meet the requirements
set forth by the administrative director for all carriers of workers'
compensation coverage to report necessary information regarding
medical and health care service cost and utilization, rates of return
to work, average time in medical treatment, and other measures as
determined by the administrative director to enable the director to
determine the effectiveness of the plan.
(4) Agrees to provide the administrative director with
information, reports, and records prepared and submitted to the
Department of Insurance in compliance with the Insurance Code
relating to financial solvency, provider accessibility, peer review,
utilization review, and quality assurance, upon request, if the
administrative director determines the information is necessary to
verify that the plan is providing medical treatment to injured
employees consistent with the intent of this article.
Disclosure of peer review proceedings and records to the
administrative director shall not alter the status of the proceedings
or records as privileged and confidential communications pursuant to
subdivision (d) of Section 10133 of the Insurance Code.
(5) Demonstrates the capability to provide occupational medicine
and related disciplines.
(6) Complies with any other requirement the administrative
director determines is necessary to provide medical services to
injured employees consistent with the intent of this article,
including, but not limited to, a written patient grievance policy.
(e) If the health care organization is a workers' compensation
insurer, third-party administrator, or any other entity that the
administrative director determines meets the requirements of Section
4600.6, the administrative director shall certify the organization to
provide health care pursuant to Section 4600.3 if the director finds
that it meets the following additional requirements:
(1) Proposes to provide all medical and health care services that
may be required by this article.
(2) Provides a program involving cooperative efforts by the
employees, the employer, and the health plan to promote workplace
health and safety, consultative and other services, and early return
to work for injured employees.
(3) Proposes a timely and accurate method to meet the requirements
set forth by the administrative director for all carriers of workers'
compensation coverage to report necessary information regarding
medical and health care service cost and utilization, rates of return
to work, average time in medical treatment, and other measures as
determined by the administrative director to enable the director to
determine the effectiveness of the plan.
(4) Agrees to provide the administrative director with
information, reports, and records relating to provider accessibility,
peer review, utilization review, quality assurance, advertising,
disclosure, medical and financial audits, and grievance systems, upon
request, if the administrative director determines the information
is necessary to verify that the plan is providing medical treatment
to injured employees consistent with the intent of this article.
Disclosure of peer review proceedings and records to the
administrative director shall not alter the status of the proceedings
or records as privileged and confidential communications pursuant to
subdivision (d) of Section 10133 of the Insurance Code.
(5) Demonstrates the capability to provide occupational medicine
and related disciplines.
(6) Complies with any other requirement the administrative
director determines is necessary to provide medical services to
injured employees consistent with the intent of this article,
including, but not limited to, a written patient grievance policy.
(7) Complies with the following requirements:
(A) An organization certified by the administrative director under
this subdivision may not provide or undertake to arrange for the
provision of health care to employees, or to pay for or to reimburse
any part of the cost of that health care in return for a prepaid or
periodic charge paid by or on behalf of those employees.
(B) Every organization certified under this subdivision shall
operate on a fee-for-service basis. As used in this section, fee for
service refers to the situation where the amount of reimbursement
paid by the employer to the organization or providers of health care
is determined by the amount and type of health care rendered by the
organization or provider of health care.
(C) An organization certified under this subdivision is prohibited
from assuming risk.
(f) (1) A workers' compensation health care provider organization
authorized by the Department of Business Oversight on December 31,
1997, shall be eligible for certification as a health care
organization under subdivision (e).
(2) An entity that had, on December 31, 1997, submitted an
application with the Commissioner of Business Oversight under Part
3.2 (commencing with Section 5150) shall be considered an applicant
for certification under subdivision (e) and shall be entitled to
priority in consideration of its application. The Commissioner of
Business Oversight shall provide complete files for all pending
applications to the administrative director on or before January 31,
1998.
(g) The provisions of this section shall not affect the
confidentiality or admission in evidence of a claimant's medical
treatment records.
(h) Charges for services arranged for or provided by health care
service plans certified by this section and that are paid on a
per-enrollee-periodic-charge basis shall not be subject to the
schedules adopted by the administrative director pursuant to Section
5307.1.
(i) Nothing in this section shall be construed to expand or
constrict any requirements imposed by law on a health care service
plan or insurer when operating as other than a health care
organization pursuant to this section.
(j) In consultation with interested parties, including the
Department of Business Oversight and the Department of Insurance, the
administrative director shall adopt rules necessary to carry out
this section.
(k) The administrative director shall refuse to certify or may
revoke or suspend the certification of any health care organization
under this section if the director finds that:
(1) The plan for providing medical treatment fails to meet the
requirements of this section.
(2) A health care service plan licensed by the Department of
Managed Health Care, a workers' compensation health care provider
organization authorized by the Department of Business Oversight, or a
carrier licensed by the Department of Insurance is not in good
standing with its licensing agency.
(3) Services under the plan are not being provided in accordance
with the terms of a certified plan.
(l) (1) When an injured employee requests chiropractic treatment
for work-related injuries, the health care organization shall provide
the injured worker with access to the services of a chiropractor
pursuant to guidelines for chiropractic care established by paragraph
(2). Within five working days of the employee's request to see a
chiropractor, the health care organization and any person or entity
who directs the kind or manner of health care services for the plan
shall refer an injured employee to an affiliated chiropractor for
work-related injuries that are within the guidelines for chiropractic
care established by paragraph (2). Chiropractic care rendered in
accordance with guidelines for chiropractic care established pursuant
to paragraph (2) shall be provided by duly licensed chiropractors
affiliated with the plan.
(2) The health care organization shall establish guidelines for
chiropractic care in consultation with affiliated chiropractors who
are participants in the health care organization's utilization review
process for chiropractic care, which may include qualified medical
evaluators knowledgeable in the treatment of chiropractic conditions.
The guidelines for chiropractic care shall, at a minimum, explicitly
require the referral of any injured employee who so requests to an
affiliated chiropractor for the evaluation or treatment, or both, of
neuromusculoskeletal conditions.
(3) Whenever a dispute concerning the appropriateness or necessity
of chiropractic care for work-related injuries arises, the dispute
shall be resolved by the health care organization's utilization
review process for chiropractic care in accordance with the health
care organization's guidelines for chiropractic care established by
paragraph (2).
Chiropractic utilization review for work-related injuries shall be
conducted in accordance with the health care organization's approved
quality assurance standards and utilization review process for
chiropractic care. Chiropractors affiliated with the plan shall have
access to the health care organization's provider appeals process
and, in the case of chiropractic care for work-related injuries, the
review shall include review by a chiropractor affiliated with the
health care organization, as determined by the health care
organization.
(4) The health care organization shall inform employees of the
procedures for processing and resolving grievances, including those
related to chiropractic care, including the location and telephone
number where grievances may be submitted.
(5) All guidelines for chiropractic care and utilization review
shall be consistent with the standards of this code that require care
to cure or relieve the effects of the industrial injury.
(m) Individually identifiable medical information on patients
submitted to the division shall not be subject to the California
Public Records Act (Chapter 3.5 (commencing with Section 6250) of
Division 7 of Title 1 of the Government Code).
(n) (1) When an injured employee requests acupuncture treatment
for work-related injuries, the health care organization shall provide
the injured worker with access to the services of an acupuncturist
pursuant to guidelines for acupuncture care established by paragraph
(2). Within five working days of the employee's request to see an
acupuncturist, the health care organization and any person or entity
who directs the kind or manner of health care services for the plan
shall refer an injured employee to an affiliated acupuncturist for
work-related injuries that are within the guidelines for acupuncture
care established by paragraph (2). Acupuncture care rendered in
accordance with guidelines for acupuncture care established pursuant
to paragraph (2) shall be provided by duly licensed acupuncturists
affiliated with the plan.
(2) The health care organization shall establish guidelines for
acupuncture care in consultation with affiliated acupuncturists who
are participants in the health care organization's utilization review
process for acupuncture care, which may include qualified medical
evaluators. The guidelines for acupuncture care shall, at a minimum,
explicitly require the referral of any injured employee who so
requests to an affiliated acupuncturist for the evaluation or
treatment, or both, of neuromusculoskeletal conditions.
(3) Whenever a dispute concerning the appropriateness or necessity
of acupuncture care for work-related injuries arises, the dispute
shall be resolved by the health care organization's utilization
review process for acupuncture care in accordance with the health
care organization's guidelines for acupuncture care established by
paragraph (2).
Acupuncture utilization review for work-related injuries shall be
conducted in accordance with the health care organization's approved
quality assurance standards and utilization review process for
acupuncture care. Acupuncturists affiliated with the plan shall have
access to the health care organization's provider appeals process
and, in the case of acupuncture care for work-related injuries, the
review shall include review by an acupuncturist affiliated with the
health care organization, as determined by the health care
organization.
(4) The health care organization shall inform employees of the
procedures for processing and resolving grievances, including those
related to acupuncture care, including the location and telephone
number where grievances may be submitted.
(5) All guidelines for acupuncture care and utilization review
shall be consistent with the standards of this code that require care
to cure or relieve the effects of the industrial injury.
Any workers' compensation insurer, third-party
administrator, or other entity seeking certification as a health care
organization under subdivision (e) of Section 4600.5 shall be
subject to the following rules and procedures:
(a) Each application for authorization as an organization under
subdivision (e) of Section 4600.5 shall be verified by an authorized
representative of the applicant and shall be in a form prescribed by
the administrative director. The application shall be accompanied by
the prescribed fee and shall set forth or be accompanied by each and
all of the following:
(1) The basic organizational documents of the applicant, such as
the articles of incorporation, articles of association, partnership
agreement, trust agreement, or other applicable documents and all
amendments thereto.
(2) A copy of the bylaws, rules, and regulations, or similar
documents regulating the conduct of the internal affairs of the
applicant.
(3) A list of the names, addresses, and official positions of the
persons who are to be responsible for the conduct of the affairs of
the applicant, which shall include, among others, all members of the
board of directors, board of trustees, executive committee, or other
governing board or committee, the principal officers, each
shareholder with over 5 percent interest in the case of a
corporation, and all partners or members in the case of a partnership
or association, and each person who has loaned funds to the
applicant for the operation of its business.
(4) A copy of any contract made, or to be made, between the
applicant and any provider of health care, or persons listed in
paragraph (3), or any other person or organization agreeing to
perform an administrative function or service for the plan. The
administrative director by rule may identify contracts excluded from
this requirement and make provision for the submission of form
contracts. The payment rendered or to be rendered to the provider of
health care services shall be deemed confidential information that
shall not be divulged by the administrative director, except that the
payment may be disclosed and become a public record in any
legislative, administrative, or judicial proceeding or inquiry. The
organization shall also submit the name and address of each provider
employed by, or contracting with, the organization, together with his
or her license number.
(5) A statement describing the organization, its method of
providing for health services, and its physical facilities. If
applicable, this statement shall include the health care delivery
capabilities of the organization, including the number of full-time
and part-time physicians under Section 3209.3, the numbers and types
of licensed or state-certified health care support staff, the number
of hospital beds contracted for, and the arrangements and the methods
by which health care will be provided, as defined by the
administrative director under Sections 4600.3 and 4600.5.
(6) A copy of the disclosure forms or materials that are to be
issued to employees.
(7) A copy of the form of the contract that is to be issued to any
employer, insurer of an employer, or a group of self-insured
employers.
(8) Financial statements accompanied by a report, certificate, or
opinion of an independent certified public accountant. However, the
financial statements from public entities or political subdivisions
of the state need not include a report, certificate, or opinion by an
independent certified public accountant if the financial statement
complies with any requirements that may be established by regulation
of the administrative director.
(9) A description of the proposed method of marketing the
organization and a copy of any contract made with any person to
solicit on behalf of the organization or a copy of the form of
agreement used and a list of the contracting parties.
(10) A statement describing the service area or areas to be
served, including the service location for each provider rendering
professional services on behalf of the organization and the location
of any other organization facilities where required by the
administrative director.
(11) A description of organization grievance procedures to be
utilized as required by this part, and a copy of the form specified
by paragraph (3) of subdivision (j).
(12) A description of the procedures and programs for internal
review of the quality of health care pursuant to the requirements set
forth in this part.
(13) Evidence of adequate insurance coverage or self-insurance to
respond to claims for damages arising out of the furnishing of
workers' compensation health care.
(14) Evidence of adequate insurance coverage or self-insurance to
protect against losses of facilities where required by the
administrative director.
(15) Evidence of adequate workers' compensation coverage to
protect against claims arising out of work-related injuries that
might be brought by the employees and staff of an organization
against the organization.
(16) Evidence of fidelity bonds in such amount as the
administrative director prescribes by regulation.
(17) Other information that the administrative director may
reasonably require.
(b) (1) An organization, solicitor, solicitor firm, or
representative may not use or permit the use of any advertising or
solicitation that is untrue or misleading, or any form of disclosure
that is deceptive. For purposes of this chapter:
(A) A written or printed statement or item of information shall be
deemed untrue if it does not conform to fact in any respect that is
or may be significant to an employer or employee, or potential
employer or employee.
(B) A written or printed statement or item of information shall be
deemed misleading whether or not it may be literally true, if, in
the total context in which the statement is made or the item of
information is communicated, the statement or item of information may
be understood by a person not possessing special knowledge regarding
health care coverage, as indicating any benefit or advantage, or the
absence of any exclusion, limitation, or disadvantage of possible
significance to an employer or employee, or potential employer or
employee.
(C) A disclosure form shall be deemed to be deceptive if the
disclosure form taken as a whole and with consideration given to
typography and format, as well as language, shall be such as to cause
a reasonable person, not possessing special knowledge of workers'
compensation health care, and the disclosure form therefor, to expect
benefits, service charges, or other advantages that the disclosure
form does not provide or that the organization issuing that
disclosure form does not regularly make available to employees.
(2) An organization, solicitor, or representative may not use or
permit the use of any verbal statement that is untrue, misleading, or
deceptive or make any representations about health care offered by
the organization or its cost that does not conform to fact. All
verbal statements are to be held to the same standards as those for
printed matter provided in paragraph (1).
(c) It is unlawful for any person, including an organization,
subject to this part, to represent or imply in any manner that the
person or organization has been sponsored, recommended, or approved,
or that the person's or organization's abilities or qualifications
have in any respect been passed upon, by the administrative director.
(d) (1) An organization may not publish or distribute, or allow to
be published or distributed on its behalf, any advertisement unless
(A) a true copy thereof has first been filed with the administrative
director, at least 30 days prior to any such use, or any shorter
period as the administrative director by rule or order may allow, and
(B) the administrative director by notice has not found the
advertisement, wholly or in part, to be untrue, misleading,
deceptive, or otherwise not in compliance with this part or the rules
thereunder, and specified the deficiencies, within the 30 days or
any shorter time as the administrative director by rule or order may
allow.
(2) If the administrative director finds that any advertisement of
an organization has materially failed to comply with this part or
the rules thereunder, the administrative director may, by order,
require the organization to publish in the same or similar medium, an
approved correction or retraction of any untrue, misleading, or
deceptive statement contained in the advertising.
(3) The administrative director by rule or order may classify
organizations and advertisements and exempt certain classes, wholly
or in part, either unconditionally or upon specified terms and
conditions or for specified periods, from the application of
subdivision (a).
(e) (1) The administrative director shall require the use by each
organization of disclosure forms or materials containing any
information regarding the health care and terms of the workers'
compensation health care contract that the administrative director
may require, so as to afford the public, employers, and employees
with a full and fair disclosure of the provisions of the contract in
readily understood language and in a clearly organized manner. The
administrative director may require that the materials be presented
in a reasonably uniform manner so as to facilitate comparisons
between contracts of the same or other types of organizations. The
disclosure form shall describe the health care that is required by
the administrative director under Sections 4600.3 and 4600.5, and
shall provide that all information be in concise and specific terms,
relative to the contract, together with any additional information as
may be required by the administrative director, in connection with
the organization or contract.
(2) All organizations, solicitors, and representatives of a
workers' compensation health care provider organization shall, when
presenting any contract for examination or sale to a prospective
employee, provide the employee with a properly completed disclosure
form, as prescribed by the administrative director pursuant to this
section for each contract so examined or sold.
(3) In addition to the other disclosures required by this section,
every organization and any agent or employee of the organization
shall, when representing an organization for examination or sale to
any individual purchaser or the representative of a group consisting
of 25 or fewer individuals, disclose in writing the ratio of premium
cost to health care paid for contracts with individuals and with
groups of the same or similar size for the organization's preceding
fiscal year. An organization may report that information by
geographic area, provided the organization identifies the geographic
area and reports information applicable to that geographic area.
(4) Where the administrative director finds it necessary in the
interest of full and fair disclosure, all advertising and other
consumer information disseminated by an organization for the purpose
of influencing persons to become members of an organization shall
contain any supplemental disclosure information that the
administrative director may require.
(f) When the administrative director finds it necessary in the
interest of full and fair disclosure, all advertising and other
consumer information disseminated by an organization for the purpose
of influencing persons to become members of an organization shall
contain any supplemental disclosure information that the
administrative director may require.
(g) (1) An organization may not refuse to enter into any contract,
or may not cancel or decline to renew or reinstate any contract,
because of the age or any characteristic listed or defined in
subdivision (b) or (e) of Section 51 of the Civil Code of any
contracting party, prospective contracting party, or person
reasonably expected to benefit from that contract as an employee or
otherwise.
(2) The terms of any contract shall not be modified, and the
benefits or coverage of any contract shall not be subject to any
limitations, exceptions, exclusions, reductions, copayments,
coinsurance, deductibles, reservations, or premium, price, or charge
differentials, or other modifications because of the age or any
characteristic listed or defined in subdivision (b) or (e) of Section
51 of the Civil Code of any contracting party, potential contracting
party, or person reasonably expected to benefit from that contract
as an employee or otherwise; except that premium, price, or charge
differentials because of the sex or age of any individual when based
on objective, valid, and up-to-date statistical and actuarial data
are not prohibited. Nothing in this section shall be construed to
permit an organization to charge different rates to individual
employees within the same group solely on the basis of the employee's
sex.
(3) It shall be deemed a violation of subdivision (a) for any
organization to utilize marital status, living arrangements,
occupation, gender, beneficiary designation, ZIP Codes or other
territorial classification, or any combination thereof for the
purpose of establishing sexual orientation. Nothing in this section
shall be construed to alter in any manner the existing law
prohibiting organizations from conducting tests for the presence of
human immunodeficiency virus or evidence thereof.
(4) This section shall not be construed to limit the authority of
the administrative director to adopt or enforce regulations
prohibiting discrimination because of sex, marital status, or sexual
orientation.
(h) (1) An organization may not use in its name any of the words
"insurance," "casualty," "health care service plan," "health plan,"
"surety," "mutual," or any other words descriptive of the health
plan, insurance, casualty, or surety business or use any name similar
to the name or description of any health care service plan,
insurance, or surety corporation doing business in this state unless
that organization controls or is controlled by an entity licensed as
a health care service plan or insurer pursuant to the Health and
Safety Code or the Insurance Code and the organization employs a name
related to that of the controlled or controlling entity.
(2) Section 2415 of the Business and Professions Code, pertaining
to fictitious names, does not apply to organizations certified under
this section.
(3) An organization or solicitor firm may not adopt a name style
that is deceptive, or one that could cause the public to believe the
organization is affiliated with or recommended by any governmental or
private entity unless this affiliation or endorsement exists.
(i) Each organization shall meet the following requirements:
(1) All facilities located in this state, including, but not
limited to, clinics, hospitals, and skilled nursing facilities, to be
utilized by the organization shall be licensed by the State
Department of Health Services, if that licensure is required by law.
Facilities not located in this state shall conform to all licensing
and other requirements of the jurisdiction in which they are located.
(2) All personnel employed by or under contract to the
organization shall be licensed or certified by their respective board
or agency, where that licensure or certification is required by law.
(3) All equipment required to be licensed or registered by law
shall be so licensed or registered and the operating personnel for
that equipment shall be licensed or certified as required by law.
(4) The organization shall furnish services in a manner providing
continuity of care and ready referral of patients to other providers
at any time as may be appropriate and consistent with good
professional practice.
(5) All health care shall be readily available at reasonable times
to all employees. To the extent feasible, the organization shall
make all health care readily accessible to all employees.
(6) The organization shall employ and utilize allied health
manpower for the furnishing of health care to the extent permitted by
law and consistent with good health care practice.
(7) The organization shall have the organizational and
administrative capacity to provide services to employees. The
organization shall be able to demonstrate to the department that
health care decisions are rendered by qualified providers, unhindered
by fiscal and administrative management.
(8) All contracts with employers, insurers of employers, and
self-insured employers and all contracts with providers, and other
persons furnishing services, equipment, or facilities to or in
connection with the workers' compensation health care organization,
shall be fair, reasonable, and consistent with the objectives of this
part.
(9) Each organization shall provide to employees all workers'
compensation health care required by this code. The administrative
director shall not determine the scope of workers' compensation
health care to be offered by an organization.
(j) (1) Every organization shall establish and maintain a
grievance system approved by the administrative director under which
employees may submit their grievances to the organization. Each
system shall provide reasonable procedures in accordance with
regulations adopted by the administrative director that shall ensure
adequate consideration of employee grievances and rectification when
appropriate.
(2) Every organization shall inform employees upon enrollment and
annually thereafter of the procedures for processing and resolving
grievances. The information shall include the location and telephone
number where grievances may be submitted.
(3) Every organization shall provide forms for complaints to be
given to employees who wish to register written complaints. The forms
used by organizations shall be approved by the administrative
director in advance as to format.
(4) The organization shall keep in its files all copies of
complaints, and the responses thereto, for a period of five years.
(k) Every organization shall establish procedures in accordance
with regulations of the administrative director for continuously
reviewing the quality of care, performance of medical personnel,
utilization of services and facilities, and costs. Notwithstanding
any other provision of law, there shall be no monetary liability on
the part of, and no cause of action for damages shall arise against,
any person who participates in quality of care or utilization reviews
by peer review committees that are composed chiefly of physicians,
as defined by Section 3209.3, for any act performed during the
reviews if the person acts without malice, has made a reasonable
effort to obtain the facts of the matter, and believes that the
action taken is warranted by the facts, and neither the proceedings
nor the records of the reviews shall be subject to discovery, nor
shall any person in attendance at the reviews be required to testify
as to what transpired thereat. Disclosure of the proceedings or
records to the governing body of an organization or to any person or
entity designated by the organization to review activities of the
committees shall not alter the status of the records or of the
proceedings as privileged communications.
The above prohibition relating to discovery or testimony does not
apply to the statements made by any person in attendance at a review
who is a party to an action or proceeding the subject matter of which
was reviewed, or to any person requesting hospital staff privileges,
or in any action against an insurance carrier alleging bad faith by
the carrier in refusing to accept a settlement offer within the
policy limits, or to the administrative director in conducting
surveys pursuant to subdivision (o).
This section shall not be construed to confer immunity from
liability on any workers' compensation health care organization. In
any case in which, but for the enactment of the preceding provisions
of this section, a cause of action would arise against an
organization, the cause of action shall exist notwithstanding the
provisions of this section.
(l) Nothing in this chapter shall be construed to prevent an
organization from utilizing subcommittees to participate in peer
review activities, nor to prevent an organization from delegating the
responsibilities required by subdivision (i) as it determines to be
appropriate, to subcommittees including subcommittees composed of a
majority of nonphysician health care providers licensed pursuant to
the Business and Professions Code, as long as the organization
controls the scope of authority delegated and may revoke all or part
of this authority at any time. Persons who participate in the
subcommittees shall be entitled to the same immunity from monetary
liability and actions for civil damages as persons who participate in
organization or provider peer review committees pursuant to
subdivision (i).
(m) Every organization shall have and shall demonstrate to the
administrative director that it has all of the following:
(1) Adequate provision for continuity of care.
(2) A procedure for prompt payment and denial of provider claims.
(n) Every contract between an organization and an employer or
insurer of an employer, and every contract between any organization
and a provider of health care, shall be in writing.
(o) (1) The administrative director shall conduct periodically an
onsite medical survey of the health care delivery system of each
organization. The survey shall include a review of the procedures for
obtaining health care, the procedures for regulating utilization,
peer review mechanisms, internal procedures for assuring quality of
care, and the overall performance of the organization in providing
health care and meeting the health needs of employees.
(2) The survey shall be conducted by a panel of qualified health
professionals experienced in evaluating the delivery of workers'
compensation health care. The administrative director shall be
authorized to contract with professional organizations or outside
personnel to conduct medical surveys. These organizations or
personnel shall have demonstrated the ability to objectively evaluate
the delivery of this health care.
(3) Surveys performed pursuant to this section shall be conducted
as often as deemed necessary by the administrative director to assure
the protection of employees, but not less frequently than once every
three years. Nothing in this section shall be construed to require
the survey team to visit each clinic, hospital, office, or facility
of the organization.
(4) Nothing in this section shall be construed to require the
medical survey team to review peer review proceedings and records
conducted and compiled under this section or in medical records.
However, the administrative director shall be authorized to require
onsite review of these peer review proceedings and records or medical
records where necessary to determine that quality health care is
being delivered to employees. Where medical record review is
authorized, the survey team shall ensure that the confidentiality of
the physician-patient relationship is safeguarded in accordance with
existing law and neither the survey team nor the administrative
director or the administrative director's staff may be compelled to
disclose this information except in accordance with the
physician-patient relationship. The administrative director shall
ensure that the confidentiality of the peer review proceedings and
records is maintained. The disclosure of the peer review proceedings
and records to the administrative director or the medical survey team
shall not alter the status of the proceedings or records as
privileged and confidential communications.
(5) The procedures and standards utilized by the survey team shall
be made available to the organizations prior to the conducting of
medical surveys.
(6) During the survey, the members of the survey team shall offer
such advice and assistance to the organization as deemed appropriate.
(7) The administrative director shall notify the organization of
deficiencies found by the survey team. The administrative director
shall give the organization a reasonable time to correct the
deficiencies, and failure on the part of the organization to comply
to the administrative director's satisfaction shall constitute cause
for disciplinary action against the organization.
(8) Reports of all surveys, deficiencies, and correction plans
shall be open to public inspection, except that no surveys,
deficiencies or correction plans shall be made public unless the
organization has had an opportunity to review the survey and file a
statement of response within 30 days, to be attached to the report.
(p) (1) All records, books, and papers of an organization,
management company, solicitor, solicitor firm, and any provider or
subcontractor providing medical or other services to an organization,
management company, solicitor, or solicitor firm shall be open to
inspection during normal business hours by the administrative
director.
(2) To the extent feasible, all the records, books, and papers
described in paragraph (1) shall be located in this state. In
examining those records outside this state, the administrative
director shall consider the cost to the organization, consistent with
the effectiveness of the administrative director's examination, and
may upon reasonable notice require that these records, books, and
papers, or a specified portion thereof, be made available for
examination in this state, or that a true and accurate copy of these
records, books, and papers, or a specified portion thereof, be
furnished to the administrative director.
(q) (1) The administrative director shall conduct an examination
of the administrative affairs of any organization, and each person
with whom the organization has made arrangements for administrative,
or management services, as often as deemed necessary to protect the
interest of employees, but not less frequently than once every five
years.
(2) The expense of conducting any additional or nonroutine
examinations pursuant to this section, and the expense of conducting
any additional or nonroutine medical surveys pursuant to subdivision
(o) shall be charged against the organization being examined or
surveyed. The amount shall include the actual salaries or
compensation paid to the persons making the examination or survey,
the expenses incurred in the course thereof, and overhead costs in
connection therewith as fixed by the administrative director. In
determining the cost of examinations or surveys, the administrative
director may use the estimated average hourly cost for all persons
performing examinations or surveys of workers' compensation health
care organizations for the fiscal year. The amount charged shall be
remitted by the organization to the administrative director.
(3) Reports of all examinations shall be open to public
inspection, except that no examination shall be made public, unless
the organization has had an opportunity to review the examination
report and file a statement or response within 30 days, to be
attached to the report.
(a) The Workers' Compensation Managed Care Fund is hereby
created in the State Treasury for the administration of Sections
4600.3 and 4600.5 by the Division of Workers' Compensation. The
administrative director shall establish a schedule of fees and
revenues to be charged to certified health care organizations and
applicants for certification to fully fund the administration of
these provisions and to repay amounts received as a loan from the
General Fund. All fees and revenues shall be deposited in the Workers'
Compensation Managed Care Fund and shall be used when appropriated
by the Legislature solely for the purpose of carrying out the
responsibilities of the Division of Workers' Compensation under
Section 4600.3 or 4600.5.
(b) On and after July 1, 1998, no funds received as a loan from
the General Fund shall be used to support the administration of
Sections 4600.3 and 4600.5. The loan amount shall be repaid to the
General Fund by assessing a surcharge on the enrollment fee for each
of the next five fiscal years. In the event the surcharge does not
produce sufficient revenue over this period, the surcharge shall be
adjusted to fully repay the loan over the following three fiscal
years, with the final assessment calculated by dividing the balance
of the loan by the enrollees at the end of the final fiscal year.
(a) If the employee so requests, the employer shall tender
the employee one change of physician. The employee at any time may
request that the employer tender this one-time change of physician.
Upon request of the employee for a change of physician, the maximum
amount of time permitted by law for the employer or insurance carrier
to provide the employee an alternative physician or, if requested by
the employee, a chiropractor, or an acupuncturist shall be five
working days from the date of the request. Notwithstanding the 30-day
time period specified in Section 4600, a request for a change of
physician pursuant to this section may be made at any time. The
employee is entitled, in any serious case, upon request, to the
services of a consulting physician, chiropractor, or acupuncturist of
his or her choice at the expense of the employer. The treatment
shall be at the expense of the employer.
(b) If an employee requesting a change of physician pursuant to
subdivision (a) has notified his or her employer in writing prior to
the date of injury that he or she has a personal chiropractor, the
alternative physician tendered by the employer to the employee, if
the employee so requests, shall be the employee's personal
chiropractor. For the purpose of this article, "personal chiropractor"
means the employee's regular chiropractor licensed pursuant to
Chapter 2 (commencing with Section 1000) of Division 2 of the
Business and Professions Code, who has previously directed treatment
of the employee, and who retains the employee's chiropractic
treatment records, including his or her chiropractic history.
(c) If an employee requesting a change of physician pursuant to
subdivision (a) has notified his or her employer in writing prior to
the date of injury that he or she has a personal acupuncturist, the
alternative physician tendered by the employer to the employee, if
the employee so requests, shall be the employee's personal
acupuncturist. For the purpose of this article, "personal
acupuncturist" means the employee's regular acupuncturist licensed
pursuant to Chapter 12 (commencing with Section 4935) of Division 2
of the Business and Professions Code, who has previously directed
treatment of the employee, and who retains the employee's acupuncture
treatment records, including his or her acupuncture history.
If the employee so requests, the employer shall procure
certification by either the administrative director or the appeals
board as the case may be of the competency, for the particular case,
of the consulting or additional physicians.
If the employer desires a change of physicians or
chiropractor, he may petition the administrative director who, upon a
showing of good cause by the employer, may order the employer to
provide a panel of five physicians, or if requested by the employee,
four physicians and one chiropractor competent to treat the
particular case, from which the employee must select one.
(a) (1) Upon selecting a physician pursuant to Section
4600, the employee or physician shall notify the employer of the name
and address, including the name of the medical group, if applicable,
of the physician. The physician shall submit a report to the
employer within five working days from the date of the initial
examination, as required by Section 6409, and shall submit periodic
reports at intervals that may be prescribed by rules and regulations
adopted by the administrative director.
(2) If the employer objects to the employee's selection of the
physician on the grounds that the physician is not within the medical
provider network used by the employer, and there is a final
determination that the employee was entitled to select the physician
pursuant to Section 4600, the employee shall be entitled to continue
treatment with that physician at the employer's expense in accordance
with this division, notwithstanding Section 4616.2. The employer
shall be required to pay from the date of the initial examination if
the physician's report was submitted within five working days of the
initial examination. If the physician's report was submitted more
than five working days after the initial examination, the employer
and the employee shall not be required to pay for any services prior
to the date the physician's report was submitted.
(3) If the employer objects to the employee's selection of the
physician on the grounds that the physician is not within the medical
provider network used by the employer, and there is a final
determination that the employee was not entitled to select a
physician outside of the medical provider network, the employer shall
have no liability for treatment provided by or at the direction of
that physician or for any consequences of the treatment obtained
outside the network.
(b) (1) Any provider of services provided pursuant to Section
4600, including, but not limited to, physicians, hospitals,
pharmacies, interpreters, copy services, transportation services, and
home health care services, shall submit its request for payment with
an itemization of services provided and the charge for each service,
a copy of all reports showing the services performed, the
prescription or referral from the primary treating physician if the
services were performed by a person other than the primary treating
physician, and any evidence of authorization for the services that
may have been received. Nothing in this section shall prohibit an
employer, insurer, or third-party claims administrator from
establishing, through written agreement, an alternative manual or
electronic request for payment with providers for services provided
pursuant to Section 4600.
(A) Notwithstanding the requirements of this paragraph, a copy of
the prescription shall not be required with a request for payment for
pharmacy services, unless the provider of services has entered into
a written agreement, as provided in this paragraph, that requires a
copy of a prescription for a pharmacy service.
(B) Notwithstanding timely billing and payment rules established
by the Division of Workers' Compensation, any entity submitting a
pharmacy bill for payment, on or after January 1, 2013, and denied
payment for not including a copy of the prescription from the
treating physician, may resubmit those bills for payment until March
31, 2014.
(C) Nothing in this section shall preclude an employer, insurer,
pharmacy benefits manager, or third-party claims administrator from
requesting a copy of the prescription during a review of any records
of prescription drugs that were dispensed by a pharmacy.
(2) Except as provided in subdivision (d) of Section 4603.4, or
under contracts authorized under Section 5307.11, payment for medical
treatment provided or prescribed by the treating physician selected
by the employee or designated by the employer shall be made at
reasonable maximum amounts in the official medical fee schedule,
pursuant to Section 5307.1, in effect on the date of service.
Payments shall be made by the employer with an explanation of review
pursuant to Section 4603.3 within 45 days after receipt of each
separate, itemization of medical services provided, together with any
required reports and any written authorization for services that may
have been received by the physician. If the itemization or a portion
thereof is contested, denied, or considered incomplete, the
physician shall be notified, in the explanation of review, that the
itemization is contested, denied, or considered incomplete, within 30
days after receipt of the itemization by the employer. An
explanation of review that states an itemization is incomplete shall
also state all additional information required to make a decision.
Any properly documented list of services provided and not paid at the
rates then in effect under Section 5307.1 within the 45-day period
shall be paid at the rates then in effect and increased by 15
percent, together with interest at the same rate as judgments in
civil actions retroactive to the date of receipt of the itemization,
unless the employer does both of the following:
(A) Pays the provider at the rates in effect within the 45-day
period.
(B) Advises, in an explanation of review pursuant to Section
4603.3, the physician, or another provider of the items being
contested, the reasons for contesting these items, and the remedies
available to the physician or the other provider if he or she
disagrees. In the case of an itemization that includes services
provided by a hospital, outpatient surgery center, or independent
diagnostic facility, advice that a request has been made for an audit
of the itemization shall satisfy the requirements of this paragraph.
An employer's liability to a physician or another provider under
this section for delayed payments shall not affect its liability to
an employee under Section 5814 or any other provision of this
division.
(3) Notwithstanding paragraph (1), if the employer is a
governmental entity, payment for medical treatment provided or
prescribed by the treating physician selected by the employee or
designated by the employer shall be made within 60 days after receipt
of each separate itemization, together with any required reports and
any written authorization for services that may have been received
by the physician.
(4) Duplicate submissions of medical services itemizations, for
which an explanation of review was previously provided, shall require
no further or additional notification or objection by the employer
to the medical provider and shall not subject the employer to any
additional penalties or interest pursuant to this section for failing
to respond to the duplicate submission. This paragraph shall apply
only to duplicate submissions and does not apply to any other
penalties or interest that may be applicable to the original
submission.
(c) Any interest or increase in compensation paid by an insurer
pursuant to this section shall be treated in the same manner as an
increase in compensation under subdivision (d) of Section 4650 for
the purposes of any classification of risks and premium rates, and
any system of merit rating approved or issued pursuant to Article 2
(commencing with Section 11730) of Chapter 3 of Part 3 of Division 2
of the Insurance Code.
(d) (1) Whenever an employer or insurer employs an individual or
contracts with an entity to conduct a review of an itemization
submitted by a physician or medical provider, the employer or insurer
shall make available to that individual or entity all documentation
submitted together with that itemization by the physician or medical
provider. When an individual or entity conducting an itemization
review determines that additional information or documentation is
necessary to review the itemization, the individual or entity shall
contact the claims administrator or insurer to obtain the necessary
information or documentation that was submitted by the physician or
medical provider pursuant to subdivision (b).
(2) An individual or entity reviewing an itemization of service
submitted by a physician or medical provider shall not alter the
procedure codes listed or recommend reduction of the amount of the
payment unless the documentation submitted by the physician or
medical provider with the itemization of service has been reviewed by
that individual or entity. If the reviewer does not recommend
payment for services as itemized by the physician or medical
provider, the explanation of review shall provide the physician or
medical provider with a specific explanation as to why the reviewer
altered the procedure code or changed other parts of the itemization
and the specific deficiency in the itemization or documentation that
caused the reviewer to conclude that the altered procedure code or
amount recommended for payment more accurately represents the service
performed.
(e) (1) If the provider disputes the amount paid, the provider may
request a second review within 90 days of service of the explanation
of review or an order of the appeals board resolving the threshold
issue as stated in the explanation of review pursuant to paragraph
(5) of subdivision (a) of Section 4603.3. The request for a second
review shall be submitted to the employer on a form prescribed by the
administrative director and shall include all of the following:
(A) The date of the explanation of review and the claim number or
other unique identifying number provided on the explanation of
review.
(B) The item and amount in dispute.
(C) The additional payment requested and the reason therefor.
(D) The additional information provided in response to a request
in the first explanation of review or any other additional
information provided in support of the additional payment requested.
(2) If the only dispute is the amount of payment and the provider
does not request a second review within 90 days, the bill shall be
deemed satisfied and neither the employer nor the employee shall be
liable for any further payment.
(3) Within 14 days of a request for second review, the employer
shall respond with a final written determination on each of the items
or amounts in dispute. Payment of any balance not in dispute shall
be made within 21 days of receipt of the request for second review.
This time limit may be extended by mutual written agreement.
(4) If the provider contests the amount paid, after receipt of the
second review, the provider shall request an independent bill review
as provided for in Section 4603.6.
(f) Except as provided in paragraph (4) of subdivision (e), the
appeals board shall have jurisdiction over disputes arising out of
this subdivision pursuant to Section 5304.
(a) Upon payment, adjustment, or denial of a complete or
incomplete itemization of medical services, an employer shall provide
an explanation of review in the manner prescribed by the
administrative director that shall include all of the following:
(1) A statement of the items or procedures billed and the amounts
requested by the provider to be paid.
(2) The amount paid.
(3) The basis for any adjustment, change, or denial of the item or
procedure billed.
(4) The additional information required to make a decision for an
incomplete itemization.
(5) If a denial of payment is for some reason other than a fee
dispute, the reason for the denial.
(6) Information on whom to contact on behalf of the employer if a
dispute arises over the payment of the billing. The explanation of
review shall inform the medical provider of the time limit to raise
any objection regarding the items or procedures paid or disputed and
how to obtain an independent review of the medical bill pursuant to
Section 4603.6.
(b) The administrative director may adopt regulations requiring
the use of electronic explanations of review.
(a) The administrative director shall adopt rules and
regulations to do all of the following:
(1) Ensure that all health care providers and facilities submit
medical bills for payment on standardized forms.
(2) Require acceptance by employers of electronic claims for
payment of medical services.
(3) Ensure confidentiality of medical information submitted on
electronic claims for payment of medical services.
(b) To the extent feasible, standards adopted pursuant to
subdivision (a) shall be consistent with existing standards under the
federal Health Insurance Portability and Accountability Act of 1996.
(c) The rules and regulations requiring employers to accept
electronic claims for payment of medical services shall be adopted on
or before January 1, 2005, and shall require all employers to accept
electronic claims for payment of medical services on or before July
1, 2006.
(d) Payment for medical treatment provided or prescribed by the
treating physician selected by the employee or designated by the
employer shall be made with an explanation of review by the employer
within 15 working days after electronic receipt of an itemized
electronic billing for services at or below the maximum fees provided
in the official medical fee schedule adopted pursuant to Section
5307.1. If the billing is contested, denied, or incomplete, payment
shall be made with an explanation of review of any uncontested
amounts within 15 working days after electronic receipt of the
billing, and payment of the balance shall be made in accordance with
Section 4603.2.
The administrative director shall adopt rules pertaining to
the format and content of notices required by this article; define
reasonable geographic areas for the purposes of Section 4600; specify
time limits for all such notices, and responses thereto; and adopt
any other rules necessary to make effective the requirements of this
article.
Employers shall notify all employees of their rights under this
section.
(a) If the only dispute is the amount of payment and the
provider has received a second review that did not resolve the
dispute, the provider may request an independent bill review within
30 calendar days of service of the second review pursuant to Section
4603.2 or 4622. If the provider fails to request an independent bill
review within 30 days, the bill shall be deemed satisfied, and
neither the employer nor the employee shall be liable for any further
payment. If the employer has contested liability for any issue other
than the reasonable amount payable for services, that issue shall be
resolved prior to filing a request for independent bill review, and
the time limit for requesting independent bill review shall not begin
to run until the resolution of that issue becomes final, except as
provided for in Section 4622.
(b) A request for independent review shall be made on a form
prescribed by the administrative director, and shall include copies
of the original billing itemization, any supporting documents that
were furnished with the original billing, the explanation of review,
the request for second review together with any supporting
documentation submitted with that request, and the final explanation
of the second review. The administrative director may require that
requests for independent bill review be submitted electronically. A
copy of the request, together with all required documents, shall be
served on the employer. Only the request form and the proof of
payment of the fee required by subdivision (c) shall be filed with
the administrative director. Upon notice of assignment of the
independent bill reviewer, the requesting party shall submit the
documents listed in this subdivision to the independent bill reviewer
within 10 days.
(c) The provider shall pay to the administrative director a fee
determined by the administrative director to cover no more than the
reasonable estimated cost of independent bill review and
administration of the independent bill review program. The
administrative director may prescribe different fees depending on the
number of items in the bill or other criteria determined by
regulation adopted by the administrative director. If any additional
payment is found owing from the employer to the medical provider, the
employer shall reimburse the provider for the fee in addition to the
amount found owing.
(d) Upon receipt of a request for independent bill review and the
required fee, the administrative director or the administrative
director's designee shall assign the request to an independent bill
reviewer within 30 days and notify the medical provider and employer
of the independent reviewer assigned.
(e) The independent bill reviewer shall review the materials
submitted by the parties and make a written determination of any
additional amounts to be paid to the medical provider and state the
reasons for the determination. If the independent bill reviewer deems
necessary, the independent bill reviewer may request additional
documents from the medical provider or employer. The employer shall
have no obligation to serve medical reports on the provider unless
the reports are requested by the independent bill reviewer. If
additional documents are requested, the parties shall respond with
the documents requested within 30 days and shall provide the other
party with copies of any documents submitted to the independent
reviewer, and the independent reviewer shall make a written
determination of any additional amounts to be paid to the medical
provider and state the reasons for the determination within 60 days
of the receipt of the administrative director's assignment. The
written determination of the independent bill reviewer shall be sent
to the administrative director and provided to both the medical
provider and the employer.
(f) The determination of the independent bill reviewer shall be
deemed a determination and order of the administrative director. The
determination is final and binding on all parties unless an aggrieved
party files with the appeals board a verified appeal from the
medical bill review determination of the administrative director
within 20 days of the service of the determination. The medical bill
review determination of the administrative director shall be presumed
to be correct and shall be set aside only upon clear and convincing
evidence of one or more of the following grounds for appeal:
(1) The administrative director acted without or in excess of his
or her powers.
(2) The determination of the administrative director was procured
by fraud.
(3) The independent bill reviewer was subject to a material
conflict of interest that is in violation of Section 139.5.
(4) The determination was the result of bias on the basis of race,
national origin, ethnic group identification, religion, age, sex,
sexual orientation, color, or disability.
(5) The determination was the result of a plainly erroneous
express or implied finding of fact, provided that the mistake of fact
is a matter of ordinary knowledge based on the information submitted
for review and not a matter that is subject to expert opinion.
(g) If the determination of the administrative director is
reversed, the dispute shall be remanded to the administrative
director to submit the dispute to independent bill review by a
different independent review organization. In the event that a
different independent bill review organization is not available after
remand, the administrative director shall submit the dispute to the
original bill review organization for review by a different reviewer
within the organization. In no event shall the appeals board or any
higher court make a determination of ultimate fact contrary to the
determination of the bill review organization.
(h) Once the independent bill reviewer has made a determination
regarding additional amounts to be paid to the medical provider, the
employer shall pay the additional amounts per the timely payment
requirements set forth in Sections 4603.2 and 4603.4.
Controversies between employer and employee arising under
this chapter shall be determined by the appeals board, upon the
request of either party, except as otherwise provided by Section
4610.5.
(a) The recommended guidelines set forth in the medical
treatment utilization schedule adopted by the administrative director
pursuant to Section 5307.27 shall be presumptively correct on the
issue of extent and scope of medical treatment. The presumption is
rebuttable and may be controverted by a preponderance of the
scientific medical evidence establishing that a variance from the
guidelines reasonably is required to cure or relieve the injured
worker from the effects of his or her injury. The presumption created
is one affecting the burden of proof.
(b) The recommended guidelines set forth in the schedule adopted
pursuant to subdivision (a) shall reflect practices that are evidence
and scientifically based, nationally recognized, and peer reviewed.
The guidelines shall be designed to assist providers by offering an
analytical framework for the evaluation and treatment of injured
workers, and shall constitute care in accordance with Section 4600
for all injured workers diagnosed with industrial conditions.
(c) (1) Notwithstanding the medical treatment utilization
schedule, for injuries occurring on and after January 1, 2004, an
employee shall be entitled to no more than 24 chiropractic, 24
occupational therapy, and 24 physical therapy visits per industrial
injury.
(2) (A) Paragraph (1) shall not apply when an employer authorizes,
in writing, additional visits to a health care practitioner for
physical medicine services. Payment or authorization for treatment
beyond the limits set forth in paragraph (1) shall not be deemed a
waiver of the limits set forth by paragraph (1) with respect to
future requests for authorization.
(B) The Legislature finds and declares that the amendments made to
subparagraph (A) by the act adding this subparagraph are declaratory
of existing law.
(3) Paragraph (1) shall not apply to visits for postsurgical
physical medicine and postsurgical rehabilitation services provided
in compliance with a postsurgical treatment utilization schedule
established by the administrative director pursuant to Section
5307.27.
(d) For all injuries not covered by the official utilization
schedule adopted pursuant to Section 5307.27, authorized treatment
shall be in accordance with other evidence-based medical treatment
guidelines that are recognized generally by the national medical
community and scientifically based.
Nothing contained in this chapter shall limit the right of
the employee to provide, at his or her own expense, a consulting
physician or any attending physicians whom he or she desires. Any
report prepared by consulting or attending physicians pursuant to
this section shall not be the sole basis of an award of compensation.
A qualified medical evaluator or authorized treating physician shall
address any report procured pursuant to this section and shall
indicate whether he or she agrees or disagrees with the findings or
opinions stated in the report, and shall identify the bases for this
opinion.
Any county, city and county, city, school district, or other
public corporation within the state which was a self-insured employer
under the "Workmen's Compensation, Insurance and Safety Act,"
enacted by Chapter 176 of the Statutes of 1913, may provide such
medical, and hospital treatment, including nursing, medicines,
medical and surgical supplies, crutches, and apparatus, including
artificial members, which is reasonably required to cure or relieve
from the effects of an injury to a former employee who was covered
under such act, without regard to the 90-day limitation of
subdivision (a) of Section 15 of such act for medical treatment. The
provisions of this section shall not be operative in any such county,
city and county, city, school district, or other public corporation
unless adopted by a resolution of the governing body of such public
entity.
Where a party to a proceeding institutes proceedings to
terminate an award made by the appeals board to an applicant for
continuing medical treatment and is unsuccessful in such proceedings,
the appeals board may determine the amount of attorney's fees
reasonably incurred by the applicant in resisting the proceeding to
terminate the medical treatment, and may assess such reasonable
attorney's fees as a cost upon the party instituting the proceedings
to terminate the award of the appeals board.
No workers' compensation insurer, self-insured employer, or
agent of an insurer or self-insured employer, shall refuse to pay
pharmacy benefits solely because the claim form utilized is
reproduced by the person providing the pharmacy benefits, provided
the reproduced form is an exact copy of that used by the insurer,
self-insured employer, or agent.
(a) In order to prevent the improper selling, leasing, or
transferring of a health care provider's contract, it is the intent
of the Legislature that every arrangement that results in any payor
paying a health care provider a reduced rate for health care services
based on the health care provider's participation in a network or
panel shall be disclosed by the contracting agent to the provider in
advance and shall actively encourage employees to use the network,
unless the health care provider agrees to provide discounts without
that active encouragement.
(b) Beginning July 1, 2000, every contracting agent that sells,
leases, assigns, transfers, or conveys its list of contracted health
care providers and their contracted reimbursement rates to a payor,
as defined in subparagraph (A) of paragraph (3) of subdivision (d),
or another contracting agent shall, upon entering or renewing a
provider contract, do all of the following:
(1) Disclose whether the list of contracted providers may be sold,
leased, transferred, or conveyed to other payors or other
contracting agents, and specify whether those payors or contracting
agents include workers' compensation insurers or automobile insurers.
(2) Disclose what specific practices, if any, payors utilize to
actively encourage employees to use the list of contracted providers
when obtaining medical care that entitles a payor to claim a
contracted rate. For purposes of this paragraph, a payor is deemed to
have actively encouraged employees to use the list of contracted
providers if the employer provides information directly to employees
during the period the employer has medical control advising them of
the existence of the list of contracted providers through the use of
a variety of advertising or marketing approaches that supply the
names, addresses, and telephone numbers of contracted providers to
employees; or in advance of a workplace injury, or upon notice of an
injury or claim by an employee, the approaches may include, but are
not limited to, the use of provider directories, the use of a list of
all contracted providers in an area geographically accessible to the
posting site, the use of wall cards that direct employees to a
readily accessible listing of those providers at the same location as
the wall cards, the use of wall cards that direct employees to a
toll-free telephone number or Internet Web site address, or the use
of toll-free telephone numbers or Internet Web site addresses
supplied directly during the period the employer has medical control.
However, Internet Web site addresses alone shall not be deemed to
satisfy the requirements of this paragraph. Nothing in this paragraph
shall prevent contracting agents or payors from providing only
listings of providers located within a reasonable geographic range of
an employee. A payor who otherwise meets the requirements of this
paragraph is deemed to have met the requirements of this paragraph
regardless of the employer's ability to control medical treatment
pursuant to Sections 4600 and 4600.3.
(3) Disclose whether payors to which the list of contracted
providers may be sold, leased, transferred, or conveyed may be
permitted to pay a provider's contracted rate without actively
encouraging the employees to use the list of contracted providers
when obtaining medical care. Nothing in this subdivision shall be
construed to require a payor to actively encourage the employees to
use the list of contracted providers when obtaining medical care in
the case of an emergency.
(4) Disclose, upon the initial signing of a contract, and within
15 business days of receipt of a written request from a provider or
provider panel, a payor summary of all payors currently eligible to
claim a provider's contracted rate due to the provider's and payor's
respective written agreements with any contracting agent.
(5) Allow providers, upon the initial signing, renewal, or
amendment of a provider contract, to decline to be included in any
list of contracted providers that is sold, leased, transferred, or
conveyed to payors that do not actively encourage the employees to
use the list of contracted providers when obtaining medical care as
described in paragraph (2). Each provider's election under this
paragraph shall be binding on the contracting agent with which the
provider has the contract and any other contracting agent that buys,
leases, or otherwise obtains the list of contracted providers.
A provider shall not be excluded from any list of contracted
providers that is sold, leased, transferred, or conveyed to payors
that actively encourage the employees to use the list of contracted
providers when obtaining medical care, based upon the provider's
refusal to be included on any list of contracted providers that is
sold, leased, transferred, or conveyed to payors that do not actively
encourage the employees to use the list of contracted providers when
obtaining medical care.
(6) If the payor's explanation of benefits or explanation of
review does not identify the name of the network that has a written
agreement signed by the provider whereby the payor is entitled,
directly or indirectly, to pay a preferred rate for the services
rendered, the contracting agent shall do the following:
(A) Maintain a Web site that is accessible to all contracted
providers and updated at least quarterly and maintain a toll-free
telephone number accessible to all contracted providers whereby
providers may access payor summary information.
(B) Disclose through the use of an Internet Web site, a toll-free
telephone number, or through a delivery or mail service to its
contracted providers, within 30 days, any sale, lease assignment,
transfer or conveyance of the contracted reimbursement rates to
another contracting agent or payor.
(7) Nothing in this subdivision shall be construed to impose
requirements or regulations upon payors, as defined in subparagraph
(A) of paragraph (3) of subdivision (d).
(c) Beginning July 1, 2000, a payor, as defined in subparagraph
(B) of paragraph (3) of subdivision (d), shall do all of the
following:
(1) Provide an explanation of benefits or explanation of review
that identifies the name of the network with which the payor has an
agreement that entitles them to pay a preferred rate for the services
rendered.
(2) Demonstrate that it is entitled to pay a contracted rate
within 30 business days of receipt of a written request from a
provider who has received a claim payment from the payor. The
provider shall include in the request a statement explaining why the
payment is not at the correct contracted rate for the services
provided. The failure of the provider to include a statement shall
relieve the payor from the responsibility of demonstrating that it is
entitled to pay the disputed contracted rate. The failure of a payor
to make the demonstration to a properly documented request of the
provider within 30 business days shall render the payor responsible
for the lesser of the provider's actual fee or, as applicable, any
fee schedule pursuant to this division, which amount shall be due and
payable within 10 days of receipt of written notice from the
provider, and shall bar the payor from taking any future discounts
from that provider without the provider's express written consent
until the payor can demonstrate to the provider that it is entitled
to pay a contracted rate as provided in this subdivision. A payor
shall be deemed to have demonstrated that it is entitled to pay a
contracted rate if it complies with either of the following:
(A) Describes the specific practices the payor utilizes to comply
with paragraph (2) of subdivision (b), and demonstrates compliance
with paragraph (1).
(B) Identifies the contracting agent with whom the payor has a
written agreement whereby the payor is not required to actively
encourage employees to use the list of contracted providers pursuant
to paragraph (5) of subdivision (b).
(d) For the purposes of this section, the following terms have the
following meanings:
(1) "Contracting agent" means an insurer licensed under the
Insurance Code to provide workers' compensation insurance, a health
care service plan, including a specialized health care service plan,
a preferred provider organization, or a self-insured employer, while
engaged, for monetary or other consideration, in the act of selling,
leasing, transferring, assigning, or conveying a provider or provider
panel to provide health care services to employees for work-related
injuries.
(2) "Employee" means a person entitled to seek health care
services for a work-related injury.
(3) (A) For the purposes of subdivision (b), "payor" means a
health care service plan, including a specialized health care service
plan, an insurer licensed under the Insurance Code to provide
disability insurance that covers hospital, medical, or surgical
benefits, automobile insurance, or workers' compensation insurance,
or a self-insured employer that is responsible to pay for health care
services provided to beneficiaries.
(B) For the purposes of subdivision (c), "payor" means an insurer
licensed under the Insurance Code to provide workers' compensation
insurance, a self-insured employer, a third-party administrator or
trust, or any other third party that is responsible to pay health
care services provided to employees for work-related injuries, or an
agent of an entity included in this definition.
(4) "Payor summary" means a written summary that includes the
payor's name and the type of plan, including, but not limited to, a
group health plan, an automobile insurance plan, and a workers'
compensation insurance plan.
(5) "Provider" means any of the following:
(A) Any person licensed or certified pursuant to Division 2
(commencing with Section 500) of the Business and Professions Code.
(B) Any person licensed pursuant to the Chiropractic Initiative
Act or the Osteopathic Initiative Act.
(C) Any person licensed pursuant to Chapter 2.5 (commencing with
Section 1440) of Division 2 of the Health and Safety Code.
(D) A clinic, health dispensary, or health facility licensed
pursuant to Division 2 (commencing with Section 1200) of the Health
and Safety Code.
(E) Any entity exempt from licensure pursuant to Section 1206 of
the Health and Safety Code.
(e) This section shall become operative on July 1, 2000.
(a) For purposes of this section, "utilization review" means
utilization review or utilization management functions that
prospectively, retrospectively, or concurrently review and approve,
modify, delay, or deny, based in whole or in part on medical
necessity to cure and relieve, treatment recommendations by
physicians, as defined in Section 3209.3, prior to, retrospectively,
or concurrent with the provision of medical treatment services
pursuant to Section 4600.
(b) Every employer shall establish a utilization review process in
compliance with this section, either directly or through its insurer
or an entity with which an employer or insurer contracts for these
services.
(c) Each utilization review process shall be governed by written
policies and procedures. These policies and procedures shall ensure
that decisions based on the medical necessity to cure and relieve of
proposed medical treatment services are consistent with the schedule
for medical treatment utilization adopted pursuant to Section
5307.27. These policies and procedures, and a description of the
utilization process, shall be filed with the administrative director
and shall be disclosed by the employer to employees, physicians, and
the public upon request.
(d) If an employer, insurer, or other entity subject to this
section requests medical information from a physician in order to
determine whether to approve, modify, delay, or deny requests for
authorization, the employer shall request only the information
reasonably necessary to make the determination. The employer,
insurer, or other entity shall employ or designate a medical director
who holds an unrestricted license to practice medicine in this state
issued pursuant to Section 2050 or Section 2450 of the Business and
Professions Code. The medical director shall ensure that the process
by which the employer or other entity reviews and approves, modifies,
delays, or denies requests by physicians prior to, retrospectively,
or concurrent with the provision of medical treatment services,
complies with the requirements of this section. Nothing in this
section shall be construed as restricting the existing authority of
the Medical Board of California.
(e) No person other than a licensed physician who is competent to
evaluate the specific clinical issues involved in the medical
treatment services, and where these services are within the scope of
the physician's practice, requested by the physician may modify,
delay, or deny requests for authorization of medical treatment for
reasons of medical necessity to cure and relieve.
(f) The criteria or guidelines used in the utilization review
process to determine whether to approve, modify, delay, or deny
medical treatment services shall be all of the following:
(1) Developed with involvement from actively practicing
physicians.
(2) Consistent with the schedule for medical treatment utilization
adopted pursuant to Section 5307.27.
(3) Evaluated at least annually, and updated if necessary.
(4) Disclosed to the physician and the employee, if used as the
basis of a decision to modify, delay, or deny services in a specified
case under review.
(5) Available to the public upon request. An employer shall only
be required to disclose the criteria or guidelines for the specific
procedures or conditions requested. An employer may charge members of
the public reasonable copying and postage expenses related to
disclosing criteria or guidelines pursuant to this paragraph.
Criteria or guidelines may also be made available through electronic
means. No charge shall be required for an employee whose physician's
request for medical treatment services is under review.
(g) In determining whether to approve, modify, delay, or deny
requests by physicians prior to, retrospectively, or concurrent with
the provisions of medical treatment services to employees all of the
following requirements shall be met:
(1) Prospective or concurrent decisions shall be made in a timely
fashion that is appropriate for the nature of the employee's
condition, not to exceed five working days from the receipt of the
information reasonably necessary to make the determination, but in no
event more than 14 days from the date of the medical treatment
recommendation by the physician. In cases where the review is
retrospective, a decision resulting in denial of all or part of the
medical treatment service shall be communicated to the individual who
received services, or to the individual's designee, within 30 days
of receipt of information that is reasonably necessary to make this
determination. If payment for a medical treatment service is made
within the time prescribed by Section 4603.2, a retrospective
decision to approve the service need not otherwise be communicated.
(2) When the employee's condition is such that the employee faces
an imminent and serious threat to his or her health, including, but
not limited to, the potential loss of life, limb, or other major
bodily function, or the normal timeframe for the decisionmaking
process, as described in paragraph (1), would be detrimental to the
employee's life or health or could jeopardize the employee's ability
to regain maximum function, decisions to approve, modify, delay, or
deny requests by physicians prior to, or concurrent with, the
provision of medical treatment services to employees shall be made in
a timely fashion that is appropriate for the nature of the employee'
s condition, but not to exceed 72 hours after the receipt of the
information reasonably necessary to make the determination.
(3) (A) Decisions to approve, modify, delay, or deny requests by
physicians for authorization prior to, or concurrent with, the
provision of medical treatment services to employees shall be
communicated to the requesting physician within 24 hours of the
decision. Decisions resulting in modification, delay, or denial of
all or part of the requested health care service shall be
communicated to physicians initially by telephone or facsimile, and
to the physician and employee in writing within 24 hours for
concurrent review, or within two business days of the decision for
prospective review, as prescribed by the administrative director. If
the request is not approved in full, disputes shall be resolved in
accordance with Section 4610.5, if applicable, or otherwise in
accordance with Section 4062.
(B) In the case of concurrent review, medical care shall not be
discontinued until the employee's physician has been notified of the
decision and a care plan has been agreed upon by the physician that
is appropriate for the medical needs of the employee. Medical care
provided during a concurrent review shall be care that is medically
necessary to cure and relieve, and an insurer or self-insured
employer shall only be liable for those services determined medically
necessary to cure and relieve. If the insurer or self-insured
employer disputes whether or not one or more services offered
concurrently with a utilization review were medically necessary to
cure and relieve, the dispute shall be resolved pursuant to Section
4610.5, if applicable, or otherwise pursuant to Section 4062. Any
compromise between the parties that an insurer or self-insured
employer believes may result in payment for services that were not
medically necessary to cure and relieve shall be reported by the
insurer or the self-insured employer to the licensing board of the
provider or providers who received the payments, in a manner set
forth by the respective board and in such a way as to minimize
reporting costs both to the board and to the insurer or self-insured
employer, for evaluation as to possible violations of the statutes
governing appropriate professional practices. No fees shall be levied
upon insurers or self-insured employers making reports required by
this section.
(4) Communications regarding decisions to approve requests by
physicians shall specify the specific medical treatment service
approved. Responses regarding decisions to modify, delay, or deny
medical treatment services requested by physicians shall include a
clear and concise explanation of the reasons for the employer's
decision, a description of the criteria or guidelines used, and the
clinical reasons for the decisions regarding medical necessity. If a
utilization review decision to deny or delay a medical service is due
to incomplete or insufficient information, the decision shall
specify the reason for the decision and specify the information that
is needed.
(5) If the employer, insurer, or other entity cannot make a
decision within the timeframes specified in paragraph (1) or (2)
because the employer or other entity is not in receipt of all of the
information reasonably necessary and requested, because the employer
requires consultation by an expert reviewer, or because the employer
has asked that an additional examination or test be performed upon
the employee that is reasonable and consistent with good medical
practice, the employer shall immediately notify the physician and the
employee, in writing, that the employer cannot make a decision
within the required timeframe, and specify the information requested
but not received, the expert reviewer to be consulted, or the
additional examinations or tests required. The employer shall also
notify the physician and employee of the anticipated date on which a
decision may be rendered. Upon receipt of all information reasonably
necessary and requested by the employer, the employer shall approve,
modify, or deny the request for authorization within the timeframes
specified in paragraph (1) or (2).
(6) A utilization review decision to modify, delay, or deny a
treatment recommendation shall remain effective for 12 months from
the date of the decision without further action by the employer with
regard to any further recommendation by the same physician for the
same treatment unless the further recommendation is supported by a
documented change in the facts material to the basis of the
utilization review decision.
(7) Utilization review of a treatment recommendation shall not be
required while the employer is disputing liability for injury or
treatment of the condition for which treatment is recommended
pursuant to Section 4062.
(8) If utilization review is deferred pursuant to paragraph (7),
and it is finally determined that the employer is liable for
treatment of the condition for which treatment is recommended, the
time for the employer to conduct retrospective utilization review in
accordance with paragraph (1) shall begin on the date the
determination of the employer's liability becomes final, and the time
for the employer to conduct prospective utilization review shall
commence from the date of the employer's receipt of a treatment
recommendation after the determination of the employer's liability.
(h) Every employer, insurer, or other entity subject to this
section shall maintain telephone access for physicians to request
authorization for health care services.
(i) If the administrative director determines that the employer,
insurer, or other entity subject to this section has failed to meet
any of the timeframes in this section, or has failed to meet any
other requirement of this section, the administrative director may
assess, by order, administrative penalties for each failure. A
proceeding for the issuance of an order assessing administrative
penalties shall be subject to appropriate notice to, and an
opportunity for a hearing with regard to, the person affected. The
administrative penalties shall not be deemed to be an exclusive
remedy for the administrative director. These penalties shall be
deposited in the Workers' Compensation Administration Revolving Fund.
An employee shall not be entitled to an increase in
compensation under Section 5814 for unreasonable delay in the
provision of medical treatment for periods of time necessary to
complete the utilization review process in compliance with Section
4610. A determination by the appeals board or a final determination
of the administrative director pursuant to independent medical review
that medical treatment is appropriate shall not be conclusive
evidence that medical treatment was unreasonably delayed or denied
for purposes of penalties under Section 5814. In no case shall this
section preclude an employee from entitlement to an increase in
compensation under Section 5814 when an employer has unreasonably
delayed or denied medical treatment due to an unreasonable delay in
completion of the utilization review process set forth in Section
4610.
(a) Regardless of whether an employer has established a
medical provider network pursuant to Section 4616 or entered into a
contract with a health care organization pursuant to Section 4600.5,
an employer that authorizes medical treatment shall not rescind or
modify that authorization after the medical treatment has been
provided based on that authorization for any reason, including, but
not limited to, the employer's subsequent determination that the
physician who treated the employee was not eligible to treat that
injured employee. If the authorized medical treatment consists of a
series of treatments or services, the employer may rescind or modify
the authorization only for the treatments or services that have not
already been provided.
(b) This section shall not be construed to expand or alter the
benefits available under, or the terms and conditions of, any
contract, including, but not limited to, existing medical provider
network and health care organization contracts.
(c) This section shall not be construed to impact the ability of
the employer to transfer treatment of an injured employee into a
medical provider network or health care organization. This
subdivision is declaratory of existing law.
(d) This section shall not be construed to establish that a
provider of authorized medical treatment is the physician primarily
responsible for managing the injured employee's care for purposes of
rendering opinions on all medical issues necessary to determine
eligibility for compensation.
(a) This section applies to the following disputes:
(1) Any dispute over a utilization review decision regarding
treatment for an injury occurring on or after January 1, 2013.
(2) Any dispute over a utilization review decision if the decision
is communicated to the requesting physician on or after July 1,
2013, regardless of the date of injury.
(b) A dispute described in subdivision (a) shall be resolved only
in accordance with this section.
(c) For purposes of this section and Section 4610.6, the following
definitions apply:
(1) "Disputed medical treatment" means medical treatment that has
been modified, delayed, or denied by a utilization review decision.
(2) "Medically necessary" and "medical necessity" mean medical
treatment that is reasonably required to cure or relieve the injured
employee of the effects of his or her injury and based on the
following standards, which shall be applied in the order listed,
allowing reliance on a lower ranked standard only if every higher
ranked standard is inapplicable to the employee's medical condition:
(A) The guidelines adopted by the administrative director pursuant
to Section 5307.27.
(B) Peer-reviewed scientific and medical evidence regarding the
effectiveness of the disputed service.
(C) Nationally recognized professional standards.
(D) Expert opinion.
(E) Generally accepted standards of medical practice.
(F) Treatments that are likely to provide a benefit to a patient
for conditions for which other treatments are not clinically
efficacious.
(3) "Utilization review decision" means a decision pursuant to
Section 4610 to modify, delay, or deny, based in whole or in part on
medical necessity to cure or relieve, a treatment recommendation or
recommendations by a physician prior to, retrospectively, or
concurrent with, the provision of medical treatment services pursuant
to Section 4600 or subdivision (c) of Section 5402.
(4) Unless otherwise indicated by context, "employer" means the
employer, the insurer of an insured employer, a claims administrator,
or a utilization review organization, or other entity acting on
behalf of any of them.
(d) If a utilization review decision denies, modifies, or delays a
treatment recommendation, the employee may request an independent
medical review as provided by this section.
(e) A utilization review decision may be reviewed or appealed only
by independent medical review pursuant to this section. Neither the
employee nor the employer shall have any liability for medical
treatment furnished without the authorization of the employer if the
treatment is delayed, modified, or denied by a utilization review
decision unless the utilization review decision is overturned by
independent medical review in accordance with this section.
(f) As part of its notification to the employee regarding an
initial utilization review decision that denies, modifies, or delays
a treatment recommendation, the employer shall provide the employee
with a form not to exceed two pages, prescribed by the administrative
director, and an addressed envelope, which the employee may return
to the administrative director or the administrative director's
designee to initiate an independent medical review. The employer
shall include on the form any information required by the
administrative director to facilitate the completion of the
independent medical review. The form shall also include all of the
following:
(1) Notice that the utilization review decision is final unless
the employee requests independent medical review.
(2) A statement indicating the employee's consent to obtain any
necessary medical records from the employer or insurer and from any
medical provider the employee may have consulted on the matter, to be
signed by the employee.
(3) Notice of the employee's right to provide information or
documentation, either directly or through the employee's physician,
regarding the following:
(A) The treating physician's recommendation indicating that the
disputed medical treatment is medically necessary for the employee's
medical condition.
(B) Medical information or justification that a disputed medical
treatment, on an urgent care or emergency basis, was medically
necessary for the employee's medical condition.
(C) Reasonable information supporting the employee's position that
the disputed medical treatment is or was medically necessary for the
employee's medical condition, including all information provided to
the employee by the employer or by the treating physician, still in
the employee's possession, concerning the employer's or the physician'
s decision regarding the disputed medical treatment, as well as any
additional material that the employee believes is relevant.
(g) The independent medical review process may be terminated at
any time upon the employer's written authorization of the disputed
medical treatment.
(h) (1) The employee may submit a request for independent medical
review to the division no later than 30 days after the service of the
utilization review decision to the employee.
(2) If at the time of a utilization review decision the employer
is also disputing liability for the treatment for any reason besides
medical necessity, the time for the employee to submit a request for
independent medical review to the administrative director or
administrative director's designee is extended to 30 days after
service of a notice to the employee showing that the other dispute of
liability has been resolved.
(3) If the employer fails to comply with subdivision (f) at the
time of notification of its utilization review decision, the time
limitations for the employee to submit a request for independent
medical review shall not begin to run until the employer provides the
required notice to the employee.
(4) A provider of emergency medical treatment when the employee
faced an imminent and serious threat to his or her health, including,
but not limited to, the potential loss of life, limb, or other major
bodily function, may submit a request for independent medical review
on its own behalf. A request submitted by a provider pursuant to
this paragraph shall be submitted to the administrative director or
administrative director's designee within the time limitations
applicable for an employee to submit a request for independent
medical review.
(i) An employer shall not engage in any conduct that has the
effect of delaying the independent review process. Engaging in that
conduct or failure of the employer to promptly comply with this
section is a violation of this section and, in addition to any other
fines, penalties, and other remedies available to the administrative
director, the employer shall be subject to an administrative penalty
in an amount determined pursuant to regulations to be adopted by the
administrative director, not to exceed five thousand dollars ($5,000)
for each day that proper notification to the employee is delayed.
The administrative penalties shall be paid to the Workers'
Compensation Administration Revolving Fund.
(j) For purposes of this section, an employee may designate a
parent, guardian, conservator, relative, or other designee of the
employee as an agent to act on his or her behalf. A designation of an
agent executed prior to the utilization review decision shall not be
valid. The requesting physician may join with or otherwise assist
the employee in seeking an independent medical review, and may
advocate on behalf of the employee.
(k) The administrative director or his or her designee shall
expeditiously review requests and immediately notify the employee and
the employer in writing as to whether the request for an independent
medical review has been approved, in whole or in part, and, if not
approved, the reasons therefor. If there appears to be any medical
necessity issue, the dispute shall be resolved pursuant to an
independent medical review, except that, unless the employer agrees
that the case is eligible for independent medical review, a request
for independent medical review shall be deferred if at the time of a
utilization review decision the employer is also disputing liability
for the treatment for any reason besides medical necessity.
(l) Upon notice from the administrative director that an
independent review organization has been assigned, the employer shall
provide to the independent medical review organization all of the
following documents within 10 days of notice of assignment:
(1) A copy of all of the employee's medical records in the
possession of the employer or under the control of the employer
relevant to each of the following:
(A) The employee's current medical condition.
(B) The medical treatment being provided by the employer.
(C) The disputed medical treatment requested by the employee.
(2) A copy of all information provided to the employee by the
employer concerning employer and provider decisions regarding the
disputed treatment.
(3) A copy of any materials the employee or the employee's
provider submitted to the employer in support of the employee's
request for the disputed treatment.
(4) A copy of any other relevant documents or information used by
the employer or its utilization review organization in determining
whether the disputed treatment should have been provided, and any
statements by the employer or its utilization review organization
explaining the reasons for the decision to deny, modify, or delay the
recommended treatment on the basis of medical necessity. The
employer shall concurrently provide a copy of the documents required
by this paragraph to the employee and the requesting physician,
except that documents previously provided to the employee or
physician need not be provided again if a list of those documents is
provided.
(m) Any newly developed or discovered relevant medical records in
the possession of the employer after the initial documents are
provided to the independent medical review organization shall be
forwarded immediately to the independent medical review organization.
The employer shall concurrently provide a copy of medical records
required by this subdivision to the employee or the employee's
treating physician, unless the offer of medical records is declined
or otherwise prohibited by law. The confidentiality of medical
records shall be maintained pursuant to applicable state and federal
laws.
(n) If there is an imminent and serious threat to the health of
the employee, as specified in subdivision (c) of Section 1374.33 of
the Health and Safety Code, all necessary information and documents
required by subdivision (l) shall be delivered to the independent
medical review organization within 24 hours of approval of the
request for review.
(o) The employer shall promptly issue a notification to the
employee, after submitting all of the required material to the
independent medical review organization, that lists documents
submitted and includes copies of material not previously provided to
the employee or the employee's designee.
(a) Upon receipt of a case pursuant to Section 4610.5, an
independent medical review organization shall conduct the review in
accordance with this article and any regulations or orders of the
administrative director. The organization's review shall be limited
to an examination of the medical necessity of the disputed medical
treatment.
(b) Upon receipt of information and documents related to a case,
the medical reviewer or reviewers selected to conduct the review by
the independent medical review organization shall promptly review all
pertinent medical records of the employee, provider reports, and any
other information submitted to the organization or requested from
any of the parties to the dispute by the reviewers. If the reviewers
request information from any of the parties, a copy of the request
and the response shall be provided to all of the parties. The
reviewer or reviewers shall also review relevant information related
to the criteria set forth in subdivision (c).
(c) Following its review, the reviewer or reviewers shall
determine whether the disputed health care service was medically
necessary based on the specific medical needs of the employee and the
standards of medical necessity as defined in subdivision (c) of
Section 4610.5.
(d) The organization shall complete its review and make its
determination in writing, and in layperson's terms to the maximum
extent practicable, within 30 days of the receipt of the request for
review and supporting documentation, or within less time as
prescribed by the administrative director. If the disputed medical
treatment has not been provided and the employee's provider or the
administrative director certifies in writing that an imminent and
serious threat to the health of the employee may exist, including,
but not limited to, serious pain, the potential loss of life, limb,
or major bodily function, or the immediate and serious deterioration
of the health of the employee, the analyses and determinations of the
reviewers shall be expedited and rendered within three days of the
receipt of the information. Subject to the approval of the
administrative director, the deadlines for analyses and
determinations involving both regular and expedited reviews may be
extended for up to three days in extraordinary circumstances or for
good cause.
(e) The medical professionals' analyses and determinations shall
state whether the disputed health care service is medically
necessary. Each analysis shall cite the employee's medical condition,
the relevant documents in the record, and the relevant findings
associated with the provisions of subdivision (c) to support the
determination. If more than one medical professional reviews the
case, the recommendation of the majority shall prevail. If the
medical professionals reviewing the case are evenly split as to
whether the disputed health care service should be provided, the
decision shall be in favor of providing the service.
(f) The independent medical review organization shall provide the
administrative director, the employer, the employee, and the employee'
s provider with the analyses and determinations of the medical
professionals reviewing the case, and a description of the
qualifications of the medical professionals. The independent medical
review organization shall keep the names of the reviewers
confidential in all communications with entities or individuals
outside the independent medical review organization. If more than one
medical professional reviewed the case and the result was differing
determinations, the independent medical review organization shall
provide each of the separate reviewer's analyses and determinations.
(g) The determination of the independent medical review
organization shall be deemed to be the determination of the
administrative director and shall be binding on all parties.
(h) A determination of the administrative director pursuant to
this section may be reviewed only by a verified appeal from the
medical review determination of the administrative director, filed
with the appeals board for hearing pursuant to Chapter 3 (commencing
with Section 5500) of Part 4 and served on all interested parties
within 30 days of the date of mailing of the determination to the
aggrieved employee or the aggrieved employer. The determination of
the administrative director shall be presumed to be correct and shall
be set aside only upon proof by clear and convincing evidence of one
or more of the following grounds for appeal:
(1) The administrative director acted without or in excess of the
administrative director's powers.
(2) The determination of the administrative director was procured
by fraud.
(3) The independent medical reviewer was subject to a material
conflict of interest that is in violation of Section 139.5.
(4) The determination was the result of bias on the basis of race,
national origin, ethnic group identification, religion, age, sex,
sexual orientation, color, or disability.
(5) The determination was the result of a plainly erroneous
express or implied finding of fact, provided that the mistake of fact
is a matter of ordinary knowledge based on the information submitted
for review pursuant to Section 4610.5 and not a matter that is
subject to expert opinion.
(i) If the determination of the administrative director is
reversed, the dispute shall be remanded to the administrative
director to submit the dispute to independent medical review by a
different independent review organization. In the event that a
different independent medical review organization is not available
after remand, the administrative director shall submit the dispute to
the original medical review organization for review by a different
reviewer in the organization. In no event shall a workers'
compensation administrative law judge, the appeals board, or any
higher court make a determination of medical necessity contrary to
the determination of the independent medical review organization.
(j) Upon receiving the determination of the administrative
director that a disputed health care service is medically necessary,
the employer shall promptly implement the decision as provided by
this section unless the employer has also disputed liability for any
reason besides medical necessity. In the case of reimbursement for
services already rendered, the employer shall reimburse the provider
or employee, whichever applies, within 20 days, subject to resolution
of any remaining issue of the amount of payment pursuant to Sections
4603.2 to 4603.6, inclusive. In the case of services not yet
rendered, the employer shall authorize the services within five
working days of receipt of the written determination from the
independent medical review organization, or sooner if appropriate for
the nature of the employee's medical condition, and shall inform the
employee and provider of the authorization.
(k) Failure to pay for services already provided or to authorize
services not yet rendered within the time prescribed by subdivision
(l) is a violation of this section and, in addition to any other
fines, penalties, and other remedies available to the administrative
director, the employer shall be subject to an administrative penalty
in an amount determined pursuant to regulations to be adopted by the
administrative director, not to exceed five thousand dollars ($5,000)
for each day the decision is not implemented. The administrative
penalties shall be paid to the Workers' Compensation Administration
Revolving Fund.
(l) The costs of independent medical review and the administration
of the independent medical review system shall be borne by employers
through a fee system established by the administrative director.
After considering any relevant information on program costs, the
administrative director shall establish a reasonable, per-case
reimbursement schedule to pay the costs of independent medical review
organization reviews and the cost of administering the independent
medical review system, which may vary depending on the type of
medical condition under review and on other relevant factors.
(m) The administrative director may publish the results of
independent medical review determinations after removing individually
identifiable information.
(n) If any provision of this section, or the application thereof
to any person or circumstances, is held invalid, the remainder of the
section, and the application of its provisions to other persons or
circumstances, shall not be affected thereby.
(a) When a contracting agent sells, leases, or transfers a
health provider's contract to a payor, the rights and obligations of
the provider shall be governed by the underlying contract between the
health care provider and the contracting agent.
(b) For purposes of this section, the following terms have the
following meanings:
(1) "Contracting agent" has the meaning set forth in paragraph (2)
of subdivision (d) of Section 4609.
(2) "Payor" has the meaning set forth in paragraph (3) of
subdivision (d) of Section 4609.
(a) (1) Notwithstanding Section 5307.1, where the employee's
individual or organizational provider of health care services
rendered under this division and paid on a fee-for-service basis is
also the provider of health care services under contract with the
employee's health benefit program, and the service or treatment
provided is included within the range of benefits of the employee's
health benefit program, and paid on a fee-for-service basis, the
amount of payment for services provided under this division, for a
work-related occurrence or illness, shall be no more than the amount
that would have been paid for the same services under the health
benefit plan, for a non-work-related occurrence or illness.
(2) A health care service plan that arranges for health care
services to be rendered to an employee under this division under a
contract, and which is also the employee's organizational provider
for nonoccupational injuries and illnesses, with the exception of a
nonprofit health care service plan that exclusively contracts with a
medical group to provide or arrange for medical services to its
enrollees in a designated geographic area, shall be paid by the
employer for services rendered under this division only on a
capitated basis.
(b) (1) Where the employee's individual or organizational provider
of health care services rendered under this division who is not
providing services under a contract is not the provider of health
care services under contract with the employee's health benefit
program or where the services rendered under this division are not
within the benefits provided under the employer-sponsored health
benefit program, the provider shall receive payment that is no more
than the average of the payment that would have been paid by five of
the largest preferred provider organizations by geographic region.
Physicians, as defined in Section 3209.3, shall be reimbursed at the
same averaged rates, regardless of licensure, for the delivery of
services under the same procedure code. This subdivision shall not
apply to a health care service plan that provides its services on a
capitated basis.
(2) The administrative director shall identify the regions and the
five largest carriers in each region. The carriers shall provide the
necessary information to the administrative director in the form and
manner requested by the administrative director. The administrative
director shall make this information available to the affected
providers on an annual basis.
(c) Nothing in this section shall prohibit an individual or
organizational health care provider from being paid fees different
from those set forth in the official medical fee schedule by an
employer, insurance carrier, third-party administrator on behalf of
employers, or preferred provider organization representing an
employer or insurance carrier provided that the administrative
director has determined that the alternative negotiated rates between
the organizational or individual provider and a payer, a third-party
administrator on behalf of employers, or a preferred provider
organization will produce greater savings in the aggregate than if
each item on billings were to be charged at the scheduled rate.
(d) For the purposes of this section, "organizational provider"
means an entity that arranges for health care services to be rendered
directly by individual caregivers. An organizational provider may be
a health care service plan, disability insurer, health care
organization, preferred provider organization, or workers'
compensation insurer arranging for care through a managed care
network or on a fee-for-service basis. An individual provider is
either an individual or institution that provides care directly to
the injured worker.
Notwithstanding subdivision (f) of Section 1345 of the
Health and Safety Code, a health care service plan licensed pursuant
to the Knox-Keene Health Care Service Plan Act and certified by the
administrative director pursuant to Section 4600.5 to provide health
care pursuant to Section 4600.3 shall be permitted to accept payment
from a self-insured employer, a group of self-insured employers, or
the insurer of an employer on a fee-for-service basis for the
provision of such health care as long as the health care service plan
is not both the health care organization in which the employee is
enrolled and the plan through which the employee receives regular
health benefits.