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February 11, 2013
Workers' compensation: Answers to FAQs; Critical takeaways for employers

In September 2012, Governor Brown signed legislation intended to address steadily increasing workers' compensation costs in the state. Many of Senate Bill (S.B.) 863's major provisions went into effect on January 1, and the rest will be implemented in stages through January 1, 2014.

To help employers, healthcare providers, and insurers understand and implement the new law, the state Division of Workers' Compensation (DWC) has addressed some of the most frequently asked questions (FAQs). We'll highlight the most important information for employers.

How will independent medical review (IMR) change?

Under the current system, when a dispute arises over medical treatment, the review process relies heavily on state-certified medical evaluators and judicial decisions and can take up to a year to resolve. The new system is designed to streamline the process by:

  • Limiting IMR to cases in which a treating physician's request for a specific course of medical treatment is delayed, denied, or modified by a claims administrator for the reason that the treatment is not medically necessary; and

  • Requiring that the IMR process is administered by an independent medical review organization (IMRO) overseen by the DWC's Medical Unit.

Under the revised system, each side no longer obtains its own medical opinion and then argues in front of a workers' compensation judge. Only the injured worker can request IMR; employers and insurance carriers cannot request the review. The IMR process is expected to take about 40 days to complete.

The new IMR process is available for all occupational injuries occurring on or after January 1, 2013; as of July 1, 2013, it will be available for all cases regardless of when the injury occurred.

How will the role of qualified medical examiners (QMEs) change?

A qualified medical evaluator is a physician who evaluates an injured worker when there are questions about which benefits the worker should receive. QMEs have met the DWC's educational and licensing requirements.

Before S.B. 863 passed, QMEs were also involved in resolving disputes about medical treatment, but those disputes will now go through the new IMR process. Reviewers in the IMR program cannot also serve as QMEs under the new law.

How will the workers' ability to choose a physician change?

Previously, only workers whose employer offered a group health plan could predesignate their personal physician to treat an occupational injury or illness. Under the new law, employees who have healthcare insurance for injuries or illnesses that are not work-related may predesignate their personal physician, and are thus no longer limited to physicians within the employer's medical provider network.

Practice tip

The DWC has created a new webpage devoted to S.B. 863 to help employers find new regulations and revised forms as they become available.

What about chiropractors as primary treating physicians?

Under the new rule, a chiropractor cannot serve as the worker's primary treating physician for a work-related injury or illness after 24 visits. This is likely to happen only if the employee predesignates a chiropractor as his or her personal physician. The DWC is still drafting new regulations to interpret this provision of the bill.

What is independent bill review (IBR)?

The new rule creates an independent bill review (IBR) process to resolve disputes regarding the amount doctors are paid. The process is analogous to the IMR process that workers can use to dispute treatment decisions.

Before S.B. 863, providers had no process to resolve medical billing disputes short of litigation. Now those disputes will be turned over to medical billing and payment experts and resolved within 60 days.

S.B. 863 contains new requirements regarding how to submit billing and how employers or insurance carriers communicate their payment decisions to providers.

Self-insured employers and S.B. 863

S.B. 863 will also change the way that security deposits are figured for self-insured employers. All private self-insured employers and groups will be required to obtain an actuarial report on which their security deposits will be based.

The new requirement became effective on January 1, 2013, which did not leave enough time for the Office of Self Insurance Plans (OSIP) to put the required new regulations in place through its ordinary rulemaking process. For this reason, OSIP issued emergency regulations addressing this portion of the new rule. The emergency regulations define how OSIP will establish security deposit collateral requirements based on the required actuarial reports.

OSIP is also proceeding with a regular rulemaking that will finalize these regulations and allow the required 45-day comment period for the public to have input into the proposed permanent regulations. The emergency regulation does not eliminate the requirements for self-insured employers and third-party administrators (TPAs) to submit annual reports on or before March 1 of each calendar year.

The full text of the emergency regulation, with additional information for self-insured employers, can be found online.

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