Answers to frequently asked questions about utilization review (UR) for claims administrators

The FAQs below apply to claims filed on or before Jan. 1, 2013. Updated information based upon the implementation of SB 863 and its changes to California’s workers’ compensation system will be available soon.

In addition to the FAQs below, claims administrators may call 1-800-736-7401 to hear recorded information on a variety of workers' compensation topics 24 hours a day.

Claims administrators may also call a local office of the state Division of Workers' Compensation (DWC) and speak to the Information and Assistance (I&A) Unit for help during regular business hours.

Claims administrators may find the DWC's fact sheets and guides for injured workers useful and can access them on the I&A Unit's Web page.

Throughout this FAQ, when citations to Title 8 of the California Code of Regulations are made, they will appear in this format: (CCR, Title 8 §number.) Citations to California's Labor Code appear as: (LC number).

Topics covered in this FAQ include:

Utilization review
Requests for authorization
Different types of UR
Who can make UR decisions?
UR program requirements
Timelines and timing
UR replies
Prior authorization
UR penalty regulations
UR and AME/QME reports
UR and causation decisions
Maintaining and modifying a UR plan
UR and medical provider networks (MPNs)

About utilization review:

Q. What is utilization review (UR) and why is it used for workers' compensation?

A. UR is the process used by employers or claims administrators to review medical treatment requested for the injured worker, to determine if the proposed treatment is medically necessary. All employers or their workers' compensation claims administrators are required by law to have a UR program. This program is used to decide whether or not to approve medical treatment recommended by a treating physician.

Q. When does UR begin?

A. The UR time limit for responding to a treatment request begins when the request for authorization (RFA) is first received, whether by the employer, claims administrator or utilization review organization (URO).

Q. Is utilization review required in every case?

A. Yes. The California Supreme Court held in State Comp. Ins. Fund v. Workers' Comp. Appeals Board. (Sandhagen) (2008) 44 Cal. 4th 230, 73 Cal. Comp. Cas 981, that utilization review must be used for every medical treatment request in the California workers' compensation system. In Sandhagen, the court also held that approving requested treatment without physician review is part of utilization review (UR), and only reviewing physicians may decide to delay, deny or modify requested treatment. The court explained that employers/insurers may not skip UR by simply objecting to a medical report and starting the AME/QME process to dispute a medical treatment request. UR is the employer's only avenue to reject a requested treatment.

The UR regulations allow an employer to reduce the cost of physician review in UR by designing a "prior authorization" program within the employer's UR plan. (See section below, 'About prior authorization.')

DWC supports the establishment of "UR best practices" that allow claims administrators to approve appropriate levels of care for injured workers at the lowest possible levels within the claims organization, without having to send those requests for external physician review.

Q. Does sending the requesting physician an approval of a request for authorization mean that payment must be made for the authorized service?

A. Yes. Authorization means "assurance that appropriate reimbursement" for the treatment specified will be paid. (CCR, Title 8 §9792.6(b).)

Effective Jan. 1, 2010, Labor Code §4610.3 was added and provides, in pertinent part, that once an employer (or its insurer or URO) 'authorizes' medical treatment, that authorization shall not be rescinded or modified for any reason after the medical treatment has been provided based on the authorization, even if the employer later determines the physician 'was not eligible to treat' (e.g. was not an MPN provider). Under the UR regulations, treatment is 'authorized' when the decision to approve the RFA is communicated to the requesting physician.

The section also states that if the 'authorized' treatment was for a series of treatments or services (e.g. physical therapy; prescription refills), the employer may rescind or modify the authorization only for those treatments or services in the series not already provided.

Under some circumstances, an employer or claims examiner may wish to use the 'Two-step' UR authorization process described in the section below ' About UR and causation.' when responding to an RFA for treatment (e.g. disputes over new body parts).

Q. Does approving a request for authorization as medically necessary mean the provider's bill as submitted must be paid?

A. Not necessarily. The UR regulations require paying 'appropriate reimbursement' for the approved treatment. If the bill for treatment is properly documented and correct, based on appropriate codes and on the appropriate fee schedule, it must be timely paid. If the claims administrator disputes part of the bill for whatever reason, the uncontested portion must be timely paid and the claims administrator must comply with the regulations that govern billing disputes. (CCR, Title 8 §9795.)

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About requests for authorization:

Q. What is a request for authorization (RFA)?

A. This is how a doctor requests treatment, diagnostic tests or other medical services for an injured worker. A request for authorization may initially be made verbally, but it must be confirmed in writing within 72 hours on the doctor's first report of occupational injury or illness, the primary treating physician progress report, or in a narrative report that contains the same information required in the primary treating physician progress report form. If a narrative report is used, the document must be clearly marked at the top as a request for authorization, (CCR, Title 8 §9792.6(o)). The DWC is proposing a "Request for authorization" form, which when finally adopted after rulemaking, will require the requesting physician to use the form for each treatment request. Check the DWC Web site under 'Participate in rulemaking' or 'DWC forum' for updated information on this proposal and for the opportunity to submit comments.

Q. Who is authorized to sign a RFA?

A. The requesting treating physician must sign a request for authorization. The doctor's first report of occupational injury or illness, and the primary treating physician progress report each require a treating physician's signature. If a physician's assistant or nurse practitioner, acting within the scope of their license, sign the DLSR doctor's first report of occupational injury or illness, or the primary treating physician progress report, the supervising physician must also sign it.

Q. What type of signature for a RFA is considered a legal signature?

A. The signature must be a written, original; a typed name without signature or a signature stamp is not sufficient. Electronic signatures have not yet been accepted in workers' compensation cases in California.

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About different types of UR:

Q. What is a prospective review?

A. A prospective review is any UR conducted prior to the delivery of the requested medical services, except for review conducted during an inpatient (hospital) stay. The decision on an RFA submitted for prospective review must be made within five business days from first receipt of the request, unless additional reasonable medical information is needed to make the decision. In that case, the additional reasonable medical information must be requested by the fifth business day, then up to 14 calendar days from the date of receipt of the original RFA are allowed for making the decision on the RFA. (CCR, Title 8 §9792.6(n).)

In California, the terms prospective review and pre-authorization mean the same thing, and prospective review and pre-authorization are different from "prior authorization".

Q. What is a concurrent review?

A. A concurrent review is UR conducted on an RFA submitted for treatment during an inpatient (hospital) stay. The timeframe for making the decision is the same as for prospective reviews. There is a difference in the time allotted for the written communications-the written decision must be sent within 24 hours for concurrent reviews instead of the two business days allotted for prospective reviews. (CCR, Title 8 §§9792.6(d) and 9792.9(b).)

Q. What is a retrospective review?

A. A retrospective review is UR conducted after medical services have been provided and for which authorization has not already been given. Retrospective reviews must be completed within 30 days of receiving the necessary information required to make a decision. (CCR, Title 8 §§9792.6(p) and 9792.9(c).)

Q. What is an expedited review?

A. An expedited review is UR conducted when the injured worker 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. Expedited review also applies when the normal timeframe for the decision-making process would be detrimental to the injured worker's life or health, or could jeopardize the injured worker's permanent ability to regain maximum function. Expedited reviews must be completed within 72 hours or less if the injured worker's condition warrants a shorter timeframe. When an expedited review is needed, the requesting physician must alert the reviewer, by putting "Expedited Review" at the top of the RFA. (CCR, Title 8 §§9792.6(g) and 9792.9(e).)

Q: What is 'prior authorization' and how can it reduce an employer's UR costs?

A. "Prior authorization" is a an arrangement written into an UR plan that describes the specific conditions or circumstances under which a treating physician will be assured of 'appropriate reimbursement' for specific treatment, without submitting an RFA before, during or after the treatment. As long as that treatment fits the description of 'prior authorization' in the UR plan, the treating physician may treat and then submit the bill for payment.

"Prior authorization" is made possible by the wording in regulations §§9792.7(a)(5) and 9792.6(b).

'Prior authorization' is different from prospective review. ''Prospective review" (sometimes called pre-authorization) is the requirement or expectation that a physician will request authorization from the claims administrator or its URO before treating, which is very different from "prior authorization," and which does not require the treating physician to submit a RFA at all.

The section of the UR plan for "prior authorization" must describe the arrangement in enough detail that any reader (a medical provider, an injured worker, a claims adjuster, the administrative director) will understand who and what qualifies, the conditions under which a treating provider will qualify. If necessary, what is not included in the prior authorization process, must be made clear.

Some claims administrators who have reviewed the treatment practices and case outcomes of medical providers with whom they contract (e.g. through an MPN or otherwise) decide to allow those physicians to treat. For example, some administrators allow the treating physician to treat for the first few weeks under their prior authorization program without submitting any RFAs, and they have found the injured worker had a good outcome (e.g. better recovery and sustained return to work with less TDI, medical treatment and UR expense.)

The UR regulations give the claims administrator tremendous flexibility to design a "prior authorization" program to meet the profile of the injured worker population and provider population it covers. The only requirement is that the program be written into the UR plan and submitted to the DWC as part of the UR plan, or as an amendment to the UR plan, before it is implemented.

Q. How does prior authorization differ from retrospective review?

A. Prior authorization, by definition, means the treatment is automatically authorized when the conditions of the prior authorization program are met. Retrospective review is review of an RFA after the treatment has already been given. Usually, the review of a doctor's first report of occupational injury or illness in utilization review involves both retrospective review of some treatment already given (i.e. during the first visit), as well as prospective review for additional treatment to be given as described in the treatment plan.

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About who can make UR decisions:

Q. What decisions can be made by a claims adjuster or other non-physician reviewer?

A. A non-physician reviewer may:

• Request reasonable additional medical information needed to make a UR decision (CCR, Title 8 §9792.9(b)(2).)
• Approve a request for authorization (CCR, Title 8 §9792.7(b)(3).)
• Discuss applicable medical guidelines with the requesting physician when requested treatment appears to be inconsistent with medical guidelines (CCR, Title 8 §9792.7(b)(3).)

The non-physician reviewer may discuss the treatment plan with the requesting physician. If the requesting physician decides to make a change in the request for authorization or in the treatment plan, the claims administrator or URO must have documentation from the requesting physician of that change. (CCR, Title 8 §9792.7(b)(3).)

For example, the URO or claims adjuster could fax the modified request to the requesting provider to approve, sign and return.

Q. When may a claims administrator deny a request for authorization without first sending the RFA to a physician reviewer in UR?

A. When an RFA is submitted first to the claims administrator and the claims administrator has already made a valid written non-medical objection;

- or -

When an employer has an MPN and the claims administrator has already notified the injured worker in writing that the specific treatment requested in the RFA is authorized and must be provided by an appropriate MPN physician of the worker's choice within the MPN.

If the RFA is sent directly to the URO, the URO must complete the physician review process (i.e. medical necessity determination); the URO may not return the RFA to the claims administrator without completing its medical necessity determination unless the specific treatment requested in the RFA was already authorized in writing. The claims administrator may not direct the URO to disregard a request for authorization received by the URO unless the claims administrator can produce a valid prior objection or written authorization as described below. In the case of a valid prior objection, the best practice would be to provide a copy of the objection to the URO for its records regarding that RFA.'

If, at the time the RFA is received by the claims administrator from a non-MPN physician, the claims administrator is prepared to authorize the requested treatment without physician review in UR, the claims administrator may either approve treatment by the non-MPN physician, or issue a letter to the requesting physician and the injured worker, within the UR time limits, stating that the specific treatment requested is authorized but may only be provided by an appropriate MPN physician of the worker's choice within the MPN. The claims administrator may not modify the specific treatment requested (by authorizing part but not all of the request), nor delay nor deny the RFA without first completing UR with physician review.

Below are some examples of when a claims administrator may deny an RFA it receives directly from a treating physician without completing the physician review in UR:

• If the claims administrator has already notified the injured worker in writing that the entire claim is denied;
• If the claims administrator has already notified the injured worker in writing of an objection to a disputed body part and the RFA is for treatment to that disputed body part;
• If at the time the RFA is received by the claims administrator from a non-MPN physician, the claims administrator has already authorized the requested medical treatment in writing and explained that the authorized treatment may only be provided by an appropriate MPN physician of the worker's choice within the MPN;
• If at the time the RFA is received, it is a duplicate request. The claims administrator or URO must have a copy of the previous properly written and sent UR denial in its file that complies with Labor Code section 4610 and the UR regulations for the medical treatment requested in the RFA, and the most recent medical evidence from the requesting physician in support of the duplicate RFA has not changed from the previous request. Best practice is either to provide the requesting physician and injured worker with a copy of the prior denial or sufficient information that identifies the prior valid written denial.

These examples do not cover all scenarios. Claims administrators must ensure that any claim denials, objections or MPN coverage assertions are written in compliance with the Labor Code and regulations. Non-physicians who deny, delay or modify a request for authorization without physician review and without meeting valid criteria such as that stated in the examples above may be subject to UR penalties.

Q. What is a "reviewer?"

A. A "reviewer" is a "physician" as defined in Labor Code 3209.3 [a medical doctor, doctor of osteopathy, psychologist, acupuncturist, optometrist, dentist, podiatrist or chiropractic practitioner], who is licensed in any state or the District of Columbia, and who is competent to evaluate the specific clinical issues involved in the medical treatment services that are the subject of the request for authorization, where these services are within the scope of the reviewer's practice. (CCR, Title 8 §9792.6(q).)

Q. What is "scope of practice?"

A. Scope of practice for a UR '"reviewer" is determined by the scope of the medical professional license as defined under California law, and includes the procedures, actions and processes permitted for the licensed "physician."

Q. Does the physician reviewer have to hold the same license as the requesting physician?

A. No, as long as the reviewer's scope of practice, as defined by California licensing law, and clinical competence cover the treatment in question.

Q. Does the physician reviewer have to be in the same specialty as the requesting physician?

A. No, as long as the reviewer's experience, scope of practice and clinical competence cover the treatment in question.

Q. How do we know if a physician reviewer is qualified to review an authorization request?

A. There is a two-part test for reviewer qualifications:

1. "Competent to evaluate the specific clinical issues involved in the medical treatment services" [LC 4610(e) and CCR, Title 8 §9792.7(b)(2).],

   For example, an orthopedic surgeon requests authorization to perform carpal tunnel surgery. An occupational medicine specialist, with the appropriate knowledge, can review the request, even though that physician may not be trained to do the procedure

   AND

2. "These services are within the reviewer's scope of practice ?" as defined by that particular physician's California licensing board. (CCR, Title 8 §9792.7(b)(2).)

For example, a podiatrist could review a request for authorization for surgery on the foot and ankle, but not for low back. A chiropractor may request authorization for an injured worker to be treated by an acupuncturist, but a chiropractor cannot review that request for authorization because acupuncture is not within a chiropractor's scope of practice in California.

Q. If the reviewer is licensed out of state and the scope of practice for that license is different than the scope of practice for the same license in California, which scope of practice will be used to determine whether the out of state "reviewer" can delay, deny or modify the requested treatment authorization?

A. The California UR regulations and California scope of practice will be the deciding factors. The out of state licensed physician may make the decision, but scope of practice will be defined by California licensing standards and the reviewer must follow California laws and requirements. CCR. Title 8 §9792.8(a)(1-4).)

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About UR program requirements:

Q. Do we have to buy software to maintain our UR logs in a specific manner?

A. No. The DWC's UR regulations do not require claims administrators or UROs to maintain their UR logs in any particular way. If you have an electronic log, the division will request it when conducting a UR investigation and ask you to organize it in a way that allows the division to get the sample it needs for the investigation. If not, the division will ask that the information you keep be sorted in a specific way: by type of review, type of disposition and date of receipt of original request. (CCR, Title 8 §9792.11(i)(1).)

Q. Do claims administrators have to log every request for authorization?

A. No. If the claims organization does not have a method of logging requests, then it does not have to create one. However, documentation of the action taken on the request for authorization is required in the file of the claims organization.

For example, if a claims adjuster receives a written request for authorization and approves this request, the approval must be made by telephone or fax within 24 hours of the decision. If the initial approval is verbal, a written confirmation of the approval must be sent within 24 hours for concurrent review and within two business days for prospective review. (CCR, Title 8 §9792.9(b).) A copy of the written approval must be placed in the file to document the approval.

Q. Do we have to have a medical director to oversee our utilization review program?

A. Yes. All claims administrators must have a UR program and all UR programs must have a medical director. The medical director is responsible for all decisions made in the UR process and must ensure that all UR decisions (approvals, delays, modifications and denials) comply with the law. As long as the medical director of your UR plan is able to ensure that the claims adjusters (whether in-house for a self-insured employer or external through a TPA or WC insurer) are applying the standards of the UR plan, the claims adjusters can approve medical treatment authorization requests. If the URO medical director does not ensure that those UR activities performed through the claims administrator are compliant with the UR regulations, then the claims administrator must have its own medical director.

Q. How should claims adjusters respond when approving requests for authorization?

A. Claims adjusters are allowed to approve authorization requests. The approval must state the specific medical treatment service requested, and then approved. (CCR, Title 8 §9792.9(i).)

For prospective and concurrent reviews, approvals require communication to the requesting provider only. The initial communication must be within 24 hours of the decision, by telephone call or fax. If this is done by phone, a written communication must also be sent within 24 hours for concurrent reviews and two business days for prospective reviews. If a decision is sent initially by fax, the full communication responsibility for the approval is met. (CCR, Title 8 §9792.9(b)(3).)

When the review is retrospective, approval must be communicated to the physician, the injured worker and his or her attorney (if applicable) within 30 days of receiving the medical information reasonably necessary to make the determination. The response must be provided in writing, (CCR, Title 8 §9792.9(c).)

Q. If a URO requests additional information from the treating physician and doesn't receive that information within 14 days of receipt of the original request for authorization, what can the URO do?

A. There are two options if reasonably requested information is not received. A reviewing physician can either deny the RFA and state it will be reconsidered when the requested information is received, or issue a notice of a delay until the information is received. The physician reviewer must issue either of these decisions within 14 calendar days of receipt of the original request. A notice of delay may not be issued by a non-physician.

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About timelines and timing:

Q. Prospective or concurrent reviews of requests for authorization require a five business day turnaround of the decision. When do the five days begin?

A. Prospective or concurrent decisions must be made within five business days from the date the written request for authorization was first received, whether by the employer, the claims adjuster or the URO. (CCR, Title 8 §9792.9 (b)(1).)

According to the California Civil Code: "The time in which any act provided by law is to be done is computed by excluding the first day and including the last, unless the last day is a holiday, and then it is also excluded." In other words, except for expedited reviews (see below), if you receive an authorization request sometime before 5:30 p.m. on a Tuesday (non-holiday) the next day, Wednesday, is counted as day one. The reviewer must make the decision no later than the following Tuesday (the 5th business day). The decision must be communicated by phone or fax within 24 hours of making the decision. Saturday and Sunday are not counted as business days, and therefore receipt of requests on a weekend or a holiday does not count as a receipt, until the next business day. "Holidays" do not count as business days.

For all reviews excluding expedited reviews, count the date of first receipt as "zero" so the next day is counted as "one." When counting business days, the Saturday, Sunday or holiday is not counted as a business day, so continue the count on the next business day. (CCR, Title 8 §9792.11(o).) Whenever the last day in counting a calendar day deadline falls on a Saturday, Sunday or holiday, the count moves to the next day.

For expedited reviews the time for making the decision is counted in hours, regardless of whether the day is a calendar or business day.

Q. If the URO requires additional information to make a decision on a request for authorization, when does the mandated 14 days to make a decision start?

A. The 14 calendar days start from the date the request for authorization was first received by either the claims examiner or the URO. See the previous answer for a complete explanation of how the time is computed. (CCR, Title 8 §9792.9(b)(2).)

• If more information is reasonably needed to make a decision and it was not provided with the original request for authorization, this information must be requested within five business days from the date that the written request was received. The UR decision must then be made within 14 calendar days from the date of first receipt of the request for authorization
• Authorization may not be denied on the basis of the lack of requested additional information without documentation showing an attempt to obtain the additional information by fax or by mail (CCR, Title 8 §9792.9(l).)
• The request for additional information, made by the 5th business day, does not delay the decision deadline and extend the time to decide beyond 14 calendar days unless the reviewing physician issues a decision to delay by the 14th calendar day. In a delay, the reviewing physician notifies the requesting physician, the injured worker and the injured worker's attorney (if applicable) in writing that a decision cannot be made within the required timeframe (14 calendar days). This decision to delay must also state one of the grounds for delay permitted in the regulations (e.g. that necessary information reasonably requested by the 5th business day has not been received; that an additional examination or testing is needed; that a specialized consultation or review by an expert reviewer is needed and the specialty of the expert). (CCR, Title 8 §§9792.9(g)(1)(A) - (C) and (g)(2).)

Q. If a request for an expedited review, with all necessary information, is received at 9 a.m. on a Friday morning, when is the decision due?

A. Requests for expedited review must be decided within 72 hours or less, depending on the injured worker's condition. In this example, the decision would be due no later than 9 a.m. the following Monday. With expedited reviews, the time is counted in hours, not days.

Q. What is required of the requesting physician for an expedited review?

A. The requesting physician must indicate the need for an expedited review upon submission of the request The requester should provide all necessary information in writing so that the claims administrator can make a decision quickly.(CCR, Title 8 §9792.9(e).)

Q. How do rules on emergency health care services differ from expedited reviews, concurrent reviews and other situations?

A. Emergency health care services are those provided when an injured worker has acute symptoms severe enough to require immediate medical attention. (8 CCR §9792.6(f)) Emergency treatment may be reviewed retrospectively. Documentation for emergency health care services must be made available to the claims administrator upon request. (CCR, Title 8 §9792.9(d).)

Failure to obtain authorization in advance cannot be the basis for denying payment for emergency treatment. (CCR, Title 8 §9792.9(d).)

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About UR replies:

Q. What must decisions to approve say?

A. A written decision approving a request for authorization must specify the medical treatment service requested and approved. (CCR, Title 8 §9792.9(i).)

Q. Who must the approval notice be given to?

A. The decision must be given, by telephone or fax, to the requesting physician within 24 hours of making the decision. If the approval is given by phone it must be followed by written notice to the requesting physician, within 24 hours of the decision for concurrent review, and within two business days for prospective review. If the approval is given to the requesting physician by fax, the requirement for written approval has been fulfilled as long as the approval letter specifies the medical service requested and approved. (CCR, Title 8 §9792.9(b)(3).)

Q. What must the decisions to modify, delay or deny say?

A. The following answer applies to decisions in which any of the medical treatment listed in the request for authorization (RFA) has been modified, denied or delayed.

To document the timeliness of the review, we recommend stating the date of the decision letter and the date the RFA was received at the top of the letter.

The decision must be in writing and it must contain:

1. The date the decision was made
2. A description of the specific course of proposed medical treatment for which authorization was requested
3. A specific description of the medical treatment service approved, if any
4. A clear and concise explanation of the reasons for the claims administrator's decision
5. A description of the medical criteria or guidelines used
6. The clinical reasons explaining why the treatment isn't medically necessary
7. For all requests, other than requests for spinal surgery, a clear statement that any dispute shall be resolved under LC 4062, and that an objection to the UR decision must be communicated to the claims administrator by the injured worker or the injured worker's attorney in writing within 20 days of receipt of the decision. It must state: "You must meet this deadline even if you are participating in the claims administrator's internal utilization review appeals process." It shall further state that the 20-day time limit may be extended for good cause or by mutual agreement of the parties. The letter shall also state that the injured worker may file an application for adjudication of claim and request for expedited hearing, to resolve a dispute over medical treatment.

In the case of an RFA for spinal surgery, instead of the text in item 7 above, the decision letter must include a clear statement that since the requested spinal surgery was not approved, the claims administrator must object under Labor Code section 4062(b) within 10 calendar days of first receipt of the report recommending spinal surgery, by filing the objection to treating physician's recommendation for spinal surgery with the administrative director. The letter may explain that the administrative director shall appoint an orthopedic surgeon or neurosurgeon to issue a second opinion report on the recommended surgery, as provided under Labor Code section 4062(b) and §§9788.01 to 9788.91 title 8 of the California Code of Regulations. If the second opinion surgeon recommends the requested surgery, the claims administrator must authorize the surgery. If the second opinion surgeon does not recommend the spinal surgery, the claims administrator must file a declaration of readiness in order that a hearing on the disputed spinal surgery will be scheduled.

8. The following mandatory language:

Either

"If you want further information, you may contact the local state Information and Assistance office by calling [enter district I & A office telephone number closest to the injured worker] or you may receive recorded information by calling 1-800-736-7401.

Or

"If you want further information, you may contact the local state Information and Assistance office closest to you. Please see attached listing (attach a listing of I&A offices and telephone numbers) or you may receive recorded information by calling 1-800-736-7401."

And

"You may also consult an attorney of your choice. Should you decide to be represented by an attorney, you may or may not receive a larger award, but, unless you are determined to be ineligible for an award, the attorney's fee will be deducted from any award you might receive for disability benefits. The decision to be represented by an attorney is yours to make, but it is voluntary and may not be necessary for you to receive your benefits."

If the request for authorization also included a request that the injured worker receive goods or services from a non-physician, and contact information for that non-physician provider was given, a letter must also be sent to the non-physician provider. The letter shall include the decision modifying, delaying or denying the request for authorization but shall not include the rationale, criteria or guidelines used for the decision.

9. Details about the claims administrator's internal utilization review appeals process, if any, and a clear statement that the appeals process is on a voluntary basis. Except for RFAs for spinal surgery, it must also include the following mandatory statement:

   "If you disagree with the utilization review decision and wish to dispute it, you must send written notice of your objection to the claims administrator within 20 days of receipt of the utilization review decision in accordance with Labor Code section 4062. You must meet this deadline even if you are participating in the claims administrator's internal utilization review appeals process." (CCR, Title 8 §9792.9(j).)

10. The name and specialty of the reviewer or expert reviewer
11. The telephone number in the United States of the reviewer or expert reviewer
12. The hours of availability of either the reviewer, the expert reviewer or the medical director for the treating physician to discuss the decision, which shall be, at a minimum, four hours per week during normal business hours, 9:00 a.m. to 5:30 p.m., Pacific Time or an agreed upon scheduled time to discuss the decision with the requesting physician. In the event the reviewer is unavailable, the requesting physician may discuss the written decision with another reviewer who is competent to evaluate the specific clinical issues involved in the medical treatment services. (CCR, Title 8 §9792.9(k).)

The following example satisfies the above numbers 4, 5 and 6:

For example: The requested extension of eight additional acupuncture treatments is denied due to the lack of evidence that Mr. Jones has improved in either activities of daily living or work restrictions, and he has not decreased the amount of pain medication that he is using. MTUS, §9792.24.1 states that "acupuncture treatments may be extended if functional improvement is documented as defined in §9792.20(f)."

Q. Who must the decision to modify, delay or deny be given to?

A. For both prospective and concurrent reviews, the decision must be communicated first to the requesting physician by telephone or fax within 24 hours of the decision. A phone call must be followed by written notice to the requesting physician, the injured worker and the injured worker's attorney (if any) within 24 hours of the decision for concurrent reviews, and within two business days of the decision for prospective reviews. If the initial decision is announced within 24 hours of the decision by a fax and all mandated language is included in the fax, the written notification to the recipient is satisfied.

Providers of medical goods and services should not receive text disclosing medical details. If the request for authorization also included a request that the injured worker receive goods or services from a non-physician, and contact information for that non-physician provider was given, a letter must also be sent to the non-physician provider. The letter shall include the decision modifying, delaying or denying the request for authorization but shall not include the rationale, criteria or guidelines used for the decision.

Q. How do we handle a denial if someone is currently in the hospital?

A. By definition, a concurrent review occurs only during an in patient stay. For concurrent reviews, medical care must not be discontinued until the requesting physician has been notified of the UR decision and, if not approved, a care plan which is appropriate for the medical needs of the injured worker must be agreed upon with the requesting physician. (CCR, Title 8 §9792.10(b)(1).)

Q. Do we have to respond to a secondary physician's request for authorization?

A. Yes. You must respond to a written request for authorization from anytreating physician (written on doctor's first report of occupational injury or illness or primary treating physician progress report or narrative format with same information) (CCR, Title 8 §9792.6(o).) If necessary, concurrent with the UR process, you may also contact the primary treating physician (PTP) to confirm the referral for treatment to the secondary physician; however, requesting confirmation from the PTP does not extend the UR time limits for making and communicating a decision. Nothing in Labor Code section 4610 limits its application and time limits to requests from primary treating physicians only.

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About prior authorization:

Q. What is prior authorization?

A. "Prior authorization" has a special definition in the California workers' compensation system. It is defined as "?the claims administrator's practice ? of any prior authorization process, including but not limited to where authorization is provided without the submission of the request for authorization." To qualify as prior authorization, the process must be clearly described in the UR plan filed with the DWC, because by definition "authorization" means "assurance that appropriate reimbursement will be made [to the treating physician] for an approved specific course of proposed medical treatment" (CCR, Title 8 §9792.6(b).)

The UR plan's description of what qualifies within the 'prior authorization' process must be clear about what is required by the treating physician and how the physician will be informed of the conditions under which treatment will qualify under the prior authorization process.

For example, the "prior authorization" process described in the UR plan may allow the claims administrator to inform a particular clinic, medical provider or medical providers in the employer's MPN that all treatment and diagnostic testing given within the first five days of an injury is automatically approved and will be paid for upon submission of a bill in compliance with the billing regulations. Or, another "prior authorization" process may state that whenever rotator cuff surgery is approved through the normal prospective review process, a prescribed course of postsurgical rehabilitation is automatically approved (e.g. up to 24 postsurgical physical therapy visits even if they exceed the cap in LC section 4604.5). Or, the description of the prior authorization process may be based on documentation of specific combinations of presenting signs and symptoms, e.g. an MRI is authorized when a patient who has had low back pain with radiation to one lower extremity presents with "red flags" or with worsening symptoms and there are new and/or abnormal physical findings.

The regulation allows the employer flexibility to tailor the prior authorization process to meet its needs. However, because prior authorization (as with all treatment authorizations) involves medical issues, it must have medical director oversight, either through the UR plan medical director or the claims administrator's own medical director. Approving requests by means of a prior authorization system is part of UR and must be submitted to the DWC administrative director as part of, or as a material modification to, the written UR plan. (CCR, Title 8 §9792.7(a)(5).)

Q. How does prior authorization differ from "pre-authorized" and "prospective review"?

A. "Prospective review" applies when the treating physician is required to make a request for authorization before providing treatment, and if the request was made orally to follow up with a written request within 72 hours. (CCR, Title 8 §9792.6(n).)

"Pre-authorization" and "prospective review" have the same meaning in the California workers' compensation UR system.

"Prior authorization" however, has a different meaning in the California UR process. Prior authorization, by definition, does not require a request for authorization to be made prior to providing the treatment; the 'authorization' (assurance that appropriate payment will be made to the treating physician) is automatic as long as the treatment falls within the 'prior authorization' section of the UR plan.

Q. We want to create UR triggers so that we will not need to send everything to a third party process. Is that appropriate?

A. It is appropriate to set up triggers for those requests you want claims adjusters to approve without sending them to the URO. If you set up a prior authorization process and include these specific treatments in that process, you won't get requests from the treating physicians for these services. If you don't set up a prior authorization process, you can still establish triggers that are used by claims adjusters, but you'll have to follow the timelines and notification requirements in the UR regulations.

For example, with oversight by a medical director, a claims adjuster may be given a list of those treatments that must go to the external URO for review (e.g. surgery), and they may also have a list of those treatments that they may approve without referral to the URO, (e.g. the claims adjuster may approve an initial three to six physical therapy treatments after knee surgery).

Q. How is prior authorization different from "retrospective review"?

A. With "prior authorization", the treating physician is assured of appropriate reimbursement at the time of providing the treatment and simply needs to submit the bill for treatment, because the treatment meets the conditions described under the UR prior authorization process, meaning that the treating physician does not have to ask permission to provide the treatment.

With "retrospective review", the treating physician has already provided treatment that was not approved before hand, and later submits the treatment report with a request for authorization and bill. In 'retrospective review' the treating physician has no assurance of appropriate reimbursement at the time treatment is provided.

Most often, when a physician sees an injured worker for the first time and submits a doctor's first report of occupational injury or illness,, the treating physician is seeking a retrospective review authorization for the treatment already provided in that first visit and may also be requesting authorization for specific treatment described under the treatment plan explained in question number 24 on the form.

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About UR penalty regulations:

Q. When did the UR penalty regulations become effective?

A. The penalty regulations became effective June 7, 2007. For the purpose of assessing penalties under these regulations, they apply to all UR conduct on or after that date.

Q. Who is subject to UR penalties?

A. Claims administrators and UROs.

Q. What triggers a UR investigation?

A. UR investigations may be routine or target investigations. Claims administrators are subject to routine investigations once every five years. These routine investigations generally will be conducted as part of the existing performance audit review (PAR) process under Labor Code sections 129 and 129.5. UROs are subject to a routine investigation once every three years. The DWC can also do a target investigation based on a credible complaint (called a 'Special Target' investigation). Credible complaints will be shared with the claims administrator or URO for their response prior to an investigation, unless the administrative director (AD) determines that advance notice will render the special target investigation less useful. (CCR. Title 8 §9792.11) Also, if the claims administrator or URO has failed a previous routine investigation, DWC can return for a target investigation (called a "Return Target" investigation).

Q. What happens at an investigation?

A. During a routine investigation, a random sample of requests for authorization (RFAs) received over the most recent full three month period prior to the investigation and any additional records that may be needed will be reviewed. The administrator, at either the URO or the claims adjusting location being investigated, will get a notice at least 14 days before the investigation begins stating that the administrator will need to provide copies of all requested documents.

The investigation process varies according to whether the investigation is conducted at a claims adjusting location in conjunction with a performance audit review, (PAR) audit, or is conducted at a utilization review organization, (URO). At the claims adjusting location, the investigation is labeled a "URA" investigation. Auditors from the DWC Audit Unit are on site for the PAR audit and also review a sample of files having requests for authorization (RFAs).

In a "URO" investigation, the URO is required to submit files either in hard copy or electronically to the UR Oversight Unit within the DWC Medical Unit for review. In some cases the Medical Unit will also do an on-site investigation.

Q. What is the penalty for not responding to a request for authorization?

A. If a request for authorization is not answered, the mandatory penalty is $2,000 for each concurrent review, $1,000 for each prospective review and $500 for each retrospective review.

Q. Is there any penalty for a late response to a request for authorization?

A. Yes. The penalty is $100 per instance for failing to make and communicate a decision within the appropriate timeframe on prospective, concurrent or retrospective reviews.

Q. What are the other UR penalties?

A. There are two types of penalties: Mandatory or "a" penalties (listed in §9792.12(a) of the UR penalty regulations), which reflect situations that could have major medical consequences for an injured worker, and which should not happen in a well-run utilization review program. These penalties cannot be waived and include:

$50,000:	Failure to establish a UR plan Failure to have a medical director
$25,000:	Decision outside of scope of practice Non-physician delays, denies, modifies treatment request
$15,000:	Untimely response to expedited request
$10,000:	Failure to discuss concurrent treatment with the treating physician Failure to file plan or letter
$5,000:	Failure to include required elements in plan Failure to file modified plan after material modification within 30 days Denying treatment because the condition is not in the medical treatment utilization schedule (MTUS)
$2,000:	Failure to respond, non-expedited, concurrent
$1,000:	Failure to respond, non-expedited, prospective review No documentation of amended request
$500:	Failure to respond to retrospective request
$100:	Failure to disclose UR criteria or guideline to public

Section 9792.12 (b) lists penalties that may be subject to waiver or abatement. These penalties, called "b" penalties, in amounts of $50 and $100, are for technical mistakes such as failure to send the correct notices, failure to send timely notices and failure to send the notices to the proper individuals.

The DWC will calculate a performance rating for "b" penalties based on a review of the randomly selected requests for authorization.

All violations found during the investigation will be cited with the appropriate penalty amount under CCR, Title 8 §§9792.12(a) or 9792.12(b). All violations found must be abated even if no penalty amount is paid.

However, no "b" penalties will be assessed for payment during a routine investigation if the subject meets or exceeds 85 percent in the performance rating, which is the "pass rate." Even if the subject doesn't meet the pass rate, it is possible to have the "b" penalties waived by the administrative director if the investigation subject provides evidence showing how the violations have been abated and agrees in writing to a return investigation to verify the abatement measures are still being practiced.

Q. What is 'mitigation'?

A. Mitigation is a process that allows the UR investigation subject to request the administrative director to reduce the penalty amount. It must be requested by the URA or URO by letter once penalties have been summarized in a preliminary investigation report. The letter is addressed to the administrative director and should discuss each of the potential factors for mitigation listed in regulation §9792.13, and discuss the evidence from the investigation and reasons the URO or URA believes reduction of penalty is warranted for that mitigation factor. Generally, mitigation is requested prior to filing any appeal of cited violations or penalties. For the factors for mitigation, see regulation 9792.13.

Q. What mitigating factors will DWC consider for penalties?

A. Mandatory penalties, referred to as "a" penalties are those assessed under regulation §9792.12(a); penalties assessed under §9792.12(b) are called "b" penalties. Mandatory penalties may not be waived even if the URA or URO "passes" the investigation by a performance rating of 85 percent; "b" penalties are automatically waived by DWC when the 85 percent "passing" score is received. Both "a" penalties and "b" penalties also may be considered for reduction in a request for mitigation. Penalty amounts may be reduced at the DWC administrative director's discretion based on: the medical consequences or gravity of the violation(s); good faith attempts to comply with the law by the claims administrator or utilization review organization; history of previous penalties; the frequency of violations; and under extraordinary circumstances. (CCR, Title 8 §9792.13(a).). The investigation subject that requests mitigation must submit a written request addressing each of those factors for the DWC administrative director to consider.

Q. Since the claims administrator (including TPAs) and the URO are held jointly and independently liable for administrative penalties, how should we determine who is responsible for paying the penalties?

A. That is a matter for the claims administrator and the URO to address between themselves. One way would be to clarify this issue in the contract between the claims administrator and the URO. DWC will assess the penalties for violations found against the subject of the investigation, either the claims administrator or the URO.

Q. What happens after violations are found?

A. A preliminary investigation report will be issued during the investigation which lists each violation and penalty amount, and a conference with the investigators will take place if requested. The purpose of the preliminary conference is to discuss the violations found, for the investigation subject to offer any evidence to suggest a violation is unwarranted, and to discuss the manner in which the violations may be abated (corrected). Following the conference, the investigation unit will issue a final investigation report.

If violations carrying penalties exist at the time of issuing the final investigation report, the AD will issue an "Order to Show Cause Re: Administrative Penalty" (OSC) (which includes the final report). At that point you may either stipulate to the findings in the final investigation report, agree to abatement terms and pay any penalties owing, or you may contest the violations and/or penalties and request a hearing before a hearing officer, by serving an answer to the OSC on the administrative director's office within 30 days. If you do not stipulate but file a timely answer to appeal, an administrative hearing will be conducted. Once the administrative hearing officer issues a determination and order which resolves the appeal, or once the DWC Investigation Unit and the investigation subject reach a stipulated settlement, this resolution of the appeal is sent to the administrative director for review, and the administrative director may either adopt the resolution (i.e. the stipulation or the hearing officer's decision) and it becomes a final determination and order of the administrative director. Once the administrative director's decision is final, the claims administrator or URO is required to send a copy of the final report to the insurer, self-insured employer or TPA. Investigation results will also be posted on the DWC Web site. (CCR, Title 8 §9792.15)

Q. What is a "return target" investigation and when does it occur?

A. A "return target" investigation is done within 18 months after a routine investigation in which the investigation subject, the URA or URO, failed to pass with the 85 percent score.

If the division conducts a return target investigation due to the investigation subject's failure to pass with 85 percent, and the subject again fails to pass by having a performance rating below 85 percent, the penalties will not be waived and, if violations of the same regulations are found again, the penalty amounts for each violation found are doubled or higher. (CCR, Title 8 §9792.12(b)(3).)

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About UR and AME/QME reports:

Q. When an AME or QME orders a diagnostic test as part of the medical/legal evaluation, may the claims administrator put that request through utilization review?

A. No. Diagnostic tests ordered as part of a medical/legal evaluation are medical/legal expenses, not treatment expenses. A claims administrator must pay for a diagnostic test ordered by an AME or QME as long as the subjective complaints and physical findings that warrant the necessity for the test are included in the medical/legal evaluation report. However, if adequate medical information (i.e. current and relevant test results) is already in the medical records provided to the evaluator, the claims administrator may not be liable for the cost of the test unless the evaluator received prior authorization from the claims administrator for another diagnostic test (CCR, Title 8 §9794(a)(1).), or unless the diagnostic test will not satisfy the definition of a medical/legal expense (that is, necessary to provide a medical report that is capable of proving or disproving a disputed medical fact in the claim) (LC section 4620(c).). The prior authorization referred to in CCR, Title 8 §9794(a)(1) is not obtained through utilization review but rather is based on the claims administrator's approval in light of the requirements of Labor Code sections 4620 and 4622 (requirement to pay medical/legal expenses) as well as CCR, Title 8 §9794(a)(1).

Q. If the AME or QME states in the report that a diagnostic test is needed to complete the evaluation but does not order it, leaving the PTP to order the test, should the PTP's request be sent to UR?

A. This question shows confusion about the AME/QME roles and the role of the primary treating physician (PTP), by either the doctor or the questioner. If a diagnostic test is required to "complete the evaluation", the AME or QME should order it as part of the medical/legal evaluation and it is considered a medical/legal expense. In some cases the AME or QME report may express a 'conditional' need for a diagnostic test, e.g. in the event the worker's pain increases and mobility decreases after two weeks of physician therapy, an MRI should be obtained. In this scenario the claims administrator may approve the MRI report, based on the wording in the AME/QME report, or send the PTP's request through UR.

Q. If an AME or QME recommends treatment can we submit that report to UR?

A. No, only requests for authorization for medical treatment from a treating physician are subject to utilization review. AME and QME reports cannot be sent to UR.

If both parties agree with the AME or QME recommendation and the treating physician requests that treatment, approve the treatment. There is no dispute and no need for external physician review in UR. If there is any disagreement over the recommendation (e.g. the primary treating physician disagrees with part or all of the AME or QME's recommendation for treatment), the claims administrator must obtain a UR reviewing physician's opinion to deny, delay or modify the treatment once it is requested by the treating physician. In such cases, the injured worker represented by an attorney should consult the attorney. If the injured worker is not represented, he or she should be advised to call the local DWC information and assistance officer.

Q. If a treating physician requests authorization for medical treatment recommended by an AME or QME, must the claims administrator do UR on the request?

A. Yes, although the request may not need physician review in UR. Approval by a claims administrator is part of UR. However, the answer about whether to submit the request for external physician review may depend on several factors, including whether there is any dispute over the treatment (see above), whether a finding, order or award including that treatment has already been issued by a workers' compensation administrative law judge (WCALJ) or the Workers' Compensation Appeals Board, (WCAB), how current that award is, and how specific the AME/QME report is about the treatment in question.

Generally, the AME/QME process is used to resolve disputes about medical treatment after UR has reviewed a treating physician's recommendation for the treatment. For example, if a treating physician recommended a specific treatment which was sent to UR and the decision in UR was to deny, delay or modify the treatment, triggering an objection under LC 4062(a) by the injured employee, and the AME or QME determined the requested, disputed treatment should be provided, then it is probable that the claims administrator will be liable for the treatment, unless there is a later finding of no liability on the entire claim.

In an accepted claim, delaying medical treatment that both the treating physician and a medical/legal evaluator agree is reasonable and necessary will result in various penalties and other additional costs. While the claims administrator may wait for a WCALJ decision or order to provide medical treatment that both the treating physician and evaluator agree is reasonable and necessary, the delay often will result in a worsening of the injured worker's condition, additional temporary disability and potentially greater permanent disability.

Once a finding and order for disputed treatment is issued, such as after an expedited hearing on denied treatment, the treatment must be provided. This is true whether or not an AME or QME addressed the treatment dispute.

Q. Do AME recommendations on medical treatment "trump" or "take precedence over" the UR decision on the same treatment?

A. Yes, generally, agreed medical evaluators (AMEs) are only used in cases in which the injured employee is represented by an attorney. Based on generally understood practice in the California workers' compensation system, the agreement to use an AME generally means the parties agree to be bound by the medical opinions, determinations and recommendations from the AME. If an AME's opinion on disputed medical treatment is different than the UR decision on the same treatment and the case goes to trial, the AME's opinion will generally be given more weight than the UR reviewing physician because the AME's opinion is based on a physical examination as well as review of all available medical records, not just the medical report that prompted UR. Having entered into an AME agreement, delay or refusal to follow the opinion of the AME on disputed treatment suggests a problem with the AME arrangement.

Q. Can the claims administrator send a treating physician's RFA for treatment included in a future medical treatment award to UR?

A. Yes. In the case of an award of future medical treatment, the claims administrator may always submit treatment requests based on the future medical treatment award to UR. Since the Supreme Court in Sandhagen held that UR is the claims administrator's only mechanism for resolving treatment requests, the claims administrator is entitled to use UR.

However, realistically, the claims administer should consider whether the expense of an external physician review in UR is necessary since a non-physician may approve treatment. The answer may depend on how recently the award was issued and how specific it was about the treatment. For example, an award that states future medical treatment 'may be' or 'is' needed, must be interpreted by referring to the medical report on which the award was based. Generally that treating physician's report or AME/QME medical/legal report will be identified in the award, such as in the stipulation on which an award is based or in the opinion on decision by the WCALJ or WCAB. The more ambiguous the description in the report of what future medical treatment will be needed and under what presenting conditions, the more likely a treating physician's request based on the award or report will be sent to UR. The more time that has passed since the date of the award or report providing for future medical treatment, the greater the likelihood that conditions have changed and UR would provide medically useful information.

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About UR and causation decisions:

Q. In an accepted claim, when a claims administrator or its URO receives a request for authorization for treatment to a new body part, must the claims administrator do UR?

A. Yes, unless the new body part has already been denied in writing by the claims administrator.

Q. In an accepted claim, when a claims administrator first learns of a newly claimed body part through a request for authorization for treatment, what can the claims administrator or its URO do?

A. Once the request for authorization is first received, whether by the claims administrator or its URO, the time limits for making a decision in UR have begun. The RFA may not be "pulled back" from the URO by the claims administrator nor "not processed" by the URO and returned to the claims administrator, since the UR timeline has begun and receipt of a RFA must be included in the recipient's list of RFAs received.

The simplest response, which a non-physician claims administrator or URO nurse may do, is to ask the requesting physician by fax within five business days of receipt of the RFA, for additional medical information explaining how the requested treatment (to the new body part) is related to the underlying accepted claim. If no answer is received, by the 14th calendar day, a UR reviewing physician may:

1. deny the request on the grounds that the requested information was not received with the added statement that the request will be reconsidered upon receipt of the information (CCR, Title 8 §9792.9(b).);

   -or-

2. decide to delay the RFA on the grounds that already requested information has not yet been received (CCR, Title 8 §9792.9(g).).

In the latter case (after a 'delay' decision), once the treating physician's reply to the question is received, the decision on the medical necessity of the requested treatment must be issued within five business days of receipt of the reply. Even if the requesting physician's answer (to the request for information as to how the treatment to a new body part is related to the underlying accepted claim) is incomplete, insufficient or unpersuasive, the UR decision addressing medical necessity must issue within five business days after receipt of the requested information that led to the 'delay' decision.

Per the WCAB en banc decision in Simmons (see below) the UR reviewing physician must decide, within the UR time limit, whether the requested medical treatment (to the new body part) is 'medically necessary' but then the UR reviewing physician may add a comment or question in the UR report regarding whether the need for the requested treatment was caused by the underlying accepted injury claim.

See below for a 'Two-step' process for communicating the UR decision.

If no one asks the requesting physician for this additional information during the first five business days after receipt of the RFA, then a decision by a UR reviewing physician must be made by the 5th business day. However, through close coordination with the claims administrator, the 'Two-step' process explained below for communicating the decision may be used.

Q. How can an employer respond to a request for authorization without being in violation of the UR regulations or statute, and without triggering a UR audit or penalties, when the reviewing UR physician states the requested medical treatment is (a) medically necessary but (b) questions causation (i.e. whether the need for the requested treatment is causally related to the claimed industrial injury)?

A. When the UR physician agrees that the requested treatment is medically necessary, but questions the causal relationship to the accepted claimed injury, DWC recommends the URO and claims administrator consider using the following 'Two-step' process:

First, the UR reviewing physician must answer whether the requested medical treatment is medically necessary. If no, the requested treatment can be denied on that basis alone. If yes, the reviewing physician must state that opinion in the UR report. Then if the reviewing physician questions whether the need for treatment was caused by the accepted underlying injury in the claim, the UR physician also may question or comment on that in the UR report.

Second, the URO must communicate this decision on medical necessity first and only to the claims administrator before the UR deadline for communicating the decision to the requesting physician, in order for the claims administrator to communicate the UR decision by the UR deadline along with an objection under LC 4062(a), in the manner explained in Simmons v. California (2005) 70 Cal. Comp. Cases 866 (en banc).

In other words, the claims administrator (or its URO) would advise the requesting physician verbally or by fax within 24 hours of making the decision, that although the requested medical treatment (to the new body part) is 'medically necessary', the claims administrator is not authorizing the RFA due to an objection being made under LC 4062, which will be explained in a written letter with the UR decision that will be sent to the requesting physician and injured worker. The LC 4062 objection is, in essence, to the requesting physician's opinion and determination that the need for treatment as requested to the new body part, is causally related to the underlying accepted industrial injury. The claims administrator must then ensure that the claims administrator's LC 4062 objection and denial of the UR request, made in reliance on the attached UR reviewing physician's report, is sent to the requesting physician and injured employee (and his or her attorney if any) within the UR time limit for the UR decision. The UR denial must include all required contents of a UR denial letter.

Note that per Simmons, the UR reviewing physician's report is not admissible on the issue of causation; only on the issues of whether UR was completed timely and correctly.

Claims administrators may wish to direct their UR physicians to forward the reviewing physician's report to the claims adjuster first and only, who in turn will: (a) issue a denial, in reliance on the UR physician's report, which they attach; and (b) issue an objection about causation under LC 4062, which triggers the AME/QME process. The UR physician must provide a clear and concise explanation of the reasons for his or her conclusions or decision -- in this case questioning causation. This should be incorporated into the denial issued by the claims adjuster. (CCR, Title 8 §9792.9(j)(4).)

The claims adjuster's UR denial letter must be issued within the applicable utilization review time limit. (Simmons v. California (2005) 70 Cal. Comp. Cases 866 (en banc))

Further, until the claims adjuster affirmatively and timely issues an objection to the treating physician's determination, that the need for treatment is causally related to the claimed industrial injury, the Workers' Compensation Appeals Board (WCAB) decision in Simmons suggests the employer has not completed the objection to the recommended treatment on causation grounds. The WCAB said in Simmons that this written objection, made under LC 4062(a), must be issued within 20 or 30 days of receipt of the UR physician's report, depending on whether the injured employee is represented or unrepresented. When, as in the example above, the claims administrator's first notice of the new body part is identified during UR, the claims administrator is advised to make the LC 4062(a) objection within the UR deadlines.

Also note: A claims administrator's denial of a request for authorization, either without an attached UR reviewing physician's report that questions causation or in reliance on an attached UR physician report that fails to explain the reviewing physician's medical reasoning for questioning causation, could be found to violate LC 4610(e) and CCR, Title 8 §§9792.9(j)(4) and 9792.12(a)(7).

A denial issued directly from the reviewing physician or URO to the primary treating physician on causation grounds alone could be found in violation of CCR, Title 8 §§9792.6(s), 9792.9(j) and probably §9792.9(l), as well as the express wording of Simmons, which states the UR reviewing physician does not have the authority to determine causation.

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About maintaining and modifying a UR plan:

Q. Where do we file the UR plan?

A. The complete UR plan must be filed with the DWC administrative director, either by the claims administrator or by the designated URO. The claims administrator may send a letter naming its URO, if the URO has submitted a complete UR plan to the DWC.

The plan should be mailed to:

Division of Workers' Compensation
Medical Unit - Utilization Review
P.O. Box 71010,
Oakland, CA 94612

(CCR, Title 8 §9792.7(c).)

Q. Who is responsible for notifying the DWC about modifications to a UR plan?

A. The claims administrator. State regulations require every claims administrator to establish and maintain a utilization review process, which includes all modifications/revisions. The term "claims administrator" is defined as "a self-administered workers' compensation insurer, an insured employer, a self-administered self-insured employer, a self-administered legally uninsured employer, a self-administered joint powers authority, a third-party claims administrator or other entity subject to Labor Code section 4610. The claims administrator may utilize an entity contracted to conduct its utilization review responsibilities." (CCR, Title 8 §§9792.7(a) and 9792.6(c).)

Q. When must the claims administrator or designated URO file a change or revision in its UR plan with the DWC?

A. Within 30 calendar days of a material modification to the plan. A "material modification" is when the claims administrator changes utilization review vendors or makes a change to the utilization review standards. (CCR, Title 8 §9792.7)

Q. If the URO sends a list of its clients with its UR plan, will the DWC retain the list as a separate "confidential document" and not forward it on as part of the filed UR plan to any requesting party?

A. The document would be considered a public record, and would be included in any requested disclosure of the plan. (CCR, Title 8 §9792.7(a)(5).)

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About UR and medical provider networks (MPNs):

Q. Are MPN physicians required to provide requests for authorization?

A. Yes. Unless the treatment falls within the claims administrator's prior authorization process, MPN physicians need to provide requests for authorization. (CCR, Title 8 §9792.7(a)(5).)

Q. May a URO deny a request for authorization because the treating physician is not the MPN physician?

A. No. The URO must address medical necessity. The URO may not deny a request based on the fact that a treating physician is not the MPN physician, as that is not a medical treatment issue.

Q. May the claims administrator deny a request for authorization because the treating physician is not the MPN physician?

A. Yes, as long as the claims administrator complies with the conditions described above in the section titled 'About who can make UR decisions.' The claims administrator does not have to send the request to the URO. It may deny the request and notify the requesting provider of the MPN requirement.

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November 2012