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Frequently asked questions about Senate Bill 863

Topics covered in this FAQ include:

The basics
Independent medical review
Medical care
Qualified medical examiners
Medical provider networks
Independent bill review
Permanent disability benefits
Supplemental job displacement benefits
Liens

About the basics:

How did Senate Bill 863 (SB 863) come about?

SB 863 was the result of months of negotiations between representatives of labor unions and employers, who focused on two equally important goals: 

  • Increasing permanent disability benefits paid to injured workers to compensate for the lasting effects of workplace injuries; and
  • Improving the efficiency of the California workers’ compensation system by reducing the costs and time it takes to deliver benefits to injured workers and resolve disputes.

What areas of workers’ compensation does SB 863 affect?

SB 863 makes significant changes in the following areas:

  • Increases permanent disability values
  • Simplifies the permanent disability rating method
  • Resolves medical treatment disagreements through independent medical review
  • Resolves bill payment disputes through independent bill review
  • Simplifies the supplemental job displacement voucher system
  • Requires payment of a filing or activation fee for liens
  • Improves medical provider networks
  • Updates the Official Medical Fee Schedule
  • Establishes fee schedules for copy services, interpreters, vocational experts, and in-home health care
  • Provides additional payments for workers with disproportionate wage loss.

What are the implementation dates for each set of regulations?

SB 863 Implementation Effective Date Per Labor Code
Ambulatory Surgery Center (ASC) Fee Schedule Jan. 1, 2013
Copy Services Fee Schedule Dec. 31, 2013
Home Health Care Fee Schedule July, 1, 2013
Independent Bill Review (IBR) For dates of service on or after Jan. 1, 2013
Independent Medical Review (IMR),
Utilization Review (UR) (including Request for Authorization form) and
Qualified Medical Evaluators (QME)
For injuries on or after Jan. 1, 2013; For decisions communicated on or after July 1, 2013
Interpreter Testing and Fee Schedule Jan. 1, 2013
Lien Filing Fee Regulations Jan. 1, 2013
Medical Provider Network (MPN) Jan. 1, 2014
Physician Fee Schedule (RBRVS) The fee schedule provided by SB 863 will commence on Jan. 1, 2014 and continue until a physician fee schedule is adopted
Predesignation/Chiropractor Primary Treating Physician Regulations Jan. 1, 2013
Spinal Implant (Inpatient Fee Schedule) Jan. 1, 2013
Supplemental Job Displacement Benefit (SJDB) Voucher Jan. 1, 2013
Vocational Expert Fee Schedule Jan. 1, 2013

I have questions about SB 863.  How can I contact DWC for answers?

Questions about SB 863 should be sent to the DWC at dwc@dir.ca.gov.

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About independent medical review:

What is independent medical review (IMR)?

IMR was established by SB 863 to provide a quick, efficient way of resolving medical treatment disputes. If a request by a treating physician 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, an injured worker can ask for a review of that decision by an independent, qualified physician. The assigned physician reviewer, selected under stringent standards, will review relevant medical records and apply recognized treatment guidelines to determine if the requested medical treatment is appropriate for the injured worker’s condition. The IMR process should take about 40 days to complete, a significant improvement over the current system, which can take up to a year and heavily relies on state-certified medical evaluators and judicial decisions.

SB 863 requires that the IMR process be administered by an independent medical review organization (IMRO) chosen by DWC. Oversight of the program will be conducted by DWC’s Medical Unit. The use of an IMRO will ensure the assignment of unbiased medical experts for treatment reviews. 

When did IMR go into effect?

IMR went into effect on Jan. 1, 2013, for all occupational injuries occurring on or after that date, and on July 1, 2013 for all dates of injury.

How can I request IMR?

IMR can be requested following a delay, denial, or modification of a treatment request by the claims administrator’s utilization review process. With the decision letter, the claim administrator must provide a form for the injured worker to request IMR. The form should be completed and timely returned as instructed to start the IMR process. An injured worker can be assisted by an attorney or by his or her treating physician in the IMR process.

Will there be any changes in the utilization review (UR) process?

Beginning on Jan. 1, 2013, for all occupational injuries occurring on or after that date, and on July 1, 2013 for all dates of injury, DWC will require the use of a Request for Authorization (RFA) form that must accompany all treatment requests made by treating physicians. The RFA form will specify treatment requests and identify disputed issues to help the injured worker and claims administrator resolve differences before turning to IMR. 

Also, SB 863 will allow injured workers and claims administrators to defer to UR referrals if there is an issue in dispute over anything other than the medical necessity of a particular treatment requested by the injured worker’s treating physician (such as cases where the injury itself or the injury to a specific body part is in dispute). UR decisions will be now be in effect for 12 months, allowing claims administrators, absent any documented change in facts, to reject duplicate treatment requests.

Will the IMR physician reviewer conduct an examination?

No, the IMR physician reviewer will not conduct a hands-on examination of the injured worker. The physician reviewer will analyze all relevant medical records and information submitted by the employee, the treating physician and the claims administrator. The parties will be instructed by the IMRO, once an IMR request is accepted, as to the types of records and information that must be submitted for review.

What is the difference between a qualified medical examiner (QME) physician and an IMR physician?

In terms of medical qualifications, there may not be a difference between QMEs and IMR physicians, as both have to be licensed and in good standing, with appropriate training and experience. QMEs are, and will continue to be, certified by the State of California. IMR physicians will be screened and certified by the IMRO, applying criteria developed in consultation with DWC.

Can a QME also be a reviewer in the new IMR program?

Starting Jan. 1, 2014, a reviewer in the IMR program may not also hold an appointment as a QME. A physician who wants to be a reviewer in the IMR program next year would need to apply to the IMRO.

What is the time limit for the IMR decision to issue and can it be appealed?

The statute requires the IMRO to issue a determination within 30 days of receipt of all necessary records. IMR appeals will be considered by a workers’ compensation judge. However, the IMR physician reviewer’s decision on the medical necessity of the medical treatment cannot be overturned by a judge. A decision can only be overturned on the basis of fraud, conflict of interest, or mistake of fact.

Who has to pay for IMR?

The claims administrator will pay the reasonable per-case cost of IMR. The cost will be determined by the IMRO in conjunction with DWC and set out in regulations.

How long will an injured worker have to wait for an IMR decision before receiving treatment?

Insurers and claims administrators are required to promptly implement an IMR determination approving disputed treatment.

What happens when the spinal surgery second opinion process stops? How will these issues be resolved?

If a disagreement arises over spinal surgery after Jan. 1, 2013 for dates of injury on or after Jan. 1, 2013, the UR denial will be resolved through the IMR process. Between Jan. 1 and July 1, 2013, for dates of injury before Jan. 1, 2013, QMEs will address spinal surgery issues. After July 1, 2013, for all dates of injury, spinal surgery issues will go through the IMR process.

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About medical care:

I would like to be treated by my personal chiropractor or acupuncturist. How does that work?

If your employer or your employer's insurer does not have a MPN, you may be able to change your treating physician to your personal chiropractor or acupuncturist following a work-related injury or illness. In order to be eligible to make this change, you must give your employer the name and business address of a personal chiropractor or acupuncturist in writing prior to the injury or illness. There is a form you can use called the notice of personal chiropractor or personal acupuncturist. After your claims administrator has initiated your treatment with another doctor during the first 30-day period, you may then, upon request, have your treatment transferred to your personal chiropractor or acupuncturist.

Are there limits on certain kinds of treatment?

Yes. If your date of injury is in 2004 or later, you are limited to a total of 24 chiropractic visits, 24 physical therapy visits, and 24 occupational therapy visits, unless the claims administrator authorizes additional visits or you have recently had surgery and need postsurgical physical medicine.

Does the 24 cap on chiropractic visits apply to all cases?

No. The 24 visit cap does not apply to injuries that occurred before Jan. 1, 2004. Also, the cap does not apply if your employer authorizes additional visits in writing. Additionally, the cap does not apply to visits for certain postsurgical physical medicine and rehabilitation services.

If your primary treating physician is a chiropractor, what happens after the injured worker has had 24 chiropractic visits?

If your injury occurred on or after Jan. 1, 2004, your chiropractor can no longer act as your primary treating physician (PTP) once you have reached the 24-visit cap. You will have to designate a new, non-chiropractic PTP once the claims administrator notifies you that you have reached the cap.

How has the predesignation process changed?

Before SB 863, in order to predesignate your personal physician, you had to meet certain qualifications. SB 863 makes predesignating available to more employees by changing the requirement that “your employer offers group health” to “you have health care insurance for injuries or illnesses that are not work related.”  During the rulemaking process, DWC will develop a new optional form that may be used to predesignate a personal physician.

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About qualified medical examiners:

What exactly will QMEs do after implementation of SB 863?

QMEs will no longer be asked to comment on specific medical treatment disputes as of Jan. 1, 2013 for injuries occurring on or after that date, and as of July 1, 2013, for all dates of injury. All disagreements regarding the necessity or appropriateness of a particular treatment request will be addressed through IMR.

How many offices are QMEs limited to?

Starting Jan. 1, 2013, a QME is limited to ten offices.

What if I have more than ten offices?

Please notify the DWC Medical Unit as soon as possible to let them know which offices you would like to designate as the ten locations where you will conduct qualified medical evaluations.
If notifying by fax or mail:

DWC Medical Unit
P.O. Box 71010 
Oakland, CA 94612
Fax: (510) 286-0693

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About medical provider networks:

How is the medical provider network (MPN) IMR process different from the IMR process specified in SB 863?

The MPN IMR process is to resolve disagreements between an injured worker and the worker’s treating physician about necessary treatment (after the worker has obtained second and third opinions and still has not resolved the dispute). In contrast, the IMR process under SB 863 is to resolve disputes over a UR decision, where the treating physician and claims administrator disagree about necessary treatment.

Are current MPNs required to go through their provider list and eliminate those providers who do not take workers’ compensation patients?

Yes, currently the MPN regulations require that the MPN providers must be willing to treat injured workers in the workers’ compensation system. Starting Jan. 1, 2014, SB 863 requires MPNs to post on their website a list of all treating physicians in the MPN and update the roster at least quarterly.

Will the DWC require a modification filing of the MPN application and notices?

Beginning Jan. 1, 2014, SB 863 requires that existing approved plans will be considered approved for a period of four years from the most recent application or modification approval date.  MPNs must be re-approved every four years. Plans for reapproval of MPNs must be submitted at least six months before the expiration of the 4-year approval period.

How does SB 863 help providers know when they are in an MPN?

Beginning Jan. 1, 2014, a treating physician will be included in a MPN only if the physician provides a separate written agreement to be in the network at the time of entering into or renewing the agreement to be in the network. 

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About independent bill review:

What is independent bill review (IBR)?

IBR was established by SB 863 to provide a quick, efficient way of resolving disputes over medical billing. Instead of litigating billing disputes with a final decision made by a judge, IBR turns the decision-making process over to medical billing and payment experts. As stated by the legislature in SB 863, “existing law provides no method of medical billing dispute resolution short of litigation.” Existing law does not provide for medical billing and payment experts to resolve billing disputes and billing issues are frequently submitted to workers’ compensation judges without the benefit of independent and unbiased findings on these issues. Medical billing and payment systems are a field of technical and specialized expertise, requiring services that are not available through the civil service system.

A medical provider who disagrees with the amount paid by a claims administrator on a properly documented bill can, after requesting and receiving a second review, request IBR.

When did IBR process begin?

IBR went into effect for all dates of service on or after Jan. 1, 2013.

What types of bills are eligible for IBR?

Any medical service where the fee is determined by a fee schedule established by the DWC can be resolved through IBR.

How does a physician initiate IBR?

If a physician disagrees with the amount of payment made by a claims administrator on a bill, the physician may request the claims administrator to conduct a second review of the bill. The second review, which is required to initiate IBR, must be requested by the physician within 90 days after receipt of the explanation of review from the claims administrator as to why the full amount of the bill was not paid. 

Within 14 days after receipt of the request for second review, the claims administrator must issue a final written determination on the bill.  Any amount not in dispute between the physician and the claims administrator must be paid within 21 days after receipt of the request for a second review.

If the physician disagrees with the decision of the claims administrator following the second review, they may request IBR. The request, to be made on a form required by the DWC, must be filed with the division within 30 days after the second review decision. Once the request is filed and assigned by the IBRO to an independent bill reviewer, the physician must submit all supporting documents, included the original billing, the claims administrator’s explanation of review, the second review request and final second review determination. If necessary, the independent bill reviewer may request additional documents from either the physician or the claims administrator.

IBR will only resolve disputes regarding the amount of payment owed the physician; disputes other than the reasonable amounts payable for services, such as whether the injury is work-related, must be resolved prior to filing a request for IBR.

What is the time limit for the IBR decision to issue and can it be appealed?

Upon review of all documents, the independent bill reviewer will issue a written determination of any additional amounts, if any, which must be paid to the physician. The IBR determination must be issued within 60 days after the request for IBR is assigned to the reviewer. As with independent medical review, an appeal of an IBR determination is considered by a workers’ compensation judge. An IBR determination can only be overturned on the basis of fraud, conflict of interest, or mistake of fact.

Who has to pay for IBR?

The physician will pay a reasonable review fee together with the application for IBR. If the independent bill reviewer determines that the claims administrator owes the physician additional payment on the bill, the claims administrator must reimburse the review fee to the physician. 

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About permanent disability benefits

How does SB 863 affect permanent disability (PD) benefits?

PD benefits will increase overall by 30%, as both the minimum and maximum weekly rates will increase. The increases will be phased in over a two-year period.
The new minimum rate will be $160 per week, for all injuries on or after Jan. 1, 2013.
The new maximum rate, for injuries between Jan. 1 and Dec. 31, 2013, will be:

  • $230 per week for PD ratings less than 55 percent
  • $270 for ratings between 55 and 69 percent
  • $290 for ratings between 70 and 99 percent. 

For injuries on or after Jan. 1, 2014, the new maximum rate will be $290 per week for all PD levels.

Are there changes regarding the types of injuries that benefits are available for?

In cases involving a physical injury, injured workers will no longer be able to collect additional PD benefits for sleep disorders or sexual dysfunction that did not directly result from those injuries. Additional PD for add-on psychiatric injuries will be limited to cases in which the physical injury is “catastrophic,” or where the injured worker was the victim of or a witness to a violent crime.

What effect will the elimination of sleep disorder, sexual dysfunction and psychological add-ons have on QMEs?

QMEs, like treating physicians, will not be able to comment on PD arising from sleep disorder, sexual dysfunction and non-excepted psychological add-ons, but can still comment on an injured worker’s need for treatment for any of those conditions.

Will PD ratings still take into account loss of future earning capacity?

The current method of modifying PD ratings to take into account an injured worker’s decreased future earning capacity, if any, has been removed, for injuries that occur on or after Jan. 1, 2013.

Are there changes in how or when PD benefits will be paid?

The current requirement that PD payments begin within 14 days of the last payment of temporary disability benefits is still in effect.  However, PD payments made before a formal award of those benefits (called “advances”) may be deferred when an injured worker has returned to the same employer he or she worked for at the time of the injury and earns at least 85 percent of his or her pre-injury wages and compensation. An injured worker who moves on to another employer must earn 100 percent of pre-injury wages and compensation for PD advances to be deferred.

What is the “Return to Work Fund?”

SB 863 creates a “Return to Work Fund” that will be established and administered by the DIR. The fund is intended to provide an additional payment to injured workers whose PD ratings are disproportionately low compared to their wage losses after a workplace injury.

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About supplemental job displacement benefits:

How are the supplemental job displacement (SJDB) vouchers changing?

Currently, the voucher amount ranges from $4,000 to $10,000, depending on the PD rating.  For injuries occurring on or after Jan. 1, 2013, the voucher amount will be $6,000 across the board, regardless of the PD rating.

When is the voucher available?

Under current law, the voucher is to be offered to an injured worker when his or her PD level has been determined, either by way of an agreement between the worker and the employer or insurance company, or by way of an award by a workers’ compensation judge. Under SB 863, the voucher will be due 60 days after a treating doctor, agreed medical evaluator, or qualified medical evaluator declares the injured worker permanent and stationary, and issues a report outlining the worker’s work capacities, if the employer does not offer the worker a job. The job must pay no less than 85 percent of the worker’s earnings at the time of the injury, and must be expected to last at least 12 months.

Does a voucher expire?

The voucher does not expire if issued prior to Jan. 1, 2013. If issued on or after Jan. 1, 2013, the voucher will expire within two years of being issued or five years from the date of injury, whichever comes later.

Can the voucher be settled for a cash payment?

Under SB 863, vouchers cannot be settled for cash.

What can the voucher be used for?

The voucher can be used for training at a California public school or any other provider listed on the state’s eligible training provider list. It can also be used to pay licensing or certification and testing fees, to purchase tools required by a training course, to purchase computer equipment of up to $1,000 and to reimburse up to $500 in miscellaneous expenses. Up to 10 percent, or $600 may be used to pay for the services of a licensed placement agency or vocational counselor.

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About liens:

What are the new lien fees?

For liens filed on or after Jan. 1, 2013 medical treatment, medical-legal expenses, or claims of costs, there is a $150 filing fee. For those liens filed before Jan. 1, 2013, there is a $100 activation fee which must be paid prior to Jan. 1, 2014, or the lien will be subject to dismissal by operation of law. There are exemptions from the fee requirements for health care service plans, group disability insurers, self-insured employee welfare benefit funds, Taft-Hartley health and welfare funds and publicly funded programs providing non-industrial medical care.

How can the fees be paid?

Lien fee payments may only be made electronically. Cash or check payments will not be accepted. Please see the lien filing and activation fees page for more information about the process.

Are there time limits for filing lien claims?

Yes. For services provided prior to July 1, 2013, the lien must be filed within three years of the date the service was provided. For services provided on or after July 1, 2013, the time frame is reduced to 18 months.

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May 2013