I want to . . .
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: (8 CCR §number). Citations to California’s Labor Code appear as: (LC number).
Topics covered in this FAQ include:
Utilization reviewDifferent 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)
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 physician.
Q. When does UR begin?
A. Although many people think UR begins when an authorization request is forwarded by the claims administrator to the reviewing physician, the process actually begins when the request for authorization is first received, whether by the employer, claims administrator or utilization review organization (URO).
Q. Is utilization review required in every case?
A. While the DWC has interpreted LC 4610(a) to require that all requests for authorization are subject to the UR time requirements and procedures, claims administrators are allowed and encouraged to establish guidelines within their utilization review plans under which certain requests for treatment are not required to go through a third party UR process. The 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 through a third party process.
Additionally, the UR regulations provide a way to give physicians authority to treat their patients without requesting authorization at all. This process is called “prior authorization.”
"Each utilization review process shall be set forth in a utilization review plan which shall contain: “… a description of the claims administrator's practice, if applicable, of any prior authorization process, including but not limited to, where authorization is provided without the submission of the request for authorization." (Emphasis added) (8 CCR § 9792.7(a)(5))
Nonetheless, the extent to which utilization review is mandatory has been the subject of recent litigation before the WCAB and the courts. A case currently pending before the California Supreme Court is expected to clarify the issue definitively later this year.
Q. Does approving a request for authorization as medically necessary mean the bill for that treatment will be paid?
A. Yes. Authorization means assurance that appropriate reimbursement for a specific treatment will be paid. (8 CCR §9792.6(b))
Q. What is a request for authorization?
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” (form DLSR 5021), the “Primary Treating Physician Progress Report” (DWC form PR-2), or in a narrative report that contains the same information required in the PR-2 form. If a narrative report is used, the document must be clearly marked at the top as a request for authorization. (8 CCR §9792.6(o))
Q. What is a prospective review?
A. A prospective review is any UR conducted prior to the delivery of the requested medical services, except during an inpatient (hospital) stay. Prospective reviews must be done within five days from receipt of the request for authorization unless more information is needed to make the decision. In that case, up to 14 days are allowed. (8 CCR §9792.6(n))
Q. What is a concurrent review?
A. A concurrent review is UR conducted during an inpatient (hospital) stay. The timeframe is the same as for prospective reviews. (8 CCR §9792.6(d))
Q. What is a retrospective review?
A. A retrospective review is UR conducted after medical services have been provided and for which approval has not already been given. Retrospective reviews must be completed within 30 days of receiving the necessary information required to make a decision. (8 CCR §9792.6(p))
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. (8 CCR §9792.6(g))
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 appropriate additional information necessary to render a decision (8 CCR §9792.7(b)(3))
- Approve a request for authorization (8 CCR §9792.7(b)(3))
- Discuss applicable medical guidelines with the requesting physician when requested treatment appears to be inconsistent with medical guidelines (8 CCR §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 treatment plan, the physician should provide documentation of that change. (8 CCR §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 it.
Q. What is a "reviewer?"
A. A "reviewer" is a medical doctor, doctor of osteopathy, psychologist, acupuncturist, optometrist, dentist, podiatrist or chiropractic practitioner licensed by any state or the District of Columbia, 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. (8CCR §9792.6(q))
Q. What is "scope of practice?"
A. Scope of practice is determined by the physician's licensing board and defines the procedures, actions and processes permitted for the licensed individual.
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 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:
- "Competent to evaluate the specific clinical issues involved in the medical treatment services"
[LC 4610(e) and 8 CCR §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
- "These services are within the reviewer's scope of practice …” as defined by that particular physician’s California licensing board. (8 CCR §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.
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. (8 CCR §9792.8(A)(1-4))
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. (8 CCR §9792.11(i)(1))
Q. Do claims administrators have to log every request for authorization?
A. No. If the claims administrator does not have a method of logging requests, then it does not have to create one.
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. (8 CCR § 9792.9(b))
A copy of the written approval (e.g. fax) 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 approved. (8 CCR § 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. (8 CCR § 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, (8CCR § 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 request 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 calendars days of receipt of the original request.
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 received. (8 CCR §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), and you need no further information, the clock starts the next day, Wednesday. The reviewer must make the decision no later than the following Tuesday (the 5th day), as long as there are no other "holidays" and communicate the decision by phone or fax within 24 hours of 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.
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 received. See the previous answer for a complete explanation of how the ticking clock is computed. (8 CCR §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 decision must then be made within 14 calendar days from the date of receipt of the original request for authorization
- Authorization may not be denied on the basis of lack of information without documentation showing an attempt to obtain the necessary information by fax or by mail (8 CCR §9792.9(l))
- The request for additional information does not extend the time to decide beyond 14 calendar days from receipt of the request for authorization, (8 CCR §9792.9(b)(2)), unless the reviewing physician issues a notice of delay within that time limit. 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, and the reasons for the delay (e.g. that necessary information reasonably requested has not been received; that an additional examination or test is needed; that a specialized consultation or review by an expert reviewer is needed). (8 CCR §9792.9(g)(1)(A) – (C) and (g)(2))
*Please see related question in previous section.
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.(8 CCR §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 situations differ from other reviews, including expedited reviews, in that they are not required to be reviewed at all, but MAY be reviewed retrospectively.
Emergency health care services are those provided when the injured worker has acute symptoms severe enough that they need immediate medical attention. For example, when a worker suffers a severe injury or illness on the job and must be immediately transported to the hospital for treatment. (8 CCR §9792.6(f))
Failure to obtain authorization in advance for emergency health care services cannot be the basis for refusing to cover the medical services provided to treat and stabilize an injured worker. However, emergency health care services may be subjected to a retrospective review. In that case, documentation for emergency health care services must be made available to the claims administrator upon request. (8 CCR §9792.9(d))
Q. What must decisions to approve say?
A. A written decision approving a request for authorization must specify the medical treatment service approved.(8 CCR §9792.9(i))
Q. Who must the approval be given to?
A. Approvals must be given, by telephone or fax, to the requesting physician within 24 hours of 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. (8 CCR §9792.9(b)(3))
Q. What must the decisions to modify, delay or deny say?
A. In order to document the timeliness of the review, we recommend including the date that the written authorization request was received.
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. 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 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, DWC form 4. The application and request must say that the dispute is regarding medical treatment to which the injured worker believes he/she is entitled.
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."
9. 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.
10. 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, including 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." (8 CCR §9792.9(j))
11. The name and specialty of the reviewer or expert reviewer
12. The telephone number in the United States of the reviewer or expert reviewer
13. 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. (8 CCR §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, section 9792.24.1 states that “acupuncture treatments may be extended if functional improvement is documented as defined in Section 9792.20(f).”
Q. Who must the decisions to modify, delay or deny be given to?
A. On both prospective and concurrent reviews, the decision must be given to the requesting physician initially by telephone or fax. The phone call must be followed by written notice to the requesting physician, the injured worker and the injured worker's attorney (if applicable) within 24 hours of the decision for concurrent reviews, and within two business days of the decision for prospective reviews. If a fax is used in lieu of the phone call, and all mandated language is included in the fax, the written notification is satisfied.
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. In the case of concurrent reviews, medical care must not be discontinued until the requesting physician has been notified of the decision and a care plan, which is appropriate for the medical needs of the injured worker, has been agreed upon by the requesting physician. (8 CCR §9792.10(b)(1))
Q. Do we have to respond to a secondary physician’s request for authorization?
A. Yes. You must respond to any written request for authorization from any physician (written on 5021 or PR-2 or narrative format with same information) (8 CCR § 9792.6(o)) If necessary, concurrent with the UR process, you may also contact the primary treating physician to confirm the referral for treatment to the secondary physician.
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 division, because “authorization” by definition means “assurance that appropriate reimbursement will be made [to the treating physician] for an approved specific course of proposed medical treatment” (8 CCR § 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 what falls within the prior authorization treatment 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 any treatment and diagnostic testing given within the first five days of an injury is automatically approved. 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. 24 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. (8 CCR § 9792.7(a)(5))
Q. How does prior authorization differ from "pre-authorized" and "prospective review"?
A. "Prospective review" requires the treating physician to make a request for authorization prior to providing treatment, and if the request was made orally to follow up with a written request within 72 hours. (8 CCR § 9792.6(n))
“Pre-authorization” and “prospective review” have the same meaning in the California workers’ compensation UR system.
“Prior authorization” however, does not require a request for authorization to be made prior to providing the treatment in order to be assured that appropriate payment will be made to the treating physician.
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 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. 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. Claims administrators are subject to routine investigations once every five years. These routine investigations generally will be conducted as part of the existingDperformance audit review (PAR) process under Labor Code sections 129 and 129.5. UROs will be subject to routine investigation once every three years. Also, if the claims administrator or URO has failed a previous routine investigation, DWC can return for a target investigation. The DWC can also do a target investigation based on a credible complaint. Credible complaints will go to the claims administrator for their response prior to an investigation, unless the AD determines that advance notice will render the special target investigation less useful. (8 CCR § 9792.11)
Q. What happens at an investigation?
A. A random sample of requests for authorization that occurred on or after June 7, 2007, along with additional records that may be needed, will be reviewed. Claims administrators will get a notice at least 14 days before the investigation begins and will need to provide copies of all requested documents.
Investigation notifications began going out the first week in October, 2007.
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 section 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.
No "b" penalties will be assessed if the subject meets or exceeds 85 percent in the performance rating, which will be the "pass rate," during a routine investigation. Even if the subject doesn't meet the pass rate, it is possible to waive penalties by demonstrating how the violations have been abated and agreeing to a return investigation. If the division conducts a return target investigation and the subject fails the 85 percent performance standard a second time, the penalties are doubled and they become mandatory.
Q. What mitigating factors will DWC consider for penalties?
A. Penalties may be lessened 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. (8 CCR § 9792.13 (a))
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. One way would be to clarify this in the contract between the claims administrator and the URO.
Q. What happens after violations are found?
A. A preliminary report will be issued during the investigation, and a conference with the investigators will be available. Following the conference, the AD will issue an "Order to Show Cause Re: Administrative Penalty" (which includes the final report). At that point you may either stipulate to the findings or answer within 30 days. If you do not stipulate, an administrative hearing will be conducted. Once the order 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. (8 CCR § 9792.15)
Q. If an AME or QME recommends treatment and that treatment recommendation did not already go through UR, can we submit it to UR?
A. If both parties agree with the recommendation, follow it: There is no dispute and no need for UR. If there is any disagreement over the recommendation, injured workers represented by attorneys should consult their attorneys. If the injured worker is not represented, he or she should be advised to call the local DWC information and assistance officer.
About UR and causation decisions:
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 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 claimed injury, DWC recommends the URO and claims administrator consider using the following process:
First, the 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 physician should state that in the UR report. Second, if the reviewing physician's opinion is that the need for treatment may not be caused by the injury, the UR physician also can state that in the UR report.
Claims administrators may wish to direct their UR physicians to forward this reviewing physician's report to the claims adjuster who 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. (8 CCR § 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.
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 8 CCR §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 8 CCR § 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.
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: DWC Medical Unit UR, P.O. Box 71010, Oakland, CA 94612 (8 CCR § 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." (8 CCR §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. (8 CCR § 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. (8 CCR §9792.7(a)(5))
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. (8 CCR § 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. 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.
January 2008