Bulletin 97-15
September 26, 1997


DWC Schedules Hearings in November on Proposed New Regulations

The Division of Workers' Compensation has announced two sets of public hearings in November which will consider a variety of new workers' compensation regulations.

The proposed regulations include a number of changes in DWC's medical fee schedules, clarify physician reporting requirements, amend utilization review standards and add procedures for filing for benefits from the Uninsured Employer Fund (UEF) and Subsequent Injury Fund (SIF) to ensure citizenship or immigration status mandated by new federal legislation.

"The revised medical fee schedules should result in a small decrease in medical costs in the workers' compensation system," said DWC Administrative Director Casey L. Young in announcing the hearings. "Although it is anticipated that physician fees will go up slightly, hospital costs will come down, resulting in a net reduction in medical costs overall," he said.

Additional regulations will enhance communications between claims administrators and medical providers and provide clearer rules, which should help reduce disputes, he added.

Other subjects to be covered at the hearings will include proposed changes in the audit and vocational rehabilitation regulations as well as rules that apply to workers' compensation referees.

Audit, Vocational Rehabilitation and UEF/SIF Regulations

The first set of hearings will take place in Los Angeles on Nov. 12 and in San Francisco on Nov. 14. It will consider new regulations that will:

  • Change the methodology by which audit subjects are chosen to allow the Audit Unit to reallocate its resources and perform more audits overall while focusing its attention on audit subjects with poor performance records. The proposed amendments would allow the Audit Unit to perform approximately ten to fifteen more audits each year.

  • Make a number of changes in vocational rehabilitation regulations, including updated Rehabilitation Unit procedures and forms and making necessary amendments to the fee schedule for vocational rehabilitation services.

  • Add new Department of Industrial Relations regulations that will eliminate UEF and SIF benefits to noncitizens who do not meet the eligibility requirements to receive public assistance that is mandated by the federal Personal Responsibility and Work Opportunity Reconciliation Act of 1996. The regulations address the process and manner by which the UEF and SIF will obtain and verify the citizenship or immigration status of applicants for benefits.
  • The Los Angeles hearing will take place in the State Office Building at 107 S. Broadway, Room 1138. The San Francisco hearing will take place in the PUC Building at 505 Van Ness Ave., Auditorium. Both begin at 10 a.m. and last until 5 p.m. or conclusion of business.

    Medical Fee Schedules, Physician Reporting, and Utilization Review

    The second set of hearings will take place on Nov. 24 in San Francisco and Nov. 25 in Los Angeles.

    It will consider changes in fee schedules for medical services to injured workers, including hospital services for admitted patients, medical-legal evaluations, utilization review standards, and physician reporting requirements. In addition, amendments to regulations that pertain to workers' compensation referees will also be considered.

    The portion of the Official Medical Fee Schedule (OMFS) that applies to hospitals would be changed to provide a complete definition of "composite factors," an amendment that is necessary to comply with a settlement reached in recent litigation, according to Young. Changes in the hospital fee schedule should result in a decrease in hospital costs in the workers' compensation system, he said.

    Proposed amendments to the OMFS that apply to physicians and other medical providers would bring it up to date with current CPT codes and relative values. The only conversion factor to be changed is a proposed increase in evaluation and management services, from $7.15 to $8.50, Young said. In addition, contracts between payers and medical providers will be exempt from the OMFS.

    The Medical-Legal Fee Schedule would be changed in only two important respects: follow-up reports would be billed by time, instead of the current flat rate, and the number of "complexity factors" would be increased. The current relative value of $10 would not be changed, said Young.

    When all medical costs affected by these schedules are considered together, a small decrease in overall medical costs in the workers' compensation system is anticipated, said Young.

    In addition, changes in reporting regulations are proposed to consolidate and simplify reporting requirements, and changes in utilization review procedures are proposed to provide clear channels of communication between claims administrators and medical providers.

    The proposed regulatory changes that apply to workers' compensation referees primarily update and clarify the rules that pertain to Labor Code section 123.5(a), which prohibits a referee from receiving his or her salary while any cause before the referee remains pending and undetermined for ninety days or more after the case has been submitted for decision.

    The San Francisco hearings will take place at the Public Utilities Commission building auditorium at 505 Van Ness Ave. The Los Angeles hearings will be held at the State Office Building at 107 S. Broadway, Room 1138. Both hearings begin at 10 a.m. and last until 5 p.m. or the conclusion of business.

    Public Inspection

    Copies of the Statement of Reasons and proposed regulations, including the Official Medical Fee Schedule, are available for public inspection at four locations:

  • Division of Workers' Compensation headquarters at 45 Fremont St., Suite 3160, San Francisco;

  • Department of Industrial Relations Sacramento office at 1121 L St., Suite 307;

  • WCAB district office in Sacramento at 2424 Arden Way, Suite 230; and

  • WCAB district office in Los Angeles at 107 S. Broadway, Room 4107.
  • Hearing notices, which include all of the proposed regulations except for the OMFS, may also be downloaded from DWC website at http://www.dir.ca.gov (click on "workers' compensation," then on "Division of Workers' Compensation.") A copy of the proposed new OMFS may be obtained by calling the Division of Workers* Compensation at (415) 975-0700.

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    Download the hearing notice material for the Nov. 12/14 DWC hearings on audit and vocational rehabilitaiton regulations (.pdf, 371k)

    Download the hearing notice material for the Nov. 12/14 DIR hearings on UEF/SIF regulations (.pdf, 98k)

    Download the hearing notice material for the Nov. 24/25 hearings on referee regulations (.pdf, 59k)

    Download the hearing notice material for the Nov. 24/25 hearings on medical fees schedules, etc. (.pdf, 234k)

    Download the proposed regulations for the Nov. 24/25 hearings on medical fees schedules, etc. (not including the OMFS) (.pdf, 332k)