DWC Publishes 1995 Audit Results

Bulletin 97-3 (attachment)
January 3, 1997

STATE OF CALIFORNIA
DEPARTMENT OF INDUSTRIAL RELATIONS
DIVISION OF WORKERS' COMPENSATION
P.O. Box 420603
San Francisco, CA 94142

SUMMARY OF REGULATIONS ADOPTED, AMENDED, AND REPEALED
BY THE ADMINISTRATIVE DIRECTOR IN DECEMBER 1996

The following is a brief summary of regulations in Title 8, California Code of Regulations that have been adopted, amended, or repealed by Administrative Director Casey L. Young in December of 1996.

Employer's Petition for Order Requiring Employee to Select Employer-Designated Physician: Section 9786

(Amendment Adopted and Effective 12/27/96)

Section 9786 was amended to clarify that the administrative director has authority to extend the time for decision of a petition for a period of 30 days; the prior language erroneously made it appear that the time could only be extended where the administrative director was attempting informal adjustment of the dispute.

Former section 9786(g) was deleted to remove the provision that a petition would be "deemed denied" if the administrative director did not act on the petition within 45 days of receipt.

Vocational Rehabilitation, Sections 10001 - 10020, 10131, 10131.1, 10133.4

(Amendments Adopted and Effective 12/27/96)

Sections 10001 - 10020, which concern vocational rehabilitation, have been repealed as redundant and obsolete since, for the most part, the same subject matter is covered in Sections 10122 through 10133.2. A few provisions relating to forms for injuries prior to 1/1/90 were not already covered by Sections 10122 through 10133.2. Therefore amendments have been made to Section 10131 (termination of vocational rehabilitation services) and Section 10131.1 (declination of rehabilitation) to specify the forms to be used for pre-1/1/90 injuries.

Section 10021 relating to rehabilitation of industrially injured inmates is renumbered as Section 10133.4. In addition,cross-references are updated to conform to the current section numbers and the term "vocational rehabilitation maintenance allowance" is substituted for "vocational rehabilitation temporary disability indemnity".

Collective Bargaining Agreements Under Labor Code Section 3201.5: Section 10203

(Amendments Adopted and Effective 12/27/96)

Revisions have been made to Section 10203, pertaining to construction industry programs authorized by Labor Code section 3201.5 to require annual reporting of specified data. These revisions were made to conform to a 1995 statutory amendment to Labor Code Section 3201.5 which requires annual reporting.

Permanent Disability Rating , Sections 9732 - 9766, 10154, 10167, 10168

( Amendments Adopted and Effective 12/27/96)

Sections 9732 through 9766 relating to Permanent Disability Ratings and Evaluations have been repealed as redundant and obsolete since, for the most part, the same subject matter is covered in Sections 10150 through 10168. However former Sections 9738(c) and 9742, which concerned informal rating determinations were not covered by Sections 10150 through 10168. Therefore, Sections 10154 and 10168 have been amended and Section 10167 has been adopted to retain DEU's authority to issue informal ratings.

Interpreter's Fee Schedule, Sections 9795.1 - 9795.4

(Amendments Adopted 12/30/96, Revised Fee Schedule Effective for Services on or after 4/1/97))

The amendments to the interpreter's fee schedule were adopted on 12/30/96, but will apply to services rendered on or after April 1,1997."

The regulations eliminate the distinction between Spanish and "other than Spanish", therefore the definition of "Other than Spanish" is deleted from Section 9795.1(g).

Section 9795.3(b)(1) pertaining to Fees for Interpreter Services is amended to provide that fees for appeals board hearings, arbitrations, depositions, or formal rehabilitation conferences are to be billed and paid at the greater of: the half-day or full-day rate as set forth in the Superior Court fee schedule in the county where the service was provided, or at the market rate. Section 9795.3(b)(2) provides that for events listed in subsection (a) of section 9795.3 other than hearings, arbitrations, depositions or rehabilitation conferences, such as medical evaluations, the fees shall be billed and paid at the greater of: the rate of $11.25 per quarter hour or portion thereof, with a minimum two hour payment, or the market rate.

In order to establish the market rate, the interpreter shall submit documentation to the claims administrator, including a list of recent similar services performed and the amounts paid for those services. Section 9795.3(b)(1),(2).

Section 9795.3(d) was amended to clarify that an interpreter may be paid fees different than those set forth in the schedule so long as the agreement is made between the interpreter and claims administrator in advance of the rendering of the services.

Schedule for Rating Permanent Disabilities, Section 10151

(Adopted 12/30/96, Rating Schedule Effective for Injuries on or after 4/1/97)

Section 10151 has been added in order to formally incorporate the revised Schedule for Rating Permanent Disabilities into Title 8 of the California Code of Regulations.

Revisions and additions have been made to the Schedule for Rating Permanent Disabilities which overhaul the sections dealing with the occupation and age adjustments; schedule some commonly used ratings that were previously unscheduled; eliminate archaic, unused provisions; and add extensive instructions, examples, and other guidance in the proper use of the schedule. The revised Schedule for Rating Permanent Disabilities will apply to injuries occurring on or after April 1, 1997. Highlights of the changes include the following:

o Expansion of Instructions: In order to provide more help to users of the Schedule additional information about rating principles, with examples, are given to assist in understanding the rating process.

o Occupational Title and Group Changes: About half the 1800 occupations in the schedule have been removed and replaced with contemporary occupations. The occupational titles have been arrayed in a new occupational grouping structure based largely on information in the federal Dictionary of Occupational Titles about the strength and other physical requirements to perform the occupations.

o Reduction in Number of Occupational Variants: In an attempt to reduce the most extreme affects of occupation on disability ratings, the number of possible variants was reduced from 12 to 8 (previously "A" through "L", now "C" through "J".) Few disability/occupation combinations were assigned the letters which are eliminated. o Consolidation of Age Groupings: In order to simplify the rating process the age modification chart was redesigned to group ages in 5 year increments rather than 2 year increments.

o Rounding Disability Percentages to Whole Numbers: To further simplify the appearance of formulas and the mathematical calculations required to perform ratings, disability ratings will now be calculated to the whole number.

o Renumbering and Rearrangement of Disabilities: To simplify, modernize and clarify disabilities listed in the Schedule, several disability sections were reorganized and renumbered. In many cases renumbering was necessary to produce sequential numbers. In other cases, disabilities were assigned numbers that provide information about the nature of the disability. The substance of the disability, including the standard rating, was not changed.

o Work Capacity Guideline for Lower Extremity Disabilities: A new set of lower extremity guidelines is added incorporating the two current scheduled benchmarks in the "Guidelines For Work Capacity" and unscheduled values commonly given for lower level disabilities.

o Loss of Near Vision:: The vision section was enhanced by the addition of loss of near vision to bring consistency to an area previously rated on a non-scheduled basis.

o Additional Guidelines for Spine and Torso Disabilities: Two intermediate disability levels are added to the Guidelines For Work Capacity, which are renamed the Spine and Torso Guidelines to better reflect their use.

o Preclusion From Emotional Stress: The common unscheduled value of 20% for disability which precludes an employee from emotional stress is added to the schedule.

o Preclusion From Dust and Fumes: The common unscheduled value of 10% for a preclusion from working in environments with exposure to dust and fumes is added to the schedule.

o Wet Work and Outside Work: The common unscheduled value of 25% for preclusion from wet or outside work is added to the schedule.

o Finger Disabilities: The provisions governing the rating of finger disabilities are simplified and made consistent with current rating practices.

o Outdated Disability Descriptions: In several areas, outdated disabilities or descriptions of disabilities have been eliminated or revised to account for advances in medical science and terminology. For example, the title "mental deterioration" has been replaced with "cognitive disorders," and "immobility of one knee joint in 90 degrees flexion," which is no longer seen because of medical advances, is removed from the schedule.

o New and Expanded Tables: New and expanded tables are added to the schedule to assist in rating several disabilities, including vision, jaw, shoulder, hip, thigh, calf, and knee.

Schedule for Inpatient Hospital Services, Sections 9790.1 , 9792.1

(Amendments Adopted 12/31/96, Inpatient Hospital Fee Schedule Effective for Admissions on or after 4/1/97)

This newly adopted schedule for inpatient hospital services applies to hospital admissions on or after April 1, 1997.

The schedule is based on the federal Medicare model of "diagnosis related groups" (DRG's). Each DRG carries a specified ratio to be used in calculating reimbursement. For the 48 diagnosis related groups that are most common in the workers' compensation population, the schedule provides "revised diagnosis related group weights" which reflect the different resource usage between workers' compensation and the Medicare population.

A "composite factor" is calculated for each hospital in California. These factors are based on Medicare operating and capital costs, and carry out the statutory directive that the inpatient fee schedule take into consideration "cost and service differentials for various types of facilities." (Labor Code Section 5307.1.)

Section 9792.1(a) provides that maximum reimbursement for a hospital admission is determined by multiplying the DRG weight (or revised DRG weight if applicable) by the hospital's composite factor, then multiplying by 1.20.

There are certain exemptions from the maximum fee schedule: admissions where there is an agreement fixing the amounts to be paid between the hospital and the employer/insurer, inpatient admissions where the length of stay exceeds the specified Medicare "day outlier threshold", inpatient services for certain diagnoses - psychiatry, substance abuse, organ transplants, rehabilitation, tracheostomies, burns; inpatient services by Level I or II trauma centers for life threatening or urgent injury, out-of-state hospitals, durable medical equipment for use at home. (Section 9792.1(b).)

Where a patient is transferred from one hospital to another, the transferring hospital has a maximum reimbursement based on a per diem calculated by dividing the maximum reimbursement for the DRG by the average length of stay for that DRG. Maximum reimbursement for the receiving hospital is determined by the usual calculations provided in Section 9792.1(a).

Annually, on or before November 15, the administrative director will make available the composite factors for each hospital, the day outlier threshold for each DRG, and the average length of stay for each DRG for use during the following calendar year.

###

SUMMARY OF REGULATIONS ADOPTED, AMENDED, AND REPEALED BY THE ADMINISTRATIVE DIRECTOR IN DECEMBER 1996

SUMMARY OF REGULATIONS ADOPTED, AMENDED, AND REPEALED
BY THE ADMINISTRATIVE DIRECTOR IN DECEMBER 1996