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Article 4. Evaluation Procedures
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§41.5. Conflicts of Interest by Medical Evaluators.

a) An evaluator shall not request or accept any compensation or other thing of value from any source that does or could create a conflict with his or her duties as an evaluator under the Labor Code or the regulations of the Administrative Director (Title 8 of the California Code of Regulations, Chapters 1 through 1.8, section 1 et seq) or of the Workers' Compensation Appeals Board (Title 8 of the California Code of Regulations, Chapters 1.9, sections 10600 through 10727) .

(b) A conflict with the duties of an evaluator as used in Labor Code section 139.2(o) means having a disqualifying conflict of interest with one or more of the persons or entities described in subdivision (c) and failing to disclose the fact of the conflict.

(c) The persons or entities with whom a disqualifying conflict of interest can exist are:

  (1) The injured worker, or his or her attorney;  

  (2) The employer, or the employer's attorney;  

  (3) The claims adjuster or insurer or third party administrator, or their attorney, respectively;  

  (4) Any primary treating physician or secondary physician for the employee, if the treatment provided by that physician is disputed in the case;  

  (5) The utilization review physician reviewer or expert reviewer, or utilization review organization, only if the opinion of that reviewer or that utilization review organization is disputed in the case;  

  (6) The surgical center in which the injured worker had, or is proposed to be used to have, surgery, only if the need for surgery is disputed in the case.  

  (7) Other purveyor of medical goods or medical services, only if the medical necessity for using such goods or services is in dispute in the case.  

(d) "Disqualifying Conflict of Interest" means the evaluator has any of the following relationships or interests with a person or entity listed in subdivision 41.5(c):

  (1) A familial relationship of parent, child, grandparent, grandchild, sibling, uncle, aunt, nephew, niece, spouse, financee or cohabitant;  

  (2) A significant disqualifying financial interest, as defined below, including:  

  (A) Employment or a promise of employment;  

  (B) An interest of five (5) % or more in the fair market value of any form of business entity involved in workers' compensation matters, or of private real property or personal property, or in a leasehold interest;  

  (C) Five (5) % or more of the evaluator's income is received from direct referrals by or from one or more contracts with a person or entity listed in subdivision 41.5(c), except that contracts for participation in a Medical Provider Network as defined under Labor Code section 4616 et seq shall be excluded;  

  (D) A financial interest as defined in Labor Code section 139.3 that would preclude referral by the evaluator to such a person or entity;  

  (E) A financial interest as defined under the Physician Ownership and Referral Act of 1993 (PORA) set out in Business and Professions Code sections 650.01 and 650.02 that would preclude referral by the evaluator to such a person or entity.  

  (3) A professional affiliation which means the evaluator performs services in the same medical group or other business entity comprised of medical evaluators who specialize in workers' compensation medical-legal evaluations;  

  (4) Any other relationship or interest not addressed by subdivisions (d)(1) through (d)(3) which would cause a person aware of the facts to reasonably entertain a doubt that the evaluator would be able to act with integrity and impartiality.  

(e) An Agreed Medical Evaluator or a Qualified Medical Evaluator may disqualify himself or herself on the basis of a conflict of interest pursuant to this section whenever the evaluator has a relationship with a person or entity in a specific case, including doctor-patient, familial, financial or professional, that causes the evaluator to decide it would be unethical to perform a comprehensive medical-legal evaluation examination or to write a report in the case.

(f) An Agreed Medical Evaluator or Qualified Medical Evaluator who knows, or should know, that he or she has a disqualifying conflict of interest with any person or entity listed in subdivision 41.5(c), that also is involved in the specific workers' compensation claim identified to the evaluator, shall send written notification to the injured worker and the claims administrator, or if none the employer, or their respective attorneys if any, within five (5) business days of the evaluator becoming aware of the conflict. The written notice shall include, at a minimum: 1) disclosure that a disqualifying conflict of interest exists; 2) the person or entity with whom the conflict arises; and 3) the category of conflict, such as familial, significant financial, or other type of ethical conflict. Whenever the evaluator declines to perform an evaluation due to disqualifying himself or herself pursuant to subdivision 41.5(e), the parties shall be entitled to a replacement QME or, in represented cases a replacement panel pursuant to section 31.5 of Title 8 of the California Code of Regulations. Whenever the evaluator notifies the parties of a conflict without stating that he or she declines to perform the evaluation, the parties shall follow the procedures set out in section 41.6 of Title 8 of the California Code of Regulations. In any case in which the injured worker is not represented by an attorney, the evaluator shall fax a copy of the notice of conflict to the Medical Unit of the Division of Workers' Compensation at the same time it is sent to the parties.

(g) Any injured worker or claims administrator or if none the employer, including his or her attorney respectively, who knows of, or becomes aware of, a potential disqualifying conflict of interest, as defined under this section, with a specific evaluator selected to perform a comprehensive medical/legal examination and report or a follow up examination and report, shall notify the selected evaluator in writing at the earliest opportunity and no later than within five (5) business days of becoming aware of the potential conflict, to enable the evaluator to determine whether the disqualifying conflict exists. The notice shall include the person with whom the alleged conflict exists and the nature of the conflict. A copy of this notice shall be served on the opposing party at the same time as it is sent to the evaluator. The evaluator shall review the information provided and advise the parties in writing within five (5) business days of receipt of the notice whether the evaluator has a conflict of interest as specified in this section.

     Note: Authority cited: Sections 133, 139.2(o) and 5307.3, Labor Code. Reference: Sections 139.2 and 139.3, Labor Code; and Sections 650.01 and 650.02, Business and Professions Code.  

1. New section filed 1-13-2009; operative 2-17-2009 (Register 2009, No. 3).

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