Chapter 4.5. Division of Workers' Compensation
Subchapter 1. Administrative Director--Administrative Rules
Article 4. Certification Standards for Health Care Organizations

§9771.1 Updating Applications.

(a) Every application submitted under Section 9771(e) shall be kept current to reflect accurately the actual operation of the HCO. An applicant or a certified HCO shall file an amendment to its application to show any change in any information contained in the application. Amendments include changes, deletions, additions and variations to the original application and its exhibits, including sample contracts. Amendments shall be filed as set forth in this section. However, the administrative director may approve an alternative form of submitting an amendment if it substantially accomplishes the purposes of this section.

(b) An original and one copy of an amendment shall be submitted to the administrative director as follows:

(1) Submit an Execution Page of the application, indicating it is an “Amendment to Pending Application” or “Amendment to Application of a Certified Organization”;

(2) Furnish only those pages of the application and/or those exhibits which are changed by the amendment.

(3) If a page of the application is amended, complete all items on that page and “redline” or otherwise clearly designated the changed item. At the lower left-hand corner of each page, type “Rev. [date]”, giving the effective date of the amendment.

(4) If an exhibit is being amended:

(A) Furnish the complete exhibit as amended, bearing the same number as the original exhibit, with the changed portions of the exhibit “redlined” or otherwise clearly designated, or

(B) Furnish the pages of the exhibit which are amended, each page to be marked with the exhibit number and the page number of the exhibit, and with the changed portions “redlined” or otherwise clearly designated. At the lower left-hand corner of each page, type “Rev. [date]”, giving the effective date of the amendment. If this method of amendment is employed, the applicant shall refile the entire exhibit as amended whenever more than 10 percent if its pages have been amended.

(c)(1) Except as provided in subsection (c)(2), amendments making material changes in the HCO’s application shall be submitted 30 days before the HCO proposes to implement the change. Material changes include, but are not limited to, a change in the geographical service area, an increase in projected enrollment, a reduction in the services provided to employers or injured workers, a change in the structure of reimbursements to providers, a change in the structural relationships between the medical director, fiscal or financial administrator, and executive officers and administrators, or a change in the method of medical decision-making, dispute resolution or quality assurance. If, in the opinion of the administrative director, a proposed change raises a question as to the ability of a certified HCO to meet the requirements of this article, the administrative director may, within 30 days of receiving the proposed amendment inform the HCO of the question. When the administrative director informs the HCO that a question exists, the HCO may not implement the proposed change. The HCO may submit whatever materials it deems appropriate to justify the amendment and may meet with the administrative director or staff to discuss the question. Within 30 days after informing the HCO of the question, the administrative director shall inform the HCO whether the amendment is approved or disapproved.

(2) In the event that it is impossible to submit a proposed material change in the application 30 days before the change is implemented, the applicant shall submit the change as soon as the applicant becomes aware that a change is required. If, in the opinion of the administrative director, the change or proposed changed raises a question as to the ability of a certified HCO to meet the requirements of this article, the administrative director may, within 30 days of receiving notice of the change inform the HCO of the question. When the administrative director informs the HCO that a question exists, the HCO may not implement the proposed change, or shall cease implementing the change. The HCO may submit whatever materials it deems appropriate to justify the amendment and may meet with the administrative director or staff to discuss the question. Within 30 days after informing the HCO of the question, the administrative director shall inform the HCO whether the amendment is approved or disapproved.

(d) Amendments making non-material changes shall be filed quarterly on dates specified by the administrative director. However, a list of providers need be amended only when 10 percent or more of the names contained in the list for a service area have been changed or when the sole or principal provider for a particular health care service in a service area is added or deleted. When amended, the complete list (or the list for the service area) shall be furnished following the instructions for the particular item, with each added “redlined” or otherwise clearly designated and the names of persons deleted from the list shown at the end under the heading “deletions.”

(e) Review of amendments submitted under section 9771.1, except quarterly updates under section 9771.1(e)(2), will be charged based on the actual cost for performing the review. The amount shall include the actual salaries or compensation paid to the persons reviewing amendment; the expenses incurred in the course thereof, and overhead costs in connection therewith as fixed by the Administrative Director. Overhead costs shall be based on the total expenditure for operating expenses and equipment, except travel, of the managed care unit of the Division of Workers' Compensation for the previous fiscal year. The invoice will be sent upon the completion of the review and shall be paid within 30 calendar days.

Note: Authority: Sections 133, 4600.5, 4600.7, 5307.3, Labor Code. Reference: Sections 4600.3, 4600.5, Labor Code.

HISTORY

1. New section filed 2-14-96; operative 2-14-96. Submitted to OAL for printing only pursuant to Government Code section 11351 (Register 96, No. 7).

2. Editorial correction restoring inadvertently omitted subsection (c)(1) (Register 2022, No. 40).