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Chapter 4.5. Division of Workers' Compensation
Subchapter 1. Administrative Director--Administrative Rules
Article 5.5.1. Utilization Review Standards
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§9792.12. Administrative Penalty Schedule for Utilization Review and Independent Medical Review Violations.

(a) Mandatory Utilization Review Administrative Penalties. Notwithstanding Labor Code section 129.5(c)(1) through (c)(3), the penalty amount that shall be assessed for each failure to comply with the utilization review process required by Labor Code section 4610, and sections 9792.6 through 9792.12 of Title 8 of the California Code of Regulations, is:

(1) For failure to establish a Labor Code section 4610 utilization review plan: $50,000;

(2) For failure to include all of the requirements of section 9792.7(a) in the utilization review plan: $5,000;

(3) For failure to file the utilization review plan or a letter in lieu of a utilization review plan with the Administrative Director as required by section 9792.7(c): $10,000;

(4) For failure to file a modified utilization review plan with the Administrative Director within 30 calendar days after the claims administrator makes a material modification to the plan as required by section 9792.7(c): $5,000;

(5) For failure to employ or designate a physician as a medical director, as defined in section 9792.6(l), of the utilization review process, as required by section 9792.7(b): $50,000;

(6) For issuance of a decision to modify or deny a request for authorization regarding a medical treatment, procedure, service or product where the requested treatment, procedure or service is not within the reviewer's scope of practice (as set forth by the reviewer's licensing board): $25,000;

(7) For failure to comply with the requirement that only a licensed physician may modify, delay, or deny requests for authorization of medical treatment for reasons of medical necessity to cure or relieve, except as provided for in Labor Code section 4604.5(c): $25,000;

(8) For failure of a non-physician reviewer (person other than a reviewer, expert reviewer or medical director as defined in section 9792.6 of Title 8 of the California Code of Regulations), who approves an amended request without documenting the amended request as provided under section 9792.7(b)(3) when a physician has voluntarily withdrawn a request in order to submit an amended request: $1,000;

(9) For failure to communicate the decision in response to a request for an expedited review, as defined in section 9792.6(g), in a timely fashion, as required by section 9792.9 and section 9792.9.1: $15,000;

(10) For failure to approve the request for authorization solely on the basis that the condition for which treatment was requested is not addressed by the medical treatment utilization schedule adopted pursuant to section 5307.27 of the Labor Code: $5,000;

(11) For failure to discuss or document attempts to discuss reasonable options for a care plan with the requesting physician as required by Labor Code section 4610(g)(3)(B), prior to denying authorization of or discontinuing medical care, in the case of concurrent review: $10,000;

(12) For failure to respond to a complete DWC Form RFA or other request for authorization accepted by a claims administrator under section 9792.9.1(c)(2) submitted by the injured employee's requesting treating physician, in the case of a non-expedited concurrent review: $ 2,000;

(13) For failure to respond to a complete DWC Form RFA or other request for authorization accepted by a claims administrator under section 9792.9.1(c)(2) submitted for authorization by the injured employee's requesting treating physician, in the case of a non-expedited prospective review: $ 1,000;

(14) For failure to respond to a complete DWC Form RFA or other request for authorization accepted by a claims administrator under section 9792.9.1(c)(2) submitted by the injured employee's requesting treating physician, in the case of a retrospective review: $ 500;

(15) For failure to disclose or otherwise to make available, if requested, the Utilization Review criteria or guidelines to the public, as required by Labor Code section 4610, subdivision (f)(5) and section 9792.7(d) of Title 8 of the California Code of Regulations: $100.

(16) For failure to timely serve the Administrative Director with documentation of compliance pursuant to section 9792.11(v)(5): $500.

(17) For failure to timely comply with any compliance requirement listed in the Final Report if no timely answer was filed or any compliance requirement listed in the Determination and Order after any and all appeals have become final: $500.

(b) Additional Utilization Review Penalties and Remediation.

(1) After conducting a Routine or Return Target Investigation, the Administrative Director, or his or her designee, shall calculate the investigation subject's performance rating based on its review of the randomly selected requests. The investigation subject's performance rating may also be calculated after conducting a Special Target Investigation. The performance rating will be calculated as follows:

(A) The factor for failure to make and/or provide a timely response to a request for authorization shall be determined by dividing the number of randomly selected requests with violations involving failure to make or provide a timely response to a request for authorization by the total number of randomly selected requests.

(B) The factor for notice(s) with faulty content shall be determined by dividing the number of requests involving notice(s) with faulty content by the total number of randomly selected requests.

(C) The factor for failure to issue notice(s) to all appropriate parties shall be determined by the number of requests involving the failure to issue notice(s) to all appropriate parties by the total number of randomly selected requests.

(D) The investigation subject's investigation performance rating will be determined by adding the factors calculated pursuant to subsections (b)(1)(A) through (b)(1)(C), dividing the total by three, subtracting from one, and multiplying by one-hundred.

(E) If the investigation subject's performance rating meets or exceeds eighty-five percent, the Administrative Director, or his or her designee, shall assess no penalties for the violations listed in this subdivision. If the performance rating is less than eighty-five percent, the violations shall be assessed as set forth below in (b)(2) through (b)(5):

(2) For the types of violations listed below in (b)(4) and (b)(5), each violation shall have a penalty amount, as specified of $100 in (b)(4) or $50 in (b)(5). The penalty amount specified in (b)(4) and (b)(5) shall be waived if the investigation subject's performance rating meets or exceeds eighty-five percent, or if following a Routine Investigation the claims administrator or utilization review organization agrees in writing to:

(A) Deliver to the Administrative Director, or his or her designee, within no more than thirty (30) calendar days from the date of the agreement or the number of days otherwise specified, written evidence, tendered with a declaration made under penalty of perjury, that explains or demonstrates how the violation has been abated in compliance with the applicable statute or regulations and the terms of abatement specified by the Administrative Director; and

(B) Grant the Administrative Director, or his or her designee, entry, upon request and within the time frame specified in the agreement, to the site at which the violation was found for a Return Target Investigation for the purpose of verifying compliance with the abatement measures reported in subdivision 9792.12(b)(1)(A) above and agree to a review of randomly selected requests for authorization; and

(C) Reinstatement of the penalty amount previously waived for each such instance, in the event the violative condition is not abated within the time period specified by the Administrative Director, or his or her designee, or in the event that such abatement measures are not consistent with abatement terms specified by the Administrative Director, or his or her designee.

(3) In the event the Administrative Director, or his or her designee, returns for a Return Target Investigation, after the initial violation has become final, and the subject fails to meet the performance standard of 85%, the amount of penalty shall be calculated as described below and in no event shall the penalty amount be waived:

(A) The penalty amount for each violation shall be multiplied by two for a second investigation, but in no event shall the total penalties for the violations exceed $100,000;

(B) The penalty amount for each violation shall be multiplied by five for a third investigation, but in no event shall the total penalties for the violations exceed $200,000;

(C) The penalty amount for each violation shall be multiplied by ten for a fourth investigation, but in no event shall the total penalties for the violations exceed $400,000.

(4) For each of the violations listed below, the penalty amount shall be $100.00 for each instance found by the Administrative Director, or his or her designee:

(A) For failure to immediately notify all parties in the manner described in section 9792.9(h)(2) and section 9792.9.1(f)(2) of the basis for extending the decision date for a request for medical treatment;

(B) For failure to document efforts to obtain information from the requesting party prior to issuing a denial of a request for authorization on the basis of lack of reasonable and necessary information;

(C) For failure to make a decision to approve or modify or deny the request for authorization, within five (5) working days of receipt of a complete DWC Form RFA or other request for authorization accepted by a claims administrator under section 9792.9.1(c)(2) submitted by the injured employee's requesting treating physician, or receipt of the requested information for prospective or concurrent review, and to communicate the decision as required by section 9792.9(h)(3) and section 9792.9.1(f)(3) and section 9792.9.1(f)(4);

(D) For failure to make and communicate a retrospective decision to approve, modify, or deny the request, within thirty (30) working days of receipt of a complete DWC Form RFA or other request for authorization accepted by a claims administrator under section 9792.9.1(c)(2) submitted by the injured employee's requesting treating physician, or receipt of the requested information, as required by section 9792.9(h)(4) and section 9792.9.1(e)(4), and (f)(6);

(E) Except as provided in subdivision (a), for failure to include in the written decision that modifies, delays or denies authorization, all of the items required by section 9792.9(k) and (l), and section 9792.9.1(e);

(F) For failure to disclose or otherwise to make available, if requested, the Utilization Review criteria or guidelines, to the injured employee whose case is under review, as required by Labor Code section 4610(f)(5) and section 9792.8(a)(3) Title 8 of the California Code of Regulations.

(5) For each of the violations listed below, the penalty amount shall be $50.00 for each instance found by the Administrative Director, or his or her designee:

(A) For failure by a non-physician or physician reviewer to timely notify the requesting physician, as required by section 9792.9(c)(2) or section 9792.9.1(f)(2), that additional information is needed in order to make a decision in compliance with the timeframes contained in section 9792.9(c) or section 9792.9.1(c);

(B) For failure to communicate the decision to approve to the requesting physician in the case of prospective or concurrent review, by phone or fax within 24 hours of the decision, as required by Labor Code section 4610(g)(3)(A) and in accordance with section 9792.9(c)(3) or section 9792.9.1(d)(2);

(C) For failure to send a written notice of the decision to modify, delay or deny to the requesting party, and to the injured employee and to his or her attorney if any, within twenty four (24) hours of making the decision for concurrent review, or within two business days for prospective review, as required by Labor Code section 4610(g)(3)(A) and section 9792.9(c)(4) or section 9792.9.1(e)(3);

(D) For failure to send a written notice of the decision in the case of retrospective review as required by section 9792.9(d) or section 9792.9.1(d)(3) and (e)(4) within thirty (30) days of receipt of the medical information that was reasonably necessary to make the determination;

(E) For failure to document that one of the following events occurred prior to the claims administrator providing written notice for delay under Labor Code section 4610(g)(5):

(1) the claims administrator had not received all of the information reasonably necessary and requested;

(2) the employer or claims administrator has requested a consultation by an expert reviewer;

(3) the physician reviewer has requested an additional examination or test be performed;

(F) Reserved.

(G) For failure to explain in writing the reason for delay as required by section 9792.9(h)(2) or section 9792.9.1(f)(2) of Title 8 of the California Code of Regulations when the decision to delay was made under one of the circumstances listed in section 9792.9(h)(1) or section 9792.9.1(f)(1).

(6) After the time to file an answer to the Order to Show Cause Re: Assessment of Administrative Penalties has elapsed and no answer has been filed or after any and all appeals have become final, the Administrative Director, or his or her designee, shall post on the website for the Division of Workers' Compensation the performance rating and summary of violations for each utilization review investigation.

(c) Independent Medical Review Administrative Penalties. Notwithstanding Labor Code section 129.5(c)(1) through (c)(3), the penalty amount that shall be assessed for each failure to comply with the independent medical review process required by Labor Code sections 4610.5 and 4610.6, and sections 9792.6 through 9792.10.8 of this Article is:

(1) For the failure to provide the Application for Independent Medical Review, DWC Form IMR, set forth at section 9792.10.2, with a written decision modifying, delaying, or denying a treatment authorization under sections 9792.9(l) or 9792.9.1: $2,000.

(2) For the failure to complete all applicable fields on the Application for Independent Medical Review, DWC Form IMR, set forth at section 9792.10.2, that is provided with a written decision modifying, delaying, or denying a treatment authorization under sections 9792.9(l) or 9792.9.1:

(A) $500 for a failure to provide the Employee Name, Address, Phone Number, and Date of Injury;

(B) $500 for a failure to provide the Requesting Physician Name, Address, Specialty, and Phone Number;

(C) $500 for a failure to provide the Claims Administrator Name, Adjustor/Contact Name, Address, and Phone Number;

(D) $500 for a failure to complete any field under the section heading “Disputed Medical Treatment;”

(E) $100 for a failure to provide any field not identified above.

(3) For the failure to include in a written decision modifying, delaying, or denying a treatment authorization under sections 9792.9(l) or 9792.9.1 a clear statement that advising the injured employee that any dispute shall be resolved in accordance with the independent medical review provisions of Labor Code section 4610.5 and 4610.6, and that an objection to the utilization review decision must be communicated by the injured worker, the injured worker's representative, or the injured worker's attorney on behalf of the injured worker on the Application for Independent Medical Review, DWC Form IMR, set forth at section 9792.10.2, within 30 days of service of the utilization review decision: $1,000.

(4) For the failure to include in a written decision modifying, delaying, or denying a treatment authorization under sections 9792.9(l) or 9792.9.1 a statement detailing the claims administrator's internal utilization review appeals process for the requesting physician, if any, and a statement that the internal appeals process is a voluntary process that neither triggers nor bars use of the dispute resolution procedures of Labor Code section 4610.5 and 4610.6, but may be pursued on an optional basis: $1,000.

(5) For the failure to timely provide information requested by the Administrative Director under section 9792.10.3(b): $500.00 for each day the response is untimely under section 9792.10.3(c), up to a maximum of $5,000.00.

(6) For the failure to timely provide all information required by section 9792.10.5(a) and (c): $500.00 for each day the response is untimely up to a maximum of $5,000.00.

(7) For the failure to authorize services found to be medically necessary by the independent medical review organization in the final determination issued under section 9792.10.6 within either five (5) business days of receipt of the determination, or sooner if appropriate for the employee's medical condition, or five (5) business days from the date the determination is final, if an appeal of the determination has been filed under Labor Code section 4610.6(h): $1,000.00 for each day up to a maximum of $5,000.00.

(8) For the failure to reimburse for services already rendered that has been found to be medically necessary by the independent medical review organization in the final determination issued under section 9792.10.6 within twenty (20) days after receipt of the final determination, or within twenty (20) days from the date the determination is final if an appeal of the determination has been filed under Labor Code section 4610.6(h), subject to resolution of any remaining issue of the amount of payment pursuant to Labor Code sections 4603.2 to 4603.6, inclusive: $500.00 for each day up to a maximum of $5,000.00

(9) For the failure to timely pay an invoice sent from the designated independent medical review organization under section 9792.10.8(c): $250.

(d) The Administrative Director, or his or her designee, may assess both an administrative penalty under either Labor Code sections 4610.5 and 4610.6, and a civil penalty under Labor Code section 129.5(e), based on the same violation(s).

(e) The penalty amounts specified for violations under this section may, in the discretion of the Administrative Director, be reduced after consideration of the factors set out in section 9792.13 of Title 8 of the California Code of Regulations. Failure to abate a violation found under section 9792.12(b)(4) and (b)(5), in the time period or in a manner consistent with that specified by the Administrative Director, or his or her designee, shall result in the assessment of the full original penalty amount proposed by the Administrative Director for that violation.

Note: Authority cited: Sections 133, 4610, 4610.5, 4610.6 and 5307.3, Labor Code. Reference: Sections 129, 129.5, 4062, 4600, 4600.4, 4604.5, 4610, 4610.5, 4610.6 and 4614, Labor Code.

HISTORY

1. New section filed 6-7-2007; operative 6-7-2007 pursuant to Government Code section 11343.4 (Register 2007, No. 23).

2. Amendment of section heading and subsections (a), (a)(7) and (a)(9), new subsections (a)-(18)-(25), amendment of subsections (b)(4)(A), (b)(4)(C)-(E), (b)(5)(A)-(B) and (b)(5)(D), repealer of subsection (b)(5)(E), subsection relettering, amendment of subsection (b)(5)(G) and amendment of Note filed 12-31-2012 as an emergency; operative 1-1-2013 pursuant to Government Code section 11346.1(d) (Register 2013, No. 1). A Certificate of Compliance must be transmitted to OAL by 7-1-2013 or emergency language will be repealed by operation of law on the following day.

3. Amendment of section heading and subsections (a), (a)(7) and (a)(9), new subsections (a)-(18)-(25), amendment of subsections (b)(4)(A), (b)(4)(C)-(E), (b)(5)(A)-(B) and (b)(5)(D), repealer of subsection (b)(5)(E), subsection relettering, amendment of newly designated subsection (b)(5)(F) and amendment of Note refiled 7-1-2013 as an emergency; operative 7-1-2013 (Register 2013, No. 27). A Certificate of Compliance must be transmitted to OAL by 9-30-2013 or emergency language will be repealed by operation of law on the following day.

4. Amendment of section heading and subsections (a), (a)(7) and (a)(9), new subsections (a)-(18)-(25), amendment of subsections (b)(4)(A), (b)(4)(C)-(E), (b)(5)(A)-(B) and (b)(5)(D), repealer of subsection (b)(5)(E), subsection relettering, amendment of newly designated subsection (b)(5)(F) and amendment of Note refiled 9-30-2013 as an emergency; operative 10-1-2013 (Register 2013, No. 40). A Certificate of Compliance must be transmitted to OAL by 12-30-2013 or emergency language will be repealed by operation of law on the following day.

5. Certificate of Compliance as to 9-30-2013 order, including amendment of section and Note, transmitted to OAL 12-30-2013 and filed 2-12-2014; amendments effective 2-12-2014 pursuant to Government Code section 11343.4(b)(3) (Register 2014, No. 7).