Bulletin 95-11
July 24, 1995

Utilization Review Regulations Adopted

The Administrative Director of the Division of Workers' Compensation has adopted regulations setting forth utilization review standards applicable to workers' compensation insurers and self-insured employers. Insurers and self-insured employers who opt to engage in case by case review of the medical treatment provided to injured employees in order to manage costs and improve care will have to comply with these standards no later than July 1, 1996.

The regulations provide a flexible framework for utilization review systems. Essentially, employers and insurers who implement or maintain a utilization review system will be required to have just three key components:

The regulations will apply to prospective requests for authorization of payment for treatment, and to a more limited extent to the review of bills for treatment which has been rendered. The regulations apply to bill review only to the extent that payment requests are denied or reduced because the services performed were not reasonably required to cure or relieve the injury; they will not apply to bill review for the purpose of ensuring that billings reflect the services actually rendered, or that bills conform to the Official Medical Fee Schedule.

Insurers and employers will have considerable flexibility in structuring a utilization review system to meet their needs. For example, either medical or non-medical personnel may be used to review cases, as long as appropriately developed medically-based criteria are used. The structure and extent of physician involvement may vary, as long as denial decisions are made only by physicians with appropriate training and experience. The regulations neither require nor prohibit an internal appeals process.

The regulations do not require insurers and self-insured employers to implement or maintain a utilization review system. However, if they do, they must: notify the administrative director upon implementation; maintain a brief description of the system; and meet the minimum utilization review standards. The Division of Workers' Compensation will maintain and make available to the public a list of those who have implemented a utilization review system.

These regulations are effective July 20, 1995, the date on which they were filed with the Secretary of State.