February 26, 2016

Did we already lose you? It’s admittedly on the more wonky side of California’s workers’ compensation policy.

The Legislature went through another long, tedious workers’ compensation system reform process back in 2012 − affectionately known as SB 863 if you’re particularly affectionate about workers’ comp. CSAC supported SB 863’s promise to deliver fair and timely benefits to public employees while reducing the administrative and financial hurdles faced by counties as employers, and has worked to uphold its intent since Governor Brown signed it.

SB 863 included several new provisions, including utilization review (UR) (request for medical treatment must go through a UR process to confirm that it is medically necessary before it is approved – your county or your county’s claims administrator has a UR plan in place as required by law), higher lien filing fees, new fee schedules for copy services, interpreters, home health care and others, and a whole host of other provisions that purported to lessen the debilitating migraine that the entire system had become.

But is it working? The California Department of Industrial Relations (DIR) is trying to figure that out and has tasked the Rand Center with evaluating the impact of the SB 863 medical provisions (specifically the medical necessity dispute resolution process, fee schedule issues and required reports). While Rand’s analysis is ongoing, it delivered an interim report on utilization review last week to the Commission on Health, Safety and Workers’ Compensation (CHSWC) – a joint labor-management body created in 1993 to examine the health and safety and workers’ compensation systems in California – and recommend administrative or legislative modifications to improve their operation.

Utilization review is a component of SB 863-created medical necessity dispute resolution process. Specifically, after the treating physical submits a request for authorization for medical treatment and that request is denied, modified or delayed after utilization review, SB 863 created what the Legislature believed would be an efficient, fast way to resolve the dispute. This is known as “Independent Medical Review (IMR),” wherein the injured worker can ask for a review of that decision by an independent, qualified physician.

After conducting reviews of various UR plans in the state and in states that have both UR and treatment guidelines, the Rand Center set out to identify best practices, as well as estimates of UR denial rates. Their interim report (their full evaluation of SB 863’s medical provisions is forthcoming) included the following recommendations for improved efficiency  after finding that UR practices vary widely and the implementation of IMR has led to increased administrative burden upon providers:

A revamp of the performance measures for utilization review organizations used by the California Division of Workers’ Compensation.

• Creation of additional standards for utilization review organizations.
• Not requiring low-cost and low-risk medical services to go through utilization review.
• Allowing the electronic submittal and processing of the requests for authorization.

Stay tuned for further reports from the Rand Center on this issue. (Are you still awake?)