Existing law establishes a workers compensation system, administered by the Administrative Director of the Division of Workers Compensation, to compensate an employee for injuries sustained in the course of his or her employment. Existing law requires every employer to establish a utilization review process, as described, and establishes an independent medical review process to resolve disputes over a utilization review decision, as specified. Existing law requires that aggregate disability payments for a single injury occurring on or after certain dates be limited, as provided.

This bill would require that if a denial of treatment requested by a treating physician is subsequently overturned by independent medical review or by the Workers Compensation Appeals Board, any temporary disability paid or owing from the date of the denial until the treatment is authorized would not be included in the calculation of the aggregate disability payments.

Date of Hearing: April 19, 2017

ASSEMBLY COMMITTEE ON INSURANCE

Tom Daly, Chair

ABPCA Bill Id:AB 1295 (

Author:Chu) – As Introduced Ver:February 17, 2017

SUBJECT: Workers’ compensation: aggregate disability payments

SUMMARY: Extends the potential duration of temporary disability (TD) payments in the event an injured worker prevails at independent medical review (IMR). Specifically, this bill:

1. Provides that if a utilization review (UR) denial of treatment recommended by a treating physician for an injured worker is overturned by IMR, any TD benefits paid or owing to the injured worker from the date of the UR denial until the date of the IMR decision shall not be used in calculating aggregate TD for which the injured worker is eligible.

EXISTING LAW:

1. Establishes a comprehensive system to provide benefits, including medical treatment and TD payments, to employees who are injured or suffer conditions that arise out of or in the course of employment.
2. Provides that an employer (or the employer’s insurer) can challenge the appropriateness of medical treatment recommended by a treating physician through UR, a system whereby physicians with comparable expertise to the treating provider apply nationally recognized, peer-reviewed, evidence-based medical guidelines to determine whether the recommended treatment is appropriate. This is the only means by which an employer can say “no” to medical treatment recommended for an injured worker.
3. Establishes the IMR system that operates as the employee’s appeal of a UR denial. The IMR system is operated by a vendor selected and regulated by the Division of Workers’ Compensation (DWC), and its review is conducted by qualified medical professionals. In most circumstances, a determination by IMR is final and binding on the parties.
4. Provides that an injured worker is entitled to up to 104 weeks of TD benefits in a 5-year period following a work-related injury. TD benefits are designed to approximate the injured worker’s take home pay, subject to a cap that is currently a little under $1100 per week.

FISCAL EFFECT: Undetermined.

COMMENTS:

1. Purpose. According to the author, “[i]t is inequitable for TD benefits to be exhausted simply because necessary treatment was erroneously or unreasonably denied, and the denial delayed the injured worker’s recovery and return to work.” The bill is designed to remedy this inequity.
2. Background. As the author correctly notes, the data shows that 96% of all treatment recommended by treating physicians is approved prior to IMR, and that 90% of the denials made at the UR stage are upheld by IMR. As a result, the number of cases where there are IMR reversals are relatively few. And the small percentage of these reversals where that injured worker is likely to exhaust the full 104 weeks of TD makes the population of injured workers who might benefit from the bill small. Even so, tangible anecdotes and hard data have not been provided that shows more than the theoretical possibility that recovery and return to work are actually delayed by erroneous UR denials.
3. Does a UR denial correlate with a delayed recovery? The bill’s underlying premise is that a UR denial that is reversed by IMR necessarily establishes that the injured worker’s recovery and ultimate return to work has been delayed. However, there is no data that establishes this as fact, and a review of typical IMR cases suggest that it may not always be true. For example, a large percentage of IMR cases involve medications, and frequently the issue is NOT whether to provide, or not provide, a medication. Rather, a common point of contention is whether a medication regimen should be 30, 60, or 90 days without follow-up. Opioid treatments often fall into this category, and modern evidence-based medical guidelines suggest that no more than a 30 day prescription be issued without a new office visit and re-evaluation. There is no reason to believe that a challenge to a 90-day prescription that was denied by UR in any way delayed that injured worker’s recovery or return to work. In fact, opponents argue that in the vast majority of cases, there is no correlation between disputes about what type of care and delayed recovery. They assert that there are few cases in the IMR system that involve a complete denial of care.
4. Is additional UR reform appropriate? Last year, the Legislature enacted and the Governor signed a substantial piece of legislation that labor and employer representatives negotiated with the assistance of the Administration. SB 1160 balanced issues favorable to injured workers with issues favorable to employers, including significant reforms of the UR system. This balance achieved a relatively high degree of consensus, and there was at least a tacit understanding that further UR changes would not be undertaken until SB 1160’s UR reforms have been fully implemented and the results analyzed. That implementation and analysis has yet to occur.

REGISTERED SUPPORT / OPPOSITION:

Support

California Applicants' Attorneys Association (CAAA) (Sponsor)

Pace Officers Research Association of California (PORAC)

Opposition

Acclamation Insurance Management Services (AIMS)

Allied Managed Care (AMC)

American Insurance Association

Association of California Healthcare Districts

Association of California Insurance Companies

California Association of Joint Powers Association

California Chamber of Commerce

California Coalition on Workers' Compensation

California Manufacturers & Technology Association

California Special Districts Association

California State Association of Counties

CSAC Excess Insurance Authority

National Federation of Independent Business

Analysis Prepared by: Mark Rakich / INS. /