AB 1422: Workers’ compensation insurance: fraud.
- Session Year: 2017-2018
- House: Assembly
- Latest Version Date: 2017-09-26
Existing law governing workers compensation requires a lien filed by or on behalf of a physician or provider of medical treatment services or medical-legal services, and any accrual of interest related to the lien, to be automatically stayed upon the filing of criminal charges against that physician or provider for an offense involving fraud against the workers compensation system, medical billing fraud, insurance fraud, or fraud against the Medicare or Medi-Cal programs. Existing law makes the stay effective from the time of the filing of the charges until the disposition of the criminal proceedings.
This bill, among other things, would revise and recast these provisions to require the liens of a physician, practitioner, or provider and the liens of an entity controlled by a physician, practitioner, or provider who has been charged with specified crimes involving the federal Medicare or Medicaid programs, the Medi-Cal program, or the workers compensation system to be automatically stayed, along with any interest accruing, until disposition of the criminal proceedings, except as provided. The bill would also provide that upon conviction of a physician, practitioner, or provider of those specified crimes the automatic stay would be required to remain in effect for any liens not dismissed, as specified, until the commencement of lien consolidation procedures, as provided. The Administrative Director of the Workers Compensation System would be authorized to adopt regulations to implement these provisions.
Existing law requires the administrative director to promptly suspend any physician, practitioner, or provider from participating in the workers compensation system as a physician, practitioner, or provider if the individual or entity has been convicted of certain crimes, including crimes involving fraud or abuse of the Medi-Cal program, Medicare program, or workers compensation system, or fraud or abuse of any patient, or if the individual or entity has been suspended, due to fraud or abuse, from the federal Medicare or Medicaid programs or the individuals license, certificate, or approval to provide health care has been surrendered or revoked. Existing law establishes procedures for the adjudication of any liens of a physician, practitioner, or provider who is suspended pursuant to this provision.
This bill, among other things, would provide that an entity would be subject to suspension as described above if it is controlled, as defined, by an individual who has been convicted of the specified crimes. The bill would specify that the suspension requirements also apply to crimes involving fraud or abuse of the federal Medicaid program and financial crimes that relate to the federal Medicaid program. The bill would authorize the administrative director to adopt regulations specifying any exemptions that would not serve as a basis for exclusion under these provisions.
This bill would also make conforming changes.
Existing law governing workers compensation requires a lien filed by or on behalf of a physician or provider of medical treatment services or medical-legal services, and any accrual of interest related to the lien, to be automatically stayed upon the filing of criminal charges against that physician or provider for an offense involving fraud against the workers compensation system, medical billing fraud, insurance fraud, or fraud against the Medicare or Medi-Cal programs. Existing law makes the stay effective from the time of the filing of the charges until the disposition of the criminal proceedings.
This bill, among other things, would revise and recast these provisions to require the liens of a physician, practitioner, or provider and the liens of an entity controlled by a physician, practitioner, or provider who has been charged with specified crimes involving the federal Medicare or Medicaid programs, the Medi-Cal program, or the workers compensation system to be automatically stayed, along with any interest accruing, until disposition of the criminal proceedings, except as provided. The bill would also provide that upon conviction of a physician, practitioner, or provider of those specified crimes the automatic stay would be required to remain in effect for any liens not dismissed, as specified, until the commencement of lien consolidation procedures, as provided. The Administrative Director of the Workers Compensation System would be authorized to adopt regulations to implement these provisions.
Existing law requires the administrative director to promptly suspend any physician, practitioner, or provider from participating in the workers compensation system as a physician, practitioner, or provider if the individual or entity has been convicted of certain crimes, including crimes involving fraud or abuse of the Medi-Cal program, Medicare program, or workers compensation system, or fraud or abuse of any patient, or if the individual or entity has been suspended, due to fraud or abuse, from the federal Medicare or Medicaid programs or the individuals license, certificate, or approval to provide health care has been surrendered or revoked. Existing law establishes procedures for the adjudication of any liens of a physician, practitioner, or provider who is suspended pursuant to this provision.
This bill, among other things, would provide that an entity would be subject to suspension as described above if it is controlled, as defined, by an individual who has been convicted of the specified crimes. The bill would specify that the suspension requirements also apply to crimes involving fraud or abuse of the federal Medicaid program and financial crimes that relate to the federal Medicaid program. The bill would authorize the administrative director to adopt regulations specifying any exemptions that would not serve as a basis for exclusion under these provisions.
This bill would also make conforming changes.
Existing law governing workers compensation requires a lien filed by or on behalf of a physician or provider of medical treatment services or medical-legal services, and any accrual of interest related to the lien, to be automatically stayed upon the filing of criminal charges against that physician or provider for an offense involving fraud against the workers compensation system, medical billing fraud, insurance fraud, or fraud against the Medicare or Medi-Cal programs. Existing law makes the stay effective from the time of the filing of the charges until the disposition of the criminal proceedings.
This bill, among other things, would revise and recast these provisions to require the liens of a physician, practitioner, or provider and the liens of an entity controlled by a physician, practitioner, or provider who has been charged with specified crimes involving the federal Medicare or Medicaid programs, the Medi-Cal program, or the workers compensation system to be automatically stayed, along with any interest accruing, until disposition of the criminal proceedings, except as provided. The bill would also provide that upon conviction of a physician, practitioner, or provider of those specified crimes the automatic stay would be required to remain in effect for any liens not dismissed, as specified, until the commencement of lien consolidation procedures, as provided. The Administrative Director of the Workers Compensation System would be authorized to adopt regulations to implement these provisions.
Existing law requires the administrative director to promptly suspend any physician, practitioner, or provider from participating in the workers compensation system as a physician, practitioner, or provider if the individual or entity has been convicted of certain crimes, including crimes involving fraud or abuse of the Medi-Cal program, Medicare program, or workers compensation system, or fraud or abuse of any patient, or if the individual or entity has been suspended, due to fraud or abuse, from the federal Medicare or Medicaid programs or the individuals license, certificate, or approval to provide health care has been surrendered or revoked. Existing law establishes procedures for the adjudication of any liens of a physician, practitioner, or provider who is suspended pursuant to this provision.
This bill, among other things, would provide that an entity would be subject to suspension as described above if it is controlled, as defined, by an individual who has been convicted of the specified crimes. The bill would specify that the suspension requirements also apply to crimes involving fraud or abuse of the federal Medicaid program and financial crimes that relate to the federal Medicaid program. The bill would authorize the administrative director to adopt regulations specifying any exemptions that would not serve as a basis for exclusion under these provisions.
This bill would also make conforming changes.
Existing law governing workers compensation requires a lien filed by or on behalf of a physician or provider of medical treatment services or medical-legal services, and any accrual of interest related to the lien, to be automatically stayed upon the filing of criminal charges against that physician or provider for an offense involving fraud against the workers compensation system, medical billing fraud, insurance fraud, or fraud against the Medicare or Medi-Cal programs. Existing law makes the stay effective from the time of the filing of the charges until the disposition of the criminal proceedings.
This bill, among other things, would revise and recast these provisions to require the liens of a physician, practitioner, or provider and the liens of an entity controlled by a physician, practitioner, or provider who has been charged with specified crimes involving the federal Medicare or Medicaid programs, the Medi-Cal program, or the workers compensation system to be automatically stayed, along with any interest accruing, until disposition of the criminal proceedings, except as provided. The bill would also provide that upon conviction of a physician, practitioner, or provider of those specified crimes the automatic stay would be required to remain in effect for any liens not dismissed, as specified, until the commencement of lien consolidation procedures, as provided. The Administrative Director of the Workers Compensation System would be authorized to adopt regulations to implement these provisions.
Existing law requires the Administrative Director of the Workers Compensation System administrative director to promptly suspend any physician, practitioner, or provider from participating in the workers compensation system as a physician, practitioner, or provider if the individual or entity has been convicted of certain crimes, including crimes involving fraud or abuse of the Medi-Cal program, Medicare program, or workers compensation system, or fraud or abuse of any patient, or if the individual or entity has been suspended, due to fraud or abuse, from the federal Medicare or Medicaid programs or the individuals license, certificate, or approval to provide health care has been surrendered or revoked. Existing law establishes procedures for the adjudication of any liens of a physician, practitioner, or provider who is suspended pursuant to this provision.
This bill would, in the event the criminal proceeding resulted in a conviction, additionally require the stay to remain in effect from the date of the conviction until the adjudication procedures described above have been completed.This bill, among other things, would provide that an entity would be subject to suspension as described above if it is controlled, as defined, by an individual who has been convicted of the specified crimes. The bill would specify that the suspension requirements also apply to crimes involving fraud or abuse of the federal Medicaid program and financial crimes that relate to the federal Medicaid program. The bill would authorize the administrative director to adopt regulations specifying any exemptions that would not serve as a basis for exclusion under these provisions.
This bill would also make conforming changes.
Existing law governing workers compensation requires a lien filed by or on behalf of a physician or provider of medical treatment services or medical-legal services, and any accrual of interest related to the lien, to be automatically stayed upon the filing of criminal charges against that physician or provider for an offense involving fraud against the workers compensation system, medical billing fraud, insurance fraud, or fraud against the Medicare or Medi-Cal programs. Existing law makes the stay effective from the time of the filing of the charges until the disposition of the criminal proceedings.
Existing law requires the Administrative Director of the Workers Compensation System to promptly suspend any physician, practitioner, or provider from participating in the workers compensation system as a physician, practitioner, or provider if the individual or entity has been convicted of certain crimes, including crimes involving fraud or abuse of the Medi-Cal program, Medicare program, or workers compensation system, or fraud or abuse of any patient, or if the individual or entity has been suspended, due to fraud or abuse, from the federal Medicare or Medicaid programs or the individuals license, certificate, or approval to provide health care has been surrendered or revoked. Existing law establishes procedures for the adjudication of any liens of a physician, practitioner, or provider who is suspended pursuant to this provision.
This bill would instead make the automatic stay effective would, in the event the criminal proceeding resulted in a conviction, additionally require the stay to remain in effect from the date of the conviction until the adjudication procedures described above have been completed.
Existing law governing workers compensation requires a lien filed by or on behalf of a physician or provider of medical treatment services or medical-legal services, and any accrual of interest related to the lien, to be automatically stayed upon the filing of criminal charges against that physician or provider for an offense involving fraud against the workers compensation system, medical billing fraud, insurance fraud, or fraud against the Medicare or Medi-Cal programs. Existing law makes the stay effective from the time of the filing of the charges until the disposition of the criminal proceedings.
Existing law requires the Administrative Director of the Workers Compensation System to promptly suspend any physician, practitioner, or provider from participating in the workers compensation system as a physician, practitioner, or provider if the individual or entity has been convicted of certain crimes, including crimes involving fraud or abuse of the Medi-Cal program, Medicare program, or workers compensation system, or fraud or abuse of any patient, or if the individual or entity has been suspended, due to fraud or abuse, from the federal Medicare or Medicaid programs or the individuals license, certificate, or approval to provide health care has been surrendered or revoked. Existing law establishes procedures for the adjudication of any liens of a physician, practitioner, or provider who is suspended pursuant to this provision.
This bill would instead make the automatic stay effective until the adjudication procedures described above have been completed.
Existing law creates the Fraud Division, within the Department of Insurance, to administer provisions related to insurance fraud. Existing law requires the Insurance Commissioner to ensure that the Fraud Division aggressively pursues all reported incidents of probable workers compensation fraud, and forwards to the appropriate disciplinary body the names, along with all supporting evidence, of any individuals holding professional licenses who are suspected of actively engaging in fraudulent activity. Existing law provides for an assessment on employers, in an amount determined by the Fraud Assessment Commission and collected by the Director of Industrial Relations, in order to fund increased investigation and prosecution of workers compensation fraud and of willful failure to secure payment of workers compensation. The Fraud Assessment Commission is required to consider the advice and recommendations of the Fraud Division and the commissioner in determining the aggregate amount of the assessment.This bill would require the Fraud Assessment Commission to additionally consider the advice and recommendations of the Director of Industrial Relations in determining the aggregate amount of the assessment. The bill would also delete obsolete provisions.Existing law creates the Fraud Division, within the Department of Insurance, to administer provisions related to insurance fraud. Existing law requires the Insurance Commissioner to ensure that the Fraud Division aggressively pursues all reported incidents of probable workers compensation fraud, and forwards to the appropriate disciplinary body the names, along with all supporting evidence, of any individuals holding professional licenses who are suspected of actively engaging in fraudulent activity. Existing law provides for an assessment on employers, in an amount determined by the Fraud Assessment Commission and collected by the Director of Industrial Relations, in order to fund increased investigation and prosecution of workers compensation fraud and of willful failure to secure payment of workers compensation. The Fraud Assessment Commission is required to consider the advice and recommendations of the Fraud Division and the commissioner in determining the aggregate amount of the assessment.
This bill would require the Fraud Assessment Commission to additionally consider the advice and recommendations of the Director of Industrial Relations in determining the aggregate amount of the assessment. The bill would also delete obsolete provisions.
(a)(1)The administrative director shall promptly suspend, pursuant to subdivision (b), any physician, practitioner, or provider from participating in the workers compensation system as a physician, practitioner, or provider if the individual or entity meets any of the following criteria:
(A)The individual or entity has been convicted of any felony or misdemeanor and that crime comes within any of the following descriptions:
(i)It involves fraud or abuse of the federal Medicare or Medicaid programs, the Medi-Cal program, or the workers compensation system, or fraud or abuse of any patient.
(ii)It relates to the conduct of the individuals medical practice as it pertains to patient care.
(iii)It is a financial crime that relates to the federal Medicare or Medicaid programs, the Medi-Cal program, or the workers compensation system.
(iv)It is otherwise substantially related to the qualifications, functions, or duties of a provider of services.
(B)The individual or entity has been suspended, due to fraud or abuse, from the federal Medicare or Medicaid programs or the Medi-Cal program.
(C)The individuals license, certificate, or approval to provide health care has been surrendered or revoked.
(D)The entity is controlled by an individual who has been convicted of a felony or misdemeanor described in subparagraph (A).
(E)The changes made to clauses (i) and (iii) of subparagraph (A) and subparagraph (B) during the 201718 Regular Session of the Legislature do not constitute a change in, but are declaratory of, the existing law.
(2)The administrative director shall exercise due diligence to identify physicians, practitioners, or providers who have been suspended pursuant to subparagraph (B) of paragraph (1) by accessing the quarterly updates to the list of suspended and ineligible providers maintained by the State Department of Health Care Services for the Medi-Cal program at https://files.medi-cal.ca.gov/pubsdoco/SandILanding.asp.
(3)For purposes of this section and Section 4615, an entity is controlled by an individual if the individual is an officer or a director of the entity, or a shareholder with a 10 percent or greater interest in the entity.
(4)For purposes of this section and Section 4615, an individual or entity is considered to have been convicted of a crime if any of the following applies:
(A)A judgment of conviction has been entered by a federal, state, or local court, regardless of whether there is an appeal pending or whether the judgment of conviction or other record relating to criminal conduct has been expunged.
(B)There has been a verdict or finding of guilt by a federal, state, or local court.
(C)A plea of guilty has been accepted by a federal, state, or local court.
(5)Notwithstanding the initiation or completion of a prior suspension pursuant to this section, the administrative director may amend an existing notice of suspension or commence a subsequent suspension proceeding based upon new or additional grounds for suspending the physician, practitioner, or provider pursuant to paragraph (1).
(6)The administrative director may adopt regulations specifying any exemptions that shall not serve as the basis for exclusion under paragraph (1).
(b)(1)The administrative director shall adopt regulations for suspending a physician, practitioner, or provider from participating in the workers compensation system, subject to the notice and hearing requirements in paragraph (2).
(2)The administrative director shall furnish to the physician, practitioner, or provider written notice of the right to a hearing regarding the suspension and the procedure to follow to request a hearing. The notice shall state that the administrative director is required to suspend the physician, practitioner, or provider pursuant to subdivision (a) after 30 days from the date the notice is mailed unless the physician, practitioner, or provider requests a hearing and, in that hearing, the physician, practitioner, or provider provides proof that paragraph (1) of subdivision (a) is not applicable. The physician, practitioner, or provider may request a hearing within 10 days from the date the notice is sent by the administrative director. The request for the hearing shall stay the suspension. The hearing shall be held within 30 days of the receipt of the request. Upon the completion of the hearing, if the administrative director finds that paragraph (1) of subdivision (a) is applicable, the administrative director shall immediately suspend the physician, practitioner, or provider.
(3)The administrative director shall have power and jurisdiction to do all things necessary or convenient to conduct the hearings provided for in paragraph (2). The hearings and investigations may be conducted by any designated hearing officer appointed by the administrative director. Any authorized person conducting that hearing or investigation may administer oaths, subpoena and require the attendance of witnesses and the production of books or papers, and cause the depositions of witnesses residing within or without the state to be taken in the manner prescribed by law for like depositions in civil cases in the superior court of this state under Title 4 (commencing with Section 2016.010) of Part 4 of the Code of Civil Procedure.
(c)The administrative director shall promptly notify the physicians, practitioners, or providers state licensing, certifying, or registering authority of a suspension imposed pursuant to this section and shall update the divisions qualified medical evaluator and medical provider network databases, as appropriate.
(d)Upon suspension of a physician, practitioner, or provider pursuant to this section, the administrative director shall give notice of the suspension to the chief judge of the division, and the chief judge or his or her designee shall promptly thereafter provide written notification of the suspension to district offices and all workers compensation judges. The method of notification to all district offices and to all workers compensation judges shall be in a manner determined by the chief judge in his or her discretion. The administrative director shall also post notification of the suspension on the departments Internet Web site.
(e)The following procedures apply for the adjudication of any liens of a physician, practitioner, or provider suspended pursuant to subparagraph (A) or (D) of paragraph (1) of subdivision (a), including any liens filed by or on behalf of the physician, practitioner, or provider or any entity controlled by the suspended physician, practitioner, or provider:
(1)If the disposition of the criminal proceeding provides for or requires, whether by plea agreement or by judgment, dismissal of liens and forfeiture of sums claimed therein, as specified in the criminal disposition, all of those liens shall be deemed dismissed with prejudice by operation of law as of the effective date of the final disposition in the criminal proceeding, and orders notifying of those dismissals shall be entered by workers compensation judges.
(2)All liens that have not been dismissed in accordance with paragraph (1) and remain pending in any workers compensation case in any district office within the state shall be consolidated and adjudicated in a special lien proceeding as described in subdivisions (f) to (i), inclusive.
(f)After notice of suspension, pursuant to subdivision (d), and if subdivision (e) applies, the administrative director shall appoint a special lien proceeding attorney, who shall be an attorney employed by the division or by the department. The special lien proceeding attorney shall, based on the information that is available, identify liens subject to disposition pursuant to subdivision (e), and workers compensation cases in which those liens are pending, and shall notify the chief judge regarding those liens. Based on this information, the chief judge or his or her designee shall identify a district office for a consolidated special lien proceeding to adjudicate those liens, and shall appoint a workers compensation judge to preside over that proceeding.
(g)It shall be a presumption affecting the burden of proof that all liens to be adjudicated in the special lien proceeding, and all underlying bills for service and claims for compensation asserted therein, arise from the conduct subjecting the physician, practitioner, or provider to suspension, and that payment is not due and should not be made on those liens because they arise from, or are connected to, criminal, fraudulent, or abusive conduct or activity. A lien claimant shall not have the right to payment unless he or she rebuts that presumption by a preponderance of the evidence.
(h)The special lien proceedings shall be governed by the same laws, regulations, and procedures that govern all other matters before the appeals board. The administrative director may adopt regulations for the implementation of this section.
(i)If it is determined in a special lien proceeding that a lien does not arise from the conduct subjecting a physician, practitioner, or provider to suspension, the workers compensation judge shall have the discretion to adjudicate the lien or transfer the lien back to the district office having venue over the case in which the lien was filed.
(j)At any time following suspension, a physician, practitioner, or provider lien claimant may elect to withdraw or to dismiss his or her lien with prejudice, which shall constitute a final disposition of the claim for compensation asserted therein.
(k)The provisions of this section do not affect, amend, alter, or in any way apply to the provisions of Section 139.2.
SEC. 2.Section 4603.2 of the Labor Code is amended to read:4603.2.(a)(1)Upon selecting a physician pursuant to Section 4600, the employee or physician shall notify the employer of the name and address, including the name of the medical group, if applicable, of the physician. The physician shall submit a report to the employer within five working days from the date of the initial examination, as required by Section 6409, and shall submit periodic reports at intervals that may be prescribed by rules and regulations adopted by the administrative director.
(2)If the employer objects to the employees selection of the physician on the grounds that the physician is not within the medical provider network used by the employer, and there is a final determination that the employee was entitled to select the physician pursuant to Section 4600, the employee shall be entitled to continue treatment with that physician at the employers expense in accordance with this division, notwithstanding Section 4616.2. The employer shall be required to pay from the date of the initial examination if the physicians report was submitted within five working days of the initial examination. If the physicians report was submitted more than five working days after the initial examination, the employer and the employee shall not be required to pay for any services prior to the date the physicians report was submitted.
(3)If the employer objects to the employees selection of the physician on the grounds that the physician is not within the medical provider network used by the employer, and there is a final determination that the employee was not entitled to select a physician outside of the medical provider network, the employer is not liable for treatment provided by or at the direction of that physician or for any consequences of the treatment obtained outside the network.
(b)(1)(A)A provider of services provided pursuant to Section 4600, including, but not limited to, physicians, hospitals, pharmacies, interpreters, copy services, transportation services, and home health care services, shall submit its request for payment with an itemization of services provided and the charge for each service, a copy of all reports showing the services performed, the prescription or referral from the primary treating physician if the services were performed by a person other than the primary treating physician, and any evidence of authorization for the services that may have been received. This section does not prohibit an employer, insurer, or third-party claims administrator from establishing, through written agreement, an alternative manual or electronic request for payment with providers for services provided pursuant to Section 4600.
(B)Effective for services provided on or after January 1, 2017, the request for payment with an itemization of services provided and the charge for each service shall be submitted to the employer within 12 months of the date of service or within 12 months of the date of discharge for inpatient facility services. The administrative director shall adopt rules to implement the 12-month limitation period. The rules shall define circumstances that constitute good cause for an exception to the 12-month period, including provisions to address the circumstances of a nonoccupational injury or illness later found to be a compensable injury or illness. The request for payment is barred unless timely submitted.
(C)Notwithstanding the requirements of this paragraph, a copy of the prescription shall not be required with a request for payment for pharmacy services, unless the provider of services has entered into a written agreement, as provided in this paragraph, that requires a copy of a prescription for a pharmacy service.
(D)This section does not preclude an employer, insurer, pharmacy benefits manager, or third-party claims administrator from requesting a copy of the prescription during a review of any records of prescription drugs that were dispensed by a pharmacy.
(2)Except as provided in subdivision (d) of Section 4603.4, or under contracts authorized under Section 5307.11, payment for medical treatment provided or prescribed by the treating physician selected by the employee or designated by the employer shall be made at reasonable maximum amounts in the official medical fee schedule, pursuant to Section 5307.1, in effect on the date of service. Payments shall be made by the employer with an explanation of review pursuant to Section 4603.3 within 45 days after receipt of each separate itemization of medical services provided, together with any required reports and any written authorization for services that may have been received by the physician. If the itemization or a portion thereof is contested, denied, or considered incomplete, the physician shall be notified, in the explanation of review, that the itemization is contested, denied, or considered incomplete, within 30 days after receipt of the itemization by the employer. An explanation of review that states an itemization is incomplete shall also state all additional information required to make a decision. A properly documented list of services provided and not paid at the rates then in effect under Section 5307.1 within the 45-day period shall be paid at the rates then in effect and increased by 15 percent, together with interest at the same rate as judgments in civil actions retroactive to the date of receipt of the itemization, unless the employer does both of the following:
(A)Pays the provider at the rates in effect within the 45-day period.
(B)Advises, in an explanation of review pursuant to Section 4603.3, the physician, or another provider of the items being contested, the reasons for contesting these items, and the remedies available to the physician or the other provider if he or she disagrees. In the case of an itemization that includes services provided by a hospital, outpatient surgery center, or independent diagnostic facility, advice that a request has been made for an audit of the itemization shall satisfy the requirements of this paragraph.
An employers liability to a physician or another provider under this section for delayed payments shall not affect its liability to an employee under Section 5814 or any other provision of this division.
(3)Notwithstanding paragraph (1), if the employer is a governmental entity, payment for medical treatment provided or prescribed by the treating physician selected by the employee or designated by the employer shall be made within 60 days after receipt of each separate itemization, together with any required reports and any written authorization for services that may have been received by the physician.
(4)Duplicate submissions of medical services itemizations, for which an explanation of review was previously provided, shall require no further or additional notification or objection by the employer to the medical provider and shall not subject the employer to any additional penalties or interest pursuant to this section for failing to respond to the duplicate submission. This paragraph applies only to duplicate submissions and does not apply to any other penalties or interest that may be applicable to the original submission.
(5)(A)An employer may defer objecting to or paying any bill submitted by, or on behalf of, a provider whose liens are stayed pursuant to Section 4615, and the time limits for taking any action prescribed by paragraphs (2) and (3) shall not commence until the stay is lifted pursuant to Section 4615.
(B)An employer may object to any bill submitted by, or on behalf of, a provider who has been suspended pursuant to Section 139.21.
(c)Interest or an increase in compensation paid by an insurer pursuant to this section shall be treated in the same manner as an increase in compensation under subdivision (d) of Section 4650 for the purposes of any classification of risks and premium rates, and any system of merit rating approved or issued pursuant to Article 2 (commencing with Section 11730) of Chapter 3 of Part 3 of Division 2 of the Insurance Code.
(d)(1)Whenever an employer or insurer employs an individual or contracts with an entity to conduct a review of an itemization submitted by a physician or medical provider, the employer or insurer shall make available to that individual or entity all documentation submitted together with that itemization by the physician or medical provider. When an individual or entity conducting an itemization review determines that additional information or documentation is necessary to review the itemization, the individual or entity shall contact the claims administrator or insurer to obtain the necessary information or documentation that was submitted by the physician or medical provider pursuant to subdivision (b).
(2)An individual or entity reviewing an itemization of service submitted by a physician or medical provider shall not alter the procedure codes listed or recommend reduction of the amount of the payment unless the documentation submitted by the physician or medical provider with the itemization of service has been reviewed by that individual or entity. If the reviewer does not recommend payment for services as itemized by the physician or medical provider, the explanation of review shall provide the physician or medical provider with a specific explanation as to why the reviewer altered the procedure code or changed other parts of the itemization and the specific deficiency in the itemization or documentation that caused the reviewer to conclude that the altered procedure code or amount recommended for payment more accurately represents the service performed.
(e)(1)If the provider disputes the amount paid, the provider may request a second review within 90 days of service of the explanation of review or an order of the appeals board resolving the threshold issue as stated in the explanation of review pursuant to paragraph (5) of subdivision (a) of Section 4603.3. The request for a second review shall be submitted to the employer on a form prescribed by the administrative director and shall include all of the following:
(A)The date of the explanation of review and the claim number or other unique identifying number provided on the explanation of review.
(B)The item and amount in dispute.
(C)The additional payment requested and the reason therefor.
(D)The additional information provided in response to a request in the first explanation of review or any other additional information provided in support of the additional payment requested.
(2)If the only dispute is the amount of payment and the provider does not request a second review within 90 days, the bill shall be deemed satisfied and neither the employer nor the employee shall be liable for any further payment.
(3)Within 14 days of a request for second review, the employer shall respond with a final written determination on each of the items or amounts in dispute. Payment of any balance not in dispute shall be made within 21 days of receipt of the request for second review. This time limit may be extended by mutual written agreement.
(4)If the provider contests the amount paid, after receipt of the second review, the provider shall request an independent bill review as provided for in Section 4603.6.
(f)Except as provided in paragraph (4) of subdivision (e), the appeals board shall have jurisdiction over disputes arising out of this section pursuant to Section 5304.
SEC. 3.Section 4615 of the Labor Code is amended to read:4615.(a)Upon the filing of criminal charges against a physician, practitioner, or provider for any crime described in subparagraph (A) of paragraph (1) of subdivision (a) of Section 139.21, the following shall occur:
(1)Any lien filed by, or on behalf of, the physician, practitioner, or provider or any entity controlled, as defined in paragraph (3) of subdivision (a) of Section 139.21, by the physician, practitioner, or provider for medical treatment services under Section 4600 or medical-legal services under Section 4621, and any accrual of interest related to the lien, shall be automatically stayed.
(2)Except as provided in subdivisions (b) and (c), the stay shall be in effect from the time of the filing of the charges until the disposition of the criminal proceedings.
(b)Upon conviction, as defined in paragraph (4) of subdivision (a) of Section 139.21, of the physician, practitioner, or provider for any crime described in subparagraph (A) of paragraph (1) of subdivision (a) of Section 139.21, the automatic stay shall remain in effect for any liens not dismissed pursuant to paragraph (1) of subdivision (e) of Section 139.21 until the commencement of lien consolidation procedures under paragraph (2) of subdivision (e) of Section 139.21.
(c)The automatic stay required by this section shall not preclude a physician, practitioner, or provider from requesting the dismissal with prejudice and forfeiture of sums claimed therein of any liens subject to the stay. Upon the receipt of that request and for good cause shown, the chief judge of the Division of Workers Compensation or his or her designee may lift the stay as to one or more of those liens and order that they be dismissed with prejudice.
(d)The administrative director shall promptly post on the divisions Internet Web site the names of any physician, practitioner, or provider of medical treatment services whose liens are stayed pursuant to this section.
(e)The automatic stay required by this section shall not preclude the appeals board from inquiring into and determining within a workers compensation proceeding whether a lien is stayed pursuant to subdivision (a) or whether a lien claimant is controlled by a physician, practitioner, or provider.
(f)The administrative director may adopt rules for the implementation of this section.
(g)Notwithstanding this section, the filing of new or additional criminal charges against a physician, practitioner, or provider who has been suspended pursuant to subparagraph (A) of paragraph (1) of subdivision (a) of Section 139.21 shall not stay liens that are subject to consolidation and adjudication pursuant to subdivisions (e) to (i), inclusive, of Section 139.21, unless a determination has been made pursuant to subdivision (i) of Section 139.21 that a lien did not arise from the conduct that subjected the physician, practitioner, or provider to suspension.
(a)(1)The administrative director shall promptly suspend, pursuant to subdivision (b), any physician, practitioner, or provider from participating in the workers compensation system as a physician, practitioner, or provider if the individual or entity meets any of the following criteria:
(A)The individual or entity has been convicted of any felony or misdemeanor and that crime comes within any of the following descriptions:
(i)It involves fraud or abuse of the federal Medicare or Medicaid programs, the Medi-Cal program, or the workers compensation system, or fraud or abuse of any patient.
(ii)It relates to the conduct of the individuals medical practice as it pertains to patient care.
(iii)It is a financial crime that relates to the federal Medicare or Medicaid programs, the Medi-Cal program, or the workers compensation system.
(iv)It is otherwise substantially related to the qualifications, functions, or duties of a provider of services.
(B)The individual or entity has been suspended, due to fraud or abuse, from the federal Medicare or Medicaid programs or the Medi-Cal program.
(C)The individuals license, certificate, or approval to provide health care has been surrendered or revoked.
(D)The entity is controlled by an individual who has been convicted of a felony or misdemeanor described in subparagraph (A).
(E)The changes made to clauses (i) and (iii) of subparagraph (A) and subparagraph (B) during the 201718 Regular Session of the Legislature do not constitute a change in, but are declaratory of, the existing law.
(2)The administrative director shall exercise due diligence to identify physicians, practitioners, or providers who have been suspended pursuant to subparagraph (B) of paragraph (1) by accessing the quarterly updates to the list of suspended and ineligible providers maintained by the State Department of Health Care Services for the Medi-Cal program at https://files.medi-cal.ca.gov/pubsdoco/SandILanding.asp.
(3)For purposes of this section and Section 4615, an entity is controlled by an individual if the individual is an officer or a director of the entity, or a shareholder with a 10 percent or greater interest in the entity.
(4)For purposes of this section and Section 4615, an individual or entity is considered to have been convicted of a crime if any of the following applies:
(A)A judgment of conviction has been entered by a federal, state, or local court, regardless of whether there is an appeal pending or whether the judgment of conviction or other record relating to criminal conduct has been expunged.
(B)There has been a verdict or finding of guilt by a federal, state, or local court.
(C)A plea of guilty has been accepted by a federal, state, or local court.
(5)Notwithstanding the initiation or completion of a prior suspension pursuant to this section, the administrative director may amend an existing notice of suspension or commence a subsequent suspension proceeding based upon new or additional grounds for suspending the physician, practitioner, or provider pursuant to paragraph (1).
(6)The administrative director may adopt regulations specifying any exemptions that shall not serve as the basis for exclusion under paragraph (1).
(b)(1)The administrative director shall adopt regulations for suspending a physician, practitioner, or provider from participating in the workers compensation system, subject to the notice and hearing requirements in paragraph (2).
(2)The administrative director shall furnish to the physician, practitioner, or provider written notice of the right to a hearing regarding the suspension and the procedure to follow to request a hearing. The notice shall state that the administrative director is required to suspend the physician, practitioner, or provider pursuant to subdivision (a) after 30 days from the date the notice is mailed unless the physician, practitioner, or provider requests a hearing and, in that hearing, the physician, practitioner, or provider provides proof that paragraph (1) of subdivision (a) is not applicable. The physician, practitioner, or provider may request a hearing within 10 days from the date the notice is sent by the administrative director. The request for the hearing shall stay the suspension. The hearing shall be held within 30 days of the receipt of the request. Upon the completion of the hearing, if the administrative director finds that paragraph (1) of subdivision (a) is applicable, the administrative director shall immediately suspend the physician, practitioner, or provider.
(3)The administrative director shall have power and jurisdiction to do all things necessary or convenient to conduct the hearings provided for in paragraph (2). The hearings and investigations may be conducted by any designated hearing officer appointed by the administrative director. Any authorized person conducting that hearing or investigation may administer oaths, subpoena and require the attendance of witnesses and the production of books or papers, and cause the depositions of witnesses residing within or without the state to be taken in the manner prescribed by law for like depositions in civil cases in the superior court of this state under Title 4 (commencing with Section 2016.010) of Part 4 of the Code of Civil Procedure.
(c)The administrative director shall promptly notify the physicians, practitioners, or providers state licensing, certifying, or registering authority of a suspension imposed pursuant to this section and shall update the divisions qualified medical evaluator and medical provider network databases, as appropriate.
(d)Upon suspension of a physician, practitioner, or provider pursuant to this section, the administrative director shall give notice of the suspension to the chief judge of the division, and the chief judge or his or her designee shall promptly thereafter provide written notification of the suspension to district offices and all workers compensation judges. The method of notification to all district offices and to all workers compensation judges shall be in a manner determined by the chief judge in his or her discretion. The administrative director shall also post notification of the suspension on the departments Internet Web site.
(e)The following procedures apply for the adjudication of any liens of a physician, practitioner, or provider suspended pursuant to subparagraph (A) or (D) of paragraph (1) of subdivision (a), including any liens filed by or on behalf of the physician, practitioner, or provider or any entity controlled by the suspended physician, practitioner, or provider:
(1)If the disposition of the criminal proceeding provides for or requires, whether by plea agreement or by judgment, dismissal of liens and forfeiture of sums claimed therein, as specified in the criminal disposition, all of those liens shall be deemed dismissed with prejudice by operation of law as of the effective date of the final disposition in the criminal proceeding, and orders notifying of those dismissals shall be entered by workers compensation judges.
(2)All liens that have not been dismissed in accordance with paragraph (1) and remain pending in any workers compensation case in any district office within the state shall be consolidated and adjudicated in a special lien proceeding as described in subdivisions (f) to (i), inclusive.
(f)After notice of suspension, pursuant to subdivision (d), and if subdivision (e) applies, the administrative director shall appoint a special lien proceeding attorney, who shall be an attorney employed by the division or by the department. The special lien proceeding attorney shall, based on the information that is available, identify liens subject to disposition pursuant to subdivision (e), and workers compensation cases in which those liens are pending, and shall notify the chief judge regarding those liens. Based on this information, the chief judge or his or her designee shall identify a district office for a consolidated special lien proceeding to adjudicate those liens, and shall appoint a workers compensation judge to preside over that proceeding.
(g)It shall be a presumption affecting the burden of proof that all liens to be adjudicated in the special lien proceeding, and all underlying bills for service and claims for compensation asserted therein, arise from the conduct subjecting the physician, practitioner, or provider to suspension, and that payment is not due and should not be made on those liens because they arise from, or are connected to, criminal, fraudulent, or abusive conduct or activity. A lien claimant shall not have the right to payment unless he or she rebuts that presumption by a preponderance of the evidence.
(h)The special lien proceedings shall be governed by the same laws, regulations, and procedures that govern all other matters before the appeals board. The administrative director may adopt regulations for the implementation of this section.
(i)If it is determined in a special lien proceeding that a lien does not arise from the conduct subjecting a physician, practitioner, or provider to suspension, the workers compensation judge shall have the discretion to adjudicate the lien or transfer the lien back to the district office having venue over the case in which the lien was filed.
(j)At any time following suspension, a physician, practitioner, or provider lien claimant may elect to withdraw or to dismiss his or her lien with prejudice, which shall constitute a final disposition of the claim for compensation asserted therein.
(k)The provisions of this section do not affect, amend, alter, or in any way apply to the provisions of Section 139.2.
SEC. 2.Section 4603.2 of the Labor Code is amended to read:4603.2.(a)(1)Upon selecting a physician pursuant to Section 4600, the employee or physician shall notify the employer of the name and address, including the name of the medical group, if applicable, of the physician. The physician shall submit a report to the employer within five working days from the date of the initial examination, as required by Section 6409, and shall submit periodic reports at intervals that may be prescribed by rules and regulations adopted by the administrative director.
(2)If the employer objects to the employees selection of the physician on the grounds that the physician is not within the medical provider network used by the employer, and there is a final determination that the employee was entitled to select the physician pursuant to Section 4600, the employee shall be entitled to continue treatment with that physician at the employers expense in accordance with this division, notwithstanding Section 4616.2. The employer shall be required to pay from the date of the initial examination if the physicians report was submitted within five working days of the initial examination. If the physicians report was submitted more than five working days after the initial examination, the employer and the employee shall not be required to pay for any services prior to the date the physicians report was submitted.
(3)If the employer objects to the employees selection of the physician on the grounds that the physician is not within the medical provider network used by the employer, and there is a final determination that the employee was not entitled to select a physician outside of the medical provider network, the employer is not liable for treatment provided by or at the direction of that physician or for any consequences of the treatment obtained outside the network.
(b)(1)(A)A provider of services provided pursuant to Section 4600, including, but not limited to, physicians, hospitals, pharmacies, interpreters, copy services, transportation services, and home health care services, shall submit its request for payment with an itemization of services provided and the charge for each service, a copy of all reports showing the services performed, the prescription or referral from the primary treating physician if the services were performed by a person other than the primary treating physician, and any evidence of authorization for the services that may have been received. This section does not prohibit an employer, insurer, or third-party claims administrator from establishing, through written agreement, an alternative manual or electronic request for payment with providers for services provided pursuant to Section 4600.
(B)Effective for services provided on or after January 1, 2017, the request for payment with an itemization of services provided and the charge for each service shall be submitted to the employer within 12 months of the date of service or within 12 months of the date of discharge for inpatient facility services. The administrative director shall adopt rules to implement the 12-month limitation period. The rules shall define circumstances that constitute good cause for an exception to the 12-month period, including provisions to address the circumstances of a nonoccupational injury or illness later found to be a compensable injury or illness. The request for payment is barred unless timely submitted.
(C)Notwithstanding the requirements of this paragraph, a copy of the prescription shall not be required with a request for payment for pharmacy services, unless the provider of services has entered into a written agreement, as provided in this paragraph, that requires a copy of a prescription for a pharmacy service.
(D)This section does not preclude an employer, insurer, pharmacy benefits manager, or third-party claims administrator from requesting a copy of the prescription during a review of any records of prescription drugs that were dispensed by a pharmacy.
(2)Except as provided in subdivision (d) of Section 4603.4, or under contracts authorized under Section 5307.11, payment for medical treatment provided or prescribed by the treating physician selected by the employee or designated by the employer shall be made at reasonable maximum amounts in the official medical fee schedule, pursuant to Section 5307.1, in effect on the date of service. Payments shall be made by the employer with an explanation of review pursuant to Section 4603.3 within 45 days after receipt of each separate itemization of medical services provided, together with any required reports and any written authorization for services that may have been received by the physician. If the itemization or a portion thereof is contested, denied, or considered incomplete, the physician shall be notified, in the explanation of review, that the itemization is contested, denied, or considered incomplete, within 30 days after receipt of the itemization by the employer. An explanation of review that states an itemization is incomplete shall also state all additional information required to make a decision. A properly documented list of services provided and not paid at the rates then in effect under Section 5307.1 within the 45-day period shall be paid at the rates then in effect and increased by 15 percent, together with interest at the same rate as judgments in civil actions retroactive to the date of receipt of the itemization, unless the employer does both of the following:
(A)Pays the provider at the rates in effect within the 45-day period.
(B)Advises, in an explanation of review pursuant to Section 4603.3, the physician, or another provider of the items being contested, the reasons for contesting these items, and the remedies available to the physician or the other provider if he or she disagrees. In the case of an itemization that includes services provided by a hospital, outpatient surgery center, or independent diagnostic facility, advice that a request has been made for an audit of the itemization shall satisfy the requirements of this paragraph.
An employers liability to a physician or another provider under this section for delayed payments shall not affect its liability to an employee under Section 5814 or any other provision of this division.
(3)Notwithstanding paragraph (1), if the employer is a governmental entity, payment for medical treatment provided or prescribed by the treating physician selected by the employee or designated by the employer shall be made within 60 days after receipt of each separate itemization, together with any required reports and any written authorization for services that may have been received by the physician.
(4)Duplicate submissions of medical services itemizations, for which an explanation of review was previously provided, shall require no further or additional notification or objection by the employer to the medical provider and shall not subject the employer to any additional penalties or interest pursuant to this section for failing to respond to the duplicate submission. This paragraph applies only to duplicate submissions and does not apply to any other penalties or interest that may be applicable to the original submission.
(5)(A)An employer may defer objecting to or paying any bill submitted by, or on behalf of, a provider whose liens are stayed pursuant to Section 4615, and the time limits for taking any action prescribed by paragraphs (2) and (3) shall not commence until the stay is lifted pursuant to Section 4615.
(B)An employer may object to any bill submitted by, or on behalf of, a provider who has been suspended pursuant to Section 139.21.
(c)Interest or an increase in compensation paid by an insurer pursuant to this section shall be treated in the same manner as an increase in compensation under subdivision (d) of Section 4650 for the purposes of any classification of risks and premium rates, and any system of merit rating approved or issued pursuant to Article 2 (commencing with Section 11730) of Chapter 3 of Part 3 of Division 2 of the Insurance Code.
(d)(1)Whenever an employer or insurer employs an individual or contracts with an entity to conduct a review of an itemization submitted by a physician or medical provider, the employer or insurer shall make available to that individual or entity all documentation submitted together with that itemization by the physician or medical provider. When an individual or entity conducting an itemization review determines that additional information or documentation is necessary to review the itemization, the individual or entity shall contact the claims administrator or insurer to obtain the necessary information or documentation that was submitted by the physician or medical provider pursuant to subdivision (b).
(2)An individual or entity reviewing an itemization of service submitted by a physician or medical provider shall not alter the procedure codes listed or recommend reduction of the amount of the payment unless the documentation submitted by the physician or medical provider with the itemization of service has been reviewed by that individual or entity. If the reviewer does not recommend payment for services as itemized by the physician or medical provider, the explanation of review shall provide the physician or medical provider with a specific explanation as to why the reviewer altered the procedure code or changed other parts of the itemization and the specific deficiency in the itemization or documentation that caused the reviewer to conclude that the altered procedure code or amount recommended for payment more accurately represents the service performed.
(e)(1)If the provider disputes the amount paid, the provider may request a second review within 90 days of service of the explanation of review or an order of the appeals board resolving the threshold issue as stated in the explanation of review pursuant to paragraph (5) of subdivision (a) of Section 4603.3. The request for a second review shall be submitted to the employer on a form prescribed by the administrative director and shall include all of the following:
(A)The date of the explanation of review and the claim number or other unique identifying number provided on the explanation of review.
(B)The item and amount in dispute.
(C)The additional payment requested and the reason therefor.
(D)The additional information provided in response to a request in the first explanation of review or any other additional information provided in support of the additional payment requested.
(2)If the only dispute is the amount of payment and the provider does not request a second review within 90 days, the bill shall be deemed satisfied and neither the employer nor the employee shall be liable for any further payment.
(3)Within 14 days of a request for second review, the employer shall respond with a final written determination on each of the items or amounts in dispute. Payment of any balance not in dispute shall be made within 21 days of receipt of the request for second review. This time limit may be extended by mutual written agreement.
(4)If the provider contests the amount paid, after receipt of the second review, the provider shall request an independent bill review as provided for in Section 4603.6.
(f)Except as provided in paragraph (4) of subdivision (e), the appeals board shall have jurisdiction over disputes arising out of this section pursuant to Section 5304.
SEC. 3.Section 4615 of the Labor Code is amended to read:4615.(a)Upon the filing of criminal charges against a physician, practitioner, or provider for any crime described in subparagraph (A) of paragraph (1) of subdivision (a) of Section 139.21, the following shall occur:
(1)Any lien filed by, or on behalf of, the physician, practitioner, or provider or any entity controlled, as defined in paragraph (3) of subdivision (a) of Section 139.21, by the physician, practitioner, or provider for medical treatment services under Section 4600 or medical-legal services under Section 4621, and any accrual of interest related to the lien, shall be automatically stayed.
(2)Except as provided in subdivisions (b) and (c), the stay shall be in effect from the time of the filing of the charges until the disposition of the criminal proceedings.
(b)Upon conviction, as defined in paragraph (4) of subdivision (a) of Section 139.21, of the physician, practitioner, or provider for any crime described in subparagraph (A) of paragraph (1) of subdivision (a) of Section 139.21, the automatic stay shall remain in effect for any liens not dismissed pursuant to paragraph (1) of subdivision (e) of Section 139.21 until the commencement of lien consolidation procedures under paragraph (2) of subdivision (e) of Section 139.21.
(c)The automatic stay required by this section shall not preclude a physician, practitioner, or provider from requesting the dismissal with prejudice and forfeiture of sums claimed therein of any liens subject to the stay. Upon the receipt of that request and for good cause shown, the chief judge of the Division of Workers Compensation or his or her designee may lift the stay as to one or more of those liens and order that they be dismissed with prejudice.
(d)The administrative director shall promptly post on the divisions Internet Web site the names of any physician, practitioner, or provider of medical treatment services whose liens are stayed pursuant to this section.
(e)The automatic stay required by this section shall not preclude the appeals board from inquiring into and determining within a workers compensation proceeding whether a lien is stayed pursuant to subdivision (a) or whether a lien claimant is controlled by a physician, practitioner, or provider.
(f)The administrative director may adopt rules for the implementation of this section.
(g)Notwithstanding this section, the filing of new or additional criminal charges against a physician, practitioner, or provider who has been suspended pursuant to subparagraph (A) of paragraph (1) of subdivision (a) of Section 139.21 shall not stay liens that are subject to consolidation and adjudication pursuant to subdivisions (e) to (i), inclusive, of Section 139.21, unless a determination has been made pursuant to subdivision (i) of Section 139.21 that a lien did not arise from the conduct that subjected the physician, practitioner, or provider to suspension.
(a)(1)The administrative director shall promptly suspend, pursuant to subdivision (b), any physician, practitioner, or provider from participating in the workers compensation system as a physician, practitioner, or provider if the individual or entity meets any of the following criteria:
(A)The individual or entity has been convicted of any felony or misdemeanor and that crime comes within any of the following descriptions:
(i)It involves fraud or abuse of the federal Medicare or Medicaid programs, the Medi-Cal program, or the workers compensation system, or fraud or abuse of any patient.
(ii)It relates to the conduct of the individuals medical practice as it pertains to patient care.
(iii)It is a financial crime that relates to the federal Medicare or Medicaid programs, the Medi-Cal program, or the workers compensation system.
(iv)It is otherwise substantially related to the qualifications, functions, or duties of a provider of services.
(B)The individual or entity has been suspended, due to fraud or abuse, from the federal Medicare or Medicaid programs or the Medi-Cal program.
(C)The individuals license, certificate, or approval to provide health care has been surrendered or revoked.
(D)The entity is controlled by an individual who has been convicted of a felony or misdemeanor described in subparagraph (A).
(E)The changes made to clauses (i) and (iii) of subparagraph (A) and subparagraph (B) during the 201718 Regular Session of the Legislature do not constitute a change in, but are declaratory of, the existing law.
(2)The administrative director shall exercise due diligence to identify physicians, practitioners, or providers who have been suspended pursuant to subparagraph (B) of paragraph (1) by accessing the quarterly updates to the list of suspended and ineligible providers maintained by the State Department of Health Care Services for the Medi-Cal program at https://files.medi-cal.ca.gov/pubsdoco/SandILanding.asp.
(3)For purposes of this section and Section 4615, an entity is controlled by an individual if the individual is an officer or a director of the entity, or a shareholder with a 10 percent or greater interest in the entity.
(4)For purposes of this section and Section 4615, an individual or entity is considered to have been convicted of a crime if any of the following applies:
(A)A judgment of conviction has been entered by a federal, state, or local court, regardless of whether there is an appeal pending or whether the judgment of conviction or other record relating to criminal conduct has been expunged.
(B)There has been a verdict or finding of guilt by a federal, state, or local court.
(C)A plea of guilty has been accepted by a federal, state, or local court.
(5)Notwithstanding the initiation or completion of a prior suspension pursuant to this section, the administrative director may amend an existing notice of suspension or commence a subsequent suspension proceeding based upon new or additional grounds for suspending the physician, practitioner, or provider pursuant to paragraph (1).
(6)The administrative director may adopt regulations specifying any exemptions that shall not serve as the basis for exclusion under paragraph (1).
(b)(1)The administrative director shall adopt regulations for suspending a physician, practitioner, or provider from participating in the workers compensation system, subject to the notice and hearing requirements in paragraph (2).
(2)The administrative director shall furnish to the physician, practitioner, or provider written notice of the right to a hearing regarding the suspension and the procedure to follow to request a hearing. The notice shall state that the administrative director is required to suspend the physician, practitioner, or provider pursuant to subdivision (a) after 30 days from the date the notice is mailed unless the physician, practitioner, or provider requests a hearing and, in that hearing, the physician, practitioner, or provider provides proof that paragraph (1) of subdivision (a) is not applicable. The physician, practitioner, or provider may request a hearing within 10 days from the date the notice is sent by the administrative director. The request for the hearing shall stay the suspension. The hearing shall be held within 30 days of the receipt of the request. Upon the completion of the hearing, if the administrative director finds that paragraph (1) of subdivision (a) is applicable, the administrative director shall immediately suspend the physician, practitioner, or provider.
(3)The administrative director shall have power and jurisdiction to do all things necessary or convenient to conduct the hearings provided for in paragraph (2). The hearings and investigations may be conducted by any designated hearing officer appointed by the administrative director. Any authorized person conducting that hearing or investigation may administer oaths, subpoena and require the attendance of witnesses and the production of books or papers, and cause the depositions of witnesses residing within or without the state to be taken in the manner prescribed by law for like depositions in civil cases in the superior court of this state under Title 4 (commencing with Section 2016.010) of Part 4 of the Code of Civil Procedure.
(c)The administrative director shall promptly notify the physicians, practitioners, or providers state licensing, certifying, or registering authority of a suspension imposed pursuant to this section and shall update the divisions qualified medical evaluator and medical provider network databases, as appropriate.
(d)Upon suspension of a physician, practitioner, or provider pursuant to this section, the administrative director shall give notice of the suspension to the chief judge of the division, and the chief judge or his or her designee shall promptly thereafter provide written notification of the suspension to district offices and all workers compensation judges. The method of notification to all district offices and to all workers compensation judges shall be in a manner determined by the chief judge in his or her discretion. The administrative director shall also post notification of the suspension on the departments Internet Web site.
(e)The following procedures apply for the adjudication of any liens of a physician, practitioner, or provider suspended pursuant to subparagraph (A) or (D) of paragraph (1) of subdivision (a), including any liens filed by or on behalf of the physician, practitioner, or provider or any entity controlled by the suspended physician, practitioner, or provider:
(1)If the disposition of the criminal proceeding provides for or requires, whether by plea agreement or by judgment, dismissal of liens and forfeiture of sums claimed therein, as specified in the criminal disposition, all of those liens shall be deemed dismissed with prejudice by operation of law as of the effective date of the final disposition in the criminal proceeding, and orders notifying of those dismissals shall be entered by workers compensation judges.
(2)All liens that have not been dismissed in accordance with paragraph (1) and remain pending in any workers compensation case in any district office within the state shall be consolidated and adjudicated in a special lien proceeding as described in subdivisions (f) to (i), inclusive.
(f)After notice of suspension, pursuant to subdivision (d), and if subdivision (e) applies, the administrative director shall appoint a special lien proceeding attorney, who shall be an attorney employed by the division or by the department. The special lien proceeding attorney shall, based on the information that is available, identify liens subject to disposition pursuant to subdivision (e), and workers compensation cases in which those liens are pending, and shall notify the chief judge regarding those liens. Based on this information, the chief judge or his or her designee shall identify a district office for a consolidated special lien proceeding to adjudicate those liens, and shall appoint a workers compensation judge to preside over that proceeding.
(g)It shall be a presumption affecting the burden of proof that all liens to be adjudicated in the special lien proceeding, and all underlying bills for service and claims for compensation asserted therein, arise from the conduct subjecting the physician, practitioner, or provider to suspension, and that payment is not due and should not be made on those liens because they arise from, or are connected to, criminal, fraudulent, or abusive conduct or activity. A lien claimant shall not have the right to payment unless he or she rebuts that presumption by a preponderance of the evidence.
(h)The special lien proceedings shall be governed by the same laws, regulations, and procedures that govern all other matters before the appeals board. The administrative director may adopt regulations for the implementation of this section.
(i)If it is determined in a special lien proceeding that a lien does not arise from the conduct subjecting a physician, practitioner, or provider to suspension, the workers compensation judge shall have the discretion to adjudicate the lien or transfer the lien back to the district office having venue over the case in which the lien was filed.
(j)At any time following suspension, a physician, practitioner, or provider lien claimant may elect to withdraw or to dismiss his or her lien with prejudice, which shall constitute a final disposition of the claim for compensation asserted therein.
(k)The provisions of this section do not affect, amend, alter, or in any way apply to the provisions of Section 139.2.
SEC. 2.Section 4603.2 of the Labor Code is amended to read:4603.2.(a)(1)Upon selecting a physician pursuant to Section 4600, the employee or physician shall notify the employer of the name and address, including the name of the medical group, if applicable, of the physician. The physician shall submit a report to the employer within five working days from the date of the initial examination, as required by Section 6409, and shall submit periodic reports at intervals that may be prescribed by rules and regulations adopted by the administrative director.
(2)If the employer objects to the employees selection of the physician on the grounds that the physician is not within the medical provider network used by the employer, and there is a final determination that the employee was entitled to select the physician pursuant to Section 4600, the employee shall be entitled to continue treatment with that physician at the employers expense in accordance with this division, notwithstanding Section 4616.2. The employer shall be required to pay from the date of the initial examination if the physicians report was submitted within five working days of the initial examination. If the physicians report was submitted more than five working days after the initial examination, the employer and the employee shall not be required to pay for any services prior to the date the physicians report was submitted.
(3)If the employer objects to the employees selection of the physician on the grounds that the physician is not within the medical provider network used by the employer, and there is a final determination that the employee was not entitled to select a physician outside of the medical provider network, the employer is not liable for treatment provided by or at the direction of that physician or for any consequences of the treatment obtained outside the network.
(b)(1)(A)A provider of services provided pursuant to Section 4600, including, but not limited to, physicians, hospitals, pharmacies, interpreters, copy services, transportation services, and home health care services, shall submit its request for payment with an itemization of services provided and the charge for each service, a copy of all reports showing the services performed, the prescription or referral from the primary treating physician if the services were performed by a person other than the primary treating physician, and any evidence of authorization for the services that may have been received. This section does not prohibit an employer, insurer, or third-party claims administrator from establishing, through written agreement, an alternative manual or electronic request for payment with providers for services provided pursuant to Section 4600.
(B)Effective for services provided on or after January 1, 2017, the request for payment with an itemization of services provided and the charge for each service shall be submitted to the employer within 12 months of the date of service or within 12 months of the date of discharge for inpatient facility services. The administrative director shall adopt rules to implement the 12-month limitation period. The rules shall define circumstances that constitute good cause for an exception to the 12-month period, including provisions to address the circumstances of a nonoccupational injury or illness later found to be a compensable injury or illness. The request for payment is barred unless timely submitted.
(C)Notwithstanding the requirements of this paragraph, a copy of the prescription shall not be required with a request for payment for pharmacy services, unless the provider of services has entered into a written agreement, as provided in this paragraph, that requires a copy of a prescription for a pharmacy service.
(D)This section does not preclude an employer, insurer, pharmacy benefits manager, or third-party claims administrator from requesting a copy of the prescription during a review of any records of prescription drugs that were dispensed by a pharmacy.
(2)Except as provided in subdivision (d) of Section 4603.4, or under contracts authorized under Section 5307.11, payment for medical treatment provided or prescribed by the treating physician selected by the employee or designated by the employer shall be made at reasonable maximum amounts in the official medical fee schedule, pursuant to Section 5307.1, in effect on the date of service. Payments shall be made by the employer with an explanation of review pursuant to Section 4603.3 within 45 days after receipt of each separate itemization of medical services provided, together with any required reports and any written authorization for services that may have been received by the physician. If the itemization or a portion thereof is contested, denied, or considered incomplete, the physician shall be notified, in the explanation of review, that the itemization is contested, denied, or considered incomplete, within 30 days after receipt of the itemization by the employer. An explanation of review that states an itemization is incomplete shall also state all additional information required to make a decision. A properly documented list of services provided and not paid at the rates then in effect under Section 5307.1 within the 45-day period shall be paid at the rates then in effect and increased by 15 percent, together with interest at the same rate as judgments in civil actions retroactive to the date of receipt of the itemization, unless the employer does both of the following:
(A)Pays the provider at the rates in effect within the 45-day period.
(B)Advises, in an explanation of review pursuant to Section 4603.3, the physician, or another provider of the items being contested, the reasons for contesting these items, and the remedies available to the physician or the other provider if he or she disagrees. In the case of an itemization that includes services provided by a hospital, outpatient surgery center, or independent diagnostic facility, advice that a request has been made for an audit of the itemization shall satisfy the requirements of this paragraph.
An employers liability to a physician or another provider under this section for delayed payments shall not affect its liability to an employee under Section 5814 or any other provision of this division.
(3)Notwithstanding paragraph (1), if the employer is a governmental entity, payment for medical treatment provided or prescribed by the treating physician selected by the employee or designated by the employer shall be made within 60 days after receipt of each separate itemization, together with any required reports and any written authorization for services that may have been received by the physician.
(4)Duplicate submissions of medical services itemizations, for which an explanation of review was previously provided, shall require no further or additional notification or objection by the employer to the medical provider and shall not subject the employer to any additional penalties or interest pursuant to this section for failing to respond to the duplicate submission. This paragraph applies only to duplicate submissions and does not apply to any other penalties or interest that may be applicable to the original submission.
(5)(A)An employer may defer objecting to or paying any bill submitted by, or on behalf of, a provider whose liens are stayed pursuant to Section 4615, and the time limits for taking any action prescribed by paragraphs (2) and (3) shall not commence until the stay is lifted pursuant to Section 4615.
(B)An employer may object to any bill submitted by, or on behalf of, a provider who has been suspended pursuant to Section 139.21.
(c)Interest or an increase in compensation paid by an insurer pursuant to this section shall be treated in the same manner as an increase in compensation under subdivision (d) of Section 4650 for the purposes of any classification of risks and premium rates, and any system of merit rating approved or issued pursuant to Article 2 (commencing with Section 11730) of Chapter 3 of Part 3 of Division 2 of the Insurance Code.
(d)(1)Whenever an employer or insurer employs an individual or contracts with an entity to conduct a review of an itemization submitted by a physician or medical provider, the employer or insurer shall make available to that individual or entity all documentation submitted together with that itemization by the physician or medical provider. When an individual or entity conducting an itemization review determines that additional information or documentation is necessary to review the itemization, the individual or entity shall contact the claims administrator or insurer to obtain the necessary information or documentation that was submitted by the physician or medical provider pursuant to subdivision (b).
(2)An individual or entity reviewing an itemization of service submitted by a physician or medical provider shall not alter the procedure codes listed or recommend reduction of the amount of the payment unless the documentation submitted by the physician or medical provider with the itemization of service has been reviewed by that individual or entity. If the reviewer does not recommend payment for services as itemized by the physician or medical provider, the explanation of review shall provide the physician or medical provider with a specific explanation as to why the reviewer altered the procedure code or changed other parts of the itemization and the specific deficiency in the itemization or documentation that caused the reviewer to conclude that the altered procedure code or amount recommended for payment more accurately represents the service performed.
(e)(1)If the provider disputes the amount paid, the provider may request a second review within 90 days of service of the explanation of review or an order of the appeals board resolving the threshold issue as stated in the explanation of review pursuant to paragraph (5) of subdivision (a) of Section 4603.3. The request for a second review shall be submitted to the employer on a form prescribed by the administrative director and shall include all of the following:
(A)The date of the explanation of review and the claim number or other unique identifying number provided on the explanation of review.
(B)The item and amount in dispute.
(C)The additional payment requested and the reason therefor.
(D)The additional information provided in response to a request in the first explanation of review or any other additional information provided in support of the additional payment requested.
(2)If the only dispute is the amount of payment and the provider does not request a second review within 90 days, the bill shall be deemed satisfied and neither the employer nor the employee shall be liable for any further payment.
(3)Within 14 days of a request for second review, the employer shall respond with a final written determination on each of the items or amounts in dispute. Payment of any balance not in dispute shall be made within 21 days of receipt of the request for second review. This time limit may be extended by mutual written agreement.
(4)If the provider contests the amount paid, after receipt of the second review, the provider shall request an independent bill review as provided for in Section 4603.6.
(f)Except as provided in paragraph (4) of subdivision (e), the appeals board shall have jurisdiction over disputes arising out of this section pursuant to Section 5304.
SEC. 3.Section 4615 of the Labor Code is amended to read:4615.(a)Upon the filing of criminal charges against a physician, practitioner, or provider for any crime described in subparagraph (A) of paragraph (1) of subdivision (a) of Section 139.21, the following shall occur:
(1)Any lien filed by, or on behalf of, the physician, practitioner, or provider or any entity controlled controlled, as defined in paragraph (3) of subdivision (a) of Section 139.21, by the physician, practitioner, or provider for medical treatment services under Section 4600 or medical-legal services under Section 4621, and any accrual of interest related to the lien, shall be automatically stayed.
(2)Except as provided in subdivisions (b) and (c), the stay shall be in effect from the time of the filing of the charges until the disposition of the criminal proceedings.
(b)Upon conviction, as defined in paragraph (4) of subdivision (a) of Section 139.21, of the physician, practitioner, or provider for any crime described in subparagraph (A) of paragraph (1)of (1) of subdivision (a) of section 139.21, the automatic stay shall remain in effect for any liens not dismissed pursuant to paragraph (1) of subdivision (e) of Section 139.21 until the commencement of lien consolidation procedures under paragraph (2) of subdivision (e) of Section 139.21.
(c)The automatic stay required by this section shall not preclude a physician, practitioner, or provider from requesting the dismissal with prejudice and forfeiture of sums claimed therein of any liens subject to the stay. Upon the receipt of that request and for good cause shown, the chief judge of the Division of Workers Compensation or his or her designee may lift the stay as to one or more of those liens and order that they be dismissed with prejudice.
(d)The administrative director shall promptly post on the divisions Internet Web site the names of any physician, practitioner, or provider of medical treatment services whose liens are stayed pursuant to this section in the divisions Electronic Adjudication Management System (EAMS). section.
(e)The automatic stay required by this section shall not preclude the appeals board from inquiring into and determining within a workers compensation proceeding whether a lien is stayed pursuant to subdivision (a) or whether a lien claimant is controlled by a physician, practitioner, or provider.
(f)The administrative director may adopt rules for the implementation of this section.
(g)Notwithstanding this section, the filing of new or additional criminal charges against a physician, practitioner, or provider who has been suspended pursuant to subparagraph (A) of paragraph (1) of subdivision (a) of Section 139.21 shall not stay liens that are subject to consolidation and adjudication pursuant to subdivisions (e) to (i), inclusive, of Section 139.21, unless a determination has been made pursuant to subdivision (i) of Section 139.21 that a lien did not arise from the conduct that subjected the physician, practitioner, or provider to suspension.
(a)(1)The administrative director shall promptly suspend, pursuant to subdivision (b), any physician, practitioner, or provider from participating in the workers compensation system as a physician, practitioner, or provider if the individual or entity meets any of the following criteria:
(A)The individual or entity has been convicted of any felony or misdemeanor and that crime comes within any of the following descriptions:
(i)It involves fraud or abuse of the Medi-Cal program, Medicare program, or federal Medicare or Medicaid programs, the Medi-Cal program, or the workers compensation system, or fraud or abuse of any patient.
(ii)It relates to the conduct of the individuals medical practice as it pertains to patient care.
(iii)It is a financial crime that relates to the Medi-Cal program, Medicare program, or federal Medicare or Medicaid programs, the Medi-Cal program, or the workers compensation system.
(iv)It is otherwise substantially related to the qualifications, functions, or duties of a provider of services.
(B)The individual or entity has been suspended, due to fraud or abuse, from the federal Medicare or Medicaid programs. programs or the Medi-Cal program.
(C)The individuals license, certificate, or approval to provide health care has been surrendered or revoked.
(D)The entity is controlled by an individual who has been convicted of a felony or misdemeanor described in subparagraph (A).
(E)The changes made to clauses (i) and (iii) of subparagraph (A) and subparagraph (B) during the 201718 Regular Session of the Legislature do not constitute a change in, but are declaratory of, the existing law.
(2)The administrative director shall exercise due diligence to identify physicians, practitioners, or providers who have been suspended as described in subdivision (a) pursuant to subparagraph (B) of paragraph (1) by accessing the quarterly updates to the list of suspended and ineligible providers maintained by the State Department of Health Care Services for the Medi-Cal program at https://files.medi-cal.ca.gov/pubsdoco/SandILanding.asp.
(3)For purposes of this section and Section 4615, an entity is controlled by an individual if the individual is an officer or a director of the entity, or a shareholder with a 10 percent or greater interest in the entity.
(4)For purposes of this section and Section 4615, an individual or entity is considered to have been convicted of a crime if any of the following applies:
(A)A judgment of conviction has been entered by a federal, state, or local court, regardless of whether there is an appeal pending or whether the judgment of conviction or other record relating to criminal conduct has been expunged.
(B)There has been a verdict or finding of guilt by a federal, state, or local court.
(C)A plea of guilty has been accepted by a federal, state, or local court.
(5)Notwithstanding the initiation or completion of a prior suspension pursuant to this section, the administrative director may amend an existing notice of suspension or commence a subsequent suspension proceeding based upon new or additional grounds for suspending the physician, practitioner, or provider pursuant to paragraph (1).
(6)The administrative director may adopt regulations specifying any exemptions that shall not serve as the basis for exclusion under paragraph (1).
(b)(1)The administrative director shall adopt regulations for suspending a physician, practitioner, or provider from participating in the workers compensation system, subject to the notice and hearing requirements in paragraph (2).
(2)The administrative director shall furnish to the physician, practitioner, or provider written notice of the right to a hearing regarding the suspension and the procedure to follow to request a hearing. The notice shall state that the administrative director is required to suspend the physician, practitioner, or provider pursuant to subdivision (a) after 30 days from the date the notice is mailed unless the physician, practitioner, or provider requests a hearing and, in that hearing, the physician, practitioner, or provider provides proof that paragraph (1) of subdivision (a) is not applicable. The physician, practitioner, or provider may request a hearing within 10 days from the date the notice is sent by the administrative director. The request for the hearing shall stay the suspension. The hearing shall be held within 30 days of the receipt of the request. Upon the completion of the hearing, if the administrative director finds that paragraph (1) of subdivision (a) is applicable, the administrative director shall immediately suspend the physician, practitioner, or provider.
(3)The administrative director shall have power and jurisdiction to do all things necessary or convenient to conduct the hearings provided for in paragraph (2). The hearings and investigations may be conducted by any designated hearing officer appointed by the administrative director. Any authorized person conducting that hearing or investigation may administer oaths, subpoena and require the attendance of witnesses and the production of books or papers, and cause the depositions of witnesses residing within or without the state to be taken in the manner prescribed by law for like depositions in civil cases in the superior court of this state under Title 4 (commencing with Section 2016.010) of Part 4 of the Code of Civil Procedure.
(c)The administrative director shall promptly notify the physicians, practitioners, or providers state licensing, certifying, or registering authority of a suspension imposed pursuant to this section and shall update the divisions qualified medical evaluator and medical provider network databases, as appropriate.
(d)Upon suspension of a physician, practitioner, or provider pursuant to this section, the administrative director shall give notice of the suspension to the chief judge of the division, and the chief judge or his or her designee shall promptly thereafter provide written notification of the suspension to district offices and all workers compensation judges. The method of notification to all district offices and to all workers compensation judges shall be in a manner determined by the chief judge in his or her discretion. The administrative director shall also post notification of the suspension on the departments Internet Web site.
(e)The following procedures shall apply for the adjudication of any liens of a physician, practitioner, or provider suspended pursuant to subparagraph (A) or (D) of paragraph (1) of subdivision (a), including any liens filed by or on behalf of the physician, practitioner, or provider or any clinic, group or corporation in which entity controlled by the suspended physician, practitioner, or provider has an ownership interest. provider:
(1)If the disposition of the criminal proceeding provides for or requires, whether by plea agreement or by judgment, dismissal of liens and forfeiture of sums claimed therein, as specified in the criminal disposition, all of those liens shall be deemed dismissed with prejudice by operation of law as of the effective date of the final disposition in the criminal proceeding, and orders notifying of those dismissals may and shall be entered by workers compensation judges.
(2)If the disposition of the criminal proceeding fails to specify the disposition to be made of lien filings in the workers compensation system as set forth in paragraph (1), all liens All liens that have not been dismissed in accordance with paragraph (1) and remain pending in any workers compensation case in any district office within the state shall be consolidated and adjudicated in a special lien proceeding as described in subdivisions (f) to (i), inclusive.
(f)After notice of suspension, pursuant to subdivision (d), and if subdivision (e) applies, the administrative director shall appoint a special lien proceeding attorney, who shall be an attorney employed by the division or by the department. The special lien proceeding attorney shall, based on the information that is available, identify liens subject to disposition pursuant to subdivision (e), and workers compensation cases in which those liens are pending, and shall notify the chief judge regarding those liens. Based on this information, the chief judge or his or her designee shall identify a district office for a consolidated special lien proceeding to adjudicate those liens, and shall appoint a workers compensation judge to preside over that proceeding.
(g)It shall be a presumption affecting the burden of proof that all liens to be adjudicated in the special lien proceeding, and all underlying bills for service and claims for compensation asserted therein, arise from the conduct subjecting the physician, practitioner, or provider to suspension, and that payment is not due and should not be made on those liens because they arise from, or are connected to, criminal, fraudulent, or abusive conduct or activity. A lien claimant shall not have the right to payment unless he or she rebuts that presumption by a preponderance of the evidence.
(h)The special lien proceedings shall be governed by the same laws, regulations, and procedures that govern all other matters before the appeals board. The administrative director shall promulgate may adopt regulations for the implementation of this section.
(i)If it is determined in a special lien proceeding that a lien does not arise from the conduct subjecting a physician, practitioner, or provider to suspension, the workers compensation judge shall have the discretion to adjudicate the lien or transfer the lien back to the district office having venue over the case in which the lien was filed.
(j)At any time following suspension, a physician, practitioner, or provider lien claimant may elect to withdraw or to dismiss his or her lien with prejudice, which shall constitute a final disposition of the claim for compensation asserted therein.
(k)The provisions of this section shall do not affect, amend, alter, or in any way apply to the provisions of Section 139.2.
SEC. 2.Section 4603.2 of the Labor Code is amended to read:4603.2.(a)(1)Upon selecting a physician pursuant to Section 4600, the employee or physician shall notify the employer of the name and address, including the name of the medical group, if applicable, of the physician. The physician shall submit a report to the employer within five working days from the date of the initial examination, as required by Section 6409, and shall submit periodic reports at intervals that may be prescribed by rules and regulations adopted by the administrative director.
(2)If the employer objects to the employees selection of the physician on the grounds that the physician is not within the medical provider network used by the employer, and there is a final determination that the employee was entitled to select the physician pursuant to Section 4600, the employee shall be entitled to continue treatment with that physician at the employers expense in accordance with this division, notwithstanding Section 4616.2. The employer shall be required to pay from the date of the initial examination if the physicians report was submitted within five working days of the initial examination. If the physicians report was submitted more than five working days after the initial examination, the employer and the employee shall not be required to pay for any services prior to the date the physicians report was submitted.
(3)If the employer objects to the employees selection of the physician on the grounds that the physician is not within the medical provider network used by the employer, and there is a final determination that the employee was not entitled to select a physician outside of the medical provider network, the employer shall have no liability is not liable for treatment provided by or at the direction of that physician or for any consequences of the treatment obtained outside the network.
(b)(1)(A)A provider of services provided pursuant to Section 4600, including, but not limited to, physicians, hospitals, pharmacies, interpreters, copy services, transportation services, and home health care services, shall submit its request for payment with an itemization of services provided and the charge for each service, a copy of all reports showing the services performed, the prescription or referral from the primary treating physician if the services were performed by a person other than the primary treating physician, and any evidence of authorization for the services that may have been received. This section does not prohibit an employer, insurer, or third-party claims administrator from establishing, through written agreement, an alternative manual or electronic request for payment with providers for services provided pursuant to Section 4600.
(B)Effective for services provided on or after January 1, 2017, the request for payment with an itemization of services provided and the charge for each service shall be submitted to the employer within 12 months of the date of service or within 12 months of the date of discharge for inpatient facility services. The administrative director shall adopt rules to implement the 12-month limitation period. The rules shall define circumstances that constitute good cause for an exception to the 12-month period, including provisions to address the circumstances of a nonoccupational injury or illness later found to be a compensable injury or illness. The request for payment is barred unless timely submitted.
(C)Notwithstanding the requirements of this paragraph, a copy of the prescription shall not be required with a request for payment for pharmacy services, unless the provider of services has entered into a written agreement, as provided in this paragraph, that requires a copy of a prescription for a pharmacy service.
(D)This section does not preclude an employer, insurer, pharmacy benefits manager, or third-party claims administrator from requesting a copy of the prescription during a review of any records of prescription drugs that were dispensed by a pharmacy.
(2)Except as provided in subdivision (d) of Section 4603.4, or under contracts authorized under Section 5307.11, payment for medical treatment provided or prescribed by the treating physician selected by the employee or designated by the employer shall be made at reasonable maximum amounts in the official medical fee schedule, pursuant to Section 5307.1, in effect on the date of service. Payments shall be made by the employer with an explanation of review pursuant to Section 4603.3 within 45 days after receipt of each separate, separate itemization of medical services provided, together with any required reports and any written authorization for services that may have been received by the physician. If the itemization or a portion thereof is contested, denied, or considered incomplete, the physician shall be notified, in the explanation of review, that the itemization is contested, denied, or considered incomplete, within 30 days after receipt of the itemization by the employer. An explanation of review that states an itemization is incomplete shall also state all additional information required to make a decision. A properly documented list of services provided and not paid at the rates then in effect under Section 5307.1 within the 45-day period shall be paid at the rates then in effect and increased by 15 percent, together with interest at the same rate as judgments in civil actions retroactive to the date of receipt of the itemization, unless the employer does both of the following:
(A)Pays the provider at the rates in effect within the 45-day period.
(B)Advises, in an explanation of review pursuant to Section 4603.3, the physician, or another provider of the items being contested, the reasons for contesting these items, and the remedies available to the physician or the other provider if he or she disagrees. In the case of an itemization that includes services provided by a hospital, outpatient surgery center, or independent diagnostic facility, advice that a request has been made for an audit of the itemization shall satisfy the requirements of this paragraph.
An employers liability to a physician or another provider under this section for delayed payments shall not affect its liability to an employee under Section 5814 or any other provision of this division.
(3)Notwithstanding paragraph (1), if the employer is a governmental entity, payment for medical treatment provided or prescribed by the treating physician selected by the employee or designated by the employer shall be made within 60 days after receipt of each separate itemization, together with any required reports and any written authorization for services that may have been received by the physician.
(4)Duplicate submissions of medical services itemizations, for which an explanation of review was previously provided, shall require no further or additional notification or objection by the employer to the medical provider and shall not subject the employer to any additional penalties or interest pursuant to this section for failing to respond to the duplicate submission. This paragraph shall apply applies only to duplicate submissions and does not apply to any other penalties or interest that may be applicable to the original submission.
(5)(A)An employer may defer objecting to or paying any bill submitted by, or on behalf of, a provider whose liens are stayed pursuant to Section 4615, and the time limits for taking any action prescribed by paragraphs (2) and (3) shall not commence until the stay is lifted pursuant to Section 4615.
(B)An employer may object to any bill submitted by, or on behalf of, a provider who has been suspended pursuant to Section 139.21.
(c)Interest or an increase in compensation paid by an insurer pursuant to this section shall be treated in the same manner as an increase in compensation under subdivision (d) of Section 4650 for the purposes of any classification of risks and premium rates, and any system of merit rating approved or issued pursuant to Article 2 (commencing with Section 11730) of Chapter 3 of Part 3 of Division 2 of the Insurance Code.
(d)(1)Whenever an employer or insurer employs an individual or contracts with an entity to conduct a review of an itemization submitted by a physician or medical provider, the employer or insurer shall make available to that individual or entity all documentation submitted together with that itemization by the physician or medical provider. When an individual or entity conducting an itemization review determines that additional information or documentation is necessary to review the itemization, the individual or entity shall contact the claims administrator or insurer to obtain the necessary information or documentation that was submitted by the physician or medical provider pursuant to subdivision (b).
(2)An individual or entity reviewing an itemization of service submitted by a physician or medical provider shall not alter the procedure codes listed or recommend reduction of the amount of the payment unless the documentation submitted by the physician or medical provider with the itemization of service has been reviewed by that individual or entity. If the reviewer does not recommend payment for services as itemized by the physician or medical provider, the explanation of review shall provide the physician or medical provider with a specific explanation as to why the reviewer altered the procedure code or changed other parts of the itemization and the specific deficiency in the itemization or documentation that caused the reviewer to conclude that the altered procedure code or amount recommended for payment more accurately represents the service performed.
(e)(1)If the provider disputes the amount paid, the provider may request a second review within 90 days of service of the explanation of review or an order of the appeals board resolving the threshold issue as stated in the explanation of review pursuant to paragraph (5) of subdivision (a) of Section 4603.3. The request for a second review shall be submitted to the employer on a form prescribed by the administrative director and shall include all of the following:
(A)The date of the explanation of review and the claim number or other unique identifying number provided on the explanation of review.
(B)The item and amount in dispute.
(C)The additional payment requested and the reason therefor.
(D)The additional information provided in response to a request in the first explanation of review or any other additional information provided in support of the additional payment requested.
(2)If the only dispute is the amount of payment and the provider does not request a second review within 90 days, the bill shall be deemed satisfied and neither the employer nor the employee shall be liable for any further payment.
(3)Within 14 days of a request for second review, the employer shall respond with a final written determination on each of the items or amounts in dispute. Payment of any balance not in dispute shall be made within 21 days of receipt of the request for second review. This time limit may be extended by mutual written agreement.
(4)If the provider contests the amount paid, after receipt of the second review, the provider shall request an independent bill review as provided for in Section 4603.6.
(f)Except as provided in paragraph (4) of subdivision (e), the appeals board shall have jurisdiction over disputes arising out of this subdivision section pursuant to Section 5304.
SECTION 1.SEC. 3.Section 4615 of the Labor Code is amended to read:4615.(a)Any Upon the filing of criminal charges against a physician, practitioner, or provider for any crime described in subparagraph (A) of paragraph (1) of subdivision (a) of Section 139.21, the following shall occur:
(1)Any lien filed by by, or on behalf of a physician or provider of of, the physician, practitioner, or provider or any entity controlled by the physician, practitioner, or provider for medical treatment services under Section 4600 or medical-legal services under Section 4621, and any accrual of interest related to the lien, shall be automatically stayed upon the filing of criminal charges against that physician or provider for an offense involving fraud against the workers compensation system, medical billing fraud, insurance fraud, or fraud against the Medicare or Medi-Cal programs. The stayed.
(2)Except as provided in subdivisions (b) and (c), the stay shall be in effect from the time of the filing of the charges until the disposition of the criminal proceedings. In the event the criminal proceedings result in a conviction, the stay shall remain in effect from the date of the conviction until the adjudication procedures specified in Section 139.21 have been completed. The administrative director may promulgate rules for the implementation of this section.
(b)Upon conviction, as defined in paragraph (4) of subdivision (a) of Section 139.21, of the physician, practitioner, or provider for any crime described in subparagraph (A) of paragraph (1)of subdivision (a) of section 139.21, the automatic stay shall remain in effect for any liens not dismissed pursuant to paragraph (1) of subdivision (e) of Section 139.21 until the commencement of lien consolidation procedures under paragraph (2) of subdivision (e) of Section 139.21.
(c)The automatic stay required by this section shall not preclude a physician, practitioner, or provider from requesting the dismissal with prejudice and forfeiture of sums claimed therein of any liens subject to the stay. Upon the receipt of that request and for good cause shown, the chief judge of the Division of Workers Compensation or his or her designee may lift the stay as to one or more of those liens and order that they be dismissed with prejudice.
(b)(d)The administrative director shall promptly post on the divisions Internet Web site the names of any physician physician, practitioner, or provider of medical treatment services whose liens were are stayed pursuant to this section. section in the divisions Electronic Adjudication Management System (EAMS).
(e)The automatic stay required by this section shall not preclude the appeals board from inquiring into and determining within a workers compensation proceeding whether a lien is stayed pursuant to subdivision (a) or whether a lien claimant is controlled by a physician, practitioner, or provider.
(f)The administrative director may adopt rules for the implementation of this section.
(a)Any lien filed by or on behalf of a physician or provider of medical treatment services under Section 4600 or medical-legal services under Section 4621, and any accrual of interest related to the lien, shall be automatically stayed upon the filing of criminal charges against that physician or provider for an offense involving fraud against the workers compensation system, medical billing fraud, insurance fraud, or fraud against the Medicare or Medi-Cal programs. The stay shall be in effect from the time of the filing of the charges until the disposition of the criminal proceedings. In the event the criminal proceedings result in a conviction, the stay shall remain in effect from the date of the conviction until the adjudication procedures specified in Section 139.21 have been completed. The administrative director may promulgate rules for the implementation of this section.
(b)The administrative director shall promptly post on the divisions Internet Web site the names of any physician or provider of medical treatment services whose liens were stayed pursuant to this section.
(a)Any lien filed by or on behalf of a physician or provider of medical treatment services under Section 4600 or medical-legal services under Section 4621, and any accrual of interest related to the lien, shall be automatically stayed upon the filing of criminal charges against that physician or provider for an offense involving fraud against the workers compensation system, medical billing fraud, insurance fraud, or fraud against the Medicare or Medi-Cal programs. The stay shall be in effect from the time of the filing of the charges until the disposition of the criminal proceedings. until the adjudication procedures specified in Section 139.21 have been completed. The administrative director may promulgate rules for the implementation of this section.
(b)The administrative director shall promptly post on the divisions Internet Web site the names of any physician or provider of medical treatment services whose liens were stayed pursuant to this section.
SECTION 1.Section 1872.83 of the Insurance Code is amended to read:1872.83.(a)The commissioner shall ensure that the Fraud Division aggressively pursues all reported incidents of probable workers compensation fraud, as defined in Sections 11760 and 11880, and in subdivision (a) of Section 1871.4, and in Section 549 of the Penal Code, and forwards to the appropriate disciplinary body the names, along with all supporting evidence, of any individuals licensed under the Business and Professions Code who are suspected of actively engaging in fraudulent activity. The Fraud Division shall forward to the commissioner or the Director of Industrial Relations, as appropriate, the name, along with all supporting evidence, of any insurer, as defined in subdivision (c) of Section 1877.1, suspected of actively engaging in the fraudulent denial of claims.(b)To fund increased investigation and prosecution of workers compensation fraud, and of willful failure to secure payment of workers compensation, in violation of Section 3700.5 of the Labor Code, there shall be an annual assessment as follows:(1)The aggregate amount of the assessment shall be determined by the Fraud Assessment Commission, which is hereby established. The commission shall be composed of seven members consisting of two representatives of organized labor, two representatives of self-insured employers, one representative of insured employers, one representative of workers compensation insurers, and the President of the State Compensation Insurance Fund, or his or her designee.The Governor shall appoint members representing organized labor, self-insured employers, insured employers, and insurers. The term of office of members of the commission shall be four years, and a member shall hold office until the appointment of a successor. The President of the State Compensation Insurance Fund shall be an ex officio, voting member of the commission. Members of the commission shall receive one hundred dollars ($100) for each day of actual attendance at commission meetings and other official commission business, and shall also receive their actual and necessary traveling expenses incurred in the performance of commission duties. Payment of per diem and travel expenses shall be made from the Workers Compensation Fraud Account in the Insurance Fund, established in paragraph (4), upon appropriation by the Legislature.(2)In determining the aggregate amount of the assessment, the Fraud Assessment Commission shall consider the advice and recommendations of the Fraud Division, the Director of Industrial Relations, and the commissioner.(3)The aggregate amount of the assessment shall be collected by the Director of Industrial Relations pursuant to Section 62.6 of the Labor Code. The Fraud Assessment Commission shall annually advise the Director of Industrial Relations, not later than March 15, of the aggregate amount to be assessed for the next fiscal year.(4)The amount collected, together with the fines collected for violations of the unlawful acts specified in Sections 1871.4, 11760, and 11880, Section 3700.5 of the Labor Code, and Section 549 of the Penal Code, shall be deposited in the Workers Compensation Fraud Account in the Insurance Fund, which is hereby created, and may be used, upon appropriation by the Legislature, only for enhanced investigation and prosecution of workers compensation fraud and of willful failure to secure payment of workers compensation as provided in this section.(c)For each fiscal year, the total amount of revenues derived from the assessment pursuant to subdivision (b) shall, together with amounts collected pursuant to fines imposed for unlawful acts described in Sections 1871.4, 11760, and 11880, Section 3700.5 of the Labor Code, and Section 549 of the Penal Code, not be less than three million dollars ($3,000,000). Any funds appropriated by the Legislature pursuant to subdivision (b) that are not expended in the fiscal year for which they have been appropriated, and that have not been allocated under subdivision (f), shall be applied to satisfy for the immediately following fiscal year the minimum total amount required by this subdivision. In no case may that money be transferred to the General Fund.(d)After incidental expenses, at least 40 percent of the funds to be used for the purposes of this section shall be provided to the Fraud Division of the Department of Insurance for enhanced investigative efforts, and at least 40 percent of the funds shall be distributed to district attorneys, pursuant to a determination by the commissioner with the advice and consent of the division and the Fraud Assessment Commission, as to the most effective distribution of moneys for purposes of the investigation and prosecution of workers compensation fraud cases and cases relating to the willful failure to secure the payment of workers compensation. Each district attorney seeking a portion of the funds shall submit to the commissioner an application setting forth in detail the proposed use of any funds provided. A district attorney receiving funds pursuant to this subdivision shall submit an annual report to the commissioner with respect to the success of his or her efforts. Upon receipt, the commissioner shall provide copies to the Fraud Division and the Fraud Assessment Commission of any application, annual report, or other documents with respect to the allocation of money pursuant to this subdivision. Both the application for moneys and the distribution of moneys shall be public documents. Information submitted to the commissioner pursuant to this section concerning criminal investigations, whether active or inactive, shall be confidential.(e)If a district attorney is determined by the commissioner to be unable or unwilling to investigate and prosecute workers compensation fraud claims or claims relating to the willful failure to secure the payment of workers compensation, the commissioner shall discontinue distribution of funds allocated for that county and may redistribute those funds according to this subdivision.(1)The commissioner shall promptly determine whether any other county could assert jurisdiction to prosecute the fraud claims or claims relating to the willful failure to secure the payment of workers compensation that would have been brought in the nonparticipating county, and if so, the commissioner may award funds to conduct the prosecutions redirected pursuant to this subdivision. These funds may be in addition to any other fraud prosecution funds or claims relating to the willful failure to secure the payment of workers compensation prosecution otherwise awarded under this section. Any district attorney receiving funds pursuant to this subdivision shall first agree that the funds shall be used solely for investigating and prosecuting those cases of workers compensation fraud or claims relating to the willful failure to secure the payment of workers compensation that are redirected pursuant to this subdivision and submit an annual report to the commissioner with respect to the success of the district attorneys efforts. The commissioner shall keep the Fraud Assessment Commission fully informed of all reallocations of funds under this paragraph.(2)If the commissioner determines that no district attorney is willing or able to investigate and prosecute the workers compensation fraud claims or claims relating to the willful failure to secure the payment of workers compensation arising in the nonparticipating county, the commissioner, with the advice and consent of the Fraud Assessment Commission, may award to the Attorney General some or all of the funds previously awarded to the nonparticipating county. Before the commissioner may award any funds, the Attorney General shall submit to the commissioner an application setting forth in detail his or her proposed use of any funds provided and agreeing that any funds awarded shall be used solely for investigating and prosecuting those cases of workers compensation fraud or claims relating to the willful failure to secure the payment of workers compensation that are redirected pursuant to this subdivision. The Attorney General shall submit an annual report to the commissioner with respect to the success of the fraud prosecution efforts of his or her office.(3)Neither the Attorney General nor any district attorney shall be required to relinquish control of any investigation or prosecution undertaken pursuant to this subdivision unless the commissioner determines that satisfactory progress is no longer being made on the case or the case has been abandoned.(4)A county that has become a nonparticipating county due to the inability or unwillingness of its district attorney to investigate and prosecute workers compensation fraud or the willful failure to secure the payment of workers compensation shall not become eligible to receive funding under this section until it has submitted a new application that meets the requirements of subdivision (d) and the applicable regulations.(f)If in any fiscal year the Fraud Division does not use all of the funds made available to it under subdivision (d), any remaining funds may be distributed to district attorneys pursuant to a determination by the commissioner in accordance with the same procedures set forth in subdivision (d).(g)The commissioner shall adopt rules and regulations to implement this section in accordance with the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code). Included in the rules and regulations shall be the criteria for redistributing funds to district attorneys and the Attorney General. The adoption of the rules and regulations shall be deemed to be an emergency and necessary for the immediate preservation of the public peace, health, and safety, or general welfare.(h)The department shall report to the Governor, the Legislature, to the committees of the Senate and Assembly having jurisdiction over insurance, and the Fraud Assessment Commission on the activities of the Fraud Division and district attorneys supported by the funds provided by this section in the annual report submitted pursuant to Section 12922.The annual report shall include, but is not limited to, all of the following information for the department and each district attorneys office:(1)All allocations, distributions, and expenditures of funds.(2)The number of search warrants issued.(3)The number of arrests and prosecutions, and the aggregate number of parties involved in each.(4)The number of convictions and the names of all convicted fraud perpetrators.(5)The estimated value of all assets frozen, penalties assessed, and restitutions made for each conviction.(6)Any additional items necessary to fully inform the Fraud Assessment Commission and the Legislature of the fraud-fighting efforts financed through this section.(i)In order to meet the requirements of subdivision (g), the department shall submit a biannual information request to those district attorneys who have applied for and received funding through the annual assessment process under this section.(j)Assessments levied or collected to fight workers compensation fraud and insurance fraud are not taxes. Those funds are entrusted to the state to fight fraud and the willful failure to secure the payment of workers compensation by funding state and local investigation and prosecution efforts. Accordingly, any funds resulting from assessments, fees, penalties, fines, restitution, or recovery of costs of investigation and prosecution deposited in the Insurance Fund shall not be deemed unexpended funds for any purpose and, if remaining in that account at the end of any fiscal year, shall be applied as provided in subdivision (f) and to offset or augment subsequent years program funding.(a)The commissioner shall ensure that the Fraud Division aggressively pursues all reported incidents of probable workers compensation fraud, as defined in Sections 11760 and 11880, and in subdivision (a) of Section 1871.4, and in Section 549 of the Penal Code, and forwards to the appropriate disciplinary body the names, along with all supporting evidence, of any individuals licensed under the Business and Professions Code who are suspected of actively engaging in fraudulent activity. The Fraud Division shall forward to the Insurance Commissioner commissioner or the Director of Industrial Relations, as appropriate, the name, along with all supporting evidence, of any insurer, as defined in subdivision (c) of Section 1877.1, suspected of actively engaging in the fraudulent denial of claims.
(b)To fund increased investigation and prosecution of workers compensation fraud, and of willful failure to secure payment of workers compensation, in violation of Section 3700.5 of the Labor Code, there shall be an annual assessment as follows:
(1)The aggregate amount of the assessment shall be determined by the Fraud Assessment Commission, which is hereby established. The commission shall be composed of seven members consisting of two representatives of organized labor, two representatives of self-insured employers, one representative of insured employers, one representative of workers compensation insurers, and the President of the State Compensation Insurance Fund, or his or her designee.
The Governor shall appoint members representing organized labor, self-insured employers, insured employers, and insurers. The term of office of members of the commission shall be four years, and a member shall hold office until the appointment of a successor. The President of the State Compensation Insurance Fund shall be an ex officio, voting member of the commission. Members of the commission shall receive one hundred dollars ($100) for each day of actual attendance at commission meetings and other official commission business, and shall also receive their actual and necessary traveling expenses incurred in the performance of commission duties. Payment of per diem and travel expenses shall be made from the Workers Compensation Fraud Account in the Insurance Fund, established in paragraph (4), upon appropriation by the Legislature.
(2)In determining the aggregate amount of the assessment, the Fraud Assessment Commission shall consider the advice and recommendations of the Fraud Division Division, the Director of Industrial Relations, and the commissioner.
(3)The aggregate amount of the assessment shall be collected by the Director of Industrial Relations pursuant to Section 62.6 of the Labor Code. The Fraud Assessment Commission shall annually advise the Director of Industrial Relations, not later than March 15, of the aggregate amount to be assessed for the next fiscal year.
(4)The amount collected, together with the fines collected for violations of the unlawful acts specified in Sections 1871.4, 11760, and 11880, Section 3700.5 of the Labor Code, and Section 549 of the Penal Code, shall be deposited in the Workers Compensation Fraud Account in the Insurance Fund, which is hereby created, and may be used, upon appropriation by the Legislature, only for enhanced investigation and prosecution of workers compensation fraud and of willful failure to secure payment of workers compensation as provided in this section.
(c)For each fiscal year, the total amount of revenues derived from the assessment pursuant to subdivision (b) shall, together with amounts collected pursuant to fines imposed for unlawful acts described in Sections 1871.4, 11760, and 11880, Section 3700.5 of the Labor Code, and Section 549 of the Penal Code, not be less than three million dollars ($3,000,000). Any funds appropriated by the Legislature pursuant to subdivision (b) that are not expended in the fiscal year for which they have been appropriated, and that have not been allocated under subdivision (f), shall be applied to satisfy for the immediately following fiscal year the minimum total amount required by this subdivision. In no case may that money be transferred to the General Fund.
(d)After incidental expenses, at least 40 percent of the funds to be used for the purposes of this section shall be provided to the Fraud Division of the Department of Insurance for enhanced investigative efforts, and at least 40 percent of the funds shall be distributed to district attorneys, pursuant to a determination by the commissioner with the advice and consent of the division and the Fraud Assessment Commission, as to the most effective distribution of moneys for purposes of the investigation and prosecution of workers compensation fraud cases and cases relating to the willful failure to secure the payment of workers compensation. Each district attorney seeking a portion of the funds shall submit to the commissioner an application setting forth in detail the proposed use of any funds provided. A district attorney receiving funds pursuant to this subdivision shall submit an annual report to the commissioner with respect to the success of his or her efforts. Upon receipt, the commissioner shall provide copies to the Fraud Division and the Fraud Assessment Commission of any application, annual report, or other documents with respect to the allocation of money pursuant to this subdivision. Both the application for moneys and the distribution of moneys shall be public documents. Information submitted to the commissioner pursuant to this section concerning criminal investigations, whether active or inactive, shall be confidential.
(e)If a district attorney is determined by the commissioner to be unable or unwilling to investigate and prosecute workers compensation fraud claims or claims relating to the willful failure to secure the payment of workers compensation, the commissioner shall discontinue distribution of funds allocated for that county and may redistribute those funds according to this subdivision.
(1)The commissioner shall promptly determine whether any other county could assert jurisdiction to prosecute the fraud claims or claims relating to the willful failure to secure the payment of workers compensation that would have been brought in the nonparticipating county, and if so, the commissioner may award funds to conduct the prosecutions redirected pursuant to this subdivision. These funds may be in addition to any other fraud prosecution funds or claims relating to the willful failure to secure the payment of workers compensation prosecution otherwise awarded under this section. Any district attorney receiving funds pursuant to this subdivision shall first agree that the funds shall be used solely for investigating and prosecuting those cases of workers compensation fraud or claims relating to the willful failure to secure the payment of workers compensation that are redirected pursuant to this subdivision and submit an annual report to the commissioner with respect to the success of the district attorneys efforts. The commissioner shall keep the Fraud Assessment Commission fully informed of all reallocations of funds under this paragraph.
(2)If the commissioner determines that no district attorney is willing or able to investigate and prosecute the workers compensation fraud claims or claims relating to the willful failure to secure the payment of workers compensation arising in the nonparticipating county, the commissioner, with the advice and consent of the Fraud Assessment Commission, may award to the Attorney General some or all of the funds previously awarded to the nonparticipating county. Before the commissioner may award any funds, the Attorney General shall submit to the commissioner an application setting forth in detail his or her proposed use of any funds provided and agreeing that any funds awarded shall be used solely for investigating and prosecuting those cases of workers compensation fraud or claims relating to the willful failure to secure the payment of workers compensation that are redirected pursuant to this subdivision. The Attorney General shall submit an annual report to the commissioner with respect to the success of the fraud prosecution efforts of his or her office.
(3)Neither the Attorney General nor any district attorney shall be required to relinquish control of any investigation or prosecution undertaken pursuant to this subdivision unless the commissioner determines that satisfactory progress is no longer being made on the case or the case has been abandoned.
(4)A county that has become a nonparticipating county due to the inability or unwillingness of its district attorney to investigate and prosecute workers compensation fraud or the willful failure to secure the payment of workers compensation shall not become eligible to receive funding under this section until it has submitted a new application that meets the requirements of subdivision (d) and the applicable regulations.
(f)If in any fiscal year the Fraud Division does not use all of the funds made available to it under subdivision (d), any remaining funds may be distributed to district attorneys pursuant to a determination by the commissioner in accordance with the same procedures set forth in subdivision (d).
(g)The commissioner shall adopt rules and regulations to implement this section in accordance with the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code). Included in the rules and regulations shall be the criteria for redistributing funds to district attorneys and the Attorney General. The adoption of the rules and regulations shall be deemed to be an emergency and necessary for the immediate preservation of the public peace, health, and safety, or general welfare.
(h)The department shall report to the Governor, the Legislature, to the committees of the Senate and Assembly having jurisdiction over insurance, and the Fraud Assessment Commission on the activities of the Fraud Division and district attorneys supported by the funds provided by this section in the annual report submitted pursuant to Section 12922.
The annual report shall include, but is not limited to, all of the following information for the department and each district attorneys office:
(1)All allocations, distributions, and expenditures of funds.
(2)The number of search warrants issued.
(3)The number of arrests and prosecutions, and the aggregate number of parties involved in each.
(4)The number of convictions and the names of all convicted fraud perpetrators.
(5)The estimated value of all assets frozen, penalties assessed, and restitutions made for each conviction.
(6)Any additional items necessary to fully inform the Fraud Assessment Commission and the Legislature of the fraud-fighting efforts financed through this section.
(i)In order to meet the requirements of subdivision (g), the department shall submit a biannual information request to those district attorneys who have applied for and received funding through the annual assessment process under this section.
(j)Assessments levied or collected to fight workers compensation fraud and insurance fraud are not taxes. Those funds are entrusted to the state to fight fraud and the willful failure to secure the payment of workers compensation by funding state and local investigation and prosecution efforts. Accordingly, any funds resulting from assessments, fees, penalties, fines, restitution, or recovery of costs of investigation and prosecution deposited in the Insurance Fund shall not be deemed unexpended funds for any purpose and, if remaining in that account at the end of any fiscal year, shall be applied as provided in subdivision (f) and to offset or augment subsequent years program funding.
(k)The California State Auditors Office shall evaluate the effectiveness of the efforts of the Fraud Assessment Commission, the Fraud Division, the Department of Insurance, and the Department of Industrial Relations, as well as local law enforcement agencies, including district attorneys, in identifying, investigating, and prosecuting workers compensation fraud and the willful failure to secure payment of workers compensation. The report shall specifically identify areas of deficiencies. Included in this report shall be recommendations on whether the current program provides the appropriate levels of accountability for those responsible for the allocation and expenditure of funds raised from the assessment provided in this section. The California State Auditors Office shall submit a report to the Chairperson of the Senate Committee on Labor and Industrial Relations and the Chairperson of the Assembly Committee on Insurance on or before May 1, 2004.|
Date
|
Status
|
|---|---|
| Sep 26, 2017 | Chaptered by Secretary of State - Chapter 300, Statutes of 2017. |
| Sep 26, 2017 | Approved by the Governor. |
| Sep 13, 2017 | From committee: That the Senate amendments be concurred in. (Ayes 9. Noes 0.) (September 13). |
| Sep 14, 2017 | Senate amendments concurred in. To Engrossing and Enrolling. |
| Sep 13, 2017 | Assembly Rule 77(a) suspended. |
| Sep 25, 2017 | Enrolled and presented to the Governor at 12 p.m. |
| Sep 14, 2017 | Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 79. Noes 0. Page 3384.). |
| Sep 13, 2017 | In Assembly. Concurrence in Senate amendments pending. May be considered on or after September 15 pursuant to Assembly Rule 77. |
| Sep 12, 2017 | Read third time. Passed. Ordered to the Assembly. |
| Sep 12, 2017 | Read third time. Passed. Ordered to the Assembly. (Ayes 40. Noes 0. Page 2774.). |
| Sep 11, 2017 | Read second time. Ordered to third reading. |
| Sep 8, 2017 | Read third time and amended. Ordered to second reading. |
| Sep 7, 2017 | From committee: That the measure be returned to Senate Floor for consideration. (Ayes 5. Noes 0.) (September 7) |
| Sep 1, 2017 | Re-referred to Com. on RLS. pursuant to Senate Rule 29.10(b). |
| Sep 1, 2017 | Read second time. Ordered to third reading. |
| Aug 31, 2017 | Read third time and amended. Ordered to second reading. |
| Aug 24, 2017 | From Consent Calendar. |
| Aug 22, 2017 | Read second time. Ordered to Consent Calendar. |
| Aug 21, 2017 | From committee: Be placed on second reading file pursuant to Senate Rule 28.8 and ordered to consent calendar. |
| Jul 12, 2017 | From committee: Do pass and re-refer to Com. on APPR. with recommendation: To Consent Calendar. (Ayes 5. Noes 0.) (July 12). Re-referred to Com. on APPR. |
| Jun 8, 2017 | Referred to Com. on L. & I.R. |
| May 30, 2017 | In Senate. Read first time. To Com. on RLS. for assignment. |
| May 30, 2017 | Read third time. Passed. Ordered to the Senate. (Ayes 77. Noes 0. Page 1859.) |
| May 25, 2017 | Read second time. Ordered to Consent Calendar. |
| May 24, 2017 | From committee: Do pass. To Consent Calendar. (Ayes 17. Noes 0.) (May 24). |
| Apr 24, 2017 | Re-referred to Com. on APPR. |
| Apr 20, 2017 | Read second time and amended. |
| Apr 19, 2017 | From committee: Amend, and do pass as amended and re-refer to Com. on APPR. with recommendation: To Consent Calendar. (Ayes 13. Noes 0.) (April 19). |
| Apr 17, 2017 | Re-referred to Com. on INS. |
| Apr 6, 2017 | From committee chair, with author's amendments: Amend, and re-refer to Com. on INS. Read second time and amended. |
| Mar 13, 2017 | Referred to Com. on INS. |
| Feb 19, 2017 | From printer. May be heard in committee March 21. |
| Feb 17, 2017 | Read first time. To print. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Sep 14, 2017 | AB 1422 DALY Concurrence in Senate Amendments | Assembly Floor |
Passed |
|
| Sep 13, 2017 | With recommendation: That Senate amendments be concurred in. | Assembly Standing Committee on Insurance |
Passed |
|
| Sep 12, 2017 | Assembly 3rd Reading AB1422 Daly By Bradford | Senate Floor |
Passed |
|
| Sep 7, 2017 | That the measure be returned to Senate Floor for consideration. Ordered to third reading. | Senate Standing Committee on Labor and Industrial Relations |
Passed |
|
| Jul 12, 2017 | Do pass, but first be re-referred to the Committee on [Appropriations] with the recommendation: To Consent Calendar | Senate Standing Committee on Labor and Industrial Relations |
Passed |
|
| May 30, 2017 | AB 1422 DALY Consent Calendar Second Day Regular Session | Assembly Floor |
Passed |
|
| May 24, 2017 | Do pass. To Consent Calendar. | Assembly Standing Committee on Appropriations |
Passed |
|
| Apr 19, 2017 | Do pass as amended, and be re-referred to the Committee on [Appropriations] with recommendation: To Consent Calendar | Assembly Standing Committee on Insurance |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| American Insurance Association | ** Support | Sep 11, 2017 |
| Armenta Law Firm | ** Against | Sep 11, 2017 |
| Association Of California Insurance Companies | * Support | Sep 7, 2017 |
| California Association Of Joint Powers Authorities | * Support | Sep 7, 2017 |
| California Chiropractic Association | ** Support | Sep 11, 2017 |
| California Coalition On Workers Compensation | * Support | Sep 7, 2017 |
| California Joint Powers Authorities | ** Support | Sep 11, 2017 |
| California Medical Association, Inc. | * Support | Sep 7, 2017 |
| The American Insurance Association | * Support | Sep 13, 2017 |
CONCURRENCE IN SENATE AMENDMENTS
CSA1 Bill Id:AB 1422
Author:(Daly)
As Amended Ver:September 8, 2017
Majority vote
ASSEMBLY: | 77-0 | (May 30, 2017) | SENATE: | 40-0 | (September 12, 2017) |
Original Committee Reference: INS.
SUMMARY: Clarifies the duration of a "stay" on litigating liens filed by a provider charged criminally with workers' compensation fraud. Specifically, this bill:
- Deletes language that terminates the stay on lien proceedings at the end of the criminal proceedings.
- Specifies that the stay remains in effect until the completion of the special administrative proceedings that apply to liens filed by providers convicted of workers' compensation fraud.
The Senate amendments
- Adopt clarifying descriptions of the federal medicare and medicaid programs in several places in current law.
- Adopt the federal definitions for determining whether an entity is controlled by the person charged with or convicted of workers' compensation fraud.
- Specify that these changes are declaratory of current law.
- Define when a "conviction" occurs for purposes of proceedings under current law to address fraudulent liens.
- Clarify that, in addition to the rules governing a stay or suspension of liens filed by a person who is charged with or convicted of workers' compensation fraud, an employer need not pay a billing from a charged or convicted provider that has not yet resulted in a filed lien.
- Clarify that the filing of new or different charges against a provider charged with workers' compensation fraud does not preclude the Workers Compensation Appeals Board or its judges from proceeding on liens already before it.
- Make a number of technical and conforming changes.
EXISTING LAW:
- Establishes a comprehensive system to provide workers' compensation benefits, including medical treatment and related services, to employees who suffer injuries or conditions that arise out of, or in the course of employment.
- Provides for criminal penalties against providers of workers' compensation services if those providers commit fraud in the delivery of or billing for those services.
- Allows providers to file a lien in a pending workers' compensation case in the event that treatments are disputed, or otherwise not being paid or authorized by the responsible payor (employer or insurer).
- Establishes a system for the adjudication of liens in the normal handling of the workers' compensation claim.
- Establishes special procedures to handle liens filed by providers who are convicted of workers' compensation fraud, or who have been barred from federal medical systems for fraudulent behavior.
- Provides that any pending liens filed by a provider described above are stayed, regardless of whether the specific liens were related to the specific acts of fraud for which the provided was convicted, pending the completion of special procedures adopted to adjudicate those liens.
FISCAL EFFECT: According to the Senate Appropriations Committee, negligible impact on state operations. In most respects, the Senate amendments codify current practices to implement current law.
COMMENTS:
- Purpose. The author introduced this bill to cure an anomaly that resulted from the enactment of two bills last Session. AB 1244 (Gray), Chapter 852, Statutes of 2016, addressed workers' compensation fraud, and included remedies against providers convicted of workers' compensation fraud, or who were barred from federal medical care programs for fraudulent behavior. The bill adopted special procedures to address liens filed by these miscreant providers.
SB 1160 (Mendoza), Chapter 868, Statutes of 2016, addressed a broader range of workers' compensation issues, but also contained provisions addressing a number of abuses in how liens were filed and processed in the workers' compensation system. Among the lien provisions was a stay on litigating any liens when a provider was charged with workers' compensation fraud. Unfortunately, the SB 1160 stay language did not conform to the this bill adjudication procedure language. This bill clarifies how the SB 1160 stay operates upon a conviction in the criminal proceedings.
- Senate Amendments. The Senate amendments primarily codify the existing procedures that have been in use implementing this bill and SB 1160. In addition, the amendments address some complications that have arisen. For example, in criminal law, a conviction is not entered until judgment is imposed, which usually means at the time of sentencing. With respect to addressing liens, that time frame does not work in cases where a provider pleads guilty, agrees to cooperate with prosecutors, and delays sentencing for an extended period. Other clarifications, such as the right to refuse to pay a bill of a convicted provider, simply fill in some gaps in the drafting of last year's bills. In some respects, the amendments are intended to be more explicit about what the Legislature intended the language in last year's enactments to mean – and these are designated as declaratory of existing law because it is clear that the new language is precisely what was intended by the Legislature in this bill and SB 1160.
Analysis Prepared by: Mark Rakich / INS. / (916) 319-2086 FN: 0002258
CONCURRENCE IN SENATE AMENDMENTS
CSA2 Bill Id:AB 1422
Author:(Daly)
As Amended Ver:September 8, 2017
Majority vote
ASSEMBLY: | 77-0 | (May 30, 2017) | SENATE: | 40-0 | (September 12, 2017) |
COMMITTEE VOTE: | 9-0 | (September 13, 2017) | RECOMMENDATION: | concur |
(INS.)
Original Committee Reference: INS.
SUMMARY: Clarifies the duration of a "stay" on litigating liens filed by a provider charged criminally with workers' compensation fraud. Specifically, this bill:
- Deletes language that terminates the stay on lien proceedings at the end of the criminal proceedings.
- Specifies that the stay remains in effect until the completion of the special administrative proceedings that apply to liens filed by providers convicted of workers' compensation fraud.
The Senate amendments:
- Adopt clarifying descriptions of the federal medicare and medicaid programs in several places in current law.
- Adopt the federal definitions for determining whether an entity is controlled by the person charged with or convicted of workers' compensation fraud.
- Specify that these changes are declaratory of current law.
- Define when a "conviction" occurs for purposes of proceedings under current law to address fraudulent liens.
- Clarify that, in addition to the rules governing a stay or suspension of liens filed by a person who is charged with or convicted of workers' compensation fraud, an employer need not pay a billing from a charged or convicted provider that has not yet resulted in a filed lien.
- Clarify that the filing of new or different charges against a provider charged with workers' compensation fraud does not preclude the Workers Compensation Appeals Board or its judges from proceeding on liens already before it.
- Make a number of technical and conforming changes.
EXISTING LAW:
- Establishes a comprehensive system to provide workers' compensation benefits, including medical treatment and related services, to employees who suffer injuries or conditions that arise out of, or in the course of employment.
- Provides for criminal penalties against providers of workers' compensation services if those providers commit fraud in the delivery of or billing for those services.
- Allows providers to file a lien in a pending workers' compensation case in the event that treatments are disputed, or otherwise not being paid or authorized by the responsible payor (employer or insurer).
- Establishes a system for the adjudication of liens in the normal handling of the workers' compensation claim.
- Establishes special procedures to handle liens filed by providers who are convicted of workers' compensation fraud, or who have been barred from federal medical systems for fraudulent behavior.
- Provides that any pending liens filed by a provider described above are stayed, regardless of whether the specific liens were related to the specific acts of fraud for which the provided was convicted, pending the completion of special procedures adopted to adjudicate those liens.
FISCAL EFFECT: Negligible impact on state operations. In most respects, the Senate amendments codify current practices to implement current law.
COMMENTS:
- Purpose. The author introduced this bill to cure an anomaly that resulted from the enactment of two bills last Session. AB 1244 (Gray), Chapter 852, Statutes of 2016, addressed workers' compensation fraud, and included remedies against providers convicted of workers' compensation fraud, or who were barred from federal medical care programs for fraudulent behavior. The bill adopted special procedures to address liens filed by these miscreant providers.
- SB 1160 (Mendoza), Chapter 868, Statutes of 2016, addressed a broader range of workers' compensation issues, but also contained provisions addressing a number of abuses in how liens were filed and processed in the workers' compensation system. Among the lien provisions was a stay on litigating any liens when a provider was charged with workers' compensation fraud. Unfortunately, the SB 1160 stay language did not conform to the AB 1244 adjudication procedure language. This bill clarifies how the SB 1160 stay operates upon a conviction in the criminal proceedings.
- Senate Amendments. The Senate amendments primarily codify the existing procedures that have been in use implementing AB 1244 and SB 1160. In addition, the amendments address some complications that have arisen. For example, in criminal law, a conviction is not entered until judgment is imposed, which usually means at the time of sentencing. With respect to addressing liens, that time frame does not work in cases where a provider pleads guilty, agrees to cooperate with prosecutors, and delays sentencing for an extended period. Other clarifications, such as the right to refuse to pay a bill of a convicted provider, simply fill in some gaps in the drafting of last year's bills. In some respects, the amendments are intended to be more explicit about what the Legislature intended the language in last year's enactments to mean – and these are designated as declaratory of existing law because it is clear that the new language is precisely what was intended by the Legislature in AB 1244 and SB 1160.
Analysis Prepared by: Mark Rakich / INS. / (916) 319-2086 FN: 0002353
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | AB |
THIRD READING
Bill No: AB 1422
: 9/8/17
SENATE LABOR & IND. REL. COMMITTEE: 5-0, 9/7/17
AYES: Bradford, Stone, Atkins, Jackson, Mitchell
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
SENATE LABOR AND IND. REL. COMMITTEE: 5-0, 9/7/17 (Pursuant to Senate Rule 29.10)
AYES: Bradford, Stone, Atkins, Jackson, Mitchell
ASSEMBLY FLOOR: 77-0, 5/30/17 (Consent) - See last page for vote
DIGEST:
This bill revises the timelines and clarifies the process for the freezing and dismissal of workers’ compensation liens due to a conviction for fraud.
Senate Floor Amendments of 9/8/17 clarify the impact of new criminal charges on a lien dismissal proceeding.
Existing law:
- Establishes a workers’ compensation system that provides benefits to an employee who suffers from an injury or illness that arises out of and in the course of employment, irrespective of fault. This system requires all employers to secure payment of benefits by either securing the consent of the Department of Industrial Relations to self-insure or by securing insurance against liability from an insurance company duly authorized by the state.
- Provides that in the event a lien filer is charged with workers’ compensation fraud, Medi-Cal fraud, or Medicare fraud, all liens are stayed pending resolution of the charges. (Labor Code §4615)
- Requires the administrative director (AD) of the Division of Workers’ Compensation (DWC) to suspend a physician, practitioner, or provider from participating in a professional capacity in the workers’ compensation system if any of the following is applicable:
- Convicted of a felony or a misdemeanor a felony or misdemeanor and that crime comes within any of the following descriptions:
- It involves fraud or abuse of the Medi-Cal program, Medicare program, or workers’ compensation system, or fraud or abuse of any patient, or patient.
- It relates to the conduct of the individual’s medical practice as it pertains to patient care.
- It is a financial crime that relates to the Medi-Cal program, Medicare program, or workers’ compensation system.
- It is otherwise substantially related to the qualifications, functions, or duties of a provider of services.
- Suspended from the federal Medicare or Medicaid programs due to fraud or abuse; or
- Lost or surrendered a license, certificate, or approval to provide health care. (Labor Code §139.21)
- Convicted of a felony or a misdemeanor a felony or misdemeanor and that crime comes within any of the following descriptions:
This bill:
- Clarifies that the suspension provisions also apply to a corporate entity if the entity is controlled by a medical provider that is convicted of Medicare, Medicaid, Medi-Cal, or workers’ compensation fraud.
- Defines a controlled entity as described above as an entity in which the convicted medical provider is an executive officer or holds an ownership stake of 10% or more.
- Defines, for the purposes of suspending a medical provider from the workers’ compensation system and dismissing his or her liens, that a conviction is any of the following:
- A judgment of conviction has been entered by a federal, state, or local court, regardless of whether there is an appeal pending or whether the judgment of conviction or other record relating to criminal conduct has been expunged.
- There has been a verdict or finding of guilt by a federal, state, or local court.
- A plea of guilty has been accepted by a federal, state, or local court.
- Provides that, notwithstanding the initiation or completion of a prior suspension, the administrative director may amend an existing notice of suspension or commence a subsequent suspension proceeding based upon new or additional grounds for suspending the physician, practitioner, or provider.
- Provides the administrative director with the ability to create regulations that will specify grounds for any exemptions that shall not serve as the basis for exclusion from the workers’ compensation system due to conviction.
- Allows, explicitly, the Chief Judge of the WCAB to select a designee to identify the appropriate district office of the WCAB to conduct the lien consolidation proceeding for a suspended medical provider, as well as select the judge to preside over the lien consolidation proceeding.
- Permits an employer to defer objecting to or paying any bill that is submitted by a medical provider has been charged with Medicare, Medicaid, Medi-Cal, or workers’ compensation fraud and stays the timelines for responding to a medical bill until the stay is lifted. This bill also provides that an employer can object to a bill submitted by a medical provider who has been convicted of Medicare, Medicaid, Medi-Cal, or workers’ compensation fraud.
- Clarifies the timeline for the staying of liens due to the filing of criminal fraud charges, and also clarifies that, if the medical provider is convicted of fraud, then the liens filed by the medical provider or entity controlled by the medical provider shall remain stayed until the lien consolidation proceeding begins.
- Clarifies that the staying of liens does not prevent a medical provider from dismissing his or her liens and forfeiting all sums claimed, nor that the staying of liens prevents the WCAB from determining if a lien claimant is controlled by physician, practitioner, or provider.
- Clarifies that the filing of new or additional criminal charges against a medical provider shall not stay a lien consolidation process, unless a determination has been made that a lien did not arise from the conduct that subjected the physician, practitioner, or provider to suspension
- Explicitly provides that the administrative director may promulgate regulations for the implementation of the lien stay process.
- Makes technical and clarifying changes.
Comments
- Need for this bill? Last year, as a part of a larger workers’ compensation anti-fraud initiative, the Legislature passed two significant bills: AB 1244 (Gray and Daly) and SB 1160 (Mendoza). Specifically, AB 1244 created a process for the consolidation and elimination of liens filed by medical providers who were convicted of fraudulent behavior, while SB 1160 froze the liens of individuals who were charged with fraudulent behavior. Both bills were a response to a series of articles from the Center of Investigative Reporting, which detailed more than $1 billion in fraudulent activity by a variety of medical providers. While all of the schemes were different, each had one common feature: the use of the workers’ compensation lien system to monetize the fraud.
Unfortunately, the timeline for the staying of liens did not conform to timeline for the lien consolidation process. This led to some rather nonsensical attempts by convicted fraudsters to try and collect on their liens before the lien consolidation process provided in AB 1244 was concluded, as the stay due to SB 1160 was lifted as the charges were no longer pending. These dueling timelines created implementation challenges for the regional WCABs.
Additionally, in the process of implementing AB 1244 and SB 1160, further challenges and legal questions came to light. These included whether the Chief Judge could utilize a designee to set up lien consolidation hearings, how employers should address continued medical bills from medical providers who have been charged or convicted of medical fraud, and how to address liens that were forfeited by a convicted medical provider as a condition of his or her plea bargain or sentence.
This bill addresses these issues by revising and clarifying the lien staying and dismissal process, codifying existing procedures developed by the WCAB, and bringing the timelines for both processes into alignment, ensuring that a medical provider who is convicted of fraudulent behavior is unable to use a loophole to pursue liens that should be dismissed under the law.
- Legal Status of SB 1160 Lien Stay Provisions: In May of this year, Dr. Eduardo Anguizola, who was criminally charged with receiving more than $2 million in kickbacks for prescribing compound medications in the California workers’ compensation system, sued the state, arguing that the lien stay provisions were unconstitutional. On July 13, 2017, U.S. District Court Judge George Wu issued a tentative decision grating a temporary injunction to the SB 1160 lien stay provisions. However, this injunction has not been finalized, and both sides continue to submit supplemental briefs to Judge Wu, suggesting that, despite the initial tentative decision, it is uncertain if a preliminary injunction will be granted. As such, SB 1160, including the lien stay provisions, remains the law of the land.
FISCAL EFFECT: Appropriation: Fiscal Com.: Local:
American Insurance Association
California Chiropractic Association
California Joint Powers Authorities
Armenta Law Firm
ARGUMENTS IN SUPPORT: The author notes that the California workers’ compensation system is a “grand bargain” between injured workers and employers, and it is a robust bargain that has served California well for over a century. However, the author argues that fraud has become a pervasive and toxic crisis, which undermines the foundation and stability of the entire workers’ compensation system. The author notes the Legislature responded to this crisis by passing both AB 1244 and SB 1160 last year, which ensures that medical providers who engage in fraudulent activity are removed from the workers’ compensation system. The author argues that AB 1422 is intended to cure an inconsistency between last years’ AB 1244 and SB 1160, and to clarify the express intent of those bills that liens of business entities controlled by the person charged with fraud are covered by the stay and suspension rules adopted in AB 1244 and SB 1160.
ARGUMENTS IN OPPOSITION: Opponents argue that AB 1422 does not address challenges created by SB 1160, which the implementation dates for lien declarations in SB 1160 and DWC communication of implementation procedures for SB 1160. Opponents believe that AB 1422 should be amended to address these perceived deficiencies, and therefore should become a second year bill.
ASSEMBLY FLOOR: 77-0, 5/30/17
AYES: Acosta, Aguiar-Curry, Travis Allen, Arambula, Baker, Berman, Bigelow, Bloom, Bocanegra, Bonta, Brough, Burke, Caballero, Calderon, Cervantes, Chávez, Chen, Chiu, Chu, Cooley, Cooper, Cunningham, Dababneh, Dahle, Daly, Flora, Fong, Frazier, Friedman, Gallagher, Cristina Garcia, Eduardo Garcia, Gipson, Gloria, Gomez, Gonzalez Fletcher, Gray, Grayson, Harper, Holden, Irwin, Jones-Sawyer, Kalra, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Muratsuchi, Nazarian, Obernolte, O'Donnell, Patterson, Quirk, Quirk-Silva, Reyes, Ridley-Thomas, Rodriguez, Rubio, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Voepel, Waldron, Weber, Wood, Rendon
NO VOTE RECORDED: Chau, Choi, Eggman
9/11/17 20:00:51
**** END ****
SENATE COMMITTEE ON LABOR AND INDUSTRIAL RELATIONS
Senator Steven Bradford, Chair
2017 - 2018 Regular
Bill No: AB 1422 Hearing Date: September 7, 2017
Author: | Daly | ||
Version: | August 31, 2017 | ||
Urgency: | No | Fiscal: | Yes |
Consultant: | Gideon L. Baum | ||
Subject: Workers’ compensation insurance: fraud
KEY ISSUE
Should the Legislature revise the timelines and clarify the process for the freezing and dismissal of workers’ compensation liens due to a conviction for fraud?
ANALYSIS
Existing law:
- Establishes a workers’ compensation system that provides benefits to an employee who suffers from an injury or illness that arises out of and in the course of employment, irrespective of fault. This system requires all employers to secure payment of benefits by either securing the consent of the Department of Industrial Relations to self-insure or by securing insurance against liability from an insurance company duly authorized by the state.
- Provides that in the event a lien filer is charged with workers’ compensation fraud, Medi-Cal fraud, or Medicare fraud, all liens are stayed pending resolution of the charges. (Labor Code §4615)
- Requires the administrative director (AD) of the Division of Workers’ Compensation (DWC) to suspend a physician, practitioner, or provider from participating in a professional capacity in the workers’ compensation system if any of the following is applicable:
a) Convicted of a felony or a misdemeanor a felony or misdemeanor and that crime comes within any of the following descriptions:
(i) It involves fraud or abuse of the Medi-Cal program, Medicare program, or workers’ compensation system, or fraud or abuse of any patient, or patient.
(ii) It relates to the conduct of the individual’s medical practice as it pertains to patient care.
(iii) It is a financial crime that relates to the Medi-Cal program, Medicare program, or workers’ compensation system.
(iv) It is otherwise substantially related to the qualifications, functions, or duties of a provider of services.
- Suspended from the federal Medicare or Medicaid programs due to fraud or abuse; or
- Lost or surrendered a license, certificate, or approval to provide health care.
(Labor Code §139.21)
This bill:
- Clarifies that the suspension provisions also apply to a corporate entity if the entity is controlled by a medical provider that is convicted of Medicare, Medicaid, Medi-Cal, or workers’ compensation fraud.
- Defines a controlled entity as described above as an entity in which the convicted medical provider is an executive officer or holds an ownership stake of 10% or more.
- Defines, for the purposes of suspending a medical provider from the workers’ compensation system and dismissing his or her liens, that a conviction is any of the following:
- A judgment of conviction has been entered by a federal, state, or local court, regardless of whether there is an appeal pending or whether the judgment of conviction or other record relating to criminal conduct has been expunged.
- There has been a verdict or finding of guilt by a federal, state, or local court.
- A plea of guilty has been accepted by a federal, state, or local court.
- Provides that, notwithstanding the initiation or completion of a prior suspension, the administrative director may amend an existing notice of suspension or commence a subsequent suspension proceeding based upon new or additional grounds for suspending the physician, practitioner, or provider.
- Provides the administrative director with the ability to create regulations that will specify grounds for any exemptions that shall not serve as the basis for exclusion from the workers’ compensation system due to conviction.
- Explicitly allows the Chief Judge of the WCAB to select a designee to identify the appropriate district office of the WCAB to conduct the lien consolidation proceeding for a suspended medical provider, as well as select the judge to preside over the lien consolidation proceeding.
- Permits an employer to defer objecting to or paying any bill that is submitted by a medical provider has been charged with Medicare, Medicaid, Medi-Cal, or workers’ compensation fraud and stays the timelines for responding to a medical bill until the stay is lifted. This bill also provides that an employer can object to a bill submitted by a medical provider who has been convicted of Medicare, Medicaid, Medi-Cal, or workers’ compensation fraud.
- Clarifies the timeline for the staying of liens due to the filing of criminal fraud charges, and also clarifies that, if the medical provider is convicted of fraud, then the liens filed by the medical provider or entity controlled by the medical provider shall remain stayed until the lien consolidation proceeding begins.
- Clarifies that the staying of liens does not prevent a medical provider from dismissing his or her liens and forfeiting all sums claimed, nor that the staying of liens prevents the WCAB from determining if a lien claimant is controlled by physician, practitioner, or provider.
- Explicitly provides that the administrative director may promulgate regulations for the implementation of the lien stay process.
- Makes technical and clarifying changes.
COMMENTS
1. Need for this bill?
Last year, as a part of a larger workers’ compensation anti-fraud initiative, the Legislature passed two significant bills: AB 1244 (Gray and Daly) and SB 1160 (Mendoza). Specifically, AB 1244 created a process for the consolidation and elimination of liens filed by medical providers who were convicted of fraudulent behavior, while SB 1160 froze the liens of individuals who were charged with fraudulent behavior. Both bills were a response to a series of articles from the Center of Investigative Reporting, which detailed more than $1 billion in fraudulent activity by a variety of medical providers. While all of the schemes were different, each had one common feature: the use of the workers’ compensation lien system to monetize the fraud.
Unfortunately, the timeline for the staying of liens did not conform to timeline for the lien consolidation process. This led to some rather nonsensical attempts by convicted fraudsters to try and collect on their liens before the lien consolidation process provided in AB 1244 was concluded, as the stay due to SB 1160 was lifted as the charges were no longer pending. These dueling timelines created implementation challenges for the regional WCABs.
Additionally, in the process of implementing AB 1244 and SB 1160, further challenges and legal questions came to light. These included whether the Chief Judge could utilize a designee to set up lien consolidation hearings, how employers should address continued medical bills from medical providers who have been charged or convicted of medical fraud, and how to address liens that were forfeited by a convicted medical provider as a condition of his or her plea bargain or sentence.
AB 1422 would address these issues by revising and clarifying the lien staying and dismissal process, codifying existing procedures developed by the WCAB, and bringing the timelines for both processes into alignment, ensuring that a medical provider who is convicted of fraudulent behavior is unable to use a loophole to pursue liens that should be dismissed under the law.
2. Legal Status of SB 1160 Lien Stay Provisions:
In May of this year, Dr. Eduardo Anguizola, who was criminally charged with receiving more than $2 million in kickbacks for prescribing compound medications in the California workers’ compensation system, sued the state, arguing that the lien stay provisions were unconstitutional. On July 13, 2017, U.S. District Court Judge George Wu issued a tentative decision grating a temporary injunction to the SB 1160 lien stay provisions. However, this injunction has not been finalized, and both sides continue to submit supplemental briefs to Judge Wu, suggesting that, despite the initial tentative decision, it is uncertain if a preliminary injunction will be granted. As such, SB 1160, including the lien stay provisions, remains the law of the land.
3. Possible Amendments:
Staff recommends the following technical and clarifying amendments to AB 1422:
- On page 12, line 19, insert “, as defined in paragraph (3) of subdivision (a) of Section 139.21,” after “controlled”;
- On page 13, line 14, strike “in the division’s” and strike line 15;
- On page 13, after line 22, insert: “(g) Notwithstanding this section, the filing of new or additional criminal charges against a physician, practitioner, or provider who has been suspended pursuant to subparagraph (A) of paragraph (1) of subdivision (a) of Section 139.21 shall not stay liens that are subject to consolidation and adjudication pursuant to subdivisions (e) through (i) of section 139.21, unless a determination has been made pursuant to subdivision (i) of section 139.21 that a lien did not arise from the conduct that subjected the physician, practitioner, or provider to suspension.”
4. Proponent Arguments:
The author notes that the California workers’ compensation system is a “grand bargain” between injured workers and employers, and it is a robust bargain that has served California well for over a century. However, the author argues that fraud has become a pervasive and toxic crisis, which undermines the foundation and stability of the entire workers’ compensation system. The author notes the Legislature responded to this crisis by passing both AB 1244 and SB 1160 last year, which ensures that medical providers who engage in fraudulent activity are removed from the workers’ compensation system. The author argues that AB 1422 is intended to cure an inconsistency between last years’ AB 1244 and SB 1160, and to clarify the express intent of those bills that liens of business entities controlled by the person charged with fraud are covered by the stay and suspension rules adopted in AB 1244 and SB 1160.
5. Opponent Arguments:
None on file.
6. Prior Legislation:
SB 1160 (Mendoza), Chapter 868, Statutes of 2016, was discussed above.
AB 1244 (Gray and Daly), Chapter 852, Statutes of 2016, was discussed above.
SUPPORT
California Chiropractic Association
OPPOSITION
None on file.
-- END --
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | AB |
THIRD READING
Bill No: AB 1422
:
SENATE LABOR & IND. REL. COMMITTEE: 5-0, 7/12/17
AYES: Bradford, Stone, Atkins, Jackson, Mitchell
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
ASSEMBLY FLOOR: 77-0, 5/30/17 (Consent) - See last page for vote
DIGEST:
This bill clarifies the timelines for the freezing and dismissal of workers’ compensation liens due to a conviction for fraud.
Existing law:
- Establishes a workers’ compensation system that provides benefits to an employee who suffers from an injury or illness that arises out of and in the course of employment, irrespective of fault. This system requires all employers to secure payment of benefits by either securing the consent of the Department of Industrial Relations to self-insure or by securing insurance against liability from an insurance company duly authorized by the state.
- Provides that in the event a lien filer is charged with workers’ compensation fraud, Medi-Cal fraud, or Medicare fraud, all liens are stayed pending resolution of the charges.
- Requires the administrative director (AD) of the Division of Workers’ Compensation (DWC) to suspend a physician, practitioner, or provider from participating in a professional capacity in the workers’ compensation system if any of the following is applicable:
- Convicted of a felony or a misdemeanor a felony or misdemeanor and that crime comes within any of the following descriptions:
- It involves fraud or abuse of the Medi-Cal program, Medicare program, or workers’ compensation system, or fraud or abuse of any patient, or patient.
- It relates to the conduct of the individual’s medical practice as it pertains to patient care.
- It is a financial crime that relates to the Medi-Cal program, Medicare program, or workers’ compensation system.
- It is otherwise substantially related to the qualifications, functions, or duties of a provider of services.
- Suspended from the federal Medicare or Medicaid programs due to fraud or abuse; or
- Lost or surrendered a license, certificate, or approval to provide health care.
- Convicted of a felony or a misdemeanor a felony or misdemeanor and that crime comes within any of the following descriptions:
This bill clarifies that liens stayed due to a criminal charge continue to be stayed if the criminal charge results in a conviction until the end the administrative process for the dismissal of liens.
Comments
Need for this bill? Last year, as a part of a larger workers’ compensation anti-fraud initiative, the Legislature passed two significant bills: AB 1244 (Gray and Daly, Chapter 852, Statutes of 2016) and SB 1160 (Mendoza, Chapter 868, Statutes of 2016). Specifically, AB 1244 created a process for the elimination of liens filed by medical providers who were convicted of fraudulent behavior, while SB 1160 froze the liens of individuals who were charged with fraudulent behavior. Both bills were a response to a series of articles from the Center of Investigative Reporting, which detailed more than $1 billion in fraudulent activity by a variety of medical providers. While all of the schemes were different, each had one common feature: the use of the workers’ compensation lien system to monetize the fraud.
Unfortunately, the timelines in SB 1160 stay language did not explicitly conform to the AB 1244 adjudication procedure language. This led to some rather nonsensical attempts by convicted fraudsters to try and collect on their liens before the process in AB 1244 was concluded, as the stay due to charges from SB 1160 was lifted as the charges were no longer pending. AB 1422 brings the timelines for both processes into alignment, ensuring that a medical provider who is convicted of fraudulent behavior is unable to use a loophole to pursue liens that should be dismissed under the law.
FISCAL EFFECT: Appropriation: Fiscal Com.: Local:
None received
OPPOSITION: (Verified 8/22/17)
None received
ASSEMBLY FLOOR: 77-0, 5/30/17
AYES: Acosta, Aguiar-Curry, Travis Allen, Arambula, Baker, Berman, Bigelow, Bloom, Bocanegra, Bonta, Brough, Burke, Caballero, Calderon, Cervantes, Chávez, Chen, Chiu, Chu, Cooley, Cooper, Cunningham, Dababneh, Dahle, Daly, Flora, Fong, Frazier, Friedman, Gallagher, Cristina Garcia, Eduardo Garcia, Gipson, Gloria, Gomez, Gonzalez Fletcher, Gray, Grayson, Harper, Holden, Irwin, Jones-Sawyer, Kalra, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Muratsuchi, Nazarian, Obernolte, O'Donnell, Patterson, Quirk, Quirk-Silva, Reyes, Ridley-Thomas, Rodriguez, Rubio, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Voepel, Waldron, Weber, Wood, Rendon
NO VOTE RECORDED: Chau, Choi, Eggman
8/25/17 11:31:40
**** END ****
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | AB |
CONSENT
Bill No: AB 1422
:
SENATE LABOR & IND. REL. COMMITTEE: 5-0, 7/12/17
AYES: Bradford, Stone, Atkins, Jackson, Mitchell
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
ASSEMBLY FLOOR: 77-0, 5/30/17 (Consent) - See last page for vote
DIGEST:
This bill clarifies the timelines for the freezing and dismissal of workers’ compensation liens due to a conviction for fraud.
Existing law:
- Establishes a workers’ compensation system that provides benefits to an employee who suffers from an injury or illness that arises out of and in the course of employment, irrespective of fault. This system requires all employers to secure payment of benefits by either securing the consent of the Department of Industrial Relations to self-insure or by securing insurance against liability from an insurance company duly authorized by the state.
- Provides that in the event a lien filer is charged with workers’ compensation fraud, Medi-Cal fraud, or Medicare fraud, all liens are stayed pending resolution of the charges.
- Requires the administrative director (AD) of the Division of Workers’ Compensation (DWC) to suspend a physician, practitioner, or provider from participating in a professional capacity in the workers’ compensation system if any of the following is applicable:
- Convicted of a felony or a misdemeanor a felony or misdemeanor and that crime comes within any of the following descriptions:
- It involves fraud or abuse of the Medi-Cal program, Medicare program, or workers’ compensation system, or fraud or abuse of any patient, or patient.
- It relates to the conduct of the individual’s medical practice as it pertains to patient care.
- It is a financial crime that relates to the Medi-Cal program, Medicare program, or workers’ compensation system.
- It is otherwise substantially related to the qualifications, functions, or duties of a provider of services.
- Suspended from the federal Medicare or Medicaid programs due to fraud or abuse; or
- Lost or surrendered a license, certificate, or approval to provide health care.
- Convicted of a felony or a misdemeanor a felony or misdemeanor and that crime comes within any of the following descriptions:
This bill clarifies that liens stayed due to a criminal charge continue to be stayed if the criminal charge results in a conviction until the end the administrative process for the dismissal of liens.
Comments
Need for this bill? Last year, as a part of a larger workers’ compensation anti-fraud initiative, the Legislature passed two significant bills: AB 1244 (Gray and Daly, Chapter 852, Statutes of 2016) and SB 1160 (Mendoza, Chapter 868, Statutes of 2016). Specifically, AB 1244 created a process for the elimination of liens filed by medical providers who were convicted of fraudulent behavior, while SB 1160 froze the liens of individuals who were charged with fraudulent behavior. Both bills were a response to a series of articles from the Center of Investigative Reporting, which detailed more than $1 billion in fraudulent activity by a variety of medical providers. While all of the schemes were different, each had one common feature: the use of the workers’ compensation lien system to monetize the fraud.
Unfortunately, the timelines in SB 1160 stay language did not explicitly conform to the AB 1244 adjudication procedure language. This led to some rather nonsensical attempts by convicted fraudsters to try and collect on their liens before the process in AB 1244 was concluded, as the stay due to charges from SB 1160 was lifted as the charges were no longer pending. AB 1422 brings the timelines for both processes into alignment, ensuring that a medical provider who is convicted of fraudulent behavior is unable to use a loophole to pursue liens that should be dismissed under the law.
FISCAL EFFECT: Appropriation: Fiscal Com.: Local:
None received
OPPOSITION: (Verified 8/22/17)
None received
ASSEMBLY FLOOR: 77-0, 5/30/17
AYES: Acosta, Aguiar-Curry, Travis Allen, Arambula, Baker, Berman, Bigelow, Bloom, Bocanegra, Bonta, Brough, Burke, Caballero, Calderon, Cervantes, Chávez, Chen, Chiu, Chu, Cooley, Cooper, Cunningham, Dababneh, Dahle, Daly, Flora, Fong, Frazier, Friedman, Gallagher, Cristina Garcia, Eduardo Garcia, Gipson, Gloria, Gomez, Gonzalez Fletcher, Gray, Grayson, Harper, Holden, Irwin, Jones-Sawyer, Kalra, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Muratsuchi, Nazarian, Obernolte, O'Donnell, Patterson, Quirk, Quirk-Silva, Reyes, Ridley-Thomas, Rodriguez, Rubio, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Voepel, Waldron, Weber, Wood, Rendon
NO VOTE RECORDED: Chau, Choi, Eggman
8/22/17 16:40:37
**** END ****
SENATE COMMITTEE ON LABOR AND INDUSTRIAL RELATIONS
Senator Steven Bradford, Chair
2017 - 2018 Regular
Bill No: AB 1422 Hearing Date: July 12, 2017
Author: | Daly | ||
Version: | April 20, 2017 | ||
Urgency: | No | Fiscal: | Yes |
Consultant: | Gideon L. Baum | ||
Subject: Workers’ compensation insurance: fraud
KEY ISSUE
Should the Legislature clarify the timelines for the freezing and dismissal of workers’ compensation liens due to a conviction for fraud?
ANALYSIS
Existing law:
- Establishes a workers’ compensation system that provides benefits to an employee who suffers from an injury or illness that arises out of and in the course of employment, irrespective of fault. This system requires all employers to secure payment of benefits by either securing the consent of the Department of Industrial Relations to self-insure or by securing insurance against liability from an insurance company duly authorized by the state.
- Provides that in the event a lien filer is charged with workers’ compensation fraud, Medi-Cal fraud, or Medicare fraud, all liens are stayed pending resolution of the charges.
- Requires the administrative director (AD) of the Division of Workers’ Compensation (DWC) to suspend a physician, practitioner, or provider from participating in a professional capacity in the workers’ compensation system if any of the following is applicable:
a) Convicted of a felony or a misdemeanor a felony or misdemeanor and that crime comes within any of the following descriptions:
(i) It involves fraud or abuse of the Medi-Cal program, Medicare program, or workers’ compensation system, or fraud or abuse of any patient, or patient.
(ii) It relates to the conduct of the individual’s medical practice as it pertains to patient care.
(iii) It is a financial crime that relates to the Medi-Cal program, Medicare program, or workers’ compensation system.
(iv) It is otherwise substantially related to the qualifications, functions, or duties of a provider of services.
- Suspended from the federal Medicare or Medicaid programs due to fraud or abuse; or
- Lost or surrendered a license, certificate, or approval to provide health care.
This Bill clarifies that liens stayed due to a criminal charge continue to be stayed if the criminal charge results in a conviction until the end the administrative process for the dismissal of liens.
COMMENTS
1. Need for this bill?
Last year, as a part of a larger workers’ compensation anti-fraud initiative, the Legislature passed two significant bills: AB 1244 (Gray and Daly) and SB 1160 (Mendoza). Specifically, AB 1244 created a process for the elimination of liens filed by medical providers who were convicted of fraudulent behavior, while SB 1160 froze the liens of individuals who were charged with fraudulent behavior. Both bills were a response to a series of articles from the Center of Investigative Reporting, which detailed more than $1 billion in fraudulent activity by a variety of medical providers. While all of the schemes were different, each had one common feature: the use of the workers’ compensation lien system to monetize the fraud.
Unfortunately, the timelines in SB 1160 stay language did not explicitly conform to the AB 1244 adjudication procedure language. This led to some rather nonsensical attempts by convicted fraudsters to try and collect on their liens before the process in AB 1244 was concluded, as the stay due to charges from SB 1160 was lifted as the charges were no longer pending. AB 1422 would bring the timelines for both processes into alignment, ensuring that a medical provider who is convicted of fraudulent behavior is unable to use a loophole to pursue liens that should be dismissed under the law.
2. Proponent Arguments:
None on file.
3. Opponent Arguments:
None on file.
4. Prior Legislation:
SB 1160 (Mendoza), Chapter 868, Statutes of 2016, was discussed above.
SUPPORT
None on file.
OPPOSITION
None on file.
-- END --
Date of Hearing: May 24, 2017
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez Fletcher, Chair
ABPCA Bill Id:AB 1422
Author:(Daly) – As Amended Ver:April 20, 2017
Policy Committee: | Insurance | Vote: | 13 - 0 |
Urgency: No State Mandated Local Program: No Reimbursable: No
SUMMARY:
This bill makes a minor change to the timing of a stay, in the case of a lien filed by a provider of medical or medical-legal services in the workers' compensation system who has had criminal fraud charges filed against them. Specifically, the bill specifies that in the event criminal proceedings result in a conviction, the stay remains in effect from the date of the conviction until specified adjudication procedures are completed.
FISCAL EFFECT:
Negligible state fiscal effect.
COMMENTS:
- Purpose. According to the author, this bill cures an anomaly that resulted from the enactment of two bills last session related to workers’ compensation and medical fraud.
- Background. AB 1244 (Gray and Daly), Chapter 852, Statutes of 2016, addressed workers’ compensation fraud, and included remedies against providers convicted of workers’ compensation fraud, or who were barred from federal medical care programs for fraudulent behavior. The bill adopted special procedures to address liens filed by these providers.
SB 1160 (Mendoza), Chapter 868, Statutes of 2016 addressed a broader range of workers’ compensation issues, but also contained provisions addressing a number of abuses in how liens were filed and processed in the workers’ compensation system. Among the lien provisions was a stay on litigating any liens when a provider was charged with workers’ compensation fraud. Unfortunately, the SB 1160 stay language did not conform to the AB 1244 adjudication procedure language. This bill clarifies how the SB 1160 stay operates upon a conviction in the criminal proceedings.
Analysis Prepared by: Lisa Murawski / APPR. / (916) 319-2081
Date of Hearing: April 19, 2017
ASSEMBLY COMMITTEE ON INSURANCE
Tom Daly, Chair
ABPCA Bill Id:AB 1422 (
Author:Daly) – As Amended April 6, 2017
SUBJECT: Workers’ compensation insurance: fraud
SUMMARY: Clarifies the duration of a “stay” on litigating liens filed by a provider charged criminally with workers’ compensation fraud. Specifically, this bill:
- Deletes language that terminates the stay on lien proceedings at the end of the criminal proceedings.
- Specifies that the stay remains in effect until the completion of the special administrative proceedings that apply to liens filed by providers convicted of workers’ compensation fraud.
EXISTING LAW:
- Establishes a comprehensive system to provide workers’ compensation benefits, including medical treatment and related services, to employees who suffer injuries or conditions that arise out of, or in the course of employment.
- Provides for criminal penalties against providers of workers’ compensation services if those providers commit fraud in the delivery of or billing for those services.
- Allows providers to file a lien in a pending workers’ compensation case in the event that treatments are disputed, or otherwise not being paid or authorized by the responsible payor (employer or insurer).
- Establishes a system for the adjudication of liens in the normal handling of the workers’ compensation claim.
- Establishes special procedures to handle liens filed by providers who are convicted of workers’ compensation fraud, or who have been barred from federal medical systems for fraudulent behavior.
- Provides that any pending liens filed by a provider described above are stayed, regardless of whether the specific liens were related to the specific acts of fraud for which the provided was convicted, pending the completion of special procedures adopted to adjudicate those liens.
FISCAL EFFECT: Undetermined
COMMENTS:
- Purpose. The author introduced AB 1422 to cure an anomaly that resulted from the enactment of two bills last Session. AB 1244 (Gray and Daly) addressed workers’ compensation fraud, and included remedies against providers convicted of workers’ compensation fraud, or who were barred from federal medical care programs for fraudulent behavior. The bill adopted special procedures to address liens filed by these miscreant providers.
SB 1160 (Mendoza) addressed a broader range of workers’ compensation issues, but also contained provisions addressing a number of abuses in how liens were filed and processed in the workers’ compensation system. Among the lien provisions was a stay on litigating any liens when a provider was charged with workers’ compensation fraud. Unfortunately, the SB 1160 stay language did not conform to the AB 1244 adjudication procedure language. This bill clarifies how the SB 1160 stay operates upon a conviction in the criminal proceedings. - Technical amendment. The California Medical Association has suggested that the bill language is vague in the case where the criminal proceedings result in either an acquittal or dismissal of the charges. They have suggested a technical amendment, which the author has agreed to, as follows:
Page 3, line 3, after the strikeout, add: from the time of the filing of the charges until the disposition of the criminal proceedings. In the event the criminal proceedings result in a conviction, the stay shall remain in effect from the date of the conviction
- Prior legislation. AB 1244 (Gray and Daly), statutes 2016, chapter 852, and SB 1160 (Mendoza), Statutes 2016, Chapter 868, adopted the rules being amended by this bill.
REGISTERED SUPPORT / OPPOSITION:
Support
None received
Opposition
None received
Analysis Prepared by: Mark Rakich / INS. /
Discussed in Hearing
1MIN
Assembly Floor
4MIN
Assembly Standing Committee on Insurance
1MIN
Senate Floor
5MIN
Senate Standing Committee on Labor and Industrial Relations
Bill Author
Bill Co-Author(s):