State of California

Gavin Newsom

Governor

George ParisottoAdministrative Director

Overview

Legislative Update

Anti-Fraud Measures

Medical Treatment Utilization Schedule

• MTUS Formulary and Drug List

• Qualified Medical Evaluators (QME)

• Electronic Reporting (DFR)

• Utilization Review

• Independent Medical Review

• Independent Bill Review

• Fee Schedules – EAMS

2019 Legislation

AB 5

Addresses problem of misclassification of workers

Extends basic rights, benefits and protections to California workers

Codifies the “ABC test” for determining whether a worker is an employee or

an independent contractor (Dynamex)

Expands the application of the ABC test

Outlines exemptions from application of ABC test

Dynamex– ABC Test: The burden is on the hiring entity to establish that the worker is

an independent contractor. In order to meet the burden, the hiring entity must establish:

(A) that the worker is free from the control and direction of the hiring entity in

connection with the performance of the work, both under the contract for the

performance of the work and in fact;

(B) that the worker performs work that is outside the usual course of the hiring entity’s

business; and

(C) that the worker is customarily engaged in an independently established trade,

occupation, or business of the same nature as the work performed.

SB 537:

• Requires AD to publish utilization data for physicians treating 10 or more

workers’ compensation patients

• Defines “normal business day” for UR

• Updates provider listing requirements for MPNs

• Codifies current requirements to provide NPI number on billings

• Expressly prohibits anyone other than the requesting provider from altering

treatment requests prior to submission to the claims administrator

• Prohibits MPNs and related entities from adjusting billing codes without review of

provider’s documentation and giving explanation

• Requires that written disclosure of pricing be given to payor if the contracted

reimbursement rate is more than 20% less than the applicable OMFS rate

Anti-Fraud Measures

Lien Stays

• Labor Code section 4615

• Liens filed by physicians or providers who are criminally charged with

workers’ compensation fraud, medical billing fraud, insurance fraud, and

Medicare or MediCal fraud automatically stayed pending the disposition of

criminal case.

• Over 180 criminally charged individuals (and their entities) currently have

their liens stayed by operation of law under Labor Code 4615.

• Over 650,000 liens are designated as “4615” in EAMS (May 1).

Provider Suspension

Labor Code section 139.21

California Code of Regulations, title 8, sections 9788.1 – 9788.4

Convicted of any felony or misdemeanor that involves fraud or abuse of

Medi-Cal, Medicare, or workers’ compensation system, or fraud or abuse

of any patient; license revoked or suspended; suspended, due to fraud or

abuse, from Medicare or Medicaid programs.

Over 400 physicians, practitioners, or providers have been suspended

under Labor Code § 139.21(a).

Lien Consolidation Proceedings

• If the disposition of the criminal proceedings provides for dismissal of liens,

the liens will be dismissed with prejudice by operation of law.

Liens of 11 convicted suspended providers dismissed.

• If the disposition of the criminal proceedings doesn’t address the

disposition to be made of the liens pending in the workers’ compensation

system, the liens will be identified, consolidated and subjected to special

lien adjudication proceedings.

• Presumption that liens connected with criminal activity

19 consolidated special lien proceedings, pursuant to section 139.21 (f),

have been initiated since the effective date of the statute.

Lien Declaration Labor Code section 4903.05

All liens for medical treatment subject to the filing fee, must be accompanied by a declaration signed under penalty of perjury affirming that the dispute is not subject to independent bill review and verifying that the lien claimant is eligible to file that lien.

The declaration requires that the entity filing the lien indicate on what basis they are eligible to file the lien.

The failure to file the declaration will result in the dismissal of the lien with prejudice. The filing of a false declaration will serve as grounds for dismissal of the lien with prejudice.

Approximately 300,000 liens have been dismissed for failure to file a Labor Code Section 4903.05 Declaration.

Liens reduced from 30,000 per month to 5,000.

MTUS Update

• Labor Code section 4600(b): Medical treatment that is reasonable and necessary to cure or relieve an injured worker from the effects of injury means treatment based on the MTUS guidelines.

• The MTUS is a set of regulations found within the California Code of Regulations.

• Contains definitions, establishes the primary role of the treatment guidelines in the MTUS, provides a Medical Evidence Search Sequence and a Methodology for Evaluating Medical Evidence when there are conflicting recommendations.

• Is based on the principles of evidence-based medicine (EBM).

• Adopts and incorporates by reference the treatment guidelines of the American College of Occupational and Environmental Medicine

ACOEM Treatment Guidelines (December 2017)

Cervical and Thoracic Spine Disorders Guideline

Shoulder Disorders Guideline

Elbow Disorders Chapter

Hand, Wrist, and Forearm Disorders Guideline

Low Back Disorders Guideline

Knee Disorders Guideline

Ankle and Foot Disorders Guideline

Eye Disorders Chapter

Chronic Pain Medical Treatment Guideline

Opioids Treatment Guideline

Initial Approaches to Treatment

Hip and Groin Guideline

Occupational/Work Related Asthma Guideline

Occupational Interstitial Lung Disease Guideline

Evidence-Based Updates to the MTUS

Effective October 30, 2018

Traumatic Brain Injury

Prevention

General Approach to Initial Assessment and Documentation

Cornerstones of Disability Prevention and Management

Effective April 18, 2019

Ankle and Foot Disorders

Cervical and Thoracic Spine Disorders

Elbow Disorders Guideline

Hand, Wrist, and Forearm Disorders

Workplace Mental Health: Posttraumatic Stress Disorder and Acute Stress

Disorder

Effective August 11, 2019

Low Back Disorders Guideline

Introduction to the Workplace Mental Health Guideline

Pending Approval

Hip and Groin Disorders Guideline (Public hearing August 26)

Upcoming

Workplace Mental Health Guideline – Depression

Online Training on use of MTUS

Free Access to MTUS-ACOEM Guidelines

MTUS Drug Formulary

MTUS Drug Formulary applies to drugs dispensed on or after January 1, 2018

Applies to all Dates of Injury (except as specified for ongoing course of treatment)

MTUS Drug Formulary applies only to drugs dispensed for outpatient use at home or

outside a clinical setting

Not applicable to physician-administered drugs

Not applicable to drugs self-administered within a facility, e.g. hospital

MTUS rules other than formulary rules apply to physician-administered drugs

ACOEM Treatment Guidelines – The Backbone; presumed correct on scope of medically

necessary treatment.

MTUS Drug List – guides the prospective review requirements.

Exempt drugs – No Prospective Review if in accord with MTUS.

Non-Exempt & Unlisted Drugs – Prospective Review require.

Special Fill & Perioperative Fill of specified Non-Preferred drugs.

Ancillary Formulary Rules

Special Fill policy.

Perioperative Fill policy.

Physician dispensed drugs.

Generic/Brand selection.

Compounded drugs.

Off-label use of drugs.

Pharmacy and Therapeutics Committee (Last meeting July 24)

17

MTUS Formulary

Adopted the MTUS Drug List v. 5 effective August 1, 2019

This is the 5th update since the formulary became effective January 1, 2018.

Addition of drugs addressed in the Post-Traumatic Stress Disorder Guideline.

Designation of additional drugs as “special fill” eligible, due to treatment recommendation in the Post-Traumatic Stress Disorder Guideline.

Deletion of codeine phosphate from the MTUS Drug List. New drug recommendations pertaining to diclofenac sodium and

divalproex sodium.

WCIRB Study (August 2019)

Share of prescriptions for exempt drugs – not subject to prospective

utilization review - increased by 41 percent compared to the pre-2018

level, while that of non-exempt drugs declined by 18 percent.

The use of opioids, compounded drugs, physician-dispensed drugs, and

brand name drugs with generic alternatives dropped significantly in 2018.

Pharmaceutical costs continue to decline.

Med-Legal Fee Schedule

May 18, 2018 DWC posts proposed changes to the Medical-Legal fee schedule to clarify interpretation. Over 500 negative responses received from QME community

October 17, 2018 Public forum held for all QME stakeholders to ascertain what the entire community wanted to see in a new Medical-Legal Fee Schedule.

December 12, 2018 DWC posts invitation for written proposals from QME stakeholder community with models for a new Medical-Legal Fee Schedule. Over 30 proposals received from stakeholders.

May 21, 2019 Small stakeholder meetings held with QME advocates and employers/carriers separately to June 11, 2019 review proposals.

August 6, 2019 Draft for new Medical-Legal Fee Schedule consisting of a synthesis of the proposals received by the DWC is posted to the forum. (Forum closed August 23.)

• A single, flat fee for comprehensive ($1,650), follow-up ($1,100), and

supplemental ($275) medical-legal evaluations.

• Additional payment for review of medical records based upon the amount

of pages reviewed.

• Elimination of complexity factors.

• An increase in the hourly fee for medical-legal testimony.

• An increased modifier for evaluations performed by a psychiatrist or

psychologist.

• An increased modifier for evaluations performed in an underserved area.

• Cap on the fee that can be charged for a missed appointment.

ML101 - Comprehensive Medical-Legal Evaluation.

$1650 Flat fee; $2.00 per page for record review over 400 pages

Typical case: 1054 pages of records

Typical fee: $1650 + $1308 (654 pgs x $2 excess record fee) = $2,958.00

Psychiatric Exam

$2475 flat fee; $2.00 per page for record review of new records over 400

pages

Typical case: 3000 pages (est.) of records

Typical fee: $2475 + $5200 (2600 pgs x $2 excess record fee) = $7675.00

ML 102 - Follow-up Medical-Legal Evaluation (any face-to-face evaluation after initial

evaluation)

• $1100 flat fee; $2.00 per page for record review of new records over 400 pages

Typical case: 1054 pages of records

Typical fee: $1100 + $1308 (654 pgs x $2 excess record fee) = $2,308.00

Psychiatric Exam

• $1650 flat fee; $2.00 per page for record review of new records over 400 pages

Typical case: 1500* pages (est) of records

Typical fee: $1650 + $2200 (1100 pgs x $2 excess record fee) = $3,850.00

*Assumes half the amount of records originally received in the typical case.

ML 103 - Supplemental Medical-Legal Evaluations (no face-to-face

time)

• $275 flat fee; $2.00 per page for record review of all new records

Typical case: 500* pages of records

Typical fee: $275 + $1000.00 (500 pgs x $2 new record review) =

$1,275.00

*Assumes half the amount of records originally received in the typical case.

Modifier for Underserved Geographical Areas

• Underserved area is defined as an area with fewer than three

physicians in a given specialty with certified office locations.

• Underserved area receives a 25% increase in the base fee for ML

101 or ML 102 evaluations

Additional Regulations?

•Update discipline procedures

•Update qualifications and training requirements

•Review of reports for quality and bias

Electronic Reporting

Doctor’s First Report

• Labor Code section 6409.1

• The current Doctor’s First Report to be submitted electronically to both

the DWC and the employer’s claim administrator

Reporting UR Data to DWC

• Mandatory electronic reporting of UR data by claims administrators to

DWC.

Physician Reporting – Request for Authorization

Document Repository

Utilization Review

New DWC Form PR-1 combines prior RFA & other “PR” forms.

• Definition of RFA (in 9792.6.1) will change to accompany the change in

format of an RFA. Narrative format still allowed but must follow the format of

the PR-1 as required in regulations.

• When an incomplete RFA is submitted, CA will either accept and comply

with timeframes (and be held liable therefore) or reject and send written

notice. (This is getting rid of minimum standards of completion.)

• Can still agree to any format

UR Plan Approval

• URAC accreditation is required for UR Plans that modify or deny

requests for authorization. (July 1, 2018)

Financial Interest Prohibition

• Claims administrators cannot refer matters to a UR entity in which the

claims administrator has a financial interest unless there is a prior

written disclosure to the employer and AD of the name of the UR entity

and the financial interest in the UR entity.

• Employers and Utilization Review Organizations (UROs) are prohibited

from offering financial incentives to physicians based on the number of

UR denial or modification decisions they issue.

SB 1160: Prospective UR is not required for treatment provided within 30

days of the initial date of injury. Labor Code section 4610(b).

Conditions:

-Accepted body part or condition;

-Addressed by and consistent with the MTUS;

-Rendered by MPN or HCO physician; by predesignated physician; or by

employer-selected physician;

-Reporting requirement (DFR and complete RFA, timely);

-Specific services excluded; and

-Timely submission of bills (30 days of the treatment)

30-day Exemption can be lost if…

• Failure to timely submit RFA may result in loss of ability to provide UR-

exempt treatment to that injured employee for the remainder of the 30-day

period.

• Non compliance w/ MTUS

• An employer may conduct retrospective UR but only for the purpose of

determining if treatment rendered was consistent with the MTUS.

• Provider who has pattern and practice of rending treatment inconsistent

w/ the MTUS could (1) lose exemption for any employee; (2) be removed

from MPN/HCO; or (3) Employer may petition for change of physician.

IMR Application Filings 2014-2018200,000 “unique” applications (less duplicates) filed in 2018

0

50,000

100,000

150,000

200,000

250,000

300,000

CY 2014 CY 2015 CY 2016 CY 2017 CY2018

Total Apps

Unique

Eligible

IMR Application Filings Jan.-Jul. 2019

0

3,000

6,000

9,000

12,000

15,000

18,000

21,000

January February March April May June July August September October November December

Total IMR Apps Unique Apps Eligible Apps

Ineligible IMR Applications 2014-2018

The number of applications deemed ineligible decreased in half in three years.

The ratio of ineligible applications to all

“unique” applications (less duplicates)

filed has decreased steadily for the past

several years.

29,04630,258

23,605

17,420

14,173

CY 2014 CY 2015 CY 2016 CY 2017 CY2018

Ineligible IMR Applications Jan.-Jul. 20196,500 ineligible out of 106,400 “unique” applications (6.1%)

Reasons for Ineligibility

• Untimely submission of application

• UR report not attached to application

• Application lacks Injured Worker’s signature

• Conditional Non-Certification*

* Denied because the treating physician has not provided the medical information requested by the claims

administrator that is required to make a medical necessity determination on the treatment recommendation.

No Signature,

415

No UR, 1,664

Other, 771

No Sig and No UR, 80

Untimely, 1,666

CNC, 1,696

IMR Decisions Issued 2014-2018

143,840

165,496175,960 172,145

184,733

CY 2014 CY 2015 CY 2016 CY 2017 CY2018

IMR Mailed and Processing Times98% of all case decisions issued within statutory time requirements.

IMR Case Decisions Jan.-Jul. 2019

At the case level…

• Uphold – None of the disputed items/services are medically necessary and appropriate.

• Partial Overturn – Some (but not all) of the disputes items/services are medically necessary and appropriate.

• Overturn – All of the disputes items/services are medically necessary and appropriate.

84%

6% 10%

Upholds (83,391) Partial Overturns (5,571) Overturns (9,836)

IMR Case Outcomes by Geographic Region Jan.-Jul. 2019

Case decision outcomes continue to be consistent across all geographic regions.

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Others/Out-of-State (2,154)

San Diego (5,884)

Sacramento Valley (N.) (1,520)

Sacramento Valley (5,028)

North State-Shasta (1,346)

Los Angeles (22,831)

Inland Empire (17,713)

Eastern Sierra Foothills (2,192)

Central Valley (12,682)

Central Coast (7,644)

Bay Area (19,804)

Upholds Partial Overturns Overturns

IMR Treatment Requests Outcomes Jan.-Jul. 2019

At the treatment level…

• Uphold – The IMRO decided that

the disputed

service was not medically

necessary and appropriate.

• Overturn – The IMRO decided

that the disputed

service is medically necessary

and appropriate.

10.3%

89.7%

Overturned (19,924) Upheld (173,515)

IMR Service Categories/Treatment Requests

Pharmaceuticals = 37% of all UR denials that are sent to IMR

16,435

29,439

9,487

65,447

28,847

12,761

1,548

6,689

1,642

1,527

2,860

988

7,451

3,290

1,508

300

1,404

489

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

DMEPOS

Rehabilitation

Surgery

Pharmaceuticals

Diagnostic Testing

Injection

Programs

Evaluation & Management

Behavioral & Mental Health Svc.

Upheld Overturned

IMR Service Category Outcomes Jan.-Jul. 2019

IMR Physician Reviewers Jan.-Jul. 2019The majority of IMR cases are reviewed by

physicians licensed in the state of California.

The IMRO medical reviewer does not necessarily have the same Board Certification as the requesting physician, but is

knowledgeable and qualified to review the requested treatment.

Board Certification / Specialty of

IMR Reviewer assigned to Cases

Percent of IMR

Reviews

Completed

Occupational Medicine 24%

Physical Med. & Rehab. 15%

Family Practice 15%

Emergency Management 9%

Orthopedic Surgery 9%

Pain Management 8%

Internal Medicine 8%

Other Specialty 11%

California, 62.6%

Other State, 37.4%

Independent Bill Review (IBR) 2014-2018Application filings decreased for the second consecutive

year.

Applications Filed Case Decisions Issued

CY 2014 CY 2015 CY 2016 CY 2017 CY 2018

2,009

2,345 2,3852,151

1,692

CY 2014 CY 2015 CY 2016 CY 2017 CY 2018

1,489

2,1891,945

1,570

1,129

IBR Application Filings Jan.-Jul. 2019

0

20

40

60

80

100

120

140

160

180

January February March April May June July August September October November December

IBR Applicable Fee Schedule 2018Physician services at least half of all evaluated services

0 100 200 300 400 500 600

Interpreter

Pharmaceutical

Durable Medical Equipment, Prosthetics, Orthotics, Supplies

Inpatient Hospital Services

Pathology and Laboratory Services

Medical-Legal Fee Schedule

Hospital Outpatient Departments and Ambulatory Surgical Centers

Contract for Reimbursement Rates

Physician Services

IBR Decisions Issued Jan.-Jul. 2019

The 507 overturned cases, where

the IBRO has determined that

additional reimbursement is

warranted, have resulted in

providers being awarded a total of

$923,681 in the first seven months

of Calendar Year 2019. Overturned,

507

Upheld,

208

Ineligible,

242

Withdrawn,

38

IMR and IBR Search Tools on DWC Web Site

https://www.dir.ca.gov/dwc/imr

/IMRDecisionSearch.asp

• Updated monthly

• Access to all decisions issued from

February 2013 to July 2019

(approximately 945,000 FDLs)

• Search by treatment request

categories, expert reviewer’s specialty,

date of injury, etc.

https://www.dir.ca.gov/dwc/ibr/

IBRDecisionSearch.asp

• Updated monthly

• Access to all decisions issued from

June 2013 to July 2019 (approximately

9,250 FDLs)

• Search by Applicable Fee Schedule,

date of filing, etc.

EAMSDWC working with DIR IT Unit and Cal. Department. of Technology to update EAMS

Goals:

• Streamline staff work and filing system.

• Improve use of online forms.

• Improve the community experience with EAMS (more easily file documents and access information on our on line system).

• Reduce costs and allow for easier upgrades.

• Allow for better processing of payments to DWC.

• Allow for easy access for judges and staff for trial and reconsideration purposes. (Currently judges must sift through multiple documents to determine which documents are trial exhibits.)

Fee Schedules

Copy Service Fee Schedule

Revisions on DWC Website Forum (closed August 16)

A one-time increase of the flat fee rate for copy services from $180 to $210

Annual cost-of-living adjustments to the flat fee for copy services

Mandatory billing codes, including proposed new codes for sales tax, contracted fees and additional sets

OMFS Fee Schedules Annual Updates

Pharmacy Fee Schedule (Change in Medi-Cal Dispensing Fee)

Interpreters Fee Schedule

Home Health Fee Schedule

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