State of CaliforniaGavin NewsomGovernor

George Parisotto Yvonne HauscarriagueAdministrative Director Acting Chief Counsel

Overview Legislative Update Anti-Fraud Update Medical Treatment Utilization Schedule • MTUS Formulary and Drug List• State Auditor Report• Qualified Medical Evaluators (QME)• Electronic Reporting (DFR)• Independent Medical Review• Independent Bill Review• Fee Schedules – EAMS

2019 Legislation – AB 5

Addresses problem of misclassification of 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

2019 Legislation – AB 5

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.

2019 Legislation – 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

2019 Legislation – SB 542 Safety Officer Presumption for PTSD

Available to peace officers primarily engaged in law enforcement activities, active firefighters, and fire & rescue coordinators with the Office of Emergency Services

6-month employment requirement unless sudden & extraordinary Available for up to 5 years after termination of service Presumption only in effect until 1/1/25

Anti-Fraud MeasuresLien Stays

• Labor Code section 4615• Liens filed by a physician or provider or entity they control, who are

criminally charged with workers’ compensation fraud, medical billing fraud, insurance fraud, Medicare or MediCal fraud or a crime substantially related to their qualifications are automatically stayed pending the disposition of criminal case.

• Over 175 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, fraud or abuse of any patient or substantially related to their qualifications, functions, or duties as a provider; suspended, due to fraud or abuse, from Medicare or Medicaid programs; or license was surrendered or revoked.

Over 450 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 over 8 convicted suspended providers dismissed through the

criminal proceedings. [139.21(e)]• 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

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 GuidelineKnee Disorders GuidelineAnkle and Foot Disorders GuidelineEye Disorders Chapter Chronic Pain Medical Treatment GuidelineOpioids Treatment GuidelineInitial Approaches to TreatmentHip and Groin GuidelineOccupational/Work Related Asthma GuidelineOccupational Interstitial Lung Disease Guideline

Evidence-Based Updates to the MTUS

Effective October 30, 2018Traumatic Brain Injury Prevention General Approach to Initial Assessment and Documentation Cornerstones of Disability Prevention and Management

Effective April 18, 2019Ankle 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, 2019Low Back Disorders GuidelineIntroduction to the Workplace Mental Health Guideline

Effective October 7, 2019 Hip and Groin Disorders Guideline

UpcomingWorkplace Mental Health Guideline – Depression

Online Training on use of MTUS

Free Access to MTUS-ACOEM Guidelines

MTUS Drug FormularyMTUS 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 January 22)

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MTUS Formulary

MTUS Formulary Update

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

• 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.

MTUS Formulary Update

Adopted the MTUS Drug List v. 6 effective January 15, 2020

• Sixth update since the formulary became effective January 1, 2018.

• Addition of drugs addressed in the Hip and Groin Disorder Guideline.

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.

State Auditor ReportIssued November 2019

DWC Has Failed to Address Its QME Shortage

Develop and implement a plan, by April 2020, to increase the number of QMEs. The plan should describe how DWC will actively recruit for and increase the pool of QMEs, prioritizing specialties with the greatest shortages relative to demand. The plan should also use QME data trends to project the necessary QME supply to meet demand. The plan should include continuing negotiation with medical groups to allow their doctors to become QMEs, as well as establishing goals for recruiting new QMEs in specific specialties.

State Auditor ReportDWC’s Practices for Disciplining Some QMEs Raise Due Process Concerns

Develop and implement written policies and procedures, by April 2020, that define and specify DWC’s internal processes for disciplining QMEs, including timelines for taking disciplinary action and for setting hearings or responding to settlement proposals.

Develop and implement written policies and procedures, by April 2020, that define DWC’s internal processes for reappointing QMEs and how that process should proceed if any disciplinary investigations are pending.

State Auditor ReportDWC Has Failed to Comply with State Law to Ensure that QMEs Produce High-Quality Reports

Create and implement a plan, by April 2020, to continuously review the quality and timeliness of QME reports, including time frames for review, methodology for selecting reports to review, and the minimum number of reports to be reviewed annually.

Develop and implement a process, by April 2020, for annually reporting to DWC’s administrative director its findings on the quality and timeliness of QME reports and recommended improvements to the QME system.

Med-Legal Fee ScheduleMay 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.)

Med-Legal Fee Schedule Stakeholder meetings to develop new fee schedule.

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 administratorReporting UR Data to DWC• Mandatory electronic reporting of UR data by claims administrators to

DWC.Physician Reporting – Request for AuthorizationDocument Repository

Physician Reporting

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

IMR Application Filings 2014-2019177,400 “unique” applications (less duplicates) filed in 2018 – 11.3% less than 2018

0

50,000

100,000

150,000

200,000

250,000

300,000

CY 2014 CY 2015 CY 2016 CY 2017 CY2018 CY2019

Total AppsUniqueEligible

Ineligible IMR Applications 2014-2019

Applications deemed ineligible decreased by two-thirds since 2015.

The ratio of ineligible applications to all “unique” applications filed has decreased steadily for the past several years.

29,046 30,258

23,605

17,42014,173

11,213

CY 2014 CY 2015 CY 2016 CY 2017 CY2018 CY2019

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

CY2014 CY2015 CY2016 CY2017 CY2018 CY2019

Ineligible Eligible

Ineligible IMR Applications 201911,200 ineligible out of 177,400 “unique” applications

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.

CNC/Invalid UR

3,144 28%

No Signature

908 8%

No UR3,070 28%

Untimely2,726 24%

Other1,365 12%

IMR Decisions Issued 2014-20191,010,059 Final Determination Letters Issued since SB863 went into effect

143,840165,496

175,960 172,145184,733

163,899

CY 2014 CY 2015 CY 2016 CY 2017 CY2018 CY2019

IMR Case Decisions 2019At 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.

Upholds 84.73%

Partial Overturns

5.73%

Overturns9.54%

CY2018

Upholds 84.22%

Partial Overturns

5.27%

Overturns10.52% CY2019

IMR Mailed and Processing TimesOver 98% of all case decisions issued within statutory time requirements.

IMR Case Outcomes by Geographic Region 2019Case decision outcomes continue to be consistent across all geographic regions.

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

Others/Out-of-StateSan Diego

Sacramento Valley (N.)Sacramento ValleyNorth State-Shasta

Los AngelesInland Empire

Eastern Sierra FoothillsCentral ValleyCentral Coast

Bay Area

Upheld Partial Overturn Overturn

IMR Treatment Requests Outcomes 2019Overturn rate almost the same in 2018 (10.28%)

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.

10.19%

89.81%

Overturned (32,614) Upheld (287,329)

IMR Service Categories/Treatment RequestsPharmaceuticals = 37% of all UR denials that are sent to IMR

27,256

2,019

49,313

49,582

16,049

105,462

21,203

2,535

11,155

2,755

2,466

194

5,069

5,191

1,638

11,893

2,730

485

2,151

797

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

DMEPOS

Home Health & Transportation

Diagnostic Testing

Rehabilitation

Surgery

Pharmaceuticals

Injection

Programs

Evaluation & Management

Behavioral & Mental Health Svc.

Upheld Overturned

Independent Bill Review (IBR) 2014-2019Application filings decreased for the third consecutive year.

Applications Filed Case Decisions Issued

0

500

1,000

1,500

2,000

2,500

CY 2014 CY 2015 CY 2016 CY 2017 CY 2018 CY 20190

500

1,000

1,500

2,000

2,500

CY 2014 CY 2015 CY 2016 CY 2017 CY 2018 CY 2019

IBR Applicable Fee Schedule 2019Physician services at least half of all evaluated services

0 200 400 600 800 1,000

Durable Medical Equipment, Prosthetics, Orthotics, Supplies

Pharmaceuticals

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 201977% of cases that go through review are awarded additional reimbursement.

The 907 overturned cases, where the IBRO has determined that additional reimbursement is warranted, have resulted in providers being awarded a total of $1,541,000 in CY 2019.

$15.4M reimbursed to providers since SB863’s ‘13 implementation.

Overturned907

Upheld271

Ineligible371

Withdrawn 75

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 EAMSGoals:• 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.)

Upcoming Regulations

Deposition Fees Copy Service Fee Schedule 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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