Senate Bill 863: Unpacking Workers Comp Reform

Transcription

1 Senate Bill 863: Unpacking Workers Comp Reform OCTOBER 3, 2012

2 Presenters Jerry Azevedo, Workers Compensation Action Network APCO Worldwide Jeremy Merz, California Chamber of Commerce Jason Schmelzer, California Coalition on Workers Compensation Shaw / Yoder / Antwih, Inc.

3 Who We Are Workers Compensation Action Network Broad-based, statewide coalition of employers and insurers dedicated to defending and advancing reform of the California workers compensation system Includes major employer trade association in California Insured, private and public self-insured employers Educate lawmakers, the business community, and members of the media on workers compensation issues Track outcomes of recent legislative reforms Provide media commentary Engage in online and social media ( Conduct annual Legislative Education Day Mobilize grassroots network to support/oppose legislative proposals

4 Who We Are California Coalition on Workers Compensation Statewide association of employers committed to maintaining a workers compensation system that provides quality benefits at a reasonable cost Advocacy Leadership Voice of California employers in legislative and regulatory venues At the forefront of lobbying efforts on key workers compensation legislation and regulations in Sacramento Coordinates lobbying efforts for employer community Educational Outreach Annual educational conference on WC trends, strategies, and policy Conduct annual Legislative Education Day Free educational webinars

5 Who We Are CalChamber California s largest pro-business advocacy group 120 year history 75% of 13,000 members have less than 100 employees Advocacy and Political Action Track more than 3,000 bills annually Identify and oppose job killers and support job creator bills Support pro-jobs candidates Education and Compliance Resources HR California Labor Law Helpline

6 What the Webinar Will Cover Need for Reform Unpacking SB 863 Provisions What Employers Should Expect Where We Go From Here

7 Need for Reform Claims cost continue to increase, far eclipsing pre-reform levels for insured/self-insured 5-year trend for medical costs +40% 5-year trend for cash benefits +35% Claims duration increasing/higher frictional costs TD benefits paid longer at higher levels Slower PD settlement, increasing payouts, more litigation Increase in expense costs Increasing claim frequency (+9.1%) After mostly moderate increases, premiums starting to escalate more sharply in 2012 Insurers paying out $1.36 for every $1.00 in premium

8 Need for Reform Cost per claim increasing unsustainably

9 Need for Reform Where the Money Goes

10 Need for Reform Industry Average Charged Rate per $100 of Payroll

11 Need for Reform

12 SB 863: A Balanced Reform General Principle: Fund an increase in PD benefits with a portion of savings obtained from system reforms supported by labor and management Common Goals: Augment PD benefits and improve timing and quality of medical care Simplify the delivery of benefits and make them more predictable Reduce litigation-related costs and delays Eliminate uncertainty and conflict associated with payment of medical bills Improve return to work and retraining for injured workers Improve speed to closure

13 MEDICAL PROVIDER NETWORKS

14 Medical Provider Networks Strengthen MPN Integrity: Limit to the reasons that an injured worker can pursue out-of-network treatment Failure to meet notification provisions no longer a basis for treatment outside of the MPN unless it resulted in the denial of medical care Requires physicians to notify employer of out-of-network care or risk non-payment AD approval of MPN is conclusive presumption of MPN validity Creates 14-day expedited hearing for medical control disputes Valdez v. WCAB addressed: Reports are admissible, but cannot support an award on their own Must be reviewed by an authorized PTP or a Panel QME

15 Medical Provider Networks Streamline approval and operations: Help injured workers locate physicians Require all MPNs to have medical assistance staff MPNs to post a roster of physicians on their website (quarterly update required) Eliminate 25% non-occupational doctor requirement Allow AD to approve an MPN, as opposed to approving an MPN for each employer Expansion of pre-designation rights to health insurance NOT provided by employer New audits for MPNs (regularly scheduled and discretionary)

16 INDEPENDENT MEDICAL REVIEW

17 Independent Medical Review Rationale, Establishment and Application: Jurisdiction over medical disputes was specifically taken away from the appeals board IMR is the only avenue for an injured worker to contest a UR decision State to establish an IMR via contract with a third party Intended to be more efficient and effective take less time and resources and have decisions made by doctors New process applies to all injuries after 1/1/2013 and all UR decisions after 7/1/2013 DWC can piggyback on the DMHC contract/process for two years IMR will be funded by per-case fee on employers

18 Independent Medical Review UR strengthened to fit with new IMR process UR decisions to delay or deny treatment now stand for 12 months unless there is a material change in the facts supporting treatment Clarified UR rules so that retrospective UR is sufficient on denied claims Cleans up ambiguity about how to best handle UR on denied claims or body parts Triggering the IMR Process: UR decision to delay, deny or modify treatment request must contain a form That form is sent by the injured worker to the DWC to begin the IMR process Employee must submit the request for IMR within 30 of service of the UR decision In some situations physicians may also trigger the IMR process

19 Independent Medical Review IMR Mechanics: Administrative Director has the authority to approve or reject IMR request Employer serves documents on IMR provider, injured worker and physician within 10 days IMR decision based on statutorily-established hierarchy 1) MTUS; 2) other guidelines; 3) nationally recognized professional standards; 4) expert opinion; 5) generally accepted standards of medical practice; 6) treatments likely to provide a benefit IMR completed within 30 days / 3 days if expedited Appeal only because of fraud, conflict of interest, or plainly erroneous mistake of fact that is not a matter of opinion

20 BILLING / PAYMENT

21 Bill Payment Procedure Documentation now required: Itemization of services provided and the charge for each service A copy of all reports showing the services performed Prescription or referral from the PTP Any evidence of authorization that has been received New timelines for payment: 45 calendar days for payment 30 calendar days for objection Explanation of Review: Amount paid Basis for any adjustment Reason for denial of payment Information on whom to contact in case of a dispute over payment Duplicate Submissions Require no further action by the employer if an explanation of review has already been provided Secondary Review Payment disputes go to secondary review prior to Independent Bill Review

22 Independent Bill Review Establishes an Independent Bill Review to resolve billing disputes IBR can be requested by provider within 30 days of second review If no IBR request within 30 days, then no further recourse for provider If employer disputes more than the amount paid, then window for an IBR request does not begin to run until issue is resolved The provider will be required to pay a fee to DWC to cover cost of service If IBR finds any additional payment, employer has to reimburse fee in addition to owed amount

23 Independent Bill Review IBR Process and Appeal IBR request assigned to reviewer by DWC within 30 days of receipt of fee and request Reviewer must make determination within 60 days of assignment Reviewer may request additional documentation from parties, who must serve the documents on the reviewer and other party within 30 days A written determination will be sent to the DWC, with a copy to the parties Limited appeal to based on very limited grounds If the IBR determination is reversed, the issue is sent to another reviewer for determination Courts do not have jurisdiction over the underlying issue

24 Lien Litigation Independent Bill Review process should eliminate most liens No other recourse for providers that didn t trigger IBR process Statute of Limitations Three years after date of service for treatment provided prior to 7/1/ months after date of service for treatment provided after 7/1/2013 Some exceptions to the above limitations, but generally applicable

25 Lien Litigation Managing existing liens New filing requirements Lien must be electronically filed with a supporting documentation Filing fee / Activation Fee New $150 filing fee for all liens filed after 1/1/2013 there are some exceptions New $100 activation fee must be paid on existing liens prior to 1/1/2014

26 MEDICAL LEGAL

27 Medical Legal Speed up and simplify medical legal process: Eliminate AME selection dance Repeal spinal surgery second opinion process Require chiropractors to pass normal QME test Limit QMEs to 10 locations

28 OTHER REFORMS

29 Other Medical Reforms Spinal surgery reimbursement Eliminates double payment for spinal surgery devices, instrumentation and implants Interpreters Requires certification of interpreters; employers not liable for services of noncertified interpreter unless they authorized the services Injured workers are required to seek employer consent for interpreters and failure to secure consent relieves employers of obligation to pay Chiropractors Can no longer be PTP after the 24 visit cap has been reached

30 Fee Schedules RBRVS Transition Ambulatory Surgery Centers Copy Service and Interpreters Home Health Services

31 Permanent Disability Eliminates FEC modifier Sleep, sex, and psyche add-ons 15% bump up/down PD moved into lower ratings Estimated $700 million direct increase in PD Increases minimum and maximum rates over two years Creation of additional $120 million/year catastrophic fund

32 Supplemental Job Displacement Voucher New timing of voucher eligibility Single amount for voucher benefit Prohibits settling voucher rights Sunsets voucher two years after delivery Injury during retraining does not constitute compensable consequence

33 What Employers Should Expect Tremendous litigation Legal challenges to SB 899 undermined previous reforms Opponents of SB 863 will bring legal challenges to numerous aspects of the bill IMR, Elimination PD Add-Ons (sleep, sex, psyche), Lien Fees Efforts to dilute/subvert provisions during regulatory process Legislative attacks

34 What Employers Should Expect Continued cost pressures Medical Costs Increased Benefits Claim Frequency Administration Costs Future Legislation Cumulative Trauma Opioids Addressing Almaraz and Guzman decisions SB 863 clean-up

35 What Employers Should Expect Implementation of Regulatory Actions required by DWC Independent Medical Review / UR Independent Bill Review Liens Medical Provide Networks/Access Assistance Supplemental Job Displacement Voucher Interpreter Fee Schedule and Certification Process Home Health RBRVS Fee Schedule Copy Service Fee Schedule Creation of $120 million Catastrophic Fund

36 Projected Impact on Employer Rates Industry Average Charged Rate per $100 of Payroll

37 Projected Impact on Employer Rates Industry Average Charged Rate per $100 of Payroll $2.65 Reduced from a 12.6% to 11.5% recommended increase

38 Projected Impact on Employer Rates Industry Average Charged Rate per $100 of Payroll $2.60 Reduced from 11.5% to 9.6% recommended increase

39 Projected Impact on Employer Rates Industry Average Charged Rate per $100 of Payroll $2.38 Reduced to no recommended increase $2.38 is the same as the average amount charged by insurers in the current year

40 Our Plans Participate in public workshops and forums Review regulatory proposals and submit written comments Keep policymakers informed on reform progress Keep employers informed on progress and needed action Highlight and oppose roll-back efforts Make the case for further reforms

41 Free CalChamber New Laws White Paper Provides detailed information on the changes in the law and how they could affect your business. Download the new 2012 New Laws white paper and you're automatically added to our notification list for the 2013 update. To Download, Click the Link in the Chat Box Here

42 What You Can Do Stay informed Stay engaged Join CalChamber, CCWC and WCAN

43 Thank You Questions?