SB (b)(8) & (9) January 1, 2013 Minimum weekly benefit increased from $130 to $160 for injuries on/after January 1, 2013

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1 SB863 The following is a quick summary sheet of changes with selected cited provisions of the Labor Code changes and amendments effectuated by the passage of SB 863 by the California Legislature. This is not a comprehensive analysis or review of all the provisions enacted, but a practical summary intended to quickly direct the reader to changes anticipated to be referenced often particularly in the early stages of implementation. If you have specific questions or need more comprehensive details or references please contact David Parker (dp@pknwlaw.com) any attorney at Parker, Kern, Nard & Wenzel (law@pknwlaw.com). Permanent Disability Labor Code section Effective Changes 4453 (b)(8) & (9) January 1, 2013 Minimum weekly benefit increased from $130 to $160 for injuries on/after January 1, 2013 (A) When the final adjusted permanent disability rating is less than 55 percent, not less than two hundred forty dollars ($240) nor more than three hundred forty-five dollars ($345). (B) When the final adjusted permanent disability rating is 55 percent or greater but less than 70 percent, not less than two hundred forty dollars ($240) nor more than four hundred five dollars ($405). (C) When the final adjusted permanent disability rating is 70 percent or greater but less than 100 percent, not less than two hundred forty dollars ($240) nor more than four hundred thirty-five dollars ($435). (D) For injuries occurring on or after January 1, 2014, not less than two hundred forty dollars ($240) nor more than four hundred thirty-five dollars ($435) (b) January 1, 2013 All WPI ratings are adjusted by a 1.4 modifier for injuries on/after January 1, (e) January 1, 2013 All 15% bump up/bump down is eliminated (b) For purposes of this section, the nature of the physical injury or disfigurement shall incorporate the descriptions and measurements of physical impairments and the corresponding percentages of impairments published in the American Medical Association (AMA) Guides to the Evaluation of Permanent Impairment (5th Edition) with the employee s whole person impairment, as provided in the Guides, multiplied by an adjustment factor of 1.4.

2 January 1, 2013 A return-to-work program funded by an annual amount of $120 million from the Workers Compensation Administration Revolving Fund is created in DIR to provide supplemental payments for workers whose benefits are disproportionately low in comparison to their earnings loss The Director of DIR shall issue regulations governing payments under this program There shall be in the department a return-to-work program administered by the director, funded by one hundred twenty million dollars ($120,000,000) annually derived from non-general Funds of the Workers Compensation Administration Revolving Fund, for the purpose of making supplemental payments to workers whose permanent disability benefits are disproportionately low in comparison to their earnings loss. Eligibility for payments and the amount of payments shall be determined by regulations adopted by the director, based on findings from studies conducted by the director in consultation with the Commission on Health and Safety and Workers Compensation. Determinations of the director shall be subject to review at the trial level of the appeals board upon the same grounds as prescribed for petitions for reconsideration (c) January 1, 2013 There are no direct increases in impairment ratings for sleep dysfunction or sexual dysfunction arising out of a compensable physical injury There are no increases in impairment ratings for psychiatric disorder arising out of a compensable physical injury expect where the impairment is due to being a victim of a violent act or from a catastrophic injury (c) (1) Except as provided in paragraph (2), there shall be no increases in impairment ratings for sleep dysfunction, sexual dysfunction, or psychiatric disorder, or any combination thereof, arising out of a compensable physical injury. Nothing in this section shall limit the ability of an injured employee to obtain treatment for sleep dysfunction, sexual dysfunction, or psychiatric disorder, if any, that are a consequence of an industrial injury. (2) An increased impairment rating for psychiatric disorder shall not be subject to paragraph (1) if the compensable psychiatric injury resulted from either of the following: (A) Being a victim of a violent act or direct exposure to a significant violent act within the meaning of Section (B) A catastrophic injury, including, but not limited to, loss of a limb, paralysis, severe burn, or severe head injury.

3 4660.1(g) (h) Statutory provision that nothing in shall preclude a finding of permanent total disability in accordance with 4662 Statutory provision that it is not the intent of the Legislature in adopting to overturn Guzman 4650(b)(2) January 1, 2013 Permanent disability advances are not required if the employer has offered a position paying 85% of the wages and compensation paid at the time of injury, or if the employee has returned to any work paying 100% of pre-injury wages and compensation (b)(2) Prior to an award of permanent disability indemnity, a permanent disability indemnity payment shall not be required if the employer has offered the employee a position that pays at least 85 percent of the wages and compensation paid to the employee at the time of injury or if the employee is employed in a position that pays at least 100 percent of the wages and compensation paid to the employee at the time of injury, provided that when an award of permanent disability indemnity is made, the amount then due shall be calculated from the last date for which temporary disability indemnity was paid, or the date the employee s disability became permanent and stationary, whichever is earlier Employer is still required to provide compensation once PD is established or file a DOR, except if deferred due to return to work or offer to return to work 4650(b)(1) 4061(a)(1) (i) After the last payment of TD, the employer shall provide timely PD payments until a reasonable estimate of PD indemnity or the amount of PD determine to be due has been paid (with the exception for those payments deferred due to return to work or offer of return to work) Upon last payment of TD, the employer shall provide notice to employee of no permanent disability, the amount that is payable and whether payments will be deferred due to return to work or offer of return to work Commission on Health and Safety and Workers Compensation ( CHSWC ) is directed to conduct a study comparing earnings losses to disability ratings and report the findings no later than January 1, 2016

4 Independent Medical Review (IMR) (a) IMR is mandatory for resolving disputes over UR decisions (a) This section applies to the following disputes: (1) Any dispute over a utilization review decision regarding treatment for an injury occurring on or after January 1, (2) Any dispute over a utilization review decision if the decision is communicated to the requesting physician on or after July 1, 2013, regardless of the date of injury. (b) A dispute described in subdivision (a) shall be resolved only in accordance with this section. 4062(a)(b); ( f); 4064(a); (e) QMEs and AMEs cannot comment on medical treatment recommendations or objections to UR determinations All disputes concerning UR decisions must go through IMR Disputes over an MPN physician s diagnosis or treatment recommendations are still resolved using the 2nd opinion/ 3rd opinion/ IMR process in the MPN statute (f) (h) (k) (h)(2) (l)(n)(o) (b)(d) Notification of a UR modification, delay or denial must include a one-page IMR application form The employee has 30 days after receipt of the UR decision to request IMR Unless the employer agrees to move forward, IMR will be deferred if the employer is disputing compensability for any reason other than medical necessity If at the time of the UR decision the employer is also disputing liability for treatment for any reason beside medical necessity, the time to submit to IMR is extended to 30 days after the liability dispute is resolved The AD will assign the request to an IMR organization; and within 10 days of assignment the employer must submit to the IMR organization all relevant medical documents and records (24 hours for imminent and serious threat) and must notify the employee of all documents provided to the reviewer The IMR reviewer may request additional information from the parties, and must complete the review and issue a determination within 30 days (3 days for imminent and serious threat)

5 4610.6(j) If IMR holds the treatment is appropriate, the employer must authorize the services within 5 working days of receipt of the determination unless disputed for reasons other than medical necessity (g)(h) The decision of the IMR reviewer will be adopted as the AD s decision. The determination is final and binding unless appealed to the Board within 30 days of date of mailing The determination is presumed correct and may be set aside only by clear and convincing evidence of the following: (1) AD acted without or in excess of his/her powers;(2) Fraud; (3) Discrimination; (4) Conflict of interest; or (5) Erroneous finding of fact (i) If the determination is reversed, the dispute is resubmitted to another IMR reviewer A judge, the Board, and reviewing courts may not make a determination of medical necessity contrary to the determination of the IMR organization Preference is to be given to California licensed physicians when assigning the IMR reviewer IMR reviewers are consultants to the DWC and have limited liability 4062(b) The separate procedure for handling spinal surgery disputes is eliminated Utilization Review All spinal surgery disputes must go through IMR 4610 January 1, 2013 Amendments to 4610 are effective January 1, (g)(6) January 1, 2013 UR decisions to modify, delay or deny a treatment recommendation remain in effect for 12 months unless a further recommendation is supported by a documented change in facts material to the determination 4610(g)(6)(7)(8) January 1, 2013 UR is not required while the employer is disputing compensability, and if the injury is later held compensable the UR time lines start on the date of the employer s receipt of a treatment request after determination of the employer s liability 4610(g)(1) January 1, 2013 If payment is made within the legal time limits, notice of a retrospective decision to approve treatment does not have to be provided

6 Medical Treatment 4600(h) January 1, 2013 A prescription for home health care services is required and the employer is not liable for any services provided more than 14 days prior to the employer s receipt of the prescription 4600(d) January 1, 2013 Any employee with health care coverage may predesignate a treating physician 4600(c) January 1, 2013 A chiropractor may not be the treating physician after the employee receives the maximum chiropractic visits (2)(A) January 1, 2013 Any payments for chiropractic care, physical therapy and occupational therapy above the statutory caps are not to be deemed a waiver of the statutory caps 4600, & 4610 January 1, 2013 Referenced to ACOEM are deleted Medical-Legal Evaluations 139.2(h)(3)(B) January 1, 2013 QMEs may not conduct evaluations at more than 10 locations (f) January 1, 2013 The requirement to attempt to agree on an AME is deleted, but the parties may agree to use and AME at any time regarding any issue except a UR dispute (f) January 1, 2013 Oral or written communications with an AME regarding non-substantive matters such as scheduled do not constitute as ex parte communication unless the Board makes a finding of an impermissible communication (b) January 1, 2013 The parties may request a panel of QMEs no earlier than the first working day at least 10 days after the date of mailing a request for an evaluation pursuant to 4060 or an objection pursuant to 4061 or (c) January 1, 2013 Within 10 days of assignment of a QME panel each party may strike one name, or the other party may select any physician who remains on the panel 139.2(h) January 1, 2013 The time to issue a QME panel is extended from 15 to 20 days for an unrepresented employee 4061(d) January 1, 2013 Within 30 days of receipt of the QME s report either party may request one supplemental report seeking correction of factual errors in the report for an unrepresented employee

7 4064(c) January 1, 2013 If the employer files a Declaration of Readiness to Proceed, the employer is liable for attorney s fees in connection with the DOR [change from application ] 4061(i) January 1, 2013 No issue relating to the existence or extent of permanent disability may be the subject of a Declaration of Readiness unless there has first been a medical evaluation by a treating physician and an AME or QME 4066 January 1, 2013 Section 4066, which allowed for attorney s fees when an employer files an application contesting the formal medical evaluation of an AME, is repealed 4605 January 1, 2013 A report from a consulting physician pursuant to 4605 is allowed but cannot be the sole basis for an award of compensation and must be addressed by the AME or QME 4620(a) & (d) January 1, 2013 A worker is entitled to the services of a qualified interpreter during a medical evaluation. The employer is not required to pay for a provisionally certified interpreter unless the employer consents in advance or the applicant requires interpreting in a rare language (as defined) Liens 4903(b) January 1, 2013 Subdivision allowing liens for medical expenses deletes reference to medical-legal expenses and adds provision excepting disputes subject to IMR or IBR (b) January 1, 2013 A lien claim for medical expenses must be filed electronically (c) January 1, 2013 All medical expense lines or claims of costs filed after January 1, 2013 must first pay a $150 filing fee (see below for exceptions) Failure to pay the fee prior to filing the lien renders the lien invalid (a) January 1, 2013 Any lien for medical expenses filed prior to 2013 and any cost filed as a lien prior to 2013 are subject to a lien activation fee of $100 unless the filing fee under former was paid (see below for exceptions) (c), (a) January 1, 2013 The Administrative Director must adopt regulations governing the collection of the filing and activation fees (a)(2) & (4) January 1, 2013 Proof of payment of the filing or activation fee must be attached to a Declaration of Readiness or submitted at a lien conference The lien will be dismissed for failure to provide proof of payment

8 4903.7(a) January 1, 2013 A lien claimant is entitled to an order or award of reimbursement of the filing fee (plus interest) if: (a) The lien claimant made a demand for payment before filing the lien; (b) The defendant did not accept that offer; and (c) A final award is made equal to or higher than the rejected offer (b) January 1, 2013 This does not preclude reimbursement pursuant to an agreement of the parties (c)(7) & (b) January 1, 2013 Filing and activation fees do not apply to health care service plans, group health insurers, selfinsured employee welfare benefit plans, a Taft-Hartley health and welfare fund, and publically funded medical programs (b) January 1, 2013 Payment of a lien for medical or hospital expenses is not allowed if at the time the expense was incurred the provider knew or in the existence of reasonable diligence should have known the need for treatment was work related, unless:(a) the services were authorized; or (b) services were provided while the employer failed to provide treatment pursuant to 5402(c); or (c) services were provided for an emergency medical condition (a)(3) January 1, 2013 The Board shall allow a lien as a living expense for a self-insured employee welfare benefit plan to the same extent such a lien had been allowed for a group disability policy (b) (deleted) January 1, 2013 Requirement to file any liens served on the parties when submitting a compromise of a claim of award is deleted (b) January 1, 2013 If a lien dispute is heard at a separate proceeding, the Board may calendar the hearing based on available resources and is not subject to 5501 (should be 5502) (a) & (b) January 1, 2013 A medical expense lien must be filed within 3 years of the provision of services, or 18 months if the services were provided on or after July 1, 2013 Health plans must file within 12 months of knowledge the injury was industrial, but not longer than 5 years from the date of service (a) January 1, 2013 Unless necessary to meet the statute of limitations, a medical expense lien or application may not be filed or served unless both:(a) 60 days have elapsed from accepted or rejection of the claim or expiration of the 90 day investigation period; and (b) either (1) the time allowed for payment of medical bills, including if necessary the IMR and/or IBR process has expired, or (2) the time allowed for payment of medical-legal bills has expired, including if necessary the IBR process (b) January 1, 2013 Lien claimants must notify the parties and the Board of representation of a change in representation (d) January 1, 2013 Except for a physician, no lien claimant is entitled to any medical information without an order by the Board

9 4903.8(b) January 1, 2013 Payment of a lien is permitted only to person entitled to the payment, not to an assignee, unless the provider has ceased doing business and assigned all rights to the assignee A copy of the assignment must be filed and served Multiple assignments may be held to constitute bad faith tactics and sanctions can be awarded (d) January 1, 2013 January 1, 2014 For liens filed after January 1, 2013, at time of filing, and for liens filed before 2013 at the earliest of the first filing of a DOR, a hearing, or January 1, 2014, the lien claimant must file documentation under penalty of perjury that the services were actually provided and the billing is correct A medical expense lien filed after January 1, 2013 that does not comply with the requirements regarding assignment and documentation is deemed invalid 4904(a) January 1, 2013 An EDD lien is against temporary or permanent disability compensation. Insurance carrier or employer to notify EDD within 15 working days of making indemnity payments January 1, 2013 The provision allowing the Board to order payment of a claim in a proceeding where it determines a lien would have been allowed if it had been duly requested is amended to exempt medical expense liens 4907 January 1, 2013 The Board of WCJs may bar a non-attorney representative for a violation of the lien statutes, WCAB rules or the AD s rules Independent Bill Review (IBR) Non-attorney representatives are held to the same professional standards of conduct as attorneys (b)(1) January 1, 2013 Medical providers, including physicians, hospitals, pharmacies, interpreters, copy services, transportation services, and home health care services, must submit a request for payment with an itemization of services, a copy of all reports, the prescription from the physician, and any evidence of authorization for the services (b)(2) January 1, 2013 Payment of a medical bill is required within 45 days (not working days ) and must include an explanation of review If any portion is contested the explanation of review must include the basis for any adjustment or denial of the bill or state any additional information needed

10 4603.2(b)(4) January 1, 2013 Duplicate bills for which an explanation of review has been provided do not have to be acknowledged January 1, 2013 Upon payment, adjustment, or denial of a complete medical bill the employer must provide an explanation of review that includes a statement of items billed, the amounts billed, the amounts paid, the basis for any adjustment, change or denial, any added information required, the reason for a denial, and information on whom to contact The explanation must also include information on the time limit to dispute the payment and information on how to obtain an independent bill review The AD may require electronic explanations of review (e)(1) January 1, 2013 If the provider disputes the amount paid, a second review may be requested on a form prescribed by the AD or an order from the appeals board. This must be completed within 90 days of service of the explanation of review. If a second review is not requested within 90 days the bill is deemed satisfied (e)(3) January 1, 2013 Within 14 days of a request for a second review the employer shall provide a final determination of the amount in dispute Payment of any amount not in dispute must be made within 21 days of the second request (e)(4) January 1, 2013 If the provider disputes the amount paid after the second review, IBR may be requested by the provider (a) January 1, 2013 If IBR is not requested within 30 days of service of the second review, the bill is deemed satisfied If the employer disputes liability for the claim, the time limits are extended until resolution of the compensability issue

11 4603.6(b) January 1, 2013 A request for IBR shall be on a form prescribed by the AD and must include supporting documentation The AD may require electronic submission The provider must serve the employer with a copy of the request and all documentation, and must serve the AD with a copy of the request plus proof of payment of the fee Within 10 days of assignment of the reviewer, the requesting party must submit all documentation to the reviewer (c) January 1, 2013 The provider must pay a fee, which will be set by the AD at a level designed to recover costs If any added fee is found owing to the provider the employer must reimburse the fee (d) January 1, 2013 The IBR reviewer must be assigned within 30 days (e) January 1, 2013 The reviewer can request additional information which must be provided within 30 days, and must make a written determination within 60 days of assignment (f) January 1, 2013 The determination of the reviewer is deemed a determination of the AD and is final and binding unless appealed to the Board within 20 days of service The determination is presumed correct and may be set aside only by clear and convincing evidence of the following:(a) AD acted without or in excess of his/her powers; (b) fraud; (c) discrimination; (d) conflict of interest; or (e) erroneous finding of fact (g) January 1, 2013 If the determination is reversed, the dispute is resubmitted to another IBR reviewer The Board and reviewing courts may not make a determination of ultimate fact contrary to the determination of the IBR organization (h) January 1, 2013 If any additional amount is owed after IBR, it must be paid pursuant to time requirements in and (b) & (c) January 1, 2013 IBR also applies to disputes over the amount paid or denied for medical-legal services

12 Medical Provider Networks (a)(2) January 1, 2013 If the employer objects to the employee s selection of a physician because the physician is not in an MPN and the employee prevails, the employee may continue treating with that physician notwithstanding However, the physician must submit a report within 5 working days of the initial examination otherwise neither the employer nor employee is required to pay for services provided prior to the date the physician s report was submitted (a)(3) January 1, 2013 If the employer objects to the employee s selection of a physician because the physician is not in an MPN and the employer prevails, the employer is not liable for treatment provided by that physician or for any consequences of that treatment (b) January 1, 2013 Failure to provide certain notices of the MPN and the right to change physicians are not a basis to treat outside the MPN unless it is shown the failure resulted in a denial of medical care 5502(b) January 1, 2013 Whether an employee can be required to treat in an MPN may be the subject of an expedited hearing and no other matter may be heard until the MPN issue is resolved 4616(a) January 1, 2013 Any entity that provides physician services may apply to become an MPN The goal to have at least 25% non-occupational physicians was deleted 4616(b)(1) January 1, 2013 January 1, 2014 MPN approval now lasts four years As of January 1, 2014 all existing approved MPNs are deemed approved for four years from the date of last application or modification approval 4616(b)(1) January 1, 2013 Upon a showing that the MPN was approved or deemed approved by the AD there shall be a conclusive presumption the network was validly formed 4616(b)(5) January 1, 2013 Unless suspended or revoked, the AD s approval of a MPN is binding on all persons and courts and a determination of the AD may be appealed only by filing an original proceeding before the reconsideration unit of the Board 4616(b)(2) January 1, 2013 Every MPN must establish and follow procedures to continuously review quality of care, performance of medical personnel, utilization of services and facility and costs 4616(a)(3) January 1, 2013 Physicians will be included in an MPN only if they provide a written acknowledgment electing to be in the network

13 4616(a)(4) January 1, 2013 Every MPN must post its full provider list on the internet and must update the list at least quarterly The AD must post the internet address of every MPN on the DWC website 4616(a)(5) January 1, 2013 Commencing January 1, 2014, every MPN must provide one or more persons to act as a medical access assistants to help find a physician, respond to questions, contact physicians offices, and schedule appointments These assistants must be available Monday through Saturday, 7am - 8pm, through a toll-free telephone number The AD must adopt regulations governing this process by July 1, (b)(4) January 1, 2013 The AD at any time may investigate complaints and conduct random reviews of MPNs 4616(b)(5) January 1, 2013 The AD may adopt regulations setting up penalties of up to $5,000 per violation for violating the MPN statutory requirements Carve-Outs (c)(4) January 1, 2013 The State of California is added to the list of entities to form a carve-out Supplemental Job Displacement Benefit (SJDB) (a) The current SJDB section applies to injuries occurring on or after January 1, 2004 and before January 1, (d) (e) Vouchers issued on or after January 1, 2013 expire two years after furnished to the employee or five years after the date of injury, whichever is later The employer is not responsible for compensation for injuries incurred while using the voucher (a) The amended SJDB section applies to injuries occurring on or after January 1, 2013

14 4658.7(b) The worker is entitled to the voucher unless within 60 days of the employer s receipt of the initial permanent and stationary report finding permanent disability, the employer makes an offer of regular or alternative/modified work lasting at least 12 months If the physician is provided a job description, the physician must evaluate work capabilities and activity restrictions, and the adjuster must forward this information to the employer (c) (d) & (e) (f) (g) (e); (i) The voucher must be offered within 20 days of expiration of the time limit of the employer to make the required work offer A voucher of up to $6,000 can be used only at a public school or with a provider on the state s Eligible Training Provider list, and for other uses including licensing fees, vocational counseling (only up to 10% of the voucher), tools or a computer (only up to $1,000) Vouchers issued after January 1, 2013 expire two years after issuance or five years after date of injury, whichever is later Settlement or commutation of the SJDB is not permitted The employer is not responsible for injuries incurred while using either the existing or the amended voucher