SB 537: California RFA and Utilization Review Data

SB 537: California RFA and Utilization Review Data

Last week Gavin Newsom, who serves as Governor of California, signed SB 537 into law, thereby adding a new section 138.8 to the Labor Code. This new §138.8 requires the Department of Workers’ Compensation (DWC) to annually publish utilization data about physicians who treat injured workers.

The net is cast very wide to include virtually all workers’ comp physicians: any physician who treated 10 or more injured workers during the 12 months before July 1 of the previous year. By January 1, 2024, the DWC must publish the following information on the division’s website:

  • data about each provider’s requests for authorization (RFAs); and
  • data about the utilization review (UR) decisions rendered in response to RFAs.

In a comprehensive review of the then-proposed, now passed, legislation, SB 537: Physicians Should REVOLT Against Inequities, DaisyBill repeatedly asked the question: What purpose is served by publishing this information?

Now, our current suggestion: if utilization data is important, the legislature needs to pursue implementation of the existing utilization review law passed in 2016 -- a law that requires employer UR reporting.

Existing Labor Code Ignored

In 2016 the legislature amended Labor Code § 4610 to demand a mandatory electronic reporting system for all documents related to “every utilization review by each employer.” This law mandates that the DWC “administrative director shall adopt regulations specifying the documents to be submitted by the employer and the authorized transmission format and timeframe for their submission.”

To date, the DWC has not adopted any regulations as required by this 2016 amended Labor Code.

Note that the bill which mandated this, SB 1160, set no deadline for establishing electronic reporting by employers, insurers, and claims administrators for their part of the utilization review process. This is, of course, in contrast to SB 537’s 2024 deadline for publication of provider data.

UR Decision Standardization Required

Currently, California regulations require physicians to submit authorization requests on the DWC Form RFA. This RFA form essentially standardizes the information submitted by providers, thereby, allowing for easy data collection.

DaisyBill offers our clients a simple and efficient way to submit RFAs using separate DaisyAuth software. In the last three years, our clients used DaisyAuth to submit over 300,000 RFAs to employers. The standardization of the RFA form makes it quite simple for us to collect and analyze the information submitted by physicians, including most of the information required by new LAB §138.8.

However, the DWC has not adopted an equivalent UR decision form, so there is currently no easy way to collect standardized information on employers’ responses to the RFAs submitted by physicians. A standard UR decision form will be needed to, for instance, capture the UR decision information required by LAB §138.8 (a)(7):

  • The number of utilization review decisions that resulted in a modification or denial of a request for authorization of medical treatment based upon a determination of medical necessity.

Electronic UR Decision Reporting Required

In addition, without an electronic system for employers to submit utilization review information, it is impossible for the DWC to collect, verify, and analyze any UR information, whether required by the new LAB §138.8 or by the existing LAB § 4610.

Electronic systems enable the transparency, easy data collection, and instant analysis that legislators seek by enacting bills such as SB 537. For instance, because DaisyBill is almost entirely electronic, we can analyze and publish the average number of days between bill submittal and bill payment for each claims administrator. With electronic systems in place, it’s possible to harvest extremely detailed and sweepingly comprehensive data about both providers and employers.

What the DWC Can Do

In a nutshell, to best meet new and existing Labor Law requirements, we urge the DWC to:

  • Standardize the information sent by employers in UR decisions, to carry out the new LAB §138.8.
  • Implement technology to electronically enable the mandatory reporting by employers as envisioned by the 2016 amendment to LAB § 4610.

With a standardized UR form and the adoption of technology that enforces employer UR reporting, the DWC could easily obtain enormous amounts of valuable information regarding the treatment (or lack thereof) of injured employees.

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