Blog: DaisyBill News

In a much-anticipated ruling, California’s Supreme Court ruled that a secondary injury derived from an incorrect Utilization Review (UR) decision is compensable under workers’ comp.

The Supreme Court denied the injured worker’s right to sue the Utilization Review Organization (URO) and UR physician in civil court, affirming workers’ comp as the “sole and exclusive remedy” for all injuries that arise out of or occur in the course of employment — including additional injuries that result from improper UR decisions regarding accepted injuries.

Medical Provider Networks (MPNs) are a drag on California workers’ compensation. Nominally designed to help employers control costs, MPNs rarely achieve more than throwing up obstacles to the treatment of injured workers, and cheating providers out of reimbursement — even for authorized services.

Authorization, of course, is supposed to be final. But when claims administrators grant authorization on the condition that the treating physician be included in the employer’s MPN, they create opportunities to deny payment.

Medical Provider Networks (MPNs) allow employers to limit where employees may seek treatment for work-related injuries. Theoretically, the purpose of MPNs is to direct care with the goal of containing employer costs for treatment.

But preliminary findings from the California Workers’ Compensation Institute (CWCI) show that when employers use MPNs to direct care, the average savings per claim is next to nothing. Meanwhile, a study from the Journal of Occupational and Environmental Medicine (JOEM) concluded that directing employee care actually costs employers more than it saves, since more frequent attorney involvement raises the cost per claim for directed care.

Frankly, we’re not surprised. Given existing authorization and billing rules, MPNs are a perfect example of how the opacity of workers’ comp leaves unknowing employers susceptible to redundant, pointless expenses.

When treating an injured worker, a provider must fax the Request for Authorization (RFA) to the fax number designated by the claims administrator. RFAs should never be sent with a bill.

Often claims administrators delegate bill review and utilization review (UR) to different entities. A provider who fails to fax RFAs to the correct destination is out of compliance with RFA regulations which require providers to fax these requests using the fax number issued by the claims administrator.

When a payor’s utilization review organization (URO) denies treatment recommended by an injured worker’s treating physician, the only recourse is for the injured worker to appeal the denial to Independent Medical Review (IMR) administered by Maximus Federal Services.

A recent analysis of Maximus’ IMR decisions by California Workers’ Compensation Institute (CWCI) found that Maximus upheld the overwhelming majority of payors’ utilization review decisions.

The notion of IMR as a largely futile pursuit works to the advantage of the CWCI, an insurers’ and employers’ group with the stated aim of analyzing data “to improve benefit delivery.”

When an employee files a workers’ compensation claim, the employer or insurer is immediately liable for the cost of all medically necessary treatment provided before the claim is accepted or denied. In other words, even if the employer or insurer ultimately denies a claim, treatment provided up to $10,000 is authorized before the claims administrator issues that denial.

This important rule guarantees that liability for medically necessary treatment is never in question while an employer or insurer considers a claim — whether the claim is accepted or not.

Let’s be very clear: in the workers’ comp dialect of Legalese, “authorization” means guaranteed payment for approved services. Period.

While one can imagine scenarios in which an insurer or employer’s claims administrator might want to change their mind, authorization can’t be undone so easily. Once a payor communicates a utilization review (UR) decision approving treatment, the provider has the green light.

A recent incident involving one of our providers is a great example.

Senate Bill 1160 makes significant changes to the authorization and utilization review (UR) process starting in 2018. New “fast-track” UR takes effect on January 1.

Fast-track UR bypasses prospective utilization review by automatically approves the required treatment in many — but not all — circumstances. A set of specific conditions must exist in order for providers to bypass the usual UR process. The new process also changes the rules regarding authorization and billing for these encounters.

DaisyBill will host a webinar on fast-track UR on January 23.