SB 899 - A Detailed Review, Part 3: Treatment, Fees

Saturday, May 22, 2004 | 0

This is the third in a series of articles extracted and edited from a new booklet attorney Michael Sullivan has prepared on the substantial changes to California workers' compensation laws instituted by SB 899. The earlier articles are available for reading by clicking on the links to the right.

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8. Medical Treatment Redefined There are many changes made in Labor Code section 4600, which is of course the foundational Code for the provision of medical care.

A. Definition of Medical Treatment.

Labor Code section 4600 has provided a relatively broad definition of medical treatment, which has set the tone for workers' compensation treatment for decades. Specifically, treatment is mandated "that is reasonably required to cure or relieve the injured worker from the effects of his or her injury." Subsection (a) of Labor Code Section 4600 specifies that this treatment must be provided in a "reasonable" fashion. The formerly used word was "seasonable."

Added is Labor Code section 4600(b). It provides that notwithstanding any other provision of the law, medical treatment that is reasonably required to cure or relieve the injured worker means treatment that is based upon the Utilization Guidelines as adopted by the Administrative Director, or prior to the Administrative Director's action, per the terms set out in ACOEM. This is a definition of reasonable care that is a radical departure from the previous understandings of the same in the system. Furthermore, it is a "clean-up" measure, which strengthens the Utilization Guidelines that were originally enacted in the 2003 legislation.

B. Establishment of the Network.

Labor Code section 4600(c) is also radically altered to help with the establishment of a treatment network as described later herein. This section had provided that after 30 days from the date of injury, the applicant could chose his or her own physician at a facility of his or her own choice within a reasonable geographic area. This is now limited to those circumstances where an employer network is not otherwise created.

C. Pre-designation of Physicians.

Section 4600(c) had also laid out a provision wherein the applicant could pre-designate a physician with the employer prior to the injury, and provided that the applicant could chose to be treated by that pre-designated physician regardless of employer control rules. This has been eliminated.

There is still a provision in Labor Code section 4600(d) that allows for treatment by a pre-designated physician. Such a scenario is allowed when the applicant has notified the employer in writing prior to the date of injury that the applicant has a personal physician, and one of the two following conditions exist: First, the employer provides a non-occupational group health coverage in the health care service plan, or second, the employer provides non-occupational health coverage in a group health plan or group health insurance policy. Thus, to put it very simply, and employer has to have non-industrial health insurance for the applicant to be allowed to pre-designate and use a personal physician. Furthermore, there are limits on what can constitute a personal physician. The personal physician has to meet all of the following conditions:

1. The physician must be the applicant's regular "physician and surgeon", and must be licensed. One wonders if the legislature really intended for this requirement that the doctor be a surgeon.

2. The physician has to be the applicant's primary care physician. This means that he or she has previously directed the medical treatment of the applicant and retains the applicant's medical records, including his or her medical history.

3. The physician agrees to be pre-designated. This could create a significant procedural barrier. The timing of this agreement is not specified.

Subsection (d)(5) indicates that no more than seven percent (7%) of all employees who are covered under the paragraph are allowed to pre-designate physicians at any given time. Obviously all this is in place at least in part to ensure that there is no illusory pre-designation of a physician in order to circumvent the purposes of employer's establishment of a physician network and resulting control of medical care.

The Legislature is careful to avoid any disputes over medical treatment that will involve qualified medical evaluations and Court intervention. Labor Code section 4600(d)(3) specifies that if the employer does have non-occupational health care, those provisions of health care law which put into place a system for resolution of medical disputes are dispositive of any such disputes.

The rules regarding pre-designation are given a sunset provision. That is, unless they are re-ratified by the Legislature and passed by April 30, 2007, they will no longer exist.

D. Demand for Prior Authorization.

Labor Code Section 4600(d)(5) indicates that the insured may require prior authorization of any non-emergency treatment or diagnostic service, and may conduct a necessary utilization review pursuant to Section 4610.

This has a huge potential. The defense may under the language here decide to demand pre-authorization for all non-emergency care and diagnostics. A failure to obtain such pre-authorization could be a basis for avoiding liability. The defense should make sure that the requirement of pre-authorization is clear if this tact is taken.

9. Fee Schedule Reform

Labor Code section 4603.2 is amended. Subsection (b) formerly provided that the defense had to make payment for medical treatment within 45 days after receipt of each separate billing. Language has been added here to indicate that such payment is to be made "at the reasonable maximum amount in the official medical fee schedule, pursuant to Section 5307.1 in effect on the date of service." This mandates payment according to fee schedule without qualification. It also "cleans up" the 2003 reform bill language, which did not specify what dates of injury or dates of service would apply for implementation of new fee schedule rules.

Article by attorney Michael Sullivan. Mr. Sullivan can be reached by e-mail at mike@mikeslaw.com, or by phone at (310) 337-4480.

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