State Releases Workers’ Compensation Regulations for Medical Provider Networks
The Division of Workers' Compensation on Friday issued new regulations authorized by a law (SB 899) to reform the state workers' compensation insurance system enacted in April that will govern the creation and operation of new "HMO-like medical provider networks" and "reverse long-standing practices" that generally allowed workers to choose any doctor, the San Francisco Chronicle reports (Abate, San Francisco Chronicle, 10/23). DWC Administrative Director Andrea Hoch developed the rules through several meetings with industry organizations, including insurance, business, medical and legal groups (Chan, Sacramento Bee, 10/23).
The 21 pages of rules require networks to:
- Include a variety of doctors and other providers with both general medical and occupational injury experience;
- Provide injured workers with primary and emergency care within 15 miles or 30 minutes; and
- Provide workers with specialist care within 30 miles or 60 minutes.
According to Lachlan Taylor, a workers' compensation appeals board judge who has reviewed the rules, the regulations allow employers to direct an injured worker to a specific provider for the initial diagnosis, but workers needing additional care can change providers within the network.
Workers also can receive outside opinions or seek an independent medical review if they disagree with initial examinations, the Chronicle reports. The new rules also entitle workers to as much as $10,000 in immediate medical treatments.
Hoch was not available Friday to specify the number of provider networks DWC expects and explain how the division will inspect them within a 60-day deadline (San Francisco Chronicle, 10/23). Medical providers will be allowed to establish networks starting Jan. 1, 2005.
Hoch next month will release "another key set of regulations" that will determine benefit awards for permanent disabilities, the Bee reports (Sacramento Bee, 10/23).
California Labor Federation spokesperson Angie Wei said, "The rules give the state 60 days to approve MPNs and says any that aren't evaluated within the deadline will be 'deemed approved,'" adding, "We have deep concerns."
Rick Rice, spokesperson for the Labor and Workforce Development Agency, which oversees DWC, said Hoch does not "want any of these entities to default" into existence and has prepared her staff to process the expected volume of network applications.
Mark Gerlach, a spokesperson for lawyers who represent injured workers, said his group plans to dispute provisions of the new rules that would force patients who are being treated for injuries sustained prior to the formation of the networks to transfer into the networks.
Nicole Mahrt, Sacramento spokesperson for the American Insurance Association, said that the rules would "stop doctor-shopping, which inflated medical costs."
Tim East, a risk manager with Walt Disney and chair of the California Coalition on Workers' Compensation, said the new rules are "comprehensive enough to give us clear direction without being bogged down in unnecessary regulation" (San Francisco Chronicle, 10/23).
Insurance Commissioner John Garamendi (D) on Wednesday will hold hearings in San Francisco to review a not-for-profit insurers group's recommendations for a 3.5% premium rate increase for policies written or renewed after Jan. 1, 2005 (Abate, San Francisco Chronicle, 10/24).
Officials from the Workers' Compensation Insurance Rating Bureau said their recommendation, released last month, accounted for the effects of laws enacted last year by former Gov. Gray Davis (D) to reform the state workers' compensation insurance system (California Healthline, 9/16). According to a spokesperson for the ratings bureau, the new regulations from the law enacted this year also were factored into the group's recommendation, the Chronicle reports.
A 3.5% premium rate increase would reduce a decline in rates that occurred between December and January, with the average premium falling during that period from $6.37 to $5.89 per $100 of payroll (San Francisco Chronicle, 10/24).
Garamendi plans to issue his nonbinding premium rate recommendation to workers' compensation insurers in November (California Healthline, 9/16).