Progress in Workers’ Compensation Cases in California

On April 19, 2004, California Governor Arnold Schwarzenegger sign SB 899 into law. It was expected to combat the state’s rapidly rising workers’ compensation costs and save approximately $3.3 billion.

Other reform measures were enacted in California to address these issues, most notably in 1993, 2002 and 2003. The latter included the adoption of mandatory utilization review (UR) using evidence-based medical guidelines. However, these measures did not succeed in fixing the state’s workers’ compensation problems due to budget cuts, court issues and other obstacles.

In 2012, SB 863 was signed into law and took effect in 2013. It primarily required the employment of independent medical review (IMR) to resolve disputes over medical necessity and incorporated increased benefits to injured workers.

Four years later, in 2016, California passed SB 1160, which enabled UR exemptions for most medical services provided within 30 days of an injury and added “automatic authorization for specific treatments under certain conditions.” Some of SB 1160’s changes took effect in 2017, while others did so in 2018.

Measuring CA Workers' Comp Reforms

The California Workers' Compensation Institute (CWCI) is a non-profit organization that “provides data, practical analyses and real-world expertise on issues and trends affecting California workers' compensation.” The organization conducted a study to ascertain the results of some of the specific laws enacted, and the outcome was positive.

Specially, the CWCI study measured “medical service approval, modification, and denial rates overall and by service category in the first 10 months following the 2018 implementation of changes that altered the Utilization Review (UR) process adopted over a decade ago and the Independent Medical Review (IMR) process that took effect in 2013.” It found that 94.1 percent of medical services performed or requested for California injured workers were either approved (92.5 percent) or approved with modifications (1.6 percent).

Here are some other results from the study:

• Twenty-nine percent of the services denied or modified by UR physicians went to IMR; in these cases, the IMR physicians overturned 8.5 percent of the UR decisions they reviewed, raising the approval rate from 93.9- 94.1 percent.
• Final approval rates varied by service category, ranging from 78.6 percent for Injections to 99.7 percent for Evaluation & Management services.
• In the pharmaceutical category, 88.1 percent of the prescriptions were approved by UR, 2.6 percent were approved with modifications and 9.2 percent were denied. Following IMR, 10.6 percent of the pharmaceutical denials and modifications were overturned, raising the overall approval rate for prescription drugs to 88.6 percent.
• Opioids had a denial rate of 17.4 percent and the highest modification rate of any drug category at 8.2 percent.
• For IMR decisions, the volume of determination letters declined in the first half of 2019 after increasing in 2018.
• Of the 2019 IMR decisions, 11.8 percent were for UR reviews in which the service was approved but the quantity or duration was modified to bring them in accord with evidence-based standards. According to CWCI, these modifications were rarely overturned in IMR, which suggests that a regulatory change precluding IMR submissions when a UR modification reduces the number or frequency of a medical service to levels that meet evidence-based standards could eliminate a substantial number of IMRs that are being submitted without an opportunity to determine results from the approved level of treatment.

The Role of Independent Medical Examinations

By utilizing an IME partner for workers’ compensation cases that employs a large network of licensed physician reviewers covering multiple specialties and subspecialties, you’ll receive an unbiased recommendation based on the examination and current medical guidelines and standards. Also, ensuring that the vendor you select is accredited by URAC is essential. URAC is an independent, third-party healthcare accreditation organization whose IME Accreditation program “shows an organization’s commitment to excellent, objective assessment of medical conditions.”

At MLS, we have the experience and resources to conduct multiple workers’ compensation services, including IMEs. We also handle utilization and peer reviews, functional capacity evaluations (FCEs) and impairment ratings. Whether you’re an insurance carrier, third-party administrator or self-funded employer, our knowledgeable team will ensure you get the service you need in a timely manner. Plus, our platform and reviewer portal are HITRUST CSF-certified, demonstrating our commitment to maintaining the highest standards for healthcare cybersecurity.