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INVESTIGATIONS AND PENALTIES FOR UTILIZATION REVIEW VIOLATIONS

INVESTIGATIONS AND PENALTIES FOR UTILIZATION REVIEW VIOLATIONS. Suzanne P. Marria Counsel Division of Workers’ Compensation DWC Educational Conference 2006. OVERVIEW Title 8, Cal. Code Regs. §§ 9792.11 – 9792.15. Investigation Procedures (§ 9792.11)

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INVESTIGATIONS AND PENALTIES FOR UTILIZATION REVIEW VIOLATIONS

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  1. INVESTIGATIONS AND PENALTIES FOR UTILIZATION REVIEW VIOLATIONS Suzanne P. Marria Counsel Division of Workers’ Compensation DWC Educational Conference 2006

  2. OVERVIEWTitle 8, Cal. Code Regs. §§ 9792.11 – 9792.15 • Investigation Procedures (§ 9792.11) • Penalty Schedule for Violations (§ 9792.12) • Penalty Adjustment Factors (§ 9792.13) • Liability for Penalties (§ 9792.14) • Order to Show Cause, Hearing Procedures, Methods of Appeal (§ 9792.15)

  3. TRIGGERS§ 9792.11(g) • Factual information or a complaint • Containing facts indicating a possible violation, OR • By selection of a claims administrator as part of a DWC audit under Labor Code §§ 129 or 129.5

  4. SITES OF INVESTIGATION§ 9792.11(a) • Employer • Insurer or TPA • UR vendor (entity with whom the employer or insurer contracts for services required by Labor Code § 4610)

  5. SCOPE OF INVESTIGATION§ 9792.11(a) • Files and documents • Practices • Other records whether electronic or paper

  6. RELATION TO AUDITS§ 9792.11(C) • UR investigation may be independent, OR • May be concurrent with routine, target or full audit under Labor Code §§ 129 or 129.5

  7. WHO WILL INVESTIGATE • Expect Medical Unit and Audit Unit staff to play role • Planning is on-going • Role of each unit likely to have different focal points • For example, Medical Unit staff likely to have bigger role in review of filed plans, screening complaints, reviewing medical documentation and decision-making at UR site, peer-to-peer communications, etc. • Audit Unit staff likely to focus on screening complaints, review of claims file and claims administrator’s compliance with notices, communications, timelines, etc. • Depending on the reason for an investigation, the staff involved and scope of investigation is likely to vary

  8. PENALTY STRUCTURE§ 9792.12 • Violations track requirements of LC § 4610 & UR regulations (8 CCR §§ 9792.6 – 9792.10) • Single instance penalties (§ 9792.12(a)(1) – (10)) • One violation carries penalty up to maximum • Penalty amounts from $1000 to $ 50,000 • Multiple instance penalties (§ 9792.12(b)(1) – (14)) • Instances grouped: 10 or less; 11 – 20; 21 – 40; more than 40 • Amounts per tier generally: • $ 200; $ 800; $ 3200; $ 6400 OR • $ 100; $ 400; $ 800; $ 1600

  9. LIABILITY FOR PENALTIES§ 9792.14 • Penalties may be assessed against each “claims administrator” for the violation(s) that occur during the time each has responsibility for the file or the UR process ( § 9792.14(a)) • Claims administrator includes insurer, TPA, employer whether insured, self insured or legally uninsured, JPA and ‘other entity subject to LC 4610’,e.g. UR vendor (§ 9792.6(c)) • There is joint and several liability for penalties • There may be successor liability after a merger, consolidation or where there is a substantial continuity of business operations and/or the new business entity uses substantially the same workforce

  10. SINGLE INSTANCE PENALTIES • Failure to establish UR process, file UR plan and maintain UR process in compliance with Labor Code § 4610 • Up to $ 50,000 • § 9792.12(a)(1) • No Medical Director holding unrestricted license to practice as MD or DO (osteopath) in CA • Up to $ 10,000 • § 9792.12(a)(2)

  11. SINGLE INSTANCE PENALTIES (con’t.) • Decision to delay, modify or deny treatment is made by someone whois not the reviewer, expert reviewer or medical director (§ 9792.12(a)(6)) • Up to $ 5,000 • Medical Director is only an MD or DO who holds an unrestricted CA license to practice (§ 9792.6(l)) • Reviewer and expert reviewer may be MD, DO, psychologist, acupuncturist, optometrist, podiatrist, chiropractor licensed in any state (§ 9792.6(h), (q))

  12. Contrast Non-physician Reviewers • Non-physician reviewers may: • Approve requests for authorization by applying specified criteria (§ 9792.7(b)(3)) • Discuss applicable criteria with requesting physician (§ 9792.7(b)(3)) • Request appropriate additional information that is necessary to render a decision, as long as the time limits under 8 Cal. Code Regs. § § 9792.9(b)(1), (b)(2) or (c) are not exceeded (§ 9792.7(b)(3))

  13. SINGLE INSTANCE PENALTIES (con’t.) • Decision to modify or deny requested treatment, procedure, service or product is outside the scope of practice or the professional competence of the medical reviewer making the decision • Up to $ 5,000 • § 9792.12(a)(3)

  14. SINGLE INSTANCE PENALTIES (con’t.) • Other Penalties with up to $ 5,000 maximum: • Fail to state medical criteria or guideline relied on, the clinical reasons and reviewer’s conclusions on medical necessity (§ 9792.12(a)(4)) • Denial solely on the basis that the requested treatment is not addressed by ACOEM when the requesting physician has provided specific clinical rationale and referenced relevant pages of other evidence-based nationally recognized guidelines (§ 9792.12(a)(5)) • Fail to respond to a request for authorization by the employee’s physician (§ 9792.12(a)(7)) • Fail to authorize and provide treatment consistent with ACOEM until the claim is accepted, denied or the $10,000 limit under Lab. Code § 5402(c) reached (§ 9792.12(a)(9))

  15. SINGLE INSTANCE PENALTIES (con’t.) • Other Penalties with up to $ 5,000 maximum (con’t.): • During concurrent review, denying authorization or discontinuing medical care prior to discussion with requesting physician about reasonable options for a care and making good faith effort to agree on care plan (§ 9792.12(a)(8)) • Concurrent UR review only occurs during in patient stay (§ 9792.6(d)) • Fail to file complete and current copy of UR plan or letter in lieu carries up to $ 1000 penalty (§ 9792.12(a)(10)

  16. MULTIPLE INSTANCE PENALTIES§ 9792.12(B) • Fail to make timely expedited review decision • § 9792.12(b)(1) • Fail to timely notify that additional information is needed to make UR decision • § 9792.12(b)(2) • Deny authorization based on lack of information but claims administrator fails to documentthe request for necessary reasonable information when it was made • §9792.12(b)(3)

  17. MULTIPLE INSTANCE PENALTIES (con’t.) • Fail to include all required topics in the written decision to modify, delay or deny requested treatment • § 9792.12(b)(4) • Fail to timely decide after receipt of requested information for concurrent or prospective review (i.e. within 5 working days and 14 calendar days from date of request) • § 9792.12(b)(5) • Fail to communicate approval within 24 hours of making the decision, for prospective & concurrent UR review • § 9792.12(b)(6)

  18. MULTIPLE INSTANCE PENALTIES (con’t.) • Fail to send a written decision to modify, delay or deny requested services within 24 hours, for concurrent review, or 2 business days, for prospective review • § 9792.12 (b)(7) • Fail to communicate decision on retrospective review within 30 calendar days of receipt of information reasonably necessary to make determination • § 9792.12(b)(8)

  19. MULTIPLE INSTANCE PENALTIES (con’t.) • Fail to provide written notice immediatelyof LC 4610(g)(5) excuse: Decision on request cannot be made within 14 calendar days, for prospective and concurrent review, or 30 calendar days for retrospective review because: • Not in receipt of all information reasonably necessary and requested, or • Require consultation by expert reviewer, or • Employer has asked for additional examination or test that is reasonable and consistent with good medical practice

  20. MULTIPLE INSTANCE PENALTIES (con’t.) • Failure to explain reason for or length of LC 4610(g)(5) delay (i.e. fail to state what info was requested but not received, name of expert reviewer, test or exam sought, or anticipated date of decision after delay) • § 9792.12(b)(11) • Failure to have documentation verifying LC 4610(g)(5) excuse at time claims administrator either delays or extends the time for the UR decision • § 9792.12(b)(10)

  21. MULTIPLE INSTANCE PENALTIES (con’t.) • Following LC 4610(g)(5) delay or extension, failure to communicate decision timely (i.e. within 5 working days, for prospective or concurrent review, or 30 calendar days for retrospective review) • § 9792.12(b)(12) • Following LC 4610(g)(5) delay or extension, failure to communicate timely decision to requesting physician, provider of goods or services identified in request, injured worker and his or her attorney • § 9792.12(b)(13)

  22. MULTIPLE INSTANCE PENALTIES (con’t.) • Failure to disclose or make available the UR criteria or guidelines in use to the public upon request • § 9792.12(b)(14)

  23. PENALTY ADJUSTMENT FACTORS§ 9792.13 • Medical consequences or gravity of violations • Good faith of employer, insurer, TPA or UR vendor • History of prior penalties for UR violations • Number and type of violations • Size of the claims adjusting or UR vendor location • Time period covered in investigation • Refusal of requesting provider or injured worker to cooperate in the UR process (§ 9792.13(d)) • Adjustment of penalties in the discretion of the Administrative Director • Multiple instance penalties will be the lesser of : 3X the value of the sum of all requested medical services in each group of violations or the amount of the penalty per the schedule (§ 9792.13(b))

  24. NOTICE, HEARING AND APPEAL PROCESS§ 9792.15 • Written Order to Show Cause (OSC) is issued and served by Administrative Director • OSC states proposed penalty assessment, alleged violations for each penalty and time/date/place of hearing • Claims administrator must serve copy of OSC on employer within 5 business days • Within 30 calendar days of date of service of OSC, must pay penalties or ‘appeal’ by filing answer • Administrative Director has discretion to hold an informal pre-hearing conference to resolve

  25. HEARING AND APPEAL PROCESS (con’t.)§ 9792.15 • Hearing officer handles pre-hearing discovery, conferences and presides at hearing • After evidentiary hearing, Hearing Officer issues Recommended Determination and Order Assessing Penalty (RDP) • Once RDP issued, Administrative Director has 60 calendar days to adopt or modify, by issuing Final Determination and Order Assessing Penalty • Any appeal must be filed within 20 calendar days of service of the Final Determination and Order Assessing Penalties. • Petition Appealing must be filed like petition for reconsideration with WCAB in SF • If no appeal filed, penalties must be paid within 30 calendar days of service of the Final Determination and Order Assessing Penalties

  26. RULEMAKING SCHEDULE • March 17, 2006 - Formal rulemaking expected to begin • May 5, 2006 – Public hearing begins at 10 AM at 1515 Clay Street, Auditorium, Oakland, CA (Oakland State Building) • Written comments must be received by 5 PM on May 5th, 2006. Oral comments may be made at the hearing. • Any changes to the regulation text after May 5th will trigger a new 15 day public comment period.

  27. COPIES and COMMENTS • Text of proposed regulations will be available from DWC on and after March 17th through http://www.dir.ca.gov/DWC/dwc_home_page.htm • Request rulemaking documents from and send comments to: Maureen Gray, Regulations Coordinator Division of Workers’ Compensation, Legal Unit P.O. Box 420603 San Francisco, CA 94142

  28. INVESTIGATIONS AND PENALTIES FOR UTILIZATION REVIEW VIOLATIONS Suzanne P. Marria Counsel Division of Workers’ Compensation DWC Educational Conference 2006

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