LOS ANGELES — The California Division of Workers’ Compensation is weeks away from starting formal rule-making to adopt a prescription drug formulary. A fee schedule for services provided by interpreters in medical settings should soon follow.

DWC Acting Administrative Director
George Parisotto speaks during the
24th annual Educational Conference
in Los Angeles on Thursday.

The agency is also working to finalize rules to implement procedures from bills passed last year addressing utilization review and accreditation, provider fraud and medical billing deadlines, according to officials who spoke Thursday at the DWC’s 24th annual Educational Conference in Los Angeles.

George Parisotto, the division’s acting administrative director, said rules to implement the formulary mandated by AB 1124 in 2015 will be formally proposed in a matter of weeks.

“We’ve been saying this for some time, but the end of the rainbow is approaching,” he said.

The division will submit the proposed rules to the Office of Administrative Law next week, he said. The DWC will follow that by opening a comment period, including a public hearing to be held some time in April.

In August, the division released an information draft of the formulary rules that included a preliminary list of what would be designated as either “preferred” or “non-preferred.”

Drugs on the preferred list could be prescribed without going through prospective utilization review. Non-preferred drugs could still be prescribed to injured workers but would be subject to utilization review, and treating physicians will be required to provide medical justification when requesting authorization, Parisotto said.

AB 1124 requires the DWC to have the formulary in place by July 1, a deadline Parisotto said the division will be able to meet.

At the same time, he said the agency plans to update all chapters of the Medical Treatment Utilization Schedule by July 1 so the state’s treatment guidelines will work hand-in-hand with the new formulary.

With disputes over pharmaceuticals accounting for 43% of independent medical review decisions, Parisotto said he hopes the new formulary will take a chunk out of the persistently high volume of challenges to utilization review decisions. Injured workers in 2016 submitted 172,590 eligible applications for IMR, up from the 165,427 submitted in 2013 and 142,658 in 2014.

“It will be quite interesting to see, when our formulary goes into effect in July of this year, how that’s going to affect IMR,” Parisotto said. “We’re hoping medications will be provided more quickly and there will be fewer disputes.”

The division is also working on rules to implement some of the provisions from SB 1160, AB 1244 and SB 1175, which the governor signed into law last year.

SB 1160 prohibits prospective utilization review on most treatment requests on accepted claims within the first 30 days following an injury. Parisotto said the DWC is drafting rules in an effort to reduce any ambiguity about what services are exempt from UR under the new law.

The measure also requires the DWC to determine the reasonable range of fees attorneys can be paid at depositions, a project Parissoto said is underway.

AB 1124 requires the division to suspend providers who are convicted of fraud. The DWC adopted emergency regulations in January to implement the legislation and has already suspended seven providers. The DWC will have to go through formal rule-making before adopting permanent regulations.

The final bill from last year requiring rule-making is SB 1175, which required medical bills to be submitted within 12 months from the date of service. Employers are not liable for bills that are submitted past the deadline.

Parisotto said the bill includes a “good cause” exception, which would allow providers who submit bills late to still be paid, that will have to be fleshed out through regulation.

The division is also getting ready to introduce rules for the interpreter fee schedule that was mandated by Senate Bill 863, according to DWC attorney Alan Hersh.

Hersh said the interpreter fee schedule will include one reimbursement rate for cases where certified interpreters are used that will be higher than the separate rate for the use of “provisionally certified” interpreters.

SB 863 requires the use of certified interpreters when they’re available. But, to account for situations where a certified interpreter can’t be hired, it allows adjusters to provisionally certify an interpreter.

As part of the forthcoming rulemaking proposal, Hersh said the division is going to place greater emphasis on using certified interpreters. If a claims adjuster can’t find a certified interpreter, the rules would require consideration of a certified interpreter that was sourced by the injured worker or was otherwise available before an adjuster could provisionally certify an interpreter, he said.

Hersh also took a couple of minutes to explain to adjusters that current rules allow interpreters to bill at either the market rate or the superior court rate. Because the market rate is almost always higher than the court rate, that is what interpreters typically charge, he said.

Claims adjusters are not allowed to object to bills on the grounds that the market rate is higher than what the adjuster typically pays or what it pays to members of its medical provider network. Such an argument could result in audits and penalties, he said, adding “you are all now warned.”

Hersh also said the division is continuing to keep an eye out for adjusters who fail to submit medical records to the independent medical review contractor within the time prescribed by law.

The DWC in 2016 announced that it issued orders to show cause to seven administrators for late submission of IMR records proposing penalties totaling $8.5 million.

Hersh said the agency is gearing up for “round two.”

“We’re going to keep coming,” he said. “The administrative director will issue an order to show cause, and this can get very uncomfortable for a claims administrator.”

He also ran through a short list of excuses the division has heard as to why claims administrators failed to submit timely medical records that are not acceptable justifications.

For example, some have argued that they handed the case to a third-party administrator and are not to blame for any late submissions. Administrators and TPAs are severally and jointly liable for late submissions, Hersh said, and this argument is “no good as an excuse.”

He also said some claims administrators have not responded to a request for records because they already authorized treatment. But unless the administrator informs Maximus Federal Services that treatment was approved, the case is still open.

Other administrators said they thought they had submitted the records and didn’t need to respond, another excuse Hersh said won’t cut mustard. Administrators have a duty to investigate what happened with the records and to contact Maximus to find out.

The DWC educational conference in Los Angeles concludes today. The program will repeat March 2-3 in Oakland.