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State: Calif. Kamin: Approval of Lien Changes Headline Busy Legislative Session: [2016-10-21] |
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Gov. Jerry Brown enacted numerous changes that will help carriers fight fraudulent lien claimants when he closed out the 2016 legislative session by signing new lien procedures into law. ![]() John Kamin The governor signed Senate Bill 1160 and Assembly Bill 1244 into law on Sept. 30, the last possible day for him to do so. SB 1160 is a 20,300-word omnibus bill that ushers in a plethora of changes that will impact all participants in the workers’ compensation system, with the most newsworthy being that lien claimants who are facing fraud charges can be subjected to automatic stays. Lawmakers doubled down on the action against fraudulent providers by passing AB 1244, which requires the Division of Workers' Compensation to suspend any providers who are convicted of fraud from practicing in the workers’ compensation system, and creates a rebuttable presumption that any lien filed by a convicted provider is not compensable if it is connected to the fraud. The Legislature approved a number of other changes that will impact providers, insurance carriers and attorneys, as it made changes to medical care during the first 30 days of the claim, attorney fees, adjuster penalties and more. We’ve summarized the most pertinent bills for your review below. BILLS PASSED Senate Bill 1160: Everything but the kitchen sink SB 1160 provides for automatic stays of any physician or provider lien, once that provider has been charged with medical fraud. The DWC will need to draft regulations to specify exactly what type of fraud charges will result in a stay, meaning that the exact definitions will be fleshed out at a later date. Please note that lawmakers also approved AB 1244, which creates a special lien proceeding and a rebuttable presumption for those convicted of fraud. The bill is described in greater detail below. The bill bars utilization review during the first 30 days of a work injury for most treatments provided by an MPN doctor, as of Jan. 1, 2018. The exceptions: Surgery and hospitalization care will still be subject to prospective utilization review, as will psyche treatment, durable medical equipment, home health care, and MRIs and CT scans. AB 2503: RFAs go to the adjuster Lawmakers approved this bill to squeeze in some additional amendments to the utilization review system that are mentioned in SB 1160. The bill requires providers to send all RFAs directly to the claims administrator. This bill was drafted to address confusion among providers about where to send RFAs. This law takes effect on Jan. 1, 2017. AB 1244: Suspension of physicians This bill requires the DWC to suspend any physician, practitioner or provider from participating in the workers’ compensation system if that person has been convicted of a felony. It also calls for a suspension if the provider’s license has been revoked by their respective licensing board. Lastly, the DWC must suspend any practitioner, provider, or physician if Medicare or Medicaid has suspended them due to fraud or abuse. That last part is notable, as Medicare fraud is quite rampant, evidenced by the countless press releases issued by prosecutors’ offices. Once flagged by the DWC for one of these reasons, the AD must also “ring the bell” and notify the various state and regulatory boards overseeing the offending provider’s profession. The DWC will also notify the chief judge about offending person’s actions and enact special lien proceedings for that person’s bills. Interestingly enough, special lien proceedings are called for if the offending provider has been convicted of a “felony or a misdemeanor” that meets specified criteria (which means that a felony is not necessary to enact special lien proceedings). During those special lien proceedings, carriers will benefit from a presumption stating that they need not pay any bill arising from or “connected to” criminal, fraudulent, or abusive conduct or activity. Lien claimants may rebut the presumption by a preponderance of the evidence. SB 482: Doctors must check the CURES database Gov. Brown approved this bill on Sept. 27. It requires doctors to check the online Controlled Substance Utilization Review and Evaluation System (CURES) database before prescribing various types of controlled substances. Doctors must check the database at least once every four months when prescribing Schedule II, Schedule III or Schedule IV drugs. Those schedules include drugs like OxyContin, Percocet, Dilaudid, Fentanyl, Klonopin, Valium, Ativan and Soma. The bill calls for doctors who fail to comply to be reported to the Medical Board of California, but the bill does not say who is to report them. Pharmacists and veterinarians are exempted from this bill. The target of this bill is a subset of doctors who recklessly prescribe drugs to just about anyone. Without any monitoring provisions, I suspect that subdivision of physicians will continue to ignore the CURES database and will keep on prescribing. AB 2883: Directors’ and officers’ worker’s compensation exemptions Directors and officers must own at least 15% of the stock of a corporation before being exempted from workers’ compensation coverage. Likewise, the bill allows a general partner (from a partnership) and managing members of a limited liability company to be exempted from coverage. In order to be exempt, these members must specify in writing that they are waiving coverage, while noting under penalty of perjury that they are a director, officer, general partner or managing member. AB 2710: Ensuring that carriers do not overcharge for CIGA assessments This bill requires insurers to bill policyholder employers for assessments that are paid to California Insurance Guarantee Association the year after the assessment is paid to CIGA. Under this bill, carriers cannot charge employers for CIGA assessments that happened years ago. Should a carrier overcharge a policyholder employer more than the minimum CIGA surcharge, that carrier must send that additional money to CIGA as well. BILLS VETOED SB 897: Salary continuation benefits bill Under this bill, first responders who suffer a “catastrophic injury” would have been able to collect up to two years of salary-continuation pay instead of temporary disability. Prior to this bill, safety workers could collect up to only one year of salary-continuation pay. Keep in mind that salary continuation pay is 67% of pre-injury wages. The bill’s definition of catastrophic injury includes amputations, shootings, stabbings, severe injuries stemming from building collapses, and severe burns. I suspect we may see a different version of this bill in future legislative sessions. AB 2086: Neuropsychologist category of QMEs Brown vetoed this bill for the second year in a row, despite strong support from both the Assembly and Senate. The bill would have given neuropsychologists their own qualified medical evaluator designation within the DWC Medical Unit. The DWC eliminated this designation in 2015. Lawmakers tried to differentiate this bill from the failed 2015 version by stating that neuropsychologists who want to be listed as a neuropysche QME must prove that they had been used as an agreed medical evaluator on at least five occasions before making the QME list. Apparently that was not enough to avoid the veto stamp that sits on the governor’s desk. Expect lawmakers to try and push a slightly edited version of this bill through in 2017. AB 1643: Reintroduction of the 'breast PD' bill Like AB 2086, this is another bill vetoed by Brown for the second year in a row. This bill would have increased the maximum permanent disability rating for a mastectomy from 5% PD to 16% PD. The reasoning behind the increase is that the PD value of a woman’s breast should be equal to the PD value of a man’s prostate. The bill would have also barred apportionment to pregnancy, menopause, carpal tunnel syndrome or osteoporosis. I suspect we will see a slightly different version of this bill in 2017. AB 1922: Ancillary agreements to the WCIRB Carriers and employers backed this bill, which would have eased mandatory filing requirements that call for ancillary agreements to be filed with the state before they can be deemed effective. The Department of Insurance had adopted rules in April 2016 specifying the documents to be filed before they may be used by carriers and employers. Under the bill, carriers would not have to submit ancillary agreements to the state, as long as the policy has deductibles of $250,000 or more. For this exemption to apply, the ancillary agreements may not have changed cancellation terms, impacted alternative-dispute resolution agreements, altered premiums or tweaked costs/benefits payable under the policy. SB 1451: State Fund’s hiring of eight new executives This bill would have allowed State Compensation Insurance Fund to create and fill up to eight new senior management positions in the areas of underwriting, technology, claims, finance and actuary. John P. Kamin is a workers’ compensation defense attorney at Bradford & Barthel’s Tarzana location. He is WorkCompCentral's former legal editor. This blog post is reprinted with the firm's permission. |