Mariellen H. Blue RN, CCM, National Director, Case Management Services / Product Management & Development, Genex Services
California Senate Bill 1160 (SB 1160) is slated to bring major reforms to the California workers’ compensation system. Its provisions aim to eliminate both delays in the utilization review (UR) process and inappropriate denials of care for injured workers. In addition, it will help prevent billions of dollars in workers’ compensation billing fraud. Depending on how effective these regulations are at achieving these objectives, it may follow that similar initiatives could be adopted across the country.
SB 1160 was initially passed in August 2016. Process clarification will become available when proposed regulations are drafted by California’s Department of Workers’ Compensation (DWC). Following the presentation of this draft, there will be period for multiple rounds of public comment and revisions to the regulations. Consequently, the final form and impact of SB 1160 are still unknown.
If the state does not have permanent regulations through the process by the January 1, 2018 deadline, the DWC may issue temporary emergency regulations.
To prepare for impending UR regulations to come into effect, it’s important for leading utilization review organizations (UROs) to stay abreast of the latest developments and help their clients prepare. Without rehashing the entire bill, here are some key factors—in regards to the UR process—that we should keep in mind:
- 1) Starting January 1, 2018, most prospective UR in the first 30 days of an accepted claim will be eliminated, if the medical treatment follows the utilization schedule and if the injured worker is sent to a predesignated physician. However, SB 1160 specifies nine types of services that would still require preauthorization (e.g. surgery, home health services, psychological services, etc.).
- 2) For medical treatment other than medications on the formulary, determination time frames are unchanged. A prospective or concurrent decision must be made within five working days from receiving a request for authorization, and in no event will it exceed 14 calendar days of the treatment recommendation by the physician.
- 3) For prospective or concurrent requests for authorization of a medication on the formulary, the decision must be made within 5 working days from receiving the request for authorization. No extension to 14 calendar days is permitted. This may place medication and other treatment on two separate review timeframes.
- 4) On or before July 1, 2018, all UROs must be accredited by an independent, nonprofit organization. The administrative director shall adopt rules to select the accrediting organization, but until then, URAC will serve as the designated accrediting organization.
This last requirement is one UROs should prepare for now. Since URAC will serve as the “designated” accrediting organization until one is selected, UROs should either have accreditation in place or be working toward it, especially since it requires an in-depth and rigorous evaluation process that includes:
- An examination of core standards related to organizational structure. URAC reviews corporate policies and procedures; marketing, sales and communications; technology and information systems; compliance with HIPAA privacy and security requirements; staff qualifications and management, as well as many other factors that confirm the strength and stability of the organization.
- Remote review of documented UR policies and procedures. An application is submitted online, which must show compliance with every aspect of URAC UR standards in terms of clinical review, timeliness, credentialing and handling of appeals.
- Onsite validation of documented practices. URAC confirms practices are in place, that these practices meet the standards and that they are consistently carried out in real-life operations.
- Ongoing monitoring. URAC randomly selects accredited UROs every month to undergo a mid-cycle onsite review to confirm ongoing compliance with URAC’s standards.
- Reaccreditation. Every three years, UROs must re-apply for accreditation to ensure it is complying with new and emerging standards, regulations and controls.
Challenges in Meeting the Accreditation Requirement
Insurers, employers and third-party administrators should begin to examine the UROs they work with in the California WC market to verify they have URAC accreditation or are well on their way to achieving it.
Considerable time, effort and expertise is required to obtain accreditation. UROs that are currently unaccredited but serving the California WC market may be unable to meet this requirement by the July 1, 2018 deadline. When a URO is starting from scratch, it can take a minimum of six months to a year. However, many small and unsophisticated players may not have core standards in place regarding their organizational structure, which may present challenges in meeting URAC requirements. In other cases, UROs may not have the financial wherewithal to invest in IT infrastructure or procedural expertise to establish the comprehensive controls needed.
As of January 2016, the DWC reported that only 26 out of more than 60 UROs operating in California had attained URAC accreditation.
Quality UR into the Future
In short, URAC accreditation provides a stamp of approval that a URO can perform UR based on a nationally accepted set of standards and best practices. As such, we may see this accreditation requirement begin to expand nationwide.
Some UROs have been URAC accredited for so long now that they’ve actually begun to go beyond the URAC requirements to pioneer new levels of excellence. For example, they’ve begun to utilize sophisticated UR technology and raised the bar on quality assurance to confirm clinical correctness and consistent adherence to evidence-based guidelines on every claim. This ensures injured workers receive appropriate care at the right time and in the right way—which is a key objective of SB 1160.
Accreditation requirements may continue to evolve, based on the direction of the soon-to-be-appointed administrative director and the soon-to-be-drafted regulations. However, the advanced strategies that sophisticated UROs have put in place will position them to meet the ongoing needs of the California WC market, as well as the new and evolving requirements under SB 1160. And as with prior WC initiatives, what is implemented and works in California is often adopted more broadly.
About Mariellen Blue
Mariellen Blue is national director of case management at Genex Services where she is responsible for overall product management and development, as well as regulatory compliance, accreditation, and quality assurance initiatives related to utilization management, telephonic and field case management, IME, and MCO services. A graduate of the Helene Fuld School of Nursing, Ms. Blue has an extensive background in nursing, case management and utilization review.
About Genex Services, LLC
Genex Services is the trusted provider of managed care services enabling workers’ compensation payers and risk managers to transform their bottom lines. Genex is a managed care leader with more than 2,900 employees and 47 service locations throughout North America. The company serves 381 of the Fortune 500 companies as well as the top workers’ compensation and disability carriers and third-party administrators in the U.S. In addition, Genex is the only company that delivers high-quality clinical services enhanced by intelligent systems and 360-degree data analysis. The company consistently drives superior results related to medical, wage loss, and productivity costs associated with claims in the workers’ compensation, disability, automobile, and health care systems.
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