Deferring Utilization Review
As stated in Labor Code § 4610(a), utilization review is the process a defendant uses to “prospectively, retrospectively, or concurrently review and approve, modify, or deny, based in whole or in part on medical necessity to cure and relieve, treatment recommendations by physicians, …” (emphasis added). UR is the process to determine only whether a request for treatment is medically necessary. It does not determine other issues.
LC 4610(l) states, “Utilization review of a treatment recommendation shall not be required while the employer is disputing liability for injury or treatment of the condition for which treatment is recommended pursuant to Section 4062.” Accordingly, California Code of Regulations 9792.9.1(b) states that UR “may be deferred if the claims administrator disputes liability for either the occupational injury for which the treatment is recommended or the recommended treatment itself on grounds other than medical necessity.” So a defendant is not required to submit a treatment recommendation to utilization review when a claim is denied or when it is disputing liability for reasons other than the reasonableness of the proposed care.
If a defendant defers utilization review because it’s disputing liability for the injury or the recommended treatment on grounds other than medical necessity, it must give notice of its intent to defer. Per CCR 9792.9.1(b)(1), “If the claims administrator disputes liability under this subdivision, it may, no later than five (5) business days from receipt of the DWC Form RFA, issue a written decision deferring utilization review of the requested treatment unless the requesting physician has been previously notified under this subdivision of a dispute over liability and an explanation for the deferral of utilization review for a specific course of treatment.”
The regulation requires the written decision deferring UR to be sent to the requesting physician, the injured worker and the injured worker’s attorney, if there is one. It also requires the written decision to include specified information including: the date on which the DWC Form RFA was first received; a description of the specific course of proposed medical treatment being requested; a clear, concise and appropriate explanation of the reason for the dispute of liability for either the injury, claimed body part or parts or the recommended treatment; and a plain-language statement advising the injured employee that any dispute must be resolved either by agreement of the parties or through the dispute resolution process of the Workers’ Compensation Appeals Board (WCAB).
CCR 9792.9.1(b)(2) states that if utilization review is deferred, the disputed issue may be resolved “either by decision of the Workers’ Compensation Appeals Board or by agreement between the parties.” It specifies that the time to conduct retrospective utilization review (that is, review of services that have been performed) “shall begin on the date the determination of the claims administrator’s liability becomes final.” The time to conduct prospective utilization (that is, review before the delivery of the requested medical services) “shall commence from the date of the claims administrator’s receipt of a DWC Form RFA after the final determination of liability.”
The recent case of Arteaga v. Starcrest Products of California, Inc., 2024 Cal. Wrk. Comp. P.D. LEXIS 348 illustrates how defendants can be protected from immediately paying for medical services by timely and properly deferring requests for authorization in disputed claims. In that case, a treating physician requested authorization for treatment, and the defendant immediately sent notice of intent to defer utilization review on a basis other than medical necessity. The defendant later denied the claim, and the applicant continued treating with the provider.
After the applicant’s underlying claim was settled by a compromise and release, the matter proceeded to a lien trial. The WCJ found, among other things, that the applicant sustained injury arising out of and in the course of employment (AOE/COE) and that the defendant did not retain medical control through the MPN during the delay period. The WCJ found that the defendant was liable for the services provided, but permitted it to conduct retrospective utilization review of them. The provider challenged the order allowing the defendant to conduct retrospective review, asserting that it did not issue a UR deferral of all the requests for authorization.
The appeals board found that the WCJ correctly determined that the defendant was entitled to conduct retrospective utilization review. It found that because the defendant responded to the lien claimant’s first request for authorization with a timely and proper notice to defer, CCR 9792.9.1(b)(1) exempted the defendant from having to issue subsequent deferral notices to subsequent requests for authorization if “the requesting physician has been previously notified under this subdivision of a dispute over liability and an explanation for the deferral of utilization review for a specific course of treatment.” It concluded that because the defendant timely and properly advised the lien claimant of the liability dispute in response to the first request for authorization, it had no obligation to issue any subsequent notices.
So, because the threshold issues of AOE/COE and medical control under the MPN were contested up to the appeals board’s decision, CCR 9792.9.1(b)(2) allowed the defendant to conduct retrospective utilization review after its liability became final. The finding that the applicant was deemed to have sustained a compensable injury did not entitle the provider to recover payment for all the services provided during the delay or denial period. The defendant was entitled to conduct retrospective UR to challenge the medical necessity of services provided because it timely and properly issued a notice deferring utilization review.Hough v. CooperVision (2018) 83 CCC 1466 (panel decision).) So, it’s imperative that defendants comply with CCR 9792.9.1(b) if they dispute a request for treatment on grounds other than medical necessity. Otherwise, the WCAB will allow the issue of medical necessity to be decided in the courts, rather than by medical professionals.
Additional Resources on Deferring Utilization Review
Sullivan on Comp ” Section 7.33 Utilization Review — Delay Due to Threshold Issue .
About the Author
A thought leader in the field, Mr. Log regularly develops seminar materials and co-authors influential white papers on critical workers’ compensation topics. His publications include “An Analysis of the New Regulations Regarding Disputes Over Medical-Legal Expense and Medical Treatment,” “Special Report: A First Look at SB 863” detailing the 2012 reforms to California’s workers’ compensation system, and “SB 863: Five Years Later.”
Mr. Log is also the co-author of Sullivan on Comp
