1. DWC

Answers to frequently asked questions about utilization review (UR) for claims administrators

In addition to the FAQs below, claims administrators may call 1-800-736-7401 during normal business hours to speak to a live representative at the Division of Workers' Compensation  Information Services Center.

Claims administrators may also call a local office of the state Division of Workers' Compensation (DWC) and speak to the Information and Assistance (I&A) Unit for help during regular business hours.

Claims administrators may find the DWC's fact sheets and guides for injured workers useful and can access them on the I&A Unit's Web page.

Throughout this FAQ, when citations to Title 8 of the California Code of Regulations are made, they will appear in this format: (CCR, Title 8 §number.) Citations to California's Labor Code appear as: (LC number).

Topics covered in this FAQ include:

Utilization review
Requests for authorization
Different types of UR
Who can make UR decisions?
UR program requirements
Timelines and timing
UR replies
Prior authorization
UR penalty regulations
UR and AME/QME reports
Maintaining and modifying a UR plan
UR and medical provider networks (MPNs)

About utilization review:

Q. What is utilization review (UR) and why is it used for workers' compensation?

A. UR is the process used by employers or claims administrators to determine if a proposed treatment requested for an injured worker is medically necessary. All employers or their workers' compensation claims administrators are required by law to have a UR program. This program is used to decide whether or not to approve medical treatment recommended by a treating physician.

Q. When does UR begin?

A. The UR time limit for responding to a treatment request begins when the request for authorization (RFA) is first received, whether by the employer, claims administrator or utilization review organization (URO).

Q. Is utilization review required in every case?

A. Yes. The California Supreme Court held that utilization review must be used for every medical treatment request in the California workers' compensation system. The court also held that approving requested treatment without physician review is part of utilization review (UR), and only reviewing physicians may decide to delay, deny or modify requested treatment. The UR regulations allow an employer to reduce the cost of physician review in UR by designing a "prior authorization" program within the employer's UR plan. (See below: About prior authorization.)

DWC supports the establishment of UR best practices that allow claims administrators to approve appropriate levels of care for injured workers at the lowest possible levels within the claims organization, without having to send those requests for external physician review.

Q. Does sending the requesting physician an approval of an RFA mean that payment must be made for the authorized service?

A. Yes. Authorization means "assurance that appropriate reimbursement" for the treatment specified will be paid. The California Labor Code provides that once an employer (or its insurer or URO) authorizes medical treatment, that authorization shall not be rescinded or modified for any reason after the medical treatment has been provided based on the authorization, even if the employer later determines the physician was not eligible to treat (e.g. was not an MPN provider). Under the UR regulations, treatment is "authorized" when the decision to approve the RFA is communicated to the requesting physician.

The Labor Code also states that if the authorized treatment was for a series of treatments or services (e.g. physical therapy; prescription refills), the employer may rescind or modify the authorization only for those treatments or services in the series not already provided.

Q. Does approving an RFA as medically necessary mean the provider's bill as submitted must be paid?

A. Not necessarily. The UR regulations require paying appropriate reimbursement for the approved treatment. If the bill for treatment is properly documented and correct, based on appropriate codes and on the appropriate fee schedule, it must be timely paid. If the claims administrator disputes part of the bill for whatever reason, the uncontested portion must be timely paid and the claims administrator must comply with the regulations that govern billing disputes.

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About requests for authorization:

Q. What is an RFA?

A. An RFA is a form that the doctor is required to use to request treatment, diagnostic tests or other medical services for an injured worker. If the treatment request was first made verbally, it must be confirmed in writing. The treating physician must fill out the form and attach the doctor's first report of occupational injury or illness (form 5021), the primary treating physician progress report (DWC form PR-2), or a narrative report that contains the same information required in the primary treating physician progress report form

Q. Who is authorized to sign an RFA?

A. The requesting treating physician must sign an RFA.

Q. What type of signature for an RFA is considered a legal signature?

A. . The signature must be a handwritten original; a typed name without signature or a signature stamp is not sufficient. If the parties agree, the treating doctor may submit the RFA with an electronic signature.

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About different types of UR:

Q. What is a prospective review?

A. A prospective review is any UR conducted prior to the delivery of the requested medical services, except for review conducted during an inpatient (hospital) stay. The decision on an RFA submitted for prospective review must be made within five business days from first receipt of the request, unless additional reasonable medical information is needed to make the decision. In that case, the additional reasonable medical information must be requested by the fifth business day, then up to 14 calendar days from the date of receipt of the original RFA are allowed for making the decision on the RFA.

In California, the terms prospective review and pre-authorization mean the same thing, and prospective review and pre-authorization are different from prior authorization.

Q. What is a concurrent review?

A. A concurrent review is UR conducted on an RFA submitted for treatment during an inpatient (hospital) stay. The timeframe for making the decision is the same as for prospective reviews. There is a difference in the time allotted for the written communications. A written decision must be sent within 24 hours for concurrent reviews instead of the two business days allotted for prospective reviews.

Q. What is a retrospective review?

A. A retrospective review is UR conducted after medical services have been provided and for which authorization has not already been given. Retrospective reviews must be completed within 30 days of receiving the necessary information required to make a decision.

Q. What is an expedited review?

A. An expedited review is UR conducted when the injured worker faces an imminent and serious threat to his or her health, including, but not limited to, the potential loss of life, limb or other major bodily function. Expedited review also applies when the normal timeframe for the decision-making process would be detrimental to the injured worker's life or health, or could jeopardize the injured worker's permanent ability to regain maximum function. Expedited reviews must be completed within 72 hours or less if the injured worker's condition warrants a shorter timeframe. When an expedited review is needed, the requesting physician must alert the reviewer, by checking the "Expedited Review" box at the top of the RFA.

Q: What is prior authorization?

A. Prior authorization is an arrangement written into the UR plan that describes the specific conditions or circumstances under which a treating physician will be assured of appropriate reimbursement for specific treatment, without submitting an RFA before, during or after the treatment. As long as that treatment fits the description of prior authorization in the UR plan, the treating physician may treat and then submit the bill for payment.

(See below: About prior authorization for a full discussion.)

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About who can make UR decisions:

Q: Who can make UR decisions?

A: Claims adjusters, non-physician reviewers, or physician reviewers may make UR decisions.

Q. What decisions can be made by a claims adjuster or other non-physician reviewer?

A. A claims adjuster or other non-physician reviewer may:

• Request reasonable additional medical information needed to make a UR decision
• Approve an RFA
• Discuss applicable medical guidelines with the requesting physician when requested treatment appears to be inconsistent with medical guidelines

The non-physician reviewer may discuss the treatment plan with the requesting physician. If the requesting physician decides to make a change in the RFA or in the treatment plan, the claims administrator or URO must have documentation from the requesting physician of that change.

Non-physicians who deny, delay or modify an RFA without physician review and without meeting valid criteria such as that stated in the examples above may be subject to UR penalties.

Claims administrators must ensure that any claim denials, objections or MPN coverage assertions are written in compliance with the Labor Code and regulations.

Q. Can a claims adjuster defer a utilization review decision?

A. Yes. A claims adjuster may defer (or postpone) a utilization review decision of an RFA if the claims administrator disputes liability for the occupational injury for which the treatment is recommended or disputes liability of the recommended treatment itself for reasons other than medical necessity. Within five (5) days from receipt of the RFA, a claims adjuster may issue a written decision deferring utilization review of the requested treatment and send it to the requesting physician, the injured worker, and if the injured worker is represented by counsel, the injured workers' attorney. The written decision shall only contain the following information specific to the request:

• The date on which the RFA was first received.
• A description of the specific course of proposed medical treatment for which authorization was requested.
• A clear, concise, and appropriate explanation of the reason for the claims adjuster's dispute of liability for the injury, claimed body part or parts, or the recommended treatment.
• A plain language statement advising the injured employee that any dispute under this subdivision shall be resolved either by agreement of the parties or through the dispute resolution process of the Workers' Compensation Appeals Board.
• The following mandatory language advising the injured employee:

"You have a right to disagree with decisions affecting your claim. If you have questions about the information in this notice, please call me (insert claims adjuster's name in parentheses) at (insert telephone number). However, if you are represented by an attorney, please contact your attorney instead of me."

- and -

"for information about the workers' compensation claims process and your rights and obligations, go to www.dwc.ca.gov or contact an information and assistance (I&A) officer of the state Division of Workers' Compensation. For recorded information and a list of offices, call toll-free 1-800-736-7401."

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About UR program requirements:

Q. Do we have to buy software to maintain our UR logs in a specific manner?

A. No. The DWC's UR regulations do not require claims administrators or UROs to maintain their UR logs in any particular way. If you have an electronic log, the division will request it when conducting a UR investigation and ask you to organize it in a way that allows the division to get the sample it needs for the investigation. If not, the division will ask that the information you keep be sorted in a specific way: by type of review, type of disposition and date of receipt of original request.

Q. Do claims administrators have to log every RFA?

A. No. If the claims organization does not have a method of logging requests, then it does not have to create one. However, documentation of the action taken on the RFA is required in the file of the claims organization.

For example, if a claims adjuster receives a written RFA and approves this request, the approval must be made by telephone or fax within 24 hours of the decision. If the initial approval is verbal, a written confirmation of the approval must be sent within 24 hours for concurrent review and within two business days for prospective review. A copy of the written approval must be placed in the file to document the approval.

Q. Do we have to have a medical director to oversee our utilization review program?

A. Yes. All claims administrators must have a UR program and all UR programs must have a medical director. The medical director is responsible for all decisions made in the UR process and must ensure that all UR decisions (approvals, delays, modifications and denials) comply with the law.

As long as the medical director of your UR plan is able to ensure that the claims adjusters (whether in-house for a self-insured employer or external through a third-party administrator (TPA) or WC insurer) are applying the standards of the UR plan, the claims adjusters can approve medical treatment authorization requests. If the URO medical director does not ensure that those UR activities performed through the claims administrator are compliant with the UR regulations, then the claims administrator must have its own medical director.

Q. How should claims adjusters respond when approving RFAs?
A. Claims adjusters are allowed to approve authorization requests. The approval must state the specific medical treatment service requested, and then approved.

For prospective and concurrent reviews, approvals require communication to the requesting provider only. The initial communication must be within 24 hours of the decision, by telephone call or fax. If this is done by phone, a written communication must also be sent within 24 hours for concurrent reviews and two business days for prospective reviews. If a decision is sent initially by fax, the full communication responsibility for the approval is met. The claims adjuster may also communicate the initial approval within 24 hours to the requesting physician via electronic mail.

When the review is retrospective, approval must be communicated to the physician, the injured worker and his or her attorney (if applicable) within 30 days of receiving the medical information reasonably necessary to make the determination. The response must be provided in writing.

Q. If a URO requests additional information from the treating physician and doesn't receive that information within 14 days of receipt of the original RFA, what can the URO do?

A. There are two options if reasonably requested information is not received. A reviewing physician can either deny the RFA and state it will be reconsidered when the requested information is received, or issue a notice of a delay until the information is received. The physician reviewer must issue either of these decisions within 14 calendar days of receipt of the original request. A notice of delay may not be issued by a non-physician.

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About timelines and timing:

Q. Prospective or concurrent reviews of RFAs require a five business day turnaround of the decision. When do the five days begin?

A. Prospective or concurrent decisions must be made within five business days from the date the written RFA was first received, whether by the employer, the claims adjuster or the URO.

According to the California Civil Code: "The time in which any act provided by law is to be done is computed by excluding the first day and including the last, unless the last day is a holiday, and then it is also excluded." In other words, except for expedited reviews (see below), if you receive an authorization request sometime before 5:30 p.m. on a Tuesday (non-holiday) the next day, Wednesday, is counted as day one. The reviewer must make the decision no later than the following Tuesday (the 5th business day). The decision must be communicated by phone or fax within 24 hours of making the decision. Saturday and Sunday are not counted as business days, and therefore receipt of requests on a weekend or a holiday does not count as a receipt, until the next business day. Holidays do not count as business days.

For all reviews excluding expedited reviews, count the date of first receipt as "zero" so the next day is counted as "one." When counting business days, the Saturday, Sunday or holiday is not counted as a business day, so continue the count on the next business day. Whenever the last day in counting a calendar day deadline falls on a Saturday, Sunday or holiday, the count moves to the next day.

For expedited reviews the time for making the decision is counted in hours, regardless of whether the day is a calendar or business day.

Q. If the URO requires additional information to make a decision on an RFA , when does the mandated 14 days to make a decision start?

A. The 14 calendar days start from the date the RFA was first received by either the claims examiner or the URO. See the previous answer for a complete explanation of how the time is computed.

• If more information is reasonably needed to make a decision and it was not provided with the original RFA, this information must be requested within five business days from the date that the written request was received. The UR decision must then be made within 14 calendar days from the date of first receipt of the RFA
• Authorization may not be denied on the basis of the lack of requested additional information without documentation showing an attempt to obtain the additional information by fax or by mail
• The request for additional information, made by the 5th business day, does not delay the decision deadline and extend the time to decide beyond 14 calendar days unless the reviewing physician issues a decision to delay by the 14th calendar day. In a delay, the reviewing physician notifies the requesting physician, the injured worker and the injured worker's attorney (if applicable) in writing that a decision cannot be made within the required timeframe (14 calendar days). This decision to delay must also state one of the grounds for delay permitted in the regulations (e.g. that necessary information reasonably requested by the 5th business day has not been received; that an additional examination or testing is needed; that a specialized consultation or review by an expert reviewer is needed and the specialty of the expert).

Q. If a request for an expedited review, with all necessary information, is received at 9 a.m. on a Friday morning, when is the decision due?

A. Requests for expedited review must be decided within 72 hours or less, depending on the injured worker's condition. In this example, the decision would be due no later than 9 a.m. the following Monday. With expedited reviews, the time is counted in hours, not days.

Q. What is required of the requesting physician for an expedited review?

A. The requesting physician must indicate the need for an expedited review upon submission of the request The requester should provide all necessary information in writing so that the claims administrator can make a decision quickly.

Q. How do rules on emergency health care services differ from expedited reviews, concurrent reviews and other situations?

A. Emergency health care services are those provided when an injured worker has acute symptoms severe enough to require immediate medical attention. Emergency treatment may be reviewed retrospectively. Documentation for emergency health care services must be made available to the claims administrator upon request.

Failure to obtain authorization in advance cannot be the basis for denying payment for emergency treatment.

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About UR replies:

Q. What must decisions to approve say?

A. A written decision approving an RFA must specify the specific medical treatment service requested, the specific medical treatment service approved, and the date of the decision.

Q. Who must the approval notice be given to?

A. The decision must be given, by telephone or fax, to the requesting physician within 24 hours of making the decision. If the approval is given by phone it must be followed by written notice to the requesting physician, within 24 hours of the decision for concurrent review, and within two business days for prospective review. If the approval is given to the requesting physician by fax, the requirement for written approval has been fulfilled as long as the approval letter specifies the medical service requested and approved.

For prospective, concurrent, or expedited review, approvals shall be communicated to the requesting physician within 24 hours of the decision, and shall be communicated to the requesting physician initially by telephone, facsimile, or electronic mail. The communication by telephone shall be followed by written notice to the requesting physician within 24 hours of the decision for concurrent review and within two (2) business days for prospective review.

For retrospective review, a written decision to approve shall be communicated to the requesting physician who provided the medical services and to the individual who received the medical services, and his or her attorney/designee, if applicable. Also, payment, or partial payment consistent with the provisions of California Code of Regulations, title 8, section 9792.5, of a medical bill for services requested on the DWC Form RFA, within the 30-day timeframe set forth in subdivision (c)(4), shall be deemed a retrospective approval. A document indicating that a payment has been made for the requested services, such as an explanation of review, may be provided to the injured employee who received the medical services, and his or her attorney/designee, if applicable, in lieu of a communication expressly acknowledging the retrospective approval.

Q. What must the decisions to modify, delay or deny say?

A. For all dates of injury, the written decision shall be provided to the requesting physician, the injured worker, and if the injured worker is represented by counsel, the injured worker's attorney and shall contain the following information:
The decision must be in writing and it must contain:

1. The date on which the DWC Form RFA was first received.
2. The date on which the decision is made.
3. A description of the specific course of proposed medical treatment for which authorization was requested.
4. A list of all medical records reviewed.
5. A specific description of the medical treatment service approved, if any.
6. A clear, concise, and appropriate explanation of the reasons for the claims administrator's decision, including the clinical reasons regarding medical necessity and a description of the relevant medical criteria or guidelines used to reach the decision pursuant to section 9792.8. If a utilization review decision to modify, deny or delay a medical service is due to incomplete or insufficient information, the decision shall specify the reason for the decision and specify the information that is needed.
7. The Application for Independent Medical Review, DWC Form IMR, with all fields, except for the signature of the employee, to be completed by the claims administrator. The application, set forth at section 9792.10.1, shall include an addressed envelope, which may be postage-paid for mailing to the Administrative Director or his or her designee.
8. A clear statement advising the injured employee that any dispute shall be resolved in accordance with the independent medical review provisions of Labor Code section 4610.5 and 4610.6, and that an objection to the utilization review decision must be communicated by the injured worker, the injured worker's representative, or the injured worker's attorney on behalf of the injured worker on the enclosed Application for Independent Medical Review, DWC Form IMR, within 30 calendar days of receipt of the decision.
9. Include the following mandatory language advising the injured employee:

"You have a right to disagree with decisions affecting your claim. If you have questions about the information in this notice, please call me (insert claims adjuster's name in parentheses) at (insert telephone number). However, if you are represented by an attorney, please contact your attorney instead of me."

And

"For information about the workers' compensation claims process and your rights and obligations, go to www.dwc.ca.gov or contact an information and assistance (I&A) officer of the state Division of Workers' Compensation. For recorded information and a list of office, call toll free 1-800-736-7401."

1. Details about the claims administrator's internal utilization review appeals process for the requesting physician, if any, and a clear statement that the internal appeals process is voluntary process that neither triggers nor bars use of the dispute resolution procedures of Labor Code section 4610.5 and 4610.6, but may be pursued on an optional basis.
2. The name and specialty of the reviewer or expert reviewer.
3. The telephone number in the United States of the reviewer or expert reviewer

The hours of availability of either the reviewer, the expert reviewer or the medical director for the treating physician to discuss the decision, which shall be, at a minimum, four hours per week during normal business hours, 9:00 a.m. to 5:30 p.m. Pacific Time, or an agreed upon scheduled time to discuss the decision with the requesting physician. In the event the reviewer is unavailable, the requesting physician may discuss the written decision with another reviewer who is competent to evaluate the specific clinical issues involved in the medical treatment services.

Q. Who must the decision to modify, delay or deny be given to?

A. For both prospective and concurrent reviews, the decision must be communicated first to the requesting physician by telephone or fax within 24 hours of the decision. A phone call must be followed by written notice to the requesting physician, the injured worker and the injured worker's attorney (if any) within 24 hours of the decision for concurrent reviews, and within two business days of the decision for prospective reviews. If the initial decision is announced within 24 hours of the decision by a fax and all mandated language is included in the fax, the written notification to the recipient is satisfied.

For prospective, concurrent, or expedited review, a decision to modify, delay, or deny shall be communicated to the requesting physician within 24 hours of the decision, and shall be communicated to the requesting physician initially by telephone, facsimile, or electronic mail. The communication by telephone shall be followed by written notice to the requesting physician within 24 hours of the decision for concurrent review and within two (2) business days for prospective review and for expedited review within 72 hours of receipt of the request.

Q. How do we handle a denial if someone is currently in the hospital?

A. By definition, a concurrent review occurs only during an inpatient stay. For concurrent reviews, medical care must not be discontinued until the requesting physician has been notified of the UR decision and, if not approved, a care plan which is appropriate for the medical needs of the injured worker must be agreed upon with the requesting physician.

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About prior authorization:

Q. What is prior authorization?

A. "Prior authorization" has a special definition in the California workers' compensation system. It is defined as "the claims administrator's practice of any prior authorization process, including but not limited to where authorization is provided without the submission of the RFA or DWC Form RFA." To qualify as prior authorization, the process must be clearly described in the UR plan filed with the DWC, because by definition "authorization" means "assurance that appropriate reimbursement will be made [to the treating physician] for an approved specific course of proposed medical treatment"

The UR plan's description of what qualifies within the prior authorization process must be clear about what is required by the treating physician and how the physician will be informed of the conditions under which treatment will qualify under the prior authorization process.

For example, the "prior authorization" process described in the UR plan may allow the claims administrator to inform a particular clinic, medical provider or medical providers in the employer's MPN that all treatment and diagnostic testing given within the first five days of an injury is automatically approved and will be paid for upon submission of a bill in compliance with the billing regulations. Or, another "prior authorization" process may state that whenever rotator cuff surgery is approved through the normal prospective review process, a prescribed course of postsurgical rehabilitation is automatically approved (e.g. up to 24 postsurgical physical therapy visits even if they exceed the cap in LC section 4604.5). Or, the description of the prior authorization process may be based on documentation of specific combinations of presenting signs and symptoms, e.g. an MRI is authorized when a patient who has had low back pain with radiation to one lower extremity presents with "red flags" or with worsening symptoms and there are new and/or abnormal physical findings.

The regulation allows the employer flexibility to tailor the prior authorization process to meet its needs. However, because prior authorization (as with all treatment authorizations) involves medical issues, it must have medical director oversight, either through the UR plan medical director or the claims administrator's own medical director. Approving requests by means of a prior authorization system is part of UR and must be submitted to the DWC administrative director as part of, or as a material modification to, the written UR plan.

Q. How does prior authorization differ from "pre-authorized" and "prospective review"?

A. Prospective review applies when the treating physician is required to make an RFA before providing treatment, and if the request was made orally to follow up with a written request within 72 hours.

"Pre-authorization" and "prospective review" have the same meaning in the California workers' compensation UR system.

"Prior authorization" however, has a different meaning in the California UR process. Prior authorization, by definition, does not require an RFA to be made prior to providing the treatment; the "authorization" (assurance that appropriate payment will be made to the treating physician) is automatic as long as the treatment falls within the prior authorization section of the UR plan.

Q. We want to create UR triggers so that we will not need to send everything to a third party process. Is that appropriate?

A. It is appropriate to set up triggers for those requests you want claims adjusters to approve without sending them to the URO. If you set up a prior authorization process and include these specific treatments in that process, you won't get requests from the treating physicians for these services. If you don't set up a prior authorization process, you can still establish triggers that are used by claims adjusters, but you'll have to follow the timelines and notification requirements in the UR regulations.

For example, with oversight by a medical director, a claims adjuster may be given a list of those treatments that must go to the external URO for review (e.g. surgery), and they may also have a list of those treatments that they may approve without referral to the URO (e.g. the claims adjuster may approve an initial three to six physical therapy treatments after knee surgery).

Q. How is prior authorization different from "retrospective review"?

A. With prior authorization, the treating physician is assured of appropriate reimbursement at the time of providing the treatment and simply needs to submit the bill for treatment, because the treatment meets the conditions described under the UR prior authorization process, meaning that the treating physician does not have to ask permission to provide the treatment.

With retrospective review, the treating physician has already provided treatment that was not approved before hand, and later submits the treatment report with an RFA and bill. In retrospective review the treating physician has no assurance of appropriate reimbursement at the time treatment is provided.

Most often, when a physician sees an injured worker for the first time and submits a doctor's first report of occupational injury or illness, the treating physician is seeking a retrospective review authorization for the treatment already provided in that first visit and may also be requesting authorization for specific treatment described under the treatment plan explained in question number 24 on the form.

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About UR penalty regulations:

Q. When did the UR penalty regulations become effective?

A. The penalty regulations became effective June 7, 2007. For the purpose of assessing penalties under these regulations, they apply to all UR conduct on or after that date.

Q. Who is subject to UR penalties?

A. Claims administrators and UROs.

Q. What triggers a UR investigation?

A. UR investigations may be routine or target investigations. Claims administrators are subject to routine investigations once every five years. These routine investigations generally will be conducted as part of the existing performance audit review (PAR) process under Labor Code sections 129 and 129.5. UROs are also subject to a routine investigation once every five years. The DWC can also do a targeted investigation based on a credible complaint (called a "special target investigation"). Credible complaints will be shared with the claims administrator or URO for their response prior to an investigation, unless the administrative director (AD) determines that advance notice will render the special target investigation less useful.

Also, if the claims administrator or URO has failed a previous routine investigation, DWC can return for a target investigation (called a "return target investigation"). A return target investigation is done within 18 months after a routine investigation in which the investigation subject, the URA or URO, failed to pass with the 85 percent score.

Q. What happens at an investigation?

A. During a routine investigation, a random sample of RFAs received over the most recent full three month period prior to the investigation and any additional records that may be needed will be reviewed. The administrator, at either the URO or the claims adjusting location being investigated, will get a notice at least 14 days before the investigation begins stating that the administrator will need to provide copies of all requested documents.

The investigation process varies according to whether the investigation is conducted at a claims adjusting location in conjunction with a performance audit review (PAR) audit, or is conducted at a utilization review organization (URO). At the claims adjusting location, the investigation is labeled a "URA" investigation. Auditors from the DWC Audit Unit are on site for the PAR audit and also review a sample of files having RFAs.

In a URO investigation, the URO is required to submit files either in hard copy or electronically to the UR Oversight Unit within the DWC Medical Unit for review. In some cases the Medical Unit will also do an on-site investigation.

Q. What is the penalty for not responding to an RFA ?

A. If an RFA is not answered, the mandatory penalty is $2,000 for each concurrent review, $1,000 for each prospective review and $500 for each retrospective review.

Q. Is there any penalty for a late response to an RFA ?

A. Yes. The penalty is $100 per instance for failing to make and communicate a decision within the appropriate timeframe on prospective, concurrent or retrospective reviews.

Q. What are the other UR penalties?

A. There are two types of penalties: Mandatory or "a" penalties (listed in §9792.12(a) of the UR penalty regulations) which reflect situations that could have major medical consequences for an injured worker, and which should not happen in a well-run utilization review program. These penalties cannot be waived and include:

Section 9792.12 (b) lists penalties that may be subject to waiver or abatement. These penalties, called "b" penalties, in amounts of $50 and $100, are for technical mistakes such as failure to send the correct notices, failure to send timely notices and failure to send the notices to the proper individuals.

The DWC will calculate a performance rating for "b" penalties based on a review of the randomly selected requests for authorization.
All violations found during the investigation will be cited with the appropriate penalty amount under CCR, Title 8 §§9792.12(a) or 9792.12(b). All violations found must be abated even if no penalty amount is paid.

However, no "b" penalties will be assessed for payment during a routine investigation if the subject meets or exceeds 85 percent in the performance rating, which is the "pass rate." Even if the subject doesn't meet the pass rate, it is possible to have the "b" penalties waived by the administrative director if the investigation subject provides evidence showing how the violations have been abated and agrees in writing to a return investigation to verify the abatement measures are still being practiced.

Q. What is mitigation?

A. Mitigation is a process that allows the UR investigation subject to request the administrative director to reduce the penalty amount. It must be requested by the URA or URO by letter once penalties have been summarized in a preliminary investigation report. The letter is addressed to the administrative director and should discuss each of the potential factors for mitigation listed in regulation §9792.13, and discuss the evidence from the investigation and reasons the URO or URA believes reduction of penalty is warranted for that mitigation factor. Generally, mitigation is requested prior to filing any appeal of cited violations or penalties.

Q. What mitigating factors will DWC consider for penalties?

A. Mandatory penalties may not be waived even if the URA or URO "passes" the investigation by a performance rating of 85 percent; "b" penalties are automatically waived by DWC when the 85 percent passing score is received. Both "a" penalties and "b" penalties also may be considered for reduction in a request for mitigation. Penalty amounts may be reduced at the DWC administrative director's discretion based on: the medical consequences or gravity of the violation(s); good faith attempts to comply with the law by the claims administrator or utilization review organization; history of previous penalties; the frequency of violations; and under extraordinary circumstances. The investigation subject that requests mitigation must submit a written request addressing each of those factors for the DWC administrative director to consider.

Q. Since the claims administrator (including TPAs) and the URO are held jointly and independently liable for administrative penalties, how should we determine who is responsible for paying the penalties?

A. That is a matter for the claims administrator and the URO to address between themselves. One way would be to clarify this issue in the contract between the claims administrator and the URO. DWC will assess the penalties for violations found against the subject of the investigation, either the claims administrator or the URO.

Q. What happens after violations are found?

A. A preliminary investigation report will be issued during the investigation which lists each violation and penalty amount, and a conference with the investigators will take place if requested. The purpose of the preliminary conference is to discuss the violations found, for the investigation subject to offer any evidence to suggest a violation is unwarranted, and to discuss the manner in which the violations may be abated (corrected). Following the conference, the investigation unit will issue a final investigation report.

If violations carrying penalties exist at the time of issuing the final investigation report, the AD will issue an "Order to Show Cause Re: Administrative Penalty" (OSC) (which includes the final report).

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About UR and AME/QME reports:

Q. When an AME or QME orders a diagnostic test as part of the medical/legal evaluation, may the claims administrator put that request through utilization review?

A. No. Diagnostic tests ordered as part of a medical/legal evaluation are medical/legal expenses, not treatment expenses. A claims administrator must pay for a diagnostic test ordered by an AME or QME as long as the subjective complaints and physical findings that warrant the necessity for the test are included in the medical/legal evaluation report. However, if adequate medical information (i.e. current and relevant test results) is already in the medical records provided to the evaluator, the claims administrator may not be liable for the cost of the test unless the evaluator received prior authorization from the claims administrator for another diagnostic test, or unless the diagnostic test will not satisfy the definition of a medical/legal expense (that is, necessary to provide a medical report that is capable of proving or disproving a disputed medical fact in the claim). The prior authorization referred to in CCR, Title 8 §9794(a)(1) is not obtained through utilization review but rather is based on the claims administrator's approval in light of the requirements of Labor Code sections 4620 and 4622 (requirement to pay medical/legal expenses) as well as CCR, Title 8 §9794(a)(1).

Q. If the AME or QME states in the report that a diagnostic test is needed to complete the evaluation but does not order it, leaving the PTP to order the test, should the PTP's request be sent to UR?

A. If a diagnostic test is required to complete the evaluation, the AME or QME should order it as part of the medical/legal evaluation and it is considered a medical/legal expense. In some cases the AME or QME report may express a conditional need for a diagnostic test, e.g,. in the event the worker's pain increases and mobility decreases after two weeks of physician therapy, an MRI should be obtained. In this scenario the claims administrator may approve the MRI report, based on the wording in the AME/QME report, or send the PTP's request through UR.

Q. If an AME or QME recommends treatment can we submit that report to UR?

A. No, only RFAs for medical treatment from a treating physician are subject to utilization review. AME and QME reports cannot be sent to UR.
If both parties agree with the AME or QME recommendation and the treating physician requests that treatment, approve the treatment. There is no dispute and no need for external physician review in UR. If there is any disagreement over the recommendation (e.g., the primary treating physician disagrees with part or all of the AME or QME's recommendation for treatment), the claims administrator must obtain a UR reviewing physician's opinion to deny, delay or modify the treatment once it is requested by the treating physician. In such cases, the injured worker represented by an attorney should consult the attorney. If the injured worker is not represented, he or she should be advised to call the local DWC information and assistance officer.

Q. If a treating physician requests authorization for medical treatment recommended by an AME or QME, must the claims administrator do UR on the request?

A. Yes, although the request may not need physician review in UR. Approval by a claims administrator is part of UR. However, the answer about whether to submit the request for external physician review may depend on several factors, including whether there is any dispute over the treatment (see above), whether a finding, order or award including that treatment has already been issued by a workers' compensation administrative law judge (WCALJ) or the Workers' Compensation Appeals Board, (WCAB), how current that award is, and how specific the AME/QME report is about the treatment in question.

Q. What is Independent Medical Review (IMR) and when is it used?

A. IMR is a quick, non-judicial way to resolve disputes about the medical treatment of injured employees. If a request by a treating physician for a specific course of medical treatment is delayed, denied or modified by a claims administrator for the reason that the treatment is not medically necessary, the injured employee can ask for a review of that decision by physician-conducted IMR. You can find out more at the DWC's IMR page and FAQ.

Q. Can the claims administrator send a treating physician's RFA for treatment included in a future medical treatment award to UR?

A. Yes. In the case of an award of future medical treatment, the claims administrator may always submit treatment requests based on the future medical treatment award to UR. Since the Supreme Court in Sandhagen held that UR is the claims administrator's only mechanism for resolving treatment requests, the claims administrator is entitled to use UR.

However, realistically, the claims administer should consider whether the expense of an external physician review in UR is necessary since a non-physician may approve treatment. The answer may depend on how recently the award was issued and how specific it was about the treatment. For example, an award that states future medical treatment "may be" or "is" needed, must be interpreted by referring to the medical report on which the award was based. Generally that treating physician's report or AME/QME medical/legal report will be identified in the award, such as in the stipulation on which an award is based or in the opinion on decision by the WCALJ or WCAB. The more ambiguous the description in the report of what future medical treatment will be needed and under what presenting conditions, the more likely a treating physician's request based on the award or report will be sent to UR. The more time that has passed since the date of the award or report providing for future medical treatment, the greater the likelihood that conditions have changed and UR would provide medically useful information.

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About maintaining and modifying a UR plan:

Q. Where do we file the UR plan?

A. The complete UR plan must be filed with the DWC administrative director, either by the claims administrator or by the designated URO. The claims administrator may send a letter naming its URO, if the URO has submitted a complete UR plan to the DWC.

The plan should be mailed to:
Division of Workers' Compensation
Medical Unit - Utilization Review
P.O. Box 71010,
Oakland, CA 94612

Q. Who is responsible for notifying the DWC about modifications to a UR plan?

A. The claims administrator. State regulations require every claims administrator to establish and maintain a utilization review process, which includes all modifications/revisions. The term "claims administrator" is defined as "a self-administered workers' compensation insurer, an insured employer, a self-administered self-insured employer, a self-administered legally uninsured employer, a self-administered joint powers authority, a third-party claims administrator or other entity subject to Labor Code section 4610. The claims administrator may utilize an entity contracted to conduct its utilization review responsibilities."

Q. When must the claims administrator or designated URO file a change or revision in its UR plan with the DWC?

A. Within 30 calendar days of a material modification to the plan. A "material modification" is when the claims administrator changes utilization review vendors or makes a change to the utilization review standards.

Q. If the URO sends a list of its clients with its UR plan, will the DWC retain the list as a separate "confidential document" and not forward it on as part of the filed UR plan to any requesting party?

A. The document would be considered a public record, and would be included in any requested disclosure of the plan.

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About UR and medical provider networks (MPNs):

Q. Are MPN physicians required to provide RFAs?

A. Yes. Unless the treatment falls within the claims administrator's prior authorization process, MPN physicians need to provide RFAs.

Q. May a URO deny an RFA because the treating physician is not the MPN physician?

A. No. The URO must address medical necessity. The URO may not deny a request based on the fact that a treating physician is not the MPN physician, as that is not a medical treatment issue.

Q. May the claims administrator deny an RFA because the treating physician is not the MPN physician?

A. Yes, as long as the claims administrator complies with the conditions described above in the section titled 'About who can make UR decisions.' The claims administrator does not have to send the request to the URO. It may deny the request and notify the requesting provider of the MPN requirement.

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March 2023