Tell It Goodbye
William Nathans
Editor
Welcome to the end of summer.
Now that the legislature has finally passed a budget with three weeks left in the session, they can turn their attention to other matters.
There are currently several bills working their way through the system regarding our dearly beloved workers compensation system. One of the bills currently under consideration is a change to the 104 week cap rule. the thrust of this proposal is to add time to the period for which temporary disability is paid.
AB 338 allows temporary disability benefits for a single injury occurring on or after January 1, 2008 to continue for up to 156 compensable weeks within five years of the injury date.
Say goodbye to the incentive for prompt medical care to get the patient to MMI status. This would create an additional year of UR battles over evidence based treatment.
Another bill currently worming its way through, is a bill to repeal the caps on chiropractic, physical therapy and occupational therapy. This is currently the subject of a legal challenge to the constitutionality of the statute.
So let me get this straight, the chiropractors are claiming that there is a constitutional right for them to over treat and make millions off the system while the patient continues to suffer. Makes sense to me!
Comments, questions, e-mail me at bill@adjustingworld.com
Don't PanicYet...I'll Tell You When
Stephen L. Kline, Esq.
Armstrong Law Firm
stephenk@arm-law.comDoes every Request for Authorization have to be submitted to Utilization Review?
For a change of pace this month, let’s look at some statutes, relatively new regulations, DWC FAQs and a DWC Press Release concerning Utilization Review and possible penalties which are hiding behind the OBAE curtain.
Labor Code §4610 (b) mandates ”Every employer shall establish a utilization review process in compliance with this section, either directly or through its insurer or an entity with which an employer or insurer contracts for these services.”
Looking to the Regulations, 8 CCR § 9792.6 (s) defines the "Utilization review process" as “utilization management functions that prospectively, retrospectively, or concurrently review and approve, modify, delay, or deny, based in whole or in part on medical necessity to cure or relieve, treatment recommendations by physicians, … prior to, retrospectively, or concurrent with the provision of medical treatment services pursuant to Labor Code § 4600. Utilization review does not include determinations of the work-relatedness of injury or disease, or bill review for the purpose of determining whether the medical services were accurately billed.”
So far so good. However, there is another regulation which raises concerns and potential penalty exposure:
Effective January 1, 2004, every claims administrator shall establish and maintain a utilization review process for treatment rendered on or after January 1, 2004, regardless of date of injury, in compliance with Labor Code § 4610. Each utilization review process shall be set forth in a utilization review plan which among other items shall contain: “A description of the claims administrator's practice, if applicable, of any prior authorization process, including but not limited to, where authorization is provided without the submission of the request for authorization”. 8 CCR § 9792.7(a) (5) (emphasis added)
This regulation is the inspiration for the Administrative Director issuing a press release where she said, “In fact, the best way for claim administrators to ensure they meet the timelines for UR is to give adjusters the ability to approve specific treatments within the treatment guidelines.” Newsline No. 50-07 June 27, 2007
So adjusters should be able to approve “specific treatments within the guidelines”. Right? Maybe. If that “prior authorization’ isn’t detailed as part of the Utilization Review Process that is on file with Administrative Director’s office for that employer, is there any exposure to the adjusting agency or employer?
On June 7, 2007, the penalty regulations for Utilization Review became effective for all transgressions after that date.
8 CCR § 9792.12 (a) (1) provides that for “failure to establish a Labor Code §4610 utilization review plan”, a $ 50,000 penalty can be assessed; §9792.12 (a) (6) provides that “for issuance of a decision to modify or deny a request for authorization regarding a medical treatment, procedure, service or product where the requested treatment, procedure or service is not within the reviewer's scope of practice (as set forth by the reviewer's licensing board)” a penalty of $ 25,000 can be assessed per violation; and §9792.12 (a) (7) provides that “for failure to comply with the requirement that only a licensed physician may modify, delay, or deny requests for authorization of medical treatment for reasons of medical necessity to cure or relieve, except as provided for in Labor Code §4604.5(d) and §9792.9(b)(2)” that a $ 25,000 penalty could be assessed per violation.
As can be seen, substantial penalties can result where an examiner authorizes a specific treatment within the guidelines, and there is no UR Plan on file with AD’s office which specifically details how and under what circumstances that prior authorizations can be done without the Utilization Review Process being completed.
No panic needed. But, it would be prudent to check with your UR Provider who wrote the Plans that should be on file with the AD to make sure that if you are doing “prior authorizations” without UR, they have included provisions in the Plan for these prior authorizations and how they are to be done. Many UR providers did not do so and thus the exposure alert.
The Sandhagen case has yet to be decided by the Supreme Court. That case is being argued on the issue as to whether UR is mandatory and whether UR is the exclusive vehicle for treatment review. Guidance from them may assist the AD in modifying the regulations regarding UR and penalties. We wait for the decision to come down.
Thanks for your attention.
Don't miss Steve's Legal Update at the SBICA Luncheon on September 28th.
See the events calendar for more information......
Dear Joan:
Two years ago I made a major career change and my boss still thinks I am not doing a good job. My last evaluation garnered only the lowest percentage of a raise and an overall rating of “fair.”
Instead of getting measurable advice on how to improve, I am told I just need to do or be “better”. I have been recognized as employee of the month in my department three times in the last 20 months for my creative ideas and I continually have new tasks and responsibilities added to my job because of my background and expertise.
How do you suggest I approach my boss about this issue?
Using Structured Settlements to Get More Bang for the Buck
Teddy Snyder
Ringer Associates
TSnyder@RinglerAssociates.com
What do you do when the money on the table just isn’t
enough to settle the case? If there’s a Medicare Set-Aside, you
can create more money for Applicant’s unrestricted use by using
a structured settlement.
Structured settlements exist due to Internal Revenue Code 104. This
Code section provides that settlement payments on account of physical
injury are tax-free to the Applicant whether paid in a lump sum or in
“periodic payments.” The payments are made by a highly rated
life insurance company. When the documentation is done correctly, not
only the original settlement amount, but also all the investment income
is tax-free to the claimant.
This is critical in MSA cases. The CMS memoranda which set out the MSA
funding criteria allow two options: a lump sum, or a structured settlement
annuity. If the MSA is funded as a lump sum, every dollar is required
to be set aside now-regardless of how far in the future the money will
be needed. There is no discount for present value. Using a structured
settlement, however, allows funding with a present value number.
Here’s an example:
The demand for C&R is $200,000, the offer is $160,000. The MSA report
for the 54-year old male Applicant states that the future Industrially
Related Medicare Eligible Expenses can be funded with a lump sum of
$130,618. Alternatively, the MSA can be funded with $29,986 seed money
and $4,193 a year for life commencing one year from the date of settlement.
Applicant’s life expectancy is 24.6 years. The cost to purchase
that income stream is $58,625. Adding that to the seed brings the total
cost of the set-aside to $88,611. This is a savings of $42,007. Compare:
Cash to Applicant: $ 5,382
Attorney fee: $ 24,000
Lump Sum MSA: $130,618
$160,000
Total anticipated lifetime payout: $160,000
Cash to Applicant: $47,389
Attorney fee: $24,000
Seed Medicare Set-Aside: $29,986
Premium for lifetime Annual payments: $58,625
$160,000
Total anticipated lifetime payout: $202,007
Don’t confuse structuring with a custodial account.
In the vast majority of cases, the periodic payments are paid directly
to the claimant for self-administration. Lump sum MSAs may be custodial
or self-administered. Structured MSAs may be custodial or self-administered.
One thing has nothing to do with the other.
Not included in this example are the benefits which accrue from structuring
non-Medicare dollars. Structuring a settlement lets the Applicant have
the best of both worlds. There are periodic payments to meet ongoing
needs, but the Applicant can also get Cash Up Front and guarantee those
ongoing payments to leave an estate for loved ones.
The icing on the cake is that there is no cost to either party for a
structured settlement broker’s services. You don’t ask a
bank teller about a fee for teller services-that is an overhead expense
which is already reflected in the rates the bank offers. Similarly,
the structured settlement broker is compensated as an overhead expense
by the life insurance company which provides the structured settlement
payments.
Structured settlement brokers are available to attend WCAB hearings
or informal settlement meetings or mediations.
Teddy Snyder is a Structured Settlement Broker with Ringler Associates
Don't Forget the Injured Worker on Labor Day in California
By
Sam Gold
A California Injured Worker
The California insurance industry agreed to a social plan known as Workers Compensation almost 100 years ago, and they have been scheming to figure a way to keep every bit of the premium dollar collected ever since. 30 cents of it just simply isn’t good enough for them. They want the entire premium dollar, period!
More >>
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Staph infection plagues California firefighters
By
Vanessa Colon
A type of drug-resistant staph infection has become so common in prisons
and fire and police stations that some union officials want it classed
as a work-related hazard. Among the latest victims are up to 13 firefighters
at three Fresno stations.
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