BILL NUMBER: AB 361 ENROLLED
BILL TEXT
PASSED THE SENATE SEPTEMBER 4, 2009
PASSED THE ASSEMBLY SEPTEMBER 9, 2009
AMENDED IN SENATE SEPTEMBER 2, 2009
AMENDED IN SENATE JUNE 16, 2009
AMENDED IN ASSEMBLY MAY 14, 2009
AMENDED IN ASSEMBLY APRIL 28, 2009
INTRODUCED BY Assembly Member Bonnie Lowenthal
(Coauthors: Assembly Members Ammiano, Coto, and Torlakson)
FEBRUARY 23, 2009
An act to add Section 4610.3 to the Labor Code, relating to
workers' compensation.
LEGISLATIVE COUNSEL'S DIGEST
AB 361, Bonnie Lowenthal. Workers' compensation: treatment
authorization.
Existing law establishes a workers' compensation system,
administered by the Administrative Director of the Division of
Workers' Compensation, to compensate an employee for injuries
sustained in the course of his or her employment. Existing law
requires every employer to establish a medical treatment utilization
review process, in compliance with specified requirements, either
directly or through its insurer or an entity with which the employer
or insurer contracts for these services.
Existing law authorizes an employer or insurer to establish or
modify a medical provider network for the provision of medical
treatment to injured employees, and to submit a medical provider
network plan to the administrative director for approval. Existing
law permits employers to enter into contracts for the provision of
medical services to injured employees with a health care organization
that has been certified by the administrative director for this
purpose.
This bill provides that, regardless of whether an employer has
established a medical provider network or entered into a contract
with a health care organization, an employer that authorizes medical
treatment shall not rescind or modify the authorization for the
portion of the medical treatment that has been provided after that
treatment has been provided for any reason, including, but not
limited to, the employer's subsequent determination that the
physician who treated the employee was not eligible to treat that
injured employee. This bill provides that its provisions shall not be
construed to expand or alter the benefits available under, or the
terms and conditions of, any contract, including, but not limited to,
existing medical provider network and health care organization
contracts. The bill would also provide that its provisions shall not
be construed to impact the ability of the employer to transfer
treatment of an injured employee into a medical provider network or
health care organization.
The bill would further provide that its provisions shall not be
construed to establish that a provider of authorized medical
treatment is the primary care physician for specified purposes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 4610.3 is added to the Labor Code, to read:
4610.3. (a) Regardless of whether an employer has established a
medical provider network pursuant to Section 4616 or entered into a
contract with a health care organization pursuant to Section 4600.5,
an employer that authorizes medical treatment shall not rescind or
modify that authorization after the medical treatment has been
provided based on that authorization for any reason, including, but
not limited to, the employer's subsequent determination that the
physician who treated the employee was not eligible to treat that
injured employee. If the authorized medical treatment consists of a
series of treatments or services, the employer may rescind or modify
the authorization only for the treatments or services that have not
already been provided.
(b) This section shall not be construed to expand or alter the
benefits available under, or the terms and conditions of, any
contract, including, but not limited to, existing medical provider
network and health care organization contracts.
(c) This section shall not be construed to impact the ability of
the employer to transfer treatment of an injured employee into a
medical provider network or health care organization. This
subdivision is declaratory of existing law.
(d) This section shall not be construed to establish that a
provider of authorized medical treatment is the physician primarily
responsible for managing the injured employee's care for purposes of
rendering opinions on all medical issues necessary to determine
eligibility for compensation.
ANALYSIS
BILL ANALYSIS
------------------------------------------------------------
|SENATE RULES COMMITTEE | AB 361|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
------------------------------------------------------------
THIRD READING
Bill No: AB 361
Author: Lowenthal (D)
Amended: 9/2/09 in Senate
Vote: 21
SENATE LABOR & INDUSTRIAL RELATIONS COMM. : 4-1, 6/25/09
AYES: DeSaulnier, Ducheny, Leno, Yee
NOES: Hollingsworth
NO VOTE RECORDED: Wyland
ASSEMBLY FLOOR : 77-0, 5/18/09 - See last page for vote
SUBJECT : Workers compensation: treatment authorization
SOURCE : California Chiropractic Association
DIGEST : This bill prohibits an employer from refusing to
pay for workers compensation medical treatment services if
the employer had approved those services prior to
treatment. This bill specifies when an employer is
authorized to rescind or modify an authorization for
treatments or services that have not already been provided.
Senate Floor Amendments of 9/2/09 specify when a employer
can rescind or modify a pre-authorized medical treatment
and stipulates a section of the bill as declaratory of
existing law.
ANALYSIS : Existing law establishes a workers'
compensation system, administered by the Administrative
CONTINUED
AB 361
Page
2
Director of the Division of Workers' Compensation (DWC), to
compensate an employee for injuries that arise out of, or
in the course of, employment. Employers are required to
secure the payment of workers' compensation for injuries
incurred by their employees. Workers' compensation
insurance provides six basic benefits which include medical
care, temporary disability benefits, permanent disability
benefits, supplemental job displacement benefits or
vocational rehabilitation and death benefits.
Existing law requires every employer to establish a medical
treatment utilization review process, in compliance with
specified requirements, either directly or through its
insurer or an entity with which the employer or insurer
contracts for these services. Utilization review (UR) is
the process used by employers or claim administrators to
review and approve, modify, delay, or deny, treatment
recommendations made by physicians. UR can occur before,
during or after medical treatment to determine if the
treatment is effective. Treatment may be modified,
delayed, or denied based upon the results of the review.
Under existing law, employers are authorized to enter into
a contract with a specialized workers' compensation health
care organization (HCO) for the provision of medical
services under the workers' compensation system. An
employer's use of HCOs, among other things, allows an
employer to maintain medical control over the injured
employee's workers' compensation claim for up to 180 days
after an injury or illness occurs, however, the HCO is
required to maintain certain standards of care as a
condition of that control.
Under existing law, employers are also authorized to
establish a medical provider network (MPN) for the
provision of medical services under the workers'
compensation system. MPNs are required to meet access to
care standards which require, among other things, that MPNs
follow all medical treatment guidelines established by the
DWC. In addition, the use of an MPN generally allows an
employer to maintain medical control for the life of the
workers' compensation claim.
Existing law prohibits, in the context of health care
CONTINUED
AB 361
Page
3
service plans, the health care insurer from rescinding or
modifying an authorization for medical services after the
services are rendered.
This bill prohibits an employer from denying payment for
medical treatment after the treatment has already been
authorized and rendered. Specifically, this bill:
1.Provides that regardless of whether an employer
established an MPN or entered into a contract with an
HCO, an employer that authorizes medical treatment shall
not, for any reason, rescind or modify the authorization
for the portion of the medical treatment that has been
provided after that treatment has been provided based on
that authorization. If the treatment consists of a
series of treatments or services, and the employer wishes
to rescind or modify its pre-authorization, the employer
may do so only for the treatments or services that have
not already been provided.
2.Provides that its provisions shall not be construed to
expand or alter the benefits available under, or the
terms and conditions of, any contract, including existing
MPN or HCO contracts.
3.Provides that its provisions shall not be construed to
impact the ability of the employer to transfer treatment
of an injured employee into an MPN or HCO. This bill
does not change the law with respect to ongoing medical
treatment.
4.Provides that its provisions shall not be construed to
establish that a provider of authorized medical treatment
is the primary care physician, as specified.
Comments
Concerns have been raised by the sponsors of the bill
claiming that some physicians have experienced
reimbursement problems when billing for services that had
been previously approved by the appropriate payor. This
bill will prohibit an employer when providing workers'
compensation coverage from rescinding or modifying an
CONTINUED
AB 361
Page
4
authorization for medical services after the services have
been rendered. UR would continue to occur, however, if by
the time the review is completed medical services have
already been provided to the injured employee, this bill
would prohibit any changes to the prior authorization and
would require employers to pay for all services rendered.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 9/3/09)
California Chiropractic Association (source)
American Federation of State, County and Municipal
Employees, AFL-CIO
Association for Los Angeles Deputy Sheriffs
California Applicants' Attorneys Association
California Chiropractic Association
California Labor Federation, AFL-CIO
California Medical Association
California Nurses Association/National Nurses Organizing
Committee
California Physical Therapy Association
California Professional Firefighters
California School Employees Association, AFL-CIO
California State Employees Association
Glendale City Employees Association
Los Angeles Police Protective League
Los Angeles Probation Officers' Union, AFSCME, Local 685
Orange County Professional Firefighters' Association
Organization of SMUD Employees
Peace Officers Research Association of California
Riverside Sheriffs' Association
San Bernardino Public Employees Association
San Luis Obispo County Employees Association
Santa Rosa City Employees Association
OPPOSITION : (Verified 9/3/09)
Association of California Insurance Companies
ARGUMENTS IN SUPPORT : According to proponents, most
doctors obtain prior authorization before beginning
treatment, however, they argue, some insurance companies
CONTINUED
AB 361
Page
5
will grant authorization for a course of treatment and then
deny reimbursement when the doctor sends in the bill after
the authorized care was provided. Proponents argue that
insurance companies will often retroactively deny coverage
for these treatments because they do not determine until
later that the doctor was not on the correct "preferred
provider" sub-panel.
The author believes this bill is necessary to prohibit an
insurance company that provides workers' compensation
coverage from rescinding or modifying an authorization for
medical services after the services are rendered.
Proponents argue that this bill would prevent retroactive
denial of payment to the physician even if the employer
subsequently determines the physician was not eligible
under the MPN or HCO contract to provide the specific
treatment. According to the author, this will assure
doctors that the pre-authorized services they provide, even
if authorized in error by the insurer, will be compensated.
In addition, proponents argue that the cost of erroneous
preauthorization should not be shifted to the injured
worker. Also, proponents assert that similar protections
are afforded patients in group health settings, and injured
workers deserve no less.
ARGUMENTS IN OPPOSITION : Opponents believe that this
bill is unfair and would not improve the medical care
provided to injured workers. The bill prohibits a carrier
from modifying or rescinding authorization for treatment
"for any reason," and opponents believe that this policy
ignores responsibilities for medical treatment that are
already imposed on employers and insurers.
According to opponents, Labor Code requires an employer to
authorize medical treatment within one working day after
the employee files the appropriate claim form. The
authorized treatment must be provided until the claim is
accepted or rejected. Opponents argue that in order to
facilitate the immediate provision of care, it is sometimes
necessary to authorize care when doubt exists. However,
opponents claim, when information makes it clear that
injury was not a workplace injury or when the carrier
CONTINUED
AB 361
Page
6
discovers that the treatment was not appropriate the
carrier/employer must, and should, rescind such
authorization. Opponents also argue that this bill's
denial of this flexibility is not in the best interest for
injured workers since it would prevent a carrier from
denying treatment that is unnecessary.
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Anderson, Arambula, Beall, Bill
Berryhill, Tom Berryhill, Blakeslee, Block, Blumenfield,
Brownley, Buchanan, Caballero, Charles Calderon, Carter,
Chesbro, Conway, Cook, Coto, Davis, De La Torre, De Leon,
DeVore, Duvall, Emmerson, Evans, Feuer, Fletcher, Fong,
Fuentes, Fuller, Furutani, Gaines, Galgiani, Garrick,
Gilmore, Hagman, Hall, Harkey, Hayashi, Hernandez, Hill,
Huber, Huffman, Jeffries, Jones, Knight, Krekorian, Lieu,
Logue, Bonnie Lowenthal, Ma, Mendoza, Miller, Monning,
Nava, Nestande, Niello, Nielsen, John A. Perez, V. Manuel
Perez, Portantino, Ruskin, Salas, Silva, Skinner, Smyth,
Solorio, Audra Strickland, Swanson, Torlakson, Torres,
Torrico, Tran, Villines, Yamada, Bass
NO VOTE RECORDED: Eng, Price, Saldana
AGB:nl 9/3/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
**** END ****
BILL TEXT
PASSED THE SENATE SEPTEMBER 4, 2009
PASSED THE ASSEMBLY SEPTEMBER 9, 2009
AMENDED IN SENATE SEPTEMBER 2, 2009
AMENDED IN SENATE JUNE 16, 2009
AMENDED IN ASSEMBLY MAY 14, 2009
AMENDED IN ASSEMBLY APRIL 28, 2009
INTRODUCED BY Assembly Member Bonnie Lowenthal
(Coauthors: Assembly Members Ammiano, Coto, and Torlakson)
FEBRUARY 23, 2009
An act to add Section 4610.3 to the Labor Code, relating to
workers' compensation.
LEGISLATIVE COUNSEL'S DIGEST
AB 361, Bonnie Lowenthal. Workers' compensation: treatment
authorization.
Existing law establishes a workers' compensation system,
administered by the Administrative Director of the Division of
Workers' Compensation, to compensate an employee for injuries
sustained in the course of his or her employment. Existing law
requires every employer to establish a medical treatment utilization
review process, in compliance with specified requirements, either
directly or through its insurer or an entity with which the employer
or insurer contracts for these services.
Existing law authorizes an employer or insurer to establish or
modify a medical provider network for the provision of medical
treatment to injured employees, and to submit a medical provider
network plan to the administrative director for approval. Existing
law permits employers to enter into contracts for the provision of
medical services to injured employees with a health care organization
that has been certified by the administrative director for this
purpose.
This bill provides that, regardless of whether an employer has
established a medical provider network or entered into a contract
with a health care organization, an employer that authorizes medical
treatment shall not rescind or modify the authorization for the
portion of the medical treatment that has been provided after that
treatment has been provided for any reason, including, but not
limited to, the employer's subsequent determination that the
physician who treated the employee was not eligible to treat that
injured employee. This bill provides that its provisions shall not be
construed to expand or alter the benefits available under, or the
terms and conditions of, any contract, including, but not limited to,
existing medical provider network and health care organization
contracts. The bill would also provide that its provisions shall not
be construed to impact the ability of the employer to transfer
treatment of an injured employee into a medical provider network or
health care organization.
The bill would further provide that its provisions shall not be
construed to establish that a provider of authorized medical
treatment is the primary care physician for specified purposes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 4610.3 is added to the Labor Code, to read:
4610.3. (a) Regardless of whether an employer has established a
medical provider network pursuant to Section 4616 or entered into a
contract with a health care organization pursuant to Section 4600.5,
an employer that authorizes medical treatment shall not rescind or
modify that authorization after the medical treatment has been
provided based on that authorization for any reason, including, but
not limited to, the employer's subsequent determination that the
physician who treated the employee was not eligible to treat that
injured employee. If the authorized medical treatment consists of a
series of treatments or services, the employer may rescind or modify
the authorization only for the treatments or services that have not
already been provided.
(b) This section shall not be construed to expand or alter the
benefits available under, or the terms and conditions of, any
contract, including, but not limited to, existing medical provider
network and health care organization contracts.
(c) This section shall not be construed to impact the ability of
the employer to transfer treatment of an injured employee into a
medical provider network or health care organization. This
subdivision is declaratory of existing law.
(d) This section shall not be construed to establish that a
provider of authorized medical treatment is the physician primarily
responsible for managing the injured employee's care for purposes of
rendering opinions on all medical issues necessary to determine
eligibility for compensation.
ANALYSIS
BILL ANALYSIS
------------------------------------------------------------
|SENATE RULES COMMITTEE | AB 361|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
------------------------------------------------------------
THIRD READING
Bill No: AB 361
Author: Lowenthal (D)
Amended: 9/2/09 in Senate
Vote: 21
SENATE LABOR & INDUSTRIAL RELATIONS COMM. : 4-1, 6/25/09
AYES: DeSaulnier, Ducheny, Leno, Yee
NOES: Hollingsworth
NO VOTE RECORDED: Wyland
ASSEMBLY FLOOR : 77-0, 5/18/09 - See last page for vote
SUBJECT : Workers compensation: treatment authorization
SOURCE : California Chiropractic Association
DIGEST : This bill prohibits an employer from refusing to
pay for workers compensation medical treatment services if
the employer had approved those services prior to
treatment. This bill specifies when an employer is
authorized to rescind or modify an authorization for
treatments or services that have not already been provided.
Senate Floor Amendments of 9/2/09 specify when a employer
can rescind or modify a pre-authorized medical treatment
and stipulates a section of the bill as declaratory of
existing law.
ANALYSIS : Existing law establishes a workers'
compensation system, administered by the Administrative
CONTINUED
AB 361
Page
2
Director of the Division of Workers' Compensation (DWC), to
compensate an employee for injuries that arise out of, or
in the course of, employment. Employers are required to
secure the payment of workers' compensation for injuries
incurred by their employees. Workers' compensation
insurance provides six basic benefits which include medical
care, temporary disability benefits, permanent disability
benefits, supplemental job displacement benefits or
vocational rehabilitation and death benefits.
Existing law requires every employer to establish a medical
treatment utilization review process, in compliance with
specified requirements, either directly or through its
insurer or an entity with which the employer or insurer
contracts for these services. Utilization review (UR) is
the process used by employers or claim administrators to
review and approve, modify, delay, or deny, treatment
recommendations made by physicians. UR can occur before,
during or after medical treatment to determine if the
treatment is effective. Treatment may be modified,
delayed, or denied based upon the results of the review.
Under existing law, employers are authorized to enter into
a contract with a specialized workers' compensation health
care organization (HCO) for the provision of medical
services under the workers' compensation system. An
employer's use of HCOs, among other things, allows an
employer to maintain medical control over the injured
employee's workers' compensation claim for up to 180 days
after an injury or illness occurs, however, the HCO is
required to maintain certain standards of care as a
condition of that control.
Under existing law, employers are also authorized to
establish a medical provider network (MPN) for the
provision of medical services under the workers'
compensation system. MPNs are required to meet access to
care standards which require, among other things, that MPNs
follow all medical treatment guidelines established by the
DWC. In addition, the use of an MPN generally allows an
employer to maintain medical control for the life of the
workers' compensation claim.
Existing law prohibits, in the context of health care
CONTINUED
AB 361
Page
3
service plans, the health care insurer from rescinding or
modifying an authorization for medical services after the
services are rendered.
This bill prohibits an employer from denying payment for
medical treatment after the treatment has already been
authorized and rendered. Specifically, this bill:
1.Provides that regardless of whether an employer
established an MPN or entered into a contract with an
HCO, an employer that authorizes medical treatment shall
not, for any reason, rescind or modify the authorization
for the portion of the medical treatment that has been
provided after that treatment has been provided based on
that authorization. If the treatment consists of a
series of treatments or services, and the employer wishes
to rescind or modify its pre-authorization, the employer
may do so only for the treatments or services that have
not already been provided.
2.Provides that its provisions shall not be construed to
expand or alter the benefits available under, or the
terms and conditions of, any contract, including existing
MPN or HCO contracts.
3.Provides that its provisions shall not be construed to
impact the ability of the employer to transfer treatment
of an injured employee into an MPN or HCO. This bill
does not change the law with respect to ongoing medical
treatment.
4.Provides that its provisions shall not be construed to
establish that a provider of authorized medical treatment
is the primary care physician, as specified.
Comments
Concerns have been raised by the sponsors of the bill
claiming that some physicians have experienced
reimbursement problems when billing for services that had
been previously approved by the appropriate payor. This
bill will prohibit an employer when providing workers'
compensation coverage from rescinding or modifying an
CONTINUED
AB 361
Page
4
authorization for medical services after the services have
been rendered. UR would continue to occur, however, if by
the time the review is completed medical services have
already been provided to the injured employee, this bill
would prohibit any changes to the prior authorization and
would require employers to pay for all services rendered.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 9/3/09)
California Chiropractic Association (source)
American Federation of State, County and Municipal
Employees, AFL-CIO
Association for Los Angeles Deputy Sheriffs
California Applicants' Attorneys Association
California Chiropractic Association
California Labor Federation, AFL-CIO
California Medical Association
California Nurses Association/National Nurses Organizing
Committee
California Physical Therapy Association
California Professional Firefighters
California School Employees Association, AFL-CIO
California State Employees Association
Glendale City Employees Association
Los Angeles Police Protective League
Los Angeles Probation Officers' Union, AFSCME, Local 685
Orange County Professional Firefighters' Association
Organization of SMUD Employees
Peace Officers Research Association of California
Riverside Sheriffs' Association
San Bernardino Public Employees Association
San Luis Obispo County Employees Association
Santa Rosa City Employees Association
OPPOSITION : (Verified 9/3/09)
Association of California Insurance Companies
ARGUMENTS IN SUPPORT : According to proponents, most
doctors obtain prior authorization before beginning
treatment, however, they argue, some insurance companies
CONTINUED
AB 361
Page
5
will grant authorization for a course of treatment and then
deny reimbursement when the doctor sends in the bill after
the authorized care was provided. Proponents argue that
insurance companies will often retroactively deny coverage
for these treatments because they do not determine until
later that the doctor was not on the correct "preferred
provider" sub-panel.
The author believes this bill is necessary to prohibit an
insurance company that provides workers' compensation
coverage from rescinding or modifying an authorization for
medical services after the services are rendered.
Proponents argue that this bill would prevent retroactive
denial of payment to the physician even if the employer
subsequently determines the physician was not eligible
under the MPN or HCO contract to provide the specific
treatment. According to the author, this will assure
doctors that the pre-authorized services they provide, even
if authorized in error by the insurer, will be compensated.
In addition, proponents argue that the cost of erroneous
preauthorization should not be shifted to the injured
worker. Also, proponents assert that similar protections
are afforded patients in group health settings, and injured
workers deserve no less.
ARGUMENTS IN OPPOSITION : Opponents believe that this
bill is unfair and would not improve the medical care
provided to injured workers. The bill prohibits a carrier
from modifying or rescinding authorization for treatment
"for any reason," and opponents believe that this policy
ignores responsibilities for medical treatment that are
already imposed on employers and insurers.
According to opponents, Labor Code requires an employer to
authorize medical treatment within one working day after
the employee files the appropriate claim form. The
authorized treatment must be provided until the claim is
accepted or rejected. Opponents argue that in order to
facilitate the immediate provision of care, it is sometimes
necessary to authorize care when doubt exists. However,
opponents claim, when information makes it clear that
injury was not a workplace injury or when the carrier
CONTINUED
AB 361
Page
6
discovers that the treatment was not appropriate the
carrier/employer must, and should, rescind such
authorization. Opponents also argue that this bill's
denial of this flexibility is not in the best interest for
injured workers since it would prevent a carrier from
denying treatment that is unnecessary.
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Anderson, Arambula, Beall, Bill
Berryhill, Tom Berryhill, Blakeslee, Block, Blumenfield,
Brownley, Buchanan, Caballero, Charles Calderon, Carter,
Chesbro, Conway, Cook, Coto, Davis, De La Torre, De Leon,
DeVore, Duvall, Emmerson, Evans, Feuer, Fletcher, Fong,
Fuentes, Fuller, Furutani, Gaines, Galgiani, Garrick,
Gilmore, Hagman, Hall, Harkey, Hayashi, Hernandez, Hill,
Huber, Huffman, Jeffries, Jones, Knight, Krekorian, Lieu,
Logue, Bonnie Lowenthal, Ma, Mendoza, Miller, Monning,
Nava, Nestande, Niello, Nielsen, John A. Perez, V. Manuel
Perez, Portantino, Ruskin, Salas, Silva, Skinner, Smyth,
Solorio, Audra Strickland, Swanson, Torlakson, Torres,
Torrico, Tran, Villines, Yamada, Bass
NO VOTE RECORDED: Eng, Price, Saldana
AGB:nl 9/3/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
**** END ****
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