The prohibition of Section 139.3 shall not apply to or restrict any of the following:

(a) A physician may refer a patient for a good or service otherwise prohibited by subdivision (a) of Section 139.3 if the physician’s regular practice is where there is no alternative provider of the service within either 25 miles or 40 minutes traveling time, via the shortest route on a paved road. A physician who refers to, or seeks consultation from, an organization in which the physician has a financial interest under this subdivision shall disclose this interest to the patient or the patient’s parents or legal guardian in writing at the time of
referral.

(b) A physician who has one or more of the following arrangements with another physician, a person, or an entity, is not prohibited from referring a patient to the physician, person, or entity because of the arrangement:

(1) A loan between a physician and the recipient of the referral, if the loan has commercially reasonable terms, bears interest at the prime rate or a higher rate that does not constitute usury, is adequately secured, and the loan terms are not affected by either party’s referral of any person or the volume of services provided by either party.

(2) A lease of space or equipment between a physician and the recipient of the referral, if the lease is
written, has commercially reasonable terms, has a fixed periodic rent payment, has a term of one year or more, and the lease payments are not affected by either party’s referral of any person or the volume of services provided by either party.

(3) A physician’s ownership of corporate investment securities, including shares, bonds, or other debt
instruments that were purchased on terms that are available to the general public through a licensed
securities exchange or NASDAQ, do not base profit distributions or other transfers of value on the
physician’s referral of persons to the corporation, do not have a separate class or accounting for any
persons or for any physicians who may refer persons to the corporation, and are in a corporation that had, at the end of the corporation’s most recent fiscal year, total gross assets exceeding one hundred million dollars ($100,000,000).

(4) A personal services arrangement between a physician or an immediate family member of the physician and the recipient of the referral if the arrangement meets all of the following requirements:

(A) It is set out in writing and is signed by the parties.

(B) It specifies all of the services to be provided by the physician or an immediate family member of the physician.

(C) The aggregate services contracted for do not exceed those that are reasonable and necessary for the legitimate business purposes of the arrangement.

(D) A written notice disclosing the existence of the personal services arrangement and including information on where a person may go to file a complaint against the licensee or the immediate family member of the licensee, is provided to the following persons at the time any services pursuant to the arrangement are first provided:

(i) An injured worker who is referred by a licensee or an immediate family member of the licensee.

(ii) The injured worker’s employer, if self-insured.

(iii) The injured worker’s employer’s insurer, if insured.

(iv) If the injured worker is known by the licensee or the recipient of the referral to be represented, the injured worker’s attorney.

(E) The term of the arrangement is for at least one year.

(F) The compensation to be paid over the term of the arrangement is set in advance, does not exceed fair market value, and is not determined in a manner that takes into account the volume or value of any referrals or other business generated between the parties, except that if the services provided pursuant to the arrangement include medical services provided under Division 4, compensation paid for the services shall be subject to the official medical fee schedule promulgated pursuant to Section 5307.1 or subject to any contract authorized by Section 5307.11.

(G) The services to be performed under the arrangement do not involve the counseling or promotion of a business arrangement or other activity that violates any state or federal law.

(c)

(1) A physician may refer a person to a health facility as defined in Section 1250 of the Health and Safety Code, to any facility owned or leased by a health facility, or to an outpatient surgical center, if the recipient of the referral does not compensate the physician for the patient referral, and any equipment lease arrangement between the physician and the referral recipient complies with the requirements of paragraph (2) of subdivision (b).

(2) Nothing shall preclude this subdivision from applying to a physician solely because the physician has an ownership or leasehold interest in an entire health facility or an entity that owns or leases an entire health facility.

(3) A physician may refer a person to a health facility for any service classified as an emergency under
subdivision (a) or (b) of Section 1317.1 of the Health and Safety Code. For nonemergency outpatient
diagnostic imaging services performed with equipment for which, when new, has a commercial retail price of four hundred thousand dollars ($400,000) or more, the referring physician shall obtain a service preauthorization from the insurer, or self-insured employer. Any oral authorization shall be memorialized in writing within five business days.

(d) A physician compensated or employed by a university may refer a person to any facility owned or
operated by the university, or for a physician service, to another physician employed by the university, provided that the facility or university does not compensate the referring physician for the patient referral. For nonemergency diagnostic imaging services performed with equipment that, when new, has a commercial retail price of four hundred thousand dollars ($400,000) or more, the referring physician shall obtain a service preauthorization from the insurer or self-insured employer. An oral authorization shall be memorialized in writing within five business days. In the case of a facility which is totally or partially owned by an entity other than the university, but which is staffed by university physicians, those physicians may not refer patients to the facility if the facility compensates the referring physician for those referrals.

(e) The prohibition of Section 139.3 shall not apply to any service for a specific patient that is performed within, or goods that are supplied by, a physician’s office, or the office of a group practice. Further, the provisions of Section 139.3 shall not alter, limit, or expand a physician’s ability to deliver, or to direct or supervise the delivery of, in-office goods or services according to the laws, rules, and regulations governing his or her scope of practice. With respect to diagnostic imaging services performed with equipment that, when new, had a commercial retail price of four hundred thousand dollars ($400,000) or more, or for physical therapy services, or for psychometric testing that exceeds the routine screening battery protocols, with a time limit of two to five hours, established by the administrative director, the referring physician obtains a service preauthorization from the insurer or self-insured employer. Any oral authorization shall be memorialized in writing within five business days.

(f) The prohibition of Section 139.3 shall not apply where the physician is in a group practice as defined in Section 139.3 and refers a person for services specified in Section 139.3 to a multispecialty clinic, as defined in subdivision (l) of Section 1206 of the Health and Safety Code. For diagnostic imaging services performed with equipment that, when new, had a commercial retail price of four hundred thousand dollars ($400,000) or more, or physical therapy services, or psychometric testing that exceeds the routine screening battery protocols, with a time limit of two to five hours, established by the administrative director, performed at the multispecialty facility, the referring physician shall obtain a service preauthorization from the insurer or self-insured employer. Any oral authorization shall be memorialized in writing within five business days.

(g) The requirement for preauthorization in Sections (c), (e), and (f) shall not apply to a patient for whom the physician or group accepts payment on a capitated risk basis.

(h) The prohibition of Section 139.3 shall not apply to any facility when used to provide health care services to an enrollee of a health care service plan licensed pursuant to the Knox-Keene Health Care Service Plan Act of 1975 (Chapter 2.2 (commencing with Section 1340) of Division 2 of the Health and Safety Code).

(i) The prohibition of Section 139.3 shall not apply to an outpatient surgical center, as defined in paragraph (7) of subdivision (b) of Section 139.3, where the referring physician obtains a service preauthorization from the insurer or self-insured employer after disclosure of the financial relationship.

http://www.workcompliens.com

When the change of Labor Code § 5307.1 took place in 2003 the statement contained therefore as to what was required to get fees in excess of fee schedule, did not show the prevention of it as there existed no rules of exclusion and the laws allowing a medical provider to get fees in excess of fee schedule were and are contained in other regulations which were not excluded nor showed language of exclusion. Therefore if it was the intent of the law makers to overturn the ‘Gould”, case there would have been express language and the other regulations mention herein would have had to address this issue which was not done. In addition the reasonableness of the medical bills is always an issue before the appeals board that is resolved by the WCAB Judges as to reasonableness. There has been no regulation adopted by the Department of Industrial Injury that states that no matter the treatment injury or any other factors the Judge only has the power to award fee schedule.

• 8 CCR 9792.5

Ҥ 9792.5. Payment for Medical Treatment
(c) To be properly documented, a bill for medical treatment which exceeds the amount presumed reasonable in the Official Medical Fee Schedule adopted pursuant to Labor Code Section 5307.1, must be accompanied by an itemization and explanation for the excess charge.”

• Cal Lab Code § 4603.2 (2009)

§ 4603.2. Notice to employer of physician’s name and address; Reports by physician; Payment for medical treatment; Contest of itemization by employer; Interest or increase in compensation; Itemization review; Jurisdiction over disputes
(b)
“(1) Except as provided in subdivision (d) of Section 4603.4, or under contracts authorized under Section 5307.11, payment for medical treatment provided or authorized by the treating physician selected by the employee or designated by the employer shall be made at reasonable maximum amounts in the official medical fee schedule, pursuant to Section 5307.1, in effect on the date of service. Payments shall be made by the employer within 45 working days after receipt of each separate, itemization of medical services provided, together with any required reports and any written authorization for services that may have been received by the physician. If the itemization or a portion thereof is contested, denied, or considered incomplete, the physician shall be notified, in writing, that the itemization is contested, denied, or considered incomplete, within 30 working days after receipt of the itemization by the employer. A notice that an itemization is incomplete shall state all additional information required to make a decision. Any properly documented list of services provided not paid at the rates then in effect under Section 5307.1 within the 45-working-day period shall be increased by 15 percent, together with interest at the same rate as judgments in civil actions retroactive to the date of receipt of the itemization, unless the employer does both of the following:”

Tapia Case En Banc Tapia v. Workers’ Comp. Appeals Bd., 73 Cal. Comp. Cas. (MB) 1338 (W.C.A.B. 2008),

“We hold that, consistent with Kunz: (1) an outpatient surgery center lien claimant (or any medical lien claimant) has the burden of proving that its charges are reasonable; (2) the outpatient surgery center lien claimant’s billing, by itself, does not establish that the claimed fee is “reasonable”; therefore, even in the absence of rebuttal evidence, the lien need not be allowed in full if it is unreasonable on its face; and (3) any evidence relevant to reasonableness may be offered to support or rebut the lien; therefore, evidence is not limited to the fees accepted by other outpatient surgery centers in the same geographic area for the services provided.”

• Also at the DWC Education Conference a lecture by Judge Foust and in her Book
Fee schedule disputes
• Scenario #1 – The lien claimant claims entitlement to more than the fee schedule allowance.
• Scenario #2 – The lien claimant claims the defendant paid less than the fee schedule
allowance.
• Requirements for payment of medical treatment in excess of the OMFS
• The charges must be reasonable.
•“Extraordinary circumstances related to the unusual nature of the medical services

• Gould v. Workers’ Comp. Appeals Bd. (1992) 4 Cal. App. 4th 1059, 1068-1069 [6 Cal. Rptr. 2d 228]. The court held;

“In deciding whether fees in excess of the schedule are reasonable, the WCAB may consider evidence regarding the medical provider’s training, qualifications, and length of time in practice; the nature of the services provided; the fees usually charged by the medical provider; the fees usually charged in the general geographical area in which the services were rendered; other aspects of the economics of the medical provider’s practice that are relevant; and any unusual circumstances in the case. We emphasize, however, that, although unusual circumstances are a factor that may be considered, a fee in excess of the schedule may be reasonable even if no unusual circumstances are present.”

• “Gould Two” Gould v. Workers’ Compensation Appeals Bd. (Barry), 60 Cal. Comp. Cas. (MB) 1109 (Cal. App. 2d Dist. 1995)

“The Board noted that payment in excess of the fee schedule is discretionary with the Board and not mandatory [citing Gould v. Workers' Comp. Appeals Bd. (1992) 4 Cal. App. 4th 1059, 6 Cal. Rptr. 2d 228, 57 Cal. Comp. Cases 157]. Since the Gould case was decided prior to the 1994 revision of the medical fee schedule and because the fee schedule had not been revised biennially as required by statute, the introduction of evidence regarding the medical provider’s training and qualifications may be considered in the determination of whether a fee in excess of the schedule is reasonable. Under the circumstances of that case, it was appropriate to look to factors outside the fee schedule”