Inside Workers’ Comp Blog

Changing UR Regulations: Will Your UR Organization Be Ready?

Posted by Tom Kerr on September 22, 2016

The eyes of the workers’ compensation industry are once on California, whose legislature recently passed Senate Bill 1160, which, if signed by the governor, could significantly affect workers’ comp in the Golden State and influence change across the country. One of the primary components of the bill focuses on utilization review, so we asked Genex’s Todd Andrew to help us gain a better understanding of which parties will be most affected by 1160.


Tom Kerr: I’m Tom Kerr. The eyes of the workers’ comp industry are once again focusing on California, whose legislature recently passed Senate Bill 1160, which, if signed by the governor, could significantly affect workers’ compensation programs not only in the Golden State, but lead to substantial changes to programs across the country. One of the primary components of the bill focuses on utilization review, so to gain a better understanding of the bill’s components, we asked Genex’s Todd Andrews to join us today.

Todd, thanks for being here.

Todd Andrew: Thank you very much for having me. Pleasure to be here.

Kerr: To start, what prompted legislators to pass this bill in California?

Andrew: Everyone's kind of recognized that there are places where utilization review was potentially being used by some insurers where it wasn't having much of an impact, and it might have actually been creating an impediment.

By putting these changes into effect, it's going to actually help everyone across the board, and it really should not impact those who were doing things appropriately in the first place.

Kerr: And if Gov. Brown does sign 1160 into law, how will these changes affect the various parties, such as injured workers, payers, and providers?

Andrew:  So with respect to injured workers and providers, one of the goals of this Senate bill was to accelerate the care and delivery of the care to the injured workers.

And really what they did is they focused on the first 30 days of the claim, where the injured worker had just been injured. And in that first 30 days, if that injured worker is treating with an MPN doctor in the medical provider network, or if they're treating with a pre‑designated doctor, then that first 30 days of care is not going to be subject to prospective UR.

Ultimately, the goal there is that there's not going to be an impediment to that provider seeing the patient and rendering the care right away, to try to get that patient better and back to work as quickly as possible.

Now that's language does allow that some care might be carved out and may be subject to utilization review, and that's usually only the care that's going to be outside of the guidelines anyway.

Now, from the payer's perspective, the truth is it's relatively rare that they would actually request utilization review during that first 30 days.

So, ultimately, from the payers', hopefully it will cut down and really streamline their process to eliminate some of the administrative overhead for that care that would normally be approved anyway. Um, one of the other impacts that I would say that we have is that utilization review tends to have a sentinel effect.

So providers will usually practice a certain way because they know that, at some point in time, those services might be subject to UR down the road, and hopefully it kind of reins in the care that they're providing. It keeps them closer to evidence‑based medicine.

Kerr: Thanks, Todd. In the next Inside Workers’ Comp, we’ll look into how 1160 could significantly revise the utilization review process. Until then, thanks for listening.

Part 2

Can UROs Keep Up?: Part 2 on California workers’ comp reform legislation examines the challenges utilization review organizations (URO) will face should SB 1160 be signed into law. Todd Andrew offers what determining factors could influence whether your URO is good to go.


Tom Kerr: I’m Tom Kerr. In part two of our discussion on California’s recently passed Senate Bill 1160, Genex’s Todd Andrew addresses its possible effects on utilization review services.

So, Todd, let’s get right into it, what types of changes could utilization review organizations expect if 1160 is signed?

Todd Andrew: There’s going to be some procedural changes that are going to take effect that we will have to modify our current policies and procedures to adopt to. And perhaps, at this point, one of the biggest questions out there is how it's going to affect the time frames for UR.

So, up until this point, prospective review in California has had to be done in five business days. If the reviewer, during that period of time, realizes they need additional information, they can request that from the provider, and it extends that time frame out to 14 calendar days. It allows the provider a chance to respond, and then that reviewer to make their determination.

The legislation actually proposes that, for most prospective review, that time frame will remain in effect. However, for medications that are addressed by the formulary here in the state, instead of having that five-to-14-day window, what will happen is the medications will have to be addressed within five business days. There'll be no extension of time frames, even if additional information is necessary.

The biggest impact of this is then how we will have to address a request that comes from the provider that has both a non-medication service that is addressed in five to 14 days, and a medication request that has to be done within five. The regulations will definitely have to spell out for us how they expect us to go through with that.

The fear or the concern on this side is whether or not that would require us to split an RFA into two separate reviews because of the two different time frame and what impact that has down the road. 

Kerr: Are all UR organizations prepared to handle these new regulations?

Andrew: Some companies will definitely have a lot of work to do to catch up. With the new legislation, one of the things that is being proposed is that the utilization review organizations, anyone that modifies or denies care, will have to be accredited by URAC by Jan 1, 2018.

Our experience of going through it almost a decade ago was that it forces you to sit down, look at your entire program from start to finish, evaluate everything you're doing and why you're doing it, and start to document and build processes and procedures to make sure you're doing things appropriately and with best practices.

So, I think that requiring this as a part of the legislation is a very good step here in California, but there are some smaller organizations that will probably either choose not to go through that accreditation process, either because of the cost or the time of it. And they may ultimately end up partnering or working with companies that are already accredited, and possibly refocusing themselves.

Kerr: Looking at the big picture, if 1160 becomes law, do you think it will have a significant impact on UR regulations in other states?

AndrewI think these changes and the amendments that we're seeing now were driven slightly by what we've seen in other states. So, for example, the formulary coming out of Texas, time frames, streamlining that process, the MPNs — which come from other states that have provider networks

I think the inclusion of all of it here in California and some of the amendments we're making now will absolutely influence what we see with a lot of those states that are still unregulated, that are exploring this as a possibility, but haven't necessarily made the decision to move forward with it yet.

Kerr: Thanks, Todd. Speaking of changes, we’ll talk about a unique approach to improving work comp programs in our next Inside Workers Comp. Until then, thanks for listening.


Need to reduce your total cost of risk?

To help lower your total cost of risk and return injured workers to work as quickly as possible, we offer a FREE consultation with a workers’ comp expert. Together, we will begin to build a workers' comp program to meet your company’s unique needs.