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SB-563: Employers to Share UR Financial Arrangements

Can you believe it, dear readers?  March is slipping away – just the other day I was admiring my beloved Mother’s Thanksgiving turkey and the relative restraint of blood-thirsty shoppers on “Black Friday.”  Now, in the blink of your humble blogger’s eye, here we are in mid-March.

Of course, not all things that greet us as time goes on include warmer weather.  In fact, Senate Bill 563, is just one cloud in what appears to be a veritable storm of anti-Business weather in California’s climate.

Introduced by Senator Richard Pan, SB 563 would force employers and insurers to disclose the financial arrangements around the UR process, specifically, “[e]ach employer, insurer, or other entity that is subject to Section 4610 shall disclose the payment methodology for each person who is involved in the process of reviewing, approving, modifying, delaying, or denying requests by physicians for authorization … for the provision of medical treatment services to injured workers…”

In other words, when employees, physicians, and the public request this information, it has to be made available to them.

The legislation does not provide for a timeline, or penalties for failure to comply, but, presumably, that can be fleshed out during the legislative process or through regulation.

Your humble blogger, however, is not a big fan of SB 563.  Forcing employers and insurers to reveal the arrangements made with their UR vendors is not going to do anyone much good.  What is the relevance of the information to determining necessity of medical treatment?  We used to have UR determinations go to panel QMEs or AMEs, and now, presumably, all disputes are resolved through IMR (at least for now – let’s watch the Courts on that one).

In some cases, the parties have even stipulated to skip IMR and have medical necessary disputes resolved by AME, in clear violation of Labor Code section 4062.2(f).

So, either the medical basis for denying the medical treatment is sound, or it isn’t – whether the physician who wrote the report was paid $10,000 or $10 for the report has no bearing on the medical reasoning.  The remedy is there as well: IMR for now, possibly something else once the Supreme Court weighs in.

What this does, instead, is increase the cost of doing business for the employers.  The cost of compliance in the form of providing information, upon “request” by anyone and everyone.  The cost of negotiating contracts with vendors who will now negotiate from the position of having their rates a subject for public knowledge.

Hopefully, this bill will face the same fate as your humble blogger’s proposed hamster-powered message delivery system (it was a really elaborate plan, actually – we would dress the hamsters up in little suits, and give them little briefcases to deliver messages, and would train them to quickly use a series of tubes to be installed throughout the city), and never be implemented.  Before you legislate, think of the hamsters!

hamster thumbs up

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