REGULATORY ACTIVITY:

• Published a letter from the Commissioner regarding Directed Care in Arizona Workers' Compensation Claims. In part the letter stated, "The Industrial Commission of Arizona continues to receive complaints about entities that are directing care in violation of the Arizona Workers' Compensation Act.  Please be advised that the only entities authorized to direct care in Arizona are private self-insured employers.  Employees of insured employers and public self-insured entities have the right to choose their own medical providers.   To view the letter, go to https://www.azica.gov/news-and-events.
• The Industrial Commission of Arizona's plan to replace the Claims Division's 27-year-old, COBOL-based mainframe computer system is nearing completion. Barring any development setbacks, the Commission is planning to launch the new Claims System on February 19, 2019. The new Salesforce-based system will feature automated workflow capabilities, enhanced analytics, superior document management, and a dynamic web-based portal for interested parties - known as the "ICA Community."  To review the complete text of the announcement, go to https://www.azica.gov/news-and-events.
• The new Claims System will require interested parties (i.e., carriers, employers, claimants, and legal representatives) to select a "preferred communication method" for Claims and/or ALJ communications. Each interested party will have an ICA Community "administrator account" that contains the party's "preferred communication method." Interested parties will be able to choose from three options:
  • S. Mail (at a single designated mailing address);
  • Electronic fax (at a single designated fax number); or
  • Secured File Transfer Protocol ("SFTP") (at a designated SFTP destination).
• S. Mail (at the address on file with the Commission) will be the default option when no alternative communication method is selected. Please note that encrypted e-mail (both inbound and outbound) and Phoenix-office pickup will not be available after the new Claims System is launched. The Commission has posted a "Request and Agreement for Alternative Service and Waiver of A.A.C. R20-5-158(B)" ("Request and Agreement") form on the Commission's website (click for link). Interested Parties may use the Request and Agreement form to select a preferred communication method and designate a mailing address or fax number in advance of the launch of the new Claims System. Please note that each distinct carrier and self-insured employer will need to complete a separate Request and Agreement form. This means that carriers or employers with multiple subsidiaries will need to complete a Request and Agreement for each applicable legal entity. Completion of the Request and Agreement form will allow the Commission to populate ICA Community administrator accounts with selected communication methods in advance of System launch. Interested parties that do not complete this process by January 31, 2019, will default to service by U.S. Mail until an alternative method of communication is selected in the ICA Community. Please be advised that, after the new Claims System is launched, the Commission will no longer address or direct Claims and/or ALJ communications to third-party administrators. See Substantive Policy Statement: Notification of Parties in Workers' Compensation Matters, effective February 19, 2019, available at https://www.azica.gov/substantive-policies-directory-other-adosh. Management of third-party administrators will be the responsibility of carriers and self-insured employers. Although the Commission will no longer address or direct Claims and/or ALJ communications to third-party administrators, carriers and self-insured employers will be permitted to direct their communications to a third-party administrator by designating the third-party administrator's mailing address, fax number, or SFTP destination. For example, if a carrier elects to receive communications by U.S. Mail or electronic fax, the carrier can input a third-party administrator's mailing address or fax number in lieu of the carrier's mailing address or fax number. Carriers and self-insured employers, however, will be limited to a single preferred communication method and a single destination address, fax number, or SFTP destination. Carriers and self-insured employers that utilize multiple third-party administrators will be responsible for managing the distribution of communications to third-party administrators responsible for claim processing functions. Carriers and self-insured employers who choose to direct communications to a third-party administrator will be solely responsible for updating the preferred communication method and designated destination if/when a third-party administrator relationship changes. To further assist impacted stakeholders with these changes, the Commission is preparing a series of FAQs related to these changes, which will shortly be posted to the Commission's website (azica.gov). Additionally, the Commission is planning a series of WebEx conference calls to further discuss the upcoming changes and answer stakeholder questions. The content of each WebEx will be similar, so it is not necessary to participate in all three WebEx sessions. The WebEx schedule and registration instructions are below:
  • WebEx : January 17, 2019 at 10:00 a.m. (Arizona Time) 
• Further questions regarding the new Claims System and the content of this letter may be directed to Claims Manager, Ruby Tate, at Ruby.Tate@azica.gov. PIO Contact, Name: Trevor Laky, Title: Chief of Legislative Affairs and Public Information Officer, Phone: 602-542-4478, Email address: trevor.laky@azica.gov

REGULATORY ACTIVITY:

• Effective October 1, 2018, the use of the Official Disability Guidelines (ODG) evidence-based medicine treatment guidelines applies to all body parts and conditions.   Treatment Guideline Frequently Asked Questions (FAQs), the MRO 1.1 Medical Treatment Preauthorization Form and Instructions, and recorded webinars can be found on the Commission website: https://www.azica.gov/divisions/medical-resource-office-mro If you have questions please contact the Medical Resource Office at 602-542-6731 or mro@azica.gov.

REGULATORY ACTIVITY:

• Posted a reminder that the Commission is updating their treatment guidelines.  The updated guidelines become effective October 1, 2018.  A summary of the updated guidelines and an FAQ regarding the changes can be viewed at https://www.azica.gov/resources/medical-provider.

REGULATORY ACTIVITY:

• Posted a resolution which adopts a new a maximum average monthly wage of $4,741.57 for injuries occurring during calendar year 2019.   To view the resolution, go to https://www.azica.gov/news-and-events.
• Issued a document that discusses information and best practices regarding full and final settlements in light of recently revised statues Section 23-841.01.  This document is intended to provide information and suggested best practices related to full and final settlement agreements submitted under A.R.S. § 23-941.01 on or after August 3, 2018.   A copy of the document may be viewed at https://www.azica.gov/news-and-events.
• Senate Bill 1111 directs the Industrial Commission of Arizona (the “Commission”) on or before July 1, 2019, as part of the Industrial Commission of Arizona’s annual review of the schedule of fees pursuant to A.R.S. § 23-908, to review information and data, consult with physicians and stakeholders, and hold at least one public hearing in considering whether to adopt additional reimbursement guidelines for medications dispensed in settings that are not accessible to the general public.   Please be advised that the Commission will hold a public hearing to receive input or information concerning this issue on August 23, 2018, at 1:00 p.m., in the Commission’s first floor auditorium located at 800 West Washington Street, Phoenix, Arizona.  This hearing will be held as part of the Commission’s scheduled meeting for that day.  The record is considered open, and written and oral comments will be accepted until 5:00 p.m. on September 13, 2018.  Action taken by the Commission on this issue will be proposed in the 2019/2020 Arizona Physicians’ and Pharmaceutical Fee Schedule Staff Proposal and Recommendations document that will be posted on the Commission website in April 2019.  Stakeholders will have an opportunity to provide comment as part of the annual fee schedule hearing process.   Written comments may be submitted prior to the August 23, 2018 public hearing c/o Jacqueline Kurth, Manager, Medical Resource Office, via fax (602) 542- 4797; email mro@azica.gov; or mail P.O. Box 19070, Phoenix, Arizona 85005-9070.
• Posted notice of adoption of amended rules R.20-5.106; 5-1301; 5-1302; 5-1303; 5-1309; 5-1310 and 5-1311. In 2017, the Arizona Legislature (in Laws 2017, Ch. 287, § 5) directed the Commission to "review and determine a process for streamlining the authorization process for treatment that is within the evidence-based treatment guidelines." The Legislature required the Commission to complete the review process on or before December 31, 2017. Consequently, on June 29, 2017, the Commission directed its Medical Resource Office to: (1) conduct a review of the existing authorization process under the Treatment Guidelines; and (2) make a recommendation to the Commission regarding "streamlining the authorization process for treatment that is within the evidence-based treatment guidelines."  Stakeholders were provided opportunities to offer suggestions and comments regarding streamlining the authorization process, including during a public hearing conducted on August 17, 2017. At its December 14, 2017 public meeting, the Commission completed its review of the existing authorization process.  Based upon suggestions submitted by interested stakeholders, the Commission approved the following methods for streamlining the Article 13 authorization process: 1. Develop and mandate the use of a Medical Treatment Preauthorization Form with accompanying instructions; and 2. Reduce the time period within which a payer must respond to requests for preauthorization or reconsideration from ten business days to seven business days.  The effective date of the rule amendments is October 1, 2018.  To view the rule, go to  https://apps.azsos.gov/public_services/register/2018/contents.htm. Open issue 30 of the administrative register.

REGULATORY ACTIVITY:

• On May 17, 2018, the Industrial Commission approved a substantive policy statement regarding the acceptance of medical-only claims that becomes effective on August 20, 2018.  This substantive policy statement is advisory only. A substantive policy statement does not include internal procedural documents that only affect the internal procedures of the agency and does not impose additional requirements or penalties on regulated parties or include confidential information or rules made in accordance with the Arizona administrative procedure act. If you believe that this substantive policy statement does impose additional requirements or penalties on regulated parties, you may petition the agency under Arizona Revised Statutes section 41-1033 for a review of the statement.  To view the substantive policy statement, go to https://www.azica.gov/news-and-events.

REGULATORY ACTIVITY:

• On April 26, 2018, the Industrial Commission of Arizona (“Commission”) held its 2018 Fee Schedule hearing as provided in A.R.S. § 23-908(B).  This hearing was held at 1:00 p.m. in the first-floor auditorium of the Commission, which is located at 800 West Washington Street, Phoenix, Arizona.  In addition to public comments received, the Commission also considered a report prepared by Commission staff.  This report is a preliminary document that is intended to serve as a foundational document for discussions that may arise during the hearing process.  To view the recommendations and proposed fee schedule, go to https://www.azica.gov/divisions/medical-resource-office-mro.
• Under A.R.S. § 23-1065(F), after notice and a hearing, the Commission is authorized to levy an additional one-half percent assessment under A.R.S. § 23-1065(A) if the total annual reserved liabilities of the Special Fund for apportionment under §§ 23-1065(B) and (C) exceed six million dollars.  Please be advised that the Commission will hold a public hearing to gather information concerning this assessment on May 17, 2018, at 1:00 p.m. in the Commission’s first floor auditorium located at 800 West Washington Street, Phoenix, Arizona.  This hearing will be held as part of the Commission’s scheduled meeting for that day.  The record is considered open, and written and oral comments will be accepted until the close of the hearing on May 17, 2018.  At a later date, the Commissioners will discuss and may take action on this assessment.  Written comments may be submitted prior to the hearing c/o Kara Dimas, Executive Secretary, Office of the Commission Director, P.O. Box 19070, Phoenix, Arizona 85005-9070.

LEGISLATIVE ACTIONS:

House Bill 2047

The purpose of this bill is to clarify coverage. The legislation adds working members of an LLC who own less than 50% membership interest to the definition of employee.  It allows working members who own more that 50% of an LLC to be deemed as an employee and sets the basis for computing wages and compensation benefits.   It adds working share holders who won less than 50% of the beneficial interest in a corporation to the definition of employee.  It allows working shareholders who own more than 50% of the beneficial interest in a corporation to be deemed as an employee and sets the basis for computing wages and compensation benefits.  Effective Date to Be Determined.

House Bill 2081

The enacted legislation requires an insurance adjuster to keep usual and customary records pertaining to the transactions of an adjuster.  The records must be maintained and made available for inspection for three years immediately after the date of completion of the transaction.  Effective Date to Be Determined.

House Bill 2549

The legislation includes an available opioid assistance and referral call service that is designated by ADHS as an option to be used when a physician must do a consultation regarding the issuance of a prescription that exceeds 90 MMEs per day. The legislation contains a retroactive date of April 26, 2018.   It permits the Arizona Poison Control System to provide statewide opioid assistance and referral resources through a toll-free telephone service. It allows a health professional to issue a prescription that exceeds 90 MMEs if the consulting physician who is board-certified in pain or an opioid call service agrees with the higher dose.  It contains a retroactive date of April 26, 2018.  It clarifies that the 90 MME limitation applies to prescriptions, rather than prescription orders. It exempts prescriptions capped at a 14-day supply that are issued following a surgical procedure from the 90 MME per day limitation.  It contains a retroactive date of April 26, 2018. It clarifies that the 90 MME limit applies to prescriptions that are filled or dispensed outside of a health care institution. It contains a retroactive date of April 26, 2018. The legislation states that a health care institution, private office or clinic must apply to ADHS for licensure as a pain clinic within 60 days of meeting the statutory definition of a pain clinic. It allows a nurse practitioner with advanced pain certification to act as a medical director of a pain clinic. It prohibits a naturopathic physician from dispensing opioids and classifies a violation as unprofessional conduct. The legislation exempts implantable devices dispensed by an allopathic or osteopathic physician, physician assistant, certified nurse midwife or nurse practitioner from the prohibition against dispensing controlled substances.  Effective Date to Be Determined.

Senate Bill 1100

The legislation clarifies that an interested party to a claim can negotiate a settlement of an accepted claim if the period of temporary disability is terminated by a final notice of claim status, award of the ICA or stipulation of the interested parties.  It allows an authorized representative of a carrier, special fund or self-insured employer to sign a settlement.  It requires a settlement to have attached certain information provided by a carrier, special fund or self-insured employer and requires settlements to include specified signed attestations regardless if the employee is represented by counsel.   It adds the following attestations that must be included in a settlement: The settlement amount representing future medical, surgical and hospital benefits; The present value and total amount of future indemnity benefits; The employee's life expectancy and rated age if applicable; The source of the employee's life expectancy; The discount rate used to calculate the present value and total amount of future indemnity benefits; The parties have conducted a search for and taken responsible steps to satisfy any unpaid medical charges; and the settlement was not achieved through coercion, duress, fraud, misrepresentation or undisclosed additional agreements.  The legislation removes the authorization for an ALJ to approve the settlement.  It stipulates an ALJ must approve the settlement if the employee is represented by counsel and certain requirements are met.  It directs an ALJ, if an employee is without counsel, to conduct a hearing and perform a detailed inquiry into the employee's attestations. The inquiry must include: Whether the employee understands the specific right being settled and released; The information, computation and methodology provided by the carrier, special fund or self-insured employer; and the employee's responsibility to protect the interest of other payors and ensure the payment of future treatment costs. It eliminates the requirement when approving a settlement that the ICA consider whether it is in the best interest of the employee based on specified criteria. It permits the ICA to approve a settlement if certain requirements are met. The legislation addresses supportive medical maintenance benefits. It states that any final settlement agreement involving undisputed entitlement to supportive medical maintenance benefits is not valid and enforceable until approved by the ICA.  The legislation permits the ICA to approve a final settlement agreement involving undisputed entitlement to supportive medical maintenance benefits if certain requirements are satisfied. It allows interested parties to a claim to enter into a final settlement and release of a claim for undisputed entitlement to supportive medical maintenance benefits after the period of temporary disability is terminated by a final notice of claim status or award of the ICA.  It directs a carrier, special fund or self-insured employer to submit a summary of all reasonably anticipated future supportive medical maintenance benefits and the projected cost of the benefits for review by the employee. It requires the summary to be included with the final statement agreement filed with the ICA.  The legislation requires all medical conditions subject to the final settlement agreement to be described in the agreement.  The enacted legislation requires the final settlement provisions only apply to future supportive medical maintenance benefits for the described condition.  It directs a carrier, special fund or self-insured employer to inform the attending physician of the approval of a final settlement agreement.  It directs a carrier, special fund or self-insured employer to remain responsible for payment for the treatment not covered by the final agreement unless supportive medical maintenance benefits rendered before the date of the final settlement are disputed or payment for treatment was included.   It asserts the requirements for a final settlement do not prohibit any other settlement. Effective Date to Be Determined.

Senate Bill 1111

The enacted legislation requires a physician who prescribes a schedule II-controlled substance to an employee to comply with statutory requirements relating to controlled substances. It modifies the information a physician must include in an ICA report as follows: Requires the report to contain information regarding the use of a schedule II narcotic or opium-based controlled substance and prescription of any opioid medication.  The report must further include the following:   Documentation regarding a physical examination, substance use risk assessment, and informed consent from the employee for opioid treatment; The frequency of face-to-face follow up visits to reevaluate an employee's continued use of opioids, guidelines for tapering and discontinuing the opioid, and the offering of treatment for opioid dependency or addiction associated with a treatment plan. It removes the provision regarding writing or dispensing an initial prescription order.  It requires a physician to obtain an employee's CSPMP utilization report prior to prescribing the employee an opioid analgesic or benzodiazepine-controlled substance that is listed as schedule II, III, or IV.  A physician must obtain a report at least quarterly while that prescription remains part of the treatment. It allows the insurance carrier, self-insured employer or ICA to request, not more than once every two months, that a physician obtain a CSPMP utilization report regarding an employee.  The enacted legislation clarifies the CSPMP utilization report, rather than the results of an inquiry to the Arizona State Board of Pharmacy is used to determine if the employee is receiving opioids from another provider. It asserts that the insurance carrier or self-insured employer is not liable for any action reasonably necessary to monitor or assess the appropriateness and effectiveness of the employee's opioid use. It allows the ICA to adopt fee reimbursement guidelines for medications dispensed in settings not accessible to the public. The enacted legislation     requires the ICA to review the fee reimbursement guidelines with stakeholders and hold a public hearing by July 1, 2019.  It repeals this requirement on July 1, 2020. It removes the qualification that a physician practice pain management in a change of physician ordered by the ICA. It removes the reporting exemption for medications administered to the employee while receiving inpatient hospital treatment. It modifies the definition of clinically meaningful improvement in function as: A significant improvement in the performance of daily activities or reduction in work restrictions; and a reduction in dependency on continued medical treatment. It eliminates the definition of off-label use. The legislation defines substance use risk assessment as an evaluation of an employee's likelihood for opioid addiction, misuse, diversion or another adverse consequence. It defines a traumatic injury as a physical injury that creates a reasonable risk of death or that causes serious or permanent impairment.  Effective Date to Be Determined.

REGULATORY ACTIVITY:

• Has posted notice of proposed amendments to its treatment guidelines. In 2012, the Arizona Legislature directed the Industrial Commission of Arizona (the “Commission”) to “develop and implement a process for the use of evidence-based treatment guidelines, where appropriate, to treat injured workers.” See A.R.S. § 23- 1062.03. With significant stakeholder input, the Commission promulgated twelve rules, published in Title 20, Chapter 5, Article 13 of the Arizona Administrative Code (“Article 13” or the “Treatment Guidelines”). Among other things, the Treatment Guidelines:
  • prescribe the use of evidence-based treatment guidelines as a tool to support clinical decision making and quality health care delivery to injured workers within Arizona’s workers’ compensation system;
  • adopted Work Loss Data Institute’s Official Disability Guidelines – Treatment in Workers Compensation (the “Official Disability Guidelines” or “ODG”) as the standard reference for evidence-based medicine;
  • until further action of the Commission, limited the applicability of ODG to the management of chronic pain and the use of opioids for all stages of pain management;
  • outlined an administrative process for the Commission to modify the applicability of ODG;
  • outlined a non-compulsory process for a medical provider or injured worker to seek preauthorization from a payer for medical services or treatment;
  • established an administrative review process to help resolve disputes between medical providers, injured workers, and payers; and
  • outlined procedures for bringing unresolved disputes to the Commission for administrative hearing. In 2017, the Arizona Legislature (in Section 5 of Senate Bill 1332 of the Fifty-Third Legislature, First Regular Session) directed the Commission to “review and determine a process for streamlining the authorization process for treatment that is within the evidence-based treatment guidelines.”
• The Legislature required the Commission to complete the review process on or before December 31, 2017. Consequently, on June 29, 2017, the Commission directed its Medical Resource Office to: (1) conduct a review of the existing authorization process under the Treatment Guidelines; and (2) make a recommendation to the Commission regarding “streamlining the authorization process for treatment that is within the evidence-based treatment guidelines.” Stakeholders were provided opportunities to offer suggestions and comments regarding streamlining the authorization process, including during a public hearing conducted on August 17, 2017.  At its December 14, 2017 public meeting, the Commission completed its review of the existing authorization process.  Based upon suggestions submitted by interested stakeholders, the Commission approved the following methods for streamlining the Article 13 authorization process: 1. Develop and mandate the use of a Medical Treatment Preauthorization Form with accompanying instructions; and 2. Reduce the time period within which a player must respond to requests for preauthorization or reconsideration from ten business days to seven business days. To view the proposed rules, go to http://apps.azsos.gov/public_services/register/2018/11/04_proposed.pdf.

LEGISLATIVE ACTIONS:

House Bill 2025

The purpose of this bill is to establish regulations regarding rate filings for workers’ compensation insurance. The legislation prohibits an insurer from simultaneously applying a deviation and a schedule rating to the same insured risk. Effective Date February 28, 2018.

REGULATORY ACTIVITY:

• The Industrial Commission of Arizona is pleased to announce that Ruby Tate joined the Claims Division as Claims Manager Monday, February 12th. Ms. Tate has over 16 years of Arizona workers' compensation claims experience, including extensive experience with program implementation. In the past year, she has been instrumental in the development of the new Claims Division computer system.
• Bonnie Holly will continue the great work of the Special Fund Division by serving as the Interim Special Fund Manager. Ms. Holly joined the Special Fund Division in June 2017 with 20 years of Arizona workers' compensation claims experience.

REGULATORY ACTIVITY:

• Under A.A.C. R20-5-1301(C), the Industrial Commission of Arizona (the “Commission”) is authorized to “modify or change the applicability of the guidelines as described in subsection B [of R20-5-1301]. If the Commission determines that modification or changing the applicability of the guidelines will:
  • 1) improve medical treatment for injured workers,
  • 2) make treatment and claims processing more efficient and cost effective, and
  • 3) the guidelines adequately cover the body parts or conditions.”
• The Commission has posted information regarding this issue at https://www.azica.gov/resources/medical-provider.

FEE SCHEDULE NEWS:

• The state adopted a new medical fee schedule effective October 1, 2017.  Some of the changed regulations are:
  • The Anesthesia conversion factor was updated to $61.00
  • 2016 Assistants at Surgery indicators have been adopted
  • New RBRVS facility rates have been adopted.
• The next update to the Arizona fee schedule is set for October 1, 2018.