FEE SCHEDULE NEWS:

• The Clinical Lab Fee Schedule has been updated with an effective date of January 1, 2017 and the DMEPOS Schedule has been updated with an effective date of February 1, 2017. The DWC has adjusted the pathology and clinical laboratory fee schedule and the DMEPOS schedule to conform with the changes to the Medicare payment system adopted by CMS for calendar year 2018.
• Medi-Cal rates have been released with an effective date of November 15, 2017. The next update is scheduled for December 15, 2017.

REGULATORY ACTIVITY:

• The Division of Workers’ Compensation (DWC) has posted an order adopting regulations to update the evidence-based treatment guidelines of the Medical Treatment Utilization Schedule (MTUS).  The updates, effective for medical treatment services rendered on or after December 1, 2017, incorporate by reference the American College of Occupational and Environmental Medicine’s (ACOEM’s) most recent treatment guidelines to the General Approaches, Clinical Topics, and Special Topics sections of the MTUS.
• The Division of Workers’ Compensation (DWC) launched its second free online physician education course. This course is highly recommended for California’s Qualified Medical Evaluators (QMEs). It is also available to the public and may be useful for attorneys, claims administrators and medical providers participating in the California workers’ compensation system. “Evaluating California’s Injured Workers: Qualified Medical Evaluators (QME)” is the second in a planned series of educational modules developed for medical doctors, chiropractors and nurses. QMEs play a critical role in resolving disputes within the workers’ compensation system.   To obtain more information go to: http://www.dir.ca.gov/dwc/CaliforniaDWCCME.htm
• The Division of Workers’ Compensation has scheduled a transmission code validation testing session for JET File in December and posted information for JET File developers on its website.
• The transmission code validation testing sessions are for prospective JET Filers who have built a transmission method for their organization’s use, software vendors who have developed products for case participants, and parties that will act as third-party filers on behalf of clients. Current trading partners and software vendors who want to change their currently validated code or share their code for use by new organizations can use this opportunity to test the code being changed.
• Testing will be conducted over a two-week period. The schedule is:

• • Monday, December 4 through Friday, December 8, 2017, 8 a.m.-5 p.m.
  • Monday, December 11, through Friday, December 15, 2017, 8 a.m.-5 p.m.

• JET File allows electronic filing of multiple court forms and attachments in a single transmission by secure file transfer protocol (SFTP). Those who develop JET File transmission code using technical specifications published by DWC must test that code to validate the data can be received by State of California servers, where it is picked up by the division and deposited into the Electronic Adjudication Management System (EAMS).
• Requests to participate in transmission code validation testing must be submitted to JET@dir.ca.gov no later than 5 p.m. on Monday, November 27. Requestors should carefully review the information posted on the JET File technical information webpage. Additional information will be provided to confirm testing participants.
• The validation will take place at DWC headquarters in Oakland, but the test files will be sent from the submitter’s location. Periodic phone conferences will be held as needed.
• Requestors will receive a daily testing schedule as well as a mandatory data sheet to be used for all validation. Parties validating JET File code for the first time for any form must successfully submit at least six of each of the JET File forms they develop for filing per the schedule set by DWC. The following categories of forms may be tested:
  • Application for adjudication of claim
  • Declaration of readiness to proceed (to hearing)
  • Declaration of readiness to proceed (to expedited trial)
  • Compromise and release
  • Stipulations with request for award
  • Notice and request for allowance of lien.
  • Unstructured form
  • Supplemental lien form and Section 4903.05(c) Declaration
• Parties that do not test for all eight forms are limited to filing only those forms for which their software has been validated. All parties who will actually do the filing following validation must also fill out and submit the Excel spreadsheet portion of the trading partner agreement to JET@dir.ca.gov.
• JET File was launched on June 27, 2011 and approved vendors are listed on the DWC website. More information on electronic filing, including JET File and e-forms, can be found on the EAMS website.

FEE SCHEDULE NEWS:

• The Physician Fee Schedule and Practitioner Services Medically Unlikely Edits and the National Correct Coding Initiative Practitioner PTP Edits have been updated with an effective date of October 1, 2017.  The update incorporates changes to the Medicare system.  The next update is expected for January 1, 2018.
• The state adopted the DMEPOS Fee Schedule effective October 1, 2017.  The next updates are expected to become effective January 1, 2018.
• The Outpatient and ASC Fee Schedule were updated with an effective date of October 1, 2017. The state has adopted the October 2017 OPPS APC Addenda A and B and ASC Addendum AA and EE to identify the definition of a “surgical procedure”.  All other factors and data remain unchanged since the 12/15/2016 revision.    All outpatient services are processed under the APC methodology, with the exception of specific services that continue to be reimbursed based on alternate fee schedules (physical therapy, laboratory, DMEPOS, ambulance).
•  Medi-Cal rates have been released with an effective date of September 15, 2017. The next update is scheduled for October 15, 2017.

REGULATORY ACTIVITY:

• The Department of Industrial Relations’ Division of Workers’ Compensation (DWC) has issued modified proposed regulations to adopt the Medical Treatment Utilization Schedule (MTUS) Drug Formulary. The proposed rulemaking implements Assembly Bill 1124 (Statutes 2015, Chapter 525), which mandates adoption of an evidence-based drug formulary.
• DWC has reviewed comments received during the first 15-day comment period and has modified the proposed regulations to provide additional detail and clarity. The second 15-day public comment period ended September 22, 2017.
• Some of the changes proposed in the revised regulations include:
• Added language clarifying that a compounded drug is subject to the compounded drug regulation even if it includes an active ingredient listed as “Exempt” on the MTUS Drug List
• Removed a provision relating to repackaged drugs
• Updated MTUS Drug List header text to match the regulatory language on the Perioperative period definition
• The notice of modification of text of proposed regulation and related rulemaking documents are posted on the DWC rulemaking web page.
• The Division of Workers’ Compensation (DWC) has posted an order adjusting the Official Medical Fee Schedule (OMFS) to conform to changes in the Medicare payment system as required by Labor Code section 5307.1.   The Physician and Non-Physician Practitioner Fee Schedule update Order adopts the following Medicare changes:
• Centers for Medicare and Medicaid Services (CMS) Medicare National Physician Fee Schedule Relative Value File RVU17D October 1, 2017 quarterly update
• National Correct Coding Initiative Physician/Practitioner Services CCI Edits October 1, 2017 quarterly update
• National Correct Coding Initiative Medically Unlikely Edits October 1, 2017 quarterly update

• The order adopting the OMFS adjustments is effective for services rendered on or after October 1, 2017 and can be found at   http://www.dir.ca.gov/dwc/OMFS9904.htm#7.
• The Division of Workers’ Compensation (DWC) has posted an order adjusting the Hospital Outpatient Departments and Ambulatory Surgical Centers section of the Official Medical Fee Schedule (OMFS) to conform to changes in the Medicare payment system as required by Labor Code section 5307.1.
• The Hospital Outpatient Departments and Ambulatory Surgical Centers fee schedule update Order adopts the following Medicare changes:
  • The Centers for Medicare & Medicaid Services (CMS) Medicare Hospital Outpatient Prospective Payment System (HOPPS) October 1, 2017 Addendum A [Zip] quarterly update
  • The Centers for Medicare & Medicaid Services (CMS) Medicare Hospital Outpatient Prospective Payment System (HOPPS) October 1, 2017 Addendum B [Zip] quarterly update
  • The Centers for Medicare & Medicaid Services (CMS) Ambulatory Surgical Center Payment System, October 2017 ASC Approved HCPCS Code and Payment Rates [zip], Column A entitled “HCPCS Code” of  “Oct 2017 ASC AA” and Column A entitled “HCPCS Code” of  “Oct 2017 ASC EE”
  • The order adopting the OMFS adjustments is effective for services rendered on or after October 1, 2017 and is posted on the DWC website.
• The Division of Workers’ Compensation (DWC) has posted an order adjusting the Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) section of the Official Medical Fee Schedule to conform to the fourth quarter 2017 changes in the Medicare payment system as required by Labor Code section 5307.1.  The order effective for services rendered on or after October 1, 2017 adopts the Medicare DMEPOS Quarter 4, 2017, DME17-D ZIP file.   The 2017 Parenteral and Enteral Nutrition Fee Schedule File from DME17-A (Updated 01/06/17) ZIP file was not updated for the fourth quarter, and remains in effect for services on or after October 1, 2017.   To obtain the appropriate documentation go to: http://www.dir.ca.gov/dwc/OMFS9904.htm#3
• The WCIS regulations adopted on March 27, 2017 pertaining to medical billing data reporting went into effect on September 27, 2017. The WCIS regulations adopted the IAIABC Workers’ Compensation Medical Bill Data Reporting Implementation Guide, Release 2.0 February 1, 2015 Publication. This version of the IAIABC Guide created the 2410 loop for reporting compound drugs and the K3 segment to report original drugs when reporting repackaged drugs. A detailed list of changes made in the California Medical Implementation Guide Version 2.0 is available on the WCIS website. The Technical Requirement table has also been updated to reflect the changes in the California Implementation Guide.
• The annual WCIS Advisory Meeting will be held in Oakland, California on Monday, October 23, 2017.  Monday, October 23rd, 2017; 9:30 a.m. – 3 p.m.; Elihu Harris State Building, Room 1304; 1515 Clay Street; Oakland, California 94612.

LEGISLATIVE ACTIONS:

• Assembly Bill 1422
  Existing law governing workers’ compensation requires a lien filed by or on behalf of a physician or provider of medical treatment services or medical-legal services, and any accrual of interest related to the lien, to be automatically stayed upon the filing of criminal charges against that physician or provider for an offense involving fraud against the workers’ compensation system, medical billing fraud, insurance fraud, or fraud against the Medicare or Medi-Cal programs. Existing law makes the stay effective from the time of the filing of the charges until the disposition of the criminal proceedings.  This bill, among other things, would revise and recast these provisions to require the liens of a physician, practitioner, or provider and the liens of an entity controlled by a physician, practitioner, or provider who has been charged with specified crimes involving the federal Medicare or Medicaid programs, the Medi-Cal program, or the workers’ compensation system to be automatically stayed, along with any interest accruing, until disposition of the criminal proceedings, except as provided. The bill would also provide that upon conviction of a physician, practitioner, or provider of those specified crimes the automatic stay would be required to remain in effect for any liens not dismissed, as specified, until the commencement of lien consolidation procedures, as provided. The Administrative Director of the Workers’ Compensation System would be authorized to adopt regulations to implement these provisions.  Existing law requires the administrative director to promptly suspend any physician, practitioner, or provider from participating in the workers’ compensation system as a physician, practitioner, or provider if the individual or entity has been convicted of certain crimes, including crimes involving fraud or abuse of the Medi-Cal program, Medicare program, or workers’ compensation system, or fraud or abuse of any patient, or if the individual or entity has been suspended, due to fraud or abuse, from the federal Medicare or Medicaid programs or the individual’s license, certificate, or approval to provide health care has been surrendered or revoked. Existing law establishes procedures for the adjudication of any liens of a physician, practitioner, or provider who is suspended pursuant to this provision. This bill, among other things, would provide that an entity would be subject to suspension as described above if it is controlled, as defined, by an individual who has been convicted of the specified crimes. The bill would specify that the suspension requirements also apply to crimes involving fraud or abuse of the federal Medicaid program and financial crimes that relate to the federal Medicaid program. The bill would authorize the administrative director to adopt regulations specifying any exemptions that would not serve as a basis for exclusion under these provisions. This bill would also make conforming changes.  Effective Date January 1, 2018.
• Senate Bill 430
  Existing law creates the California Insurance Guarantee Association (CIGA) and requires all insurers admitted to transact specified insurance lines in this state to become members. CIGA is required to pay and discharge covered claims, and in connection therewith, pay for or furnish loss adjustment services and defenses of claimants when required by policy provisions. CIGA is authorized to fulfill its duties either directly by itself or through a servicing facility or through a contract for reinsurance and assumption of liabilities by one or more member insurers or through a contract with the liquidator, upon terms satisfactory to CIGA and to the liquidator, under which payments on covered claims would be made by the liquidator using funds provided by CIGA. This bill would also authorize CIGA, with the Insurance Commissioner’s express approval, to reinsure with, or transfer liabilities to, a California admitted and authorized reinsurer or other reinsurer approved by the Insurance Commissioner in order to limit or eliminate adverse development, to stabilize or limit the need for assessments, or to reduce its potential ultimate liability for covered claims, provided certain conditions are met. The bill would require CIGA to undertake the payment and discharge of covered claims directly or through an authorized 3rd-party administrator. The bill would require any reinsurance agreement or transfer of liabilities to be paid using CIGA’s available funds, and would make any recoveries from a reinsurance agreement property of CIGA, to be paid to CIGA’s account from which the payment for reinsurance or transfer of liabilities was made.  Effective Date January 1, 2018.
• Senate Bill 489
  Existing law establishes a workers’ compensation system, administered by the Administrative Director of the Division of Workers’ Compensation, that generally requires employers to secure the payment of workers’ compensation for injuries incurred by their employees that arise out of, or in the course of, employment. Existing law requires an employer to provide all medical services reasonably required to cure or relieve the injured worker from the effects of the injury. Existing law requires every employer to establish a utilization review process and further requires that specified requests for payment for treatment be submitted to the employer or its insurer or claims administrator, within 30 days of the date the service was provided. Existing law also establishes an independent medical review process to resolve disputes over a utilization review decision, as specified. This bill would require that in the case of emergency treatment services, as defined, specified requests for payment for treatment be submitted to the employer, or its insurer or claims administrator, within 180 days of the date the service was provided.  Effective Date January 1, 2017

FEE SCHEDULE NEWS:

• Medi-Cal rates have been released with an effective date of August 15, 2017. The next update is scheduled for September 15, 2017.

REGULATORY ACTIVITY:

• The Department of Industrial Relations’ (DIR) Division of Workers’ Compensation (DWC) has scheduled lien consolidation proceedings in August for suspended providers Michael D. Drobot, Michael R. Drobot and Philip A. Sobol.  Combined, the three have approximately 13,000 liens, which have been consolidated pursuant to the Chief Judge’s order, in the workers’ compensation system pending further determination.
  • Michael D. Drobot, former CEO and owner of Pacific Hospital of Long Beach, pled guilty for his role in a scheme to illegally refer patients for spinal surgeries. DWC suspended him from participating in the California Workers’ Compensation system on April 28.
  • Michael R. Drobot operated California Pharmacy Management and Industrial Pharmacy Management, companies that also participated in the kickback scheme. The son of Michael D. Drobot, he pled guilty in U.S. District Court last year to conspiracy and illegal kickback charges and was suspended on May 15.
  • Philip Sobol, an orthopedic surgeon in Los Angeles, was suspended in May based on a criminal conviction involving fraud and abuse of the workers’ compensation system.  Sobol pled guilty for participating in the kickback scheme at Pacific Hospital of Long Beach, illegally referring thousands of his patients for spinal surgeries.   Where suspension is due to conviction of a covered crime, AB 1244 provides there is a presumption that all of the provider’s liens to be adjudicated in the special lien proceeding arise from the conduct subjecting the provider to suspension, and that payment is not due and should not be made on those liens. Lien claimants shall not have the right to payment unless they rebut that presumption by a preponderance of the evidence. DIR has posted information on its fraud prevention efforts online, including a new web page with information on lien consolidations and the Special Adjudication Unit overseeing the proceedings. The page includes a calendar with pending proceedings for suspended physicians, practitioners or providers.
• The Department of Industrial Relations’ Division of Workers’ Compensation (DWC) has issued a notice of public hearing on September 6, 2017 for proposed evidence-based updates to the Medical Treatment Utilization Schedule (MTUS) regulations by Administrative Director order pursuant to Labor Code section 5307.27(a). These proposed evidence-based updates to the MTUS incorporate by reference the American College of Occupational and Environmental Medicine’s (ACOEM’s) most recent treatment guidelines to the General Approaches, Clinical Topics, and Special Topics sections of the MTUS. As a direct result of these evidence-based updates, a website address is added to obtain the updated ACOEM treatment guidelines and introductions for the General Approaches, Clinical Topics, and Special Topics sections were also revised to match the updated guidelines contents.  The public hearing is scheduled for September 6, 2017 at 10:00 a.m. in the auditorium of the Elihu Harris Building, 1515 Clay Street, Oakland, California. Members of the public may review and comment on the proposed evidence-based updates to the MTUS until 5 p.m. on September 6, 2017. These proposed evidence-based updates to the MTUS regulations are exempt from Labor Code sections 5307.3 and 5307.4 and the rulemaking provisions of the Administrative Procedure Act. However, DWC is required to have a 30-day public comment period, hold a public hearing, respond to all the comments received during the public comment period, and publish the order online.
• The Division of Workers’ Compensation (DWC) tomorrow will dismiss more than 292,000 unresolved liens by operation of law. The liens belong to claimants who did not properly file the required Supplemental Lien form and 4903.05(c) Declaration form.   Senate Bill 1160, which became effective January 1, required all lien claimants who filed a lien between January 1, 2013 and December 31, 2016, and paid a filing fee, to file the forms by July 1. Lien claimants who failed to file the forms as required will have their liens dismissed. Labor Code section 4903.05(c) was amended as part of the bill’s reform measures to combat fraud in the workers' compensation system. To comply with SB 1160’s requirements, DWC made available an e-form declaration and the Workers’ Compensation Appeals Board promulgated regulations requiring the use of this form.  Lien claimants should be aware that DWC will not send notification to claimants whose liens have been dismissed. DWC has posted frequently asked questions on the supplemental lien form online.
• Governor Jerry Brown has designated Katherine Zalewski as the Chair on the California Workers’ Compensation Appeals Board. Zalewski served on the board since her appointment by Governor Brown on April 30, 2014. Prior to her appointment, she joined the Department of Industrial Relations (DIR) as a workers’ compensation administrative law judge and advisor to the Division of Workers’ Compensation from 2009 to 2011, and served as DIR chief counsel from 2012 to 2014. Prior to state service, she was senior associate at Schmit Law Office from 2000 to 2009, manager and attorney at Pacific Coast Services from 1998 to 2000, and worked at Express Network and Direct Legal Support Services from 1993 to 1998. Zalewski earned a Juris Doctor degree from the University of California Hastings College of the Law.
• The Division of Workers’ Compensation (DWC) has posted a searchable database of liens dismissed by operation of law per Labor Code §4903.05(c)(2).  As detailed in Newsline 2017-75, which announced the dismissal of 292,000 unresolved liens, Senate Bill 1160 amended Labor Code section 4903.05(c) to require lien claimants to file a declaration verifying the legitimacy of liens for medical treatment or medical-legal expenses. Claimants who had filed liens between January 1, 2013 and December 31, 2016, were required to file the declarations by July 1, 2017, to avoid having those liens dismissed.  To access the searchable data base go to: http://www.dir.ca.gov/DWC/DismissedLiens.asp

FEE SCHEDULE NEWS:

• Medi-Cal rates have been released with an effective date of July 15, 2017. The next update is scheduled for August 15, 2017.

REGULATORY ACTIVITY:

• The Division of Workers’ Compensation (DWC) is now accepting applications for the Qualified Medical Evaluator (QME) examination on October 21, 2017. QMEs are independent physicians certified by the DWC Medical Unit to conduct medical evaluations of injured workers. Applications for the QME exam may be downloaded from the DWC website. Applicants may also contact the Medical Unit at 510-286-3700 to request an application via U.S. mail, email or fax. The deadline for filing the exam applications is September 7, 2017. For more information, please contact the Medical Unit at 510-286-3700 or by email at QMETest@dir.ca.gov.
• The Department of Industrial Relations (DIR) and its Division of Workers’ Compensation (DWC) posted a progress report on the department’s Independent Medical Review (IMR) program. IMR is the medical dispute resolution process that uses medical expertise to obtain consistent, evidence-based decisions and is one of the most important components of Senate Bill 863, Governor Brown’s landmark 2012 workers’ compensation reform.
• The Department of Industrial Relations’ Division of Workers’ Compensation (DWC) has issued modified proposed regulations to adopt the Medical Treatment Utilization Schedule (MTUS) drug formulary. The proposed rulemaking implements Assembly Bill 1124 (Statutes 2015, Chapter 525), which mandates adoption of an evidence-based drug formulary. DWC has reviewed comments received during the initial comment period and has modified the proposed regulations to provide additional detail and clarity. The 15-Day public comment period will end August 2 and members of the public may submit written comments on the proposed regulations until 5 p.m. that day. Some of the changes proposed in the revised regulations include:
  • Moving the effective date to January 1, 2018
  • Changing the “Preferred/Non-Preferred” drug designations to “Exempt/Non-Exempt” to better align with how the designations affect the prospective utilization review status of the drug
  • Revised provisions relating to phased implementation of the formulary
  • Deletion of provisions regarding issues that will be addressed in the utilization review regulations, rather than in the formulary regulations
  • Clarification of applicable dispute resolution procedures
  • Updated drug listings on the MTUS Drug List and formatting changes.

The proposed formulary regulations are to be adopted at section 9792.27.1, et seq. of title 8 of the California Code of Regulations. DWC will consider all public comments, and may modify the proposed regulations for consideration during an additional 15-day public comment period.  The notice of modification of text of proposed regulation, and related rulemaking documents can be found on the DWC rulemaking web page.

FEE SCHEDULE NEWS:

• The Physician Fee Schedule and Practitioner Services Medically Unlikely Edits and the National Correct Coding Initiative Practitioner PTP Edits have been updated with an effective date of July 1, 2017.  The update incorporates changes to the Medicare system.  The next update is expected for October 1, 2017.
• The state adopts the DMEPOS Fee Schedule effective April 1, 2017.  The next updates are expected to become effective July 1, 2017.
• The Outpatient and ASC Fee Schedule were updated with an effective date of July 1, 2017. The state has adopted the July 2017 OPPS APC Addenda A and B and ASC Addendum AA and EE to identify the definition of a “surgical procedure”.  All other factors and data remain unchanged since the 12/15/2016 revision.
• Medi-Cal rates have been released with an effective date of June 15, 2017. The next update is scheduled for July 15, 2017.

REGULATORY ACTIVITY:

• The Division of Workers' Compensation (DWC) has posted an order adjusting the Official Medical Fee Schedule (OMFS) to conform to changes in the Medicare payment system as required by Labor Code section 5307.1.  The Physician and Non-Physician Practitioner Fee Schedule update Order adopts the following Medicare changes: Centers for Medicare and Medicaid Services (CMS) Medicare National Physician Fee Schedule Relative Value File RVU17C July 1, 2017 quarterly update, National Correct Coding Initiative Physician/Practitioner Services CCI Edits July 1, 2017 quarterly update, National Correct Coding Initiative Medically Unlikely Edits July 1, 2017 quarterly update.  The order adopting the OMFS adjustments is effective for services rendered on or after July 1, 2017 and is posted on the DWC website.
• Posted notice of proposed regulations regarding reinsurance. Notice is hereby given that the California Department of Insurance (Department) will hold a public hearing regarding the adoption of amendments to the California Code of Regulations (C.C.R.) Title 10, Chapter 5, Sub- chapter 3, Article 3, sections 2303, 2303.1, 2303.2, 4, 2303.5, 2303.8, 2303.9, 2303.11, 2303.12, 2303.13, 2303.14, 2303.15, 2303.17, 2303.19, 2303.21, 2303.22, [existing] 2303.23 [renumbered as 2303.30] and the addition of sections 2303.23, 2303.24, 2303.25, 2303.26, 2303.27, and 2303.28, hereinafter referred to as “Reinsurance Oversight Regulations”.
• The Department of Insurance posted notice rule making regarding reinsurance. The Division of Workers' Compensation published a decision regard a rule making petition.
• The Division of Workers’ Compensation (DWC) announces that the 2018 minimum and maximum temporary total disability (TTD) rates will increase on January 1, 2018. The minimum TTD rate will increase from $175.88 to $182.29 and the maximum TTD rate will increase from $1,172.57 to $1215.27 per week.  Labor Code section 4453(a) (10) requires the rate for TTD be increased by an amount equal to percentage increase in the State Average Weekly Wage (SAWW) as compared to the prior year. The SAWW is defined as the average weekly wage paid to employees covered by unemployment insurance as reported by the U.S. Department of Labor for California for the 12 months ending March 31 in the year preceding the injury. In the 12 months ending March 31, 2017, the SAWW increased from $1,164.51 to $1,206.92—an increase of 3.642 percent.  Under Labor Code section 4659(c), workers with a date of injury on or after January 1, 2003 who are receiving life pension (LP) or permanent total disability (PTD) benefits are also entitled to have their weekly LP or PTD rate adjusted based on the SAWW.  The first quarter 2016 SAWW figures may be verified at the U.S. Department of Labor website, as can the first quarter 2017 SAWW figures.
• The Division of Workers’ Compensation (DWC) has posted the 2016 ethics advisory committee's annual report on its website. The workers' compensation ethics advisory committee is a state committee independent from the DWC that is charged with reviewing and monitoring complaints of misconduct filed against workers' compensation administrative law judges.  The 2016 annual report may be viewed or downloaded at the DWC website.
• The Division of Workers’ Compensation (DWC) is reminding lien claimants that they are required to file a declaration for any lien filed between January 1, 2013 and December 31, 2016 for which a filing fee was paid.  Labor Code section 4903.05(c) provides: lien claimants shall have until July 1, 2017. DWC recommends that lien claimants complete their submission by 5 p.m. on Friday, June 30 to ensure a timely filing.   Senate Bill 1160, which became effective January 1, requires all lien claimants who filed a lien between January 1, 2013 and December 31, 2016, and paid a filing fee, to file the “Supplemental Lien Form and 4903.05(c) Declaration” form. Labor Code section 4903.05(c) was amended as part of the bill’s reform measures to combat fraud in the workers' compensation system. To comply with SB 1160’s requirements, DWC made available an e-form declaration and the WCAB promulgated regulations requiring the use of this form by e-filers and JET filers. Liens claimants who fail to file the “Supplemental Lien Form and 4903.05(c) Declaration” will have their liens dismissed. As with any court document, the declaration must be served on the parties in the case. Rule 10324 states: No document, including letters or other writings, shall be filed by a party or lien claimant with the Workers' Compensation Appeals Board unless service of a copy thereof is made on all parties together with the filing of a proof of service as provided for in Rule 10505. DWC is currently reviewing and evaluating filed declarations for compliance with the legislation, and will be holding hearings to determine whether the declarations are accurate and comply with the requirements of section 4903.05(c).  Lien claimants should be aware that the filing of a false declaration is grounds for dismissal of the lien. The DWC has posted frequently asked questions on use of the new form, which can be found on the DWC Website.
• The Division of Workers’ Compensation (DWC) has posted an order adjusting the Hospital Outpatient Departments and Ambulatory Surgical Centers section of the Official Medical Fee Schedule (OMFS) to conform to changes in the Medicare payment system as required by Labor Code section 5307.1.  The Hospital Outpatient Departments and Ambulatory Surgical Centers fee schedule update Order adopts the following Medicare changes:
  • The Centers for Medicare & Medicaid Services (CMS) Medicare Hospital Outpatient Prospective Payment System (HOPPS) July 1, 2017 Addendum A ZIP file quarterly update;
  • The Centers for Medicare & Medicaid Services (CMS) Medicare Hospital Outpatient Prospective Payment System (HOPPS) July 1, 2017 Addendum B ZIP file quarterly update;
  • The Centers for Medicare & Medicaid Services (CMS) Ambulatory Surgical Center Payment System, July 2017 ASC Approved HCPCS Code and Payment Rates ZIP file, Column A of “Jul 2017 ASC AA” and Column A of “Jul 2017 ASC EE”.
• The order adopting the OMFS adjustments is effective for services rendered on or after July 1, 2017 and is posted on the DWC at http://www.dir.ca.gov/DWC/OMFS9904.htm#6.

FEE SCHEDULE NEWS:

• Medi-Cal rates have been released with an effective date of May 15, 2017. The next update is scheduled for June 15, 2017

FEE SCHEDULE NEWS:

• The Outpatient and ASC Fee Schedule were updated with an effective date of June 1, 2017. The state has adopted the April 2017 OPPS APC Addenda A and B and the April 2017 ASC Addendum AA and EE are adopted to identify the definition of a “surgical procedure”.  The state also incorporates the January 2017 OPPS Addenda J and M and revised wage indexes and conversion factors.  The "WC Multipliers" remain unchanged since the 12/15/2016 revision.  All outpatient services are processed under the APC methodology, with the exception of specific services that continue to be reimbursed based on alternate fee schedules (physical therapy, laboratory, DMEPOS, ambulance).
• Medi-Cal rates have been released with an effective date of April 15, 2017. The next update is scheduled for May 15, 2017.

REGULATORY ACTIVITY:

• The Office of Administrative Law (OAL) has approved the Division of Workers’ Compensation’s (DWC) final version of the Workers’ Compensation Information System (WCIS) regulations regarding medical billing reporting.  The regulations include release of the California EDI Implementation Guide for First and Subsequent Reports of Injury (FROI/SROI), Version 3.1, for reporting beginning 12 months following the effective date of the regulations (March 27, 2018).  The regulations also include updates to the California Electronic Data Interchange (EDI) Implementation Guide for Medical Bill Payment Records, Version 2.0, which brings California reporting requirements into compliance with IAIABC standards for medical bill payment reporting, for reporting beginning six months following the effective date of the regulations (September 27, 2017).  DWC believes that these updates will allow WCIS to collect more robust and useful data that will assist with research regarding workers’ compensation issues.

FEE SCHEDULE NEWS:

• The Physician and Practitioner Services Medically Unlikely Edits and the National Correct Coding Initiative Practitioner PTP Edits have been updated with an effective date of April 1, 2017.  The update incorporates changes to Medicare, including the revised RVUs for therapy evaluation codes 97161-97168.  Additionally the state adopts the DMEPOS Fee Schedule effective April 1, 2017.  The next updates are expected to become effective July 1, 2017.

REGULATORY ACTIVITY:

• The Division of Workers’ Compensation (DWC) has posted an order adjusting the Official Medical Fee Schedule (OMFS) to conform to changes in the Medicare payment system as required by Labor Code section 5307.1.   The Physician and Non-Physician Practitioner Fee Schedule update Order adopts the following Medicare changes:
  • Centers for Medicare and Medicaid Services (CMS) Medicare National Physician Fee Schedule Relative Value File RVU17B April 1, 2017 quarterly update
  • National Correct Coding Initiative Physician/Practitioner Services CCI Edits   April 1, 2017 quarterly update
  • National Correct Coding Initiative Medically Unlikely Edits April 1, 2017 quarterly update.
• The order adopting the OMFS adjustments is effective for services rendered on or after April 1, 2017 and can be found on the DWC website.
• The Division of Workers’ Compensation (DWC) reminds claims administrators that submitting the Supplemental Job Displacement (SJDB) payments/vouchers to the Workers’ Compensation Information System (WCIS) is a requirement.   Employees who have a permanent partial disability caused by an injury that occurred on or after January 1, 2004 may qualify for the benefit. It comes in the form of a voucher that can be used to pay for educational retraining or skill enhancement, or both, at state- approved schools.  Additional information on the SJDB is posted online.  Claims administrators who would like information and assistance in reporting the SJDB can refer to the WCIS Training Bulletin or contact WCIS directly at wcis@dir.ca.gov. California’s Workers’ Compensation Information System (WCIS) posts occasional announcements and technical updates on California’s workers’ compensation system online, and provides email notification on the updates.
• The Department of Industrial Relations’ Division of Workers’ Compensation (DWC) has issued a notice of public hearing on May 1 for the Medical Treatment Utilization Schedule (MTUS) Drug Formulary regulations, which includes a list of preferred drugs that can be dispensed without the need for prospective utilization review. The proposed rulemaking implements Assembly Bill 1124 (Statutes 2015, Chapter 525), which mandated the adoption of an evidence-based workers’ compensation drug formulary into the MTUS by July 1, 2017. The May 1 public hearing on the proposed regulations has been scheduled at 10 a.m. in the auditorium of the Elihu Harris Building, 1515 Clay Street, Oakland, CA 94612. Members of the public may also submit written comments on the regulations until 5 p.m. that day.  The MTUS Drug Formulary is based on, and consistent with, medical treatment guidelines created by the American College of Occupational and Environmental Medicine (ACOEM), which are published by Reed Group, Ltd. The preferred drug list was compiled by DWC, with assistance from ACOEM, and takes into consideration medications frequently prescribed for occupational injuries and the evidence-based drug recommendations in the guidelines.  “The formulary, designed to work in tandem with our medical treatment utilization guidelines, will incorporate the evidence-based standards of care that best meet the needs of California’s injured workers,” said Christine Baker, Director of DIR.  The proposed formulary regulations are to be adopted at section 9792.27.1, et seq. of Title 8 of the California Code of Regulations. DWC will consider all public comments, and may modify the proposed regulations for consideration during an additional 15-day public comment period.  The notice of rulemaking, text of the regulations, and the initial statement of reasons can be found on the DWC rulemaking web page. More information about the rulemaking process can be found on the Office of Administrative Law’s (OAL) website.
• DIR Issues Amended Regulations to the Return-to-Work Supplement Program that Extends Deadline to File for Benefits. An amendment that extends the deadline to file for the Return-to-Work Supplement Program (RTWSP) has been approved by the Office of Administrative Law (OAL) and filed with the Secretary of State, effective March 20, 2017.  The regulation amendment extends the deadline to file for RTWSP benefits for certain individuals who received the Supplemental Job Displacement Benefit (SJDB) voucher between April 13, 2015 and December 1, 2015, and who may not have received notice of their eligibility to apply for the RTWSP benefit.
• The Division of Workers’ Compensation (DWC) has posted an order adjusting the Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) section of the Official Medical Fee Schedule to conform to the second quarter 2017 changes in the Medicare payment system as required by Labor Code section 5307.1.  The order, effective for services rendered on or after April 1, 2017, adopts the Medicare DMEPOS Quarter 2, 2017, DME17-B ZIP file. The 2017 Parenteral and Enteral Nutrition Fee Schedule File from DME 17-A was not updated for the second quarter, and remains in effect for services on or after April 1, 2017.

FEE SCHEDULE NEWS:

• Medi-Cal rates have been released with an effective date of February 15, 2017. The next update is scheduled for March 15, 2017.
• Ambulance fee schedule has been updated with an effective date of March 1, 2017. The state has adopted the 2017 changes to the Medicare Payment System for ambulance.  The next update is expected in January 2018.

REGULATORY ACTIVITY:

• The Division of Workers’ Compensation (DWC) has posted an order adjusting the Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) section of the Official Medical Fee Schedule (OMFS) to conform to changes in the Medicare payment system as required by Labor Code section 5307.1.  The Centers for Medicare and Medicaid Services (CMS) initially released the DMEPOS Fee Schedule 2017 zip file update in December of 2016. The DMEPOS update was adopted by the DWC Acting Administrative Director’s order of December 15, 2016. Subsequently, CMS issued a revised DMEPOS Fee Schedule zip file for 2017 to implement changes required by the 21st Century Cures Act. The Acting Administrative Director has adopted the revised DMEPOS Fee Schedule zip file for services rendered on or after February 1, 2017.
• The Division of Workers’ Compensation (DWC) is accepting applications for the Qualified Medical Evaluator (QME) examination on Saturday, April 29. QMEs are independent physicians certified by the DWC Medical Unit to conduct medical evaluations of injured workers. Applications for the QME exam may be downloaded from the DWC website.  Applicants may also contact the Medical Unit at 510-286-3700 to request an application via U.S. mail, email or fax.  The deadline for filing the exam applications is March 16, 2017.  For more information please contact the Medical Unit at 510-286-3700 or by email at QMETest@dir.ca.gov.
• The Division of Workers’ Compensation (DWC) has posted an order adjusting the ambulance services section of the Official Medical Fee Schedule (OMFS) to conform to changes in the Medicare payment system as required by Labor Code section 5307.1.  Effective for services rendered on or after March 1, 2017, the maximum reasonable fees for ambulance services shall not exceed 120% of the applicable California fees set forth in the calendar year 2017- Medicare Ambulance Fee Schedule file.  The adjustment incorporates the 2017 Ambulance Inflation Factor (AIF) which has been announced by the Centers for Medicare and Medicaid Services (CMS). The AIF for calendar year 2017 is 0.70 percent (0.70%).
• The Division of Workers’ Compensation (DWC) will begin the process of amending the MTUS regulations by posting the proposed changes to its online forum.   This round of proposed regulatory amendments will be made pursuant to the rulemaking provisions of the Administrative Procedure Act. These changes lay the foundation for the evidence-based guideline updates to the MTUS that for the first time will apply an expedited process pursuant to the recently amended Labor Code section 5307.27(a). Once the formal rulemaking process begins with these proposed regulatory amendments, DWC will begin the expedited process to update the evidence-based guidelines by Administrative Director order.

FEE SCHEDULE NEWS:

• The Physician and Practitioner Services Medically Unlikely Edits and the National Correct Coding Initiative Practitioner PTP Edits have been updated with an effective date of March 1, 2017.
• The Outpatient and ASC Fee Schedule was updated with an effective date of December 15, 2016. The state has adopted the July 2016 OPPS APC Addendum A, B and M, the July 2016 ASC Addendum AA and EE to identify the definition of a "surgical procedure", removed the "facility only" services payment methodology and revised the "other service" payment method.  All outpatient services will be processed under the APC methodology, with the exception of specific services that continue to be reimbursed based on alternate fee schedules (physical therapy, laboratory, DMEPOS, ambulance).
• Inpatient hospital fee schedule has been updated with an effective date of January 1, 2017. The DWC has adopted the final rule of August 22, 2016 and the correction notice of October 5, 2016, published in the Federal Register, which changes the Medicare payment system.  Updates to the Composite Rate, Hospital Specific Outlier Factor, and Cost to Charge Ratio for the listed hospitals have been adopted.  The next update is scheduled for January 2018.
• The Clinical Lab Fee Schedule has been updated with an effective date of January 1, 2017 and the DMEPOS Schedule has been updated with an effective date of February 1, 2017. The DWC has adjusted the pathology and clinical laboratory fee schedule and also the DMEPOS schedule to conform with the changes to the Medicare payment system adopted by CMS for calendar year 2017. The next update for Clinical Lab Schedule is scheduled for January 2018.
• Medi-Cal rates have been released with an effective date of January 15, 2017. The next update is scheduled for February 15, 2017.

REGULATORY ACTIVITY:

• The Division of Workers Compensation (DWC) and the Workers’ Compensation Appeals Board (WCAB) have made changes to lien and attorney fee disclosure statement requirements which went into effect on January 1, 2017. The changes were made to implement provisions of Senate Bill 1160 and Assembly Bill 1244. The changes are as follows:
  • In compliance with SB 1160, DWC has made available an amended lien form which includes the required declaration affirming eligibility under penalty of perjury per newly enacted Labor Code Section 4903.05(c) effective January 1, 2017. All liens filed after January 1, 2017 must use this new form. The new lien form and the required declaration are now available for all e-filers and JET Filers.  All filers that must pay the filing fee are required to fill out the declaration. Liens filed without the declaration will be dismissed.
  • Also available for e-filers and JET Filers is a declaration for all liens filed prior to January 1, 2017 that require a filing fee under Labor Code Section 4903.05, as mandated by SB 1160. The declaration, which must include information on the type of services provided by the lien claimant, must be filed by July 1, 2017. The Workers’ Compensation Appeals Board (WCAB) has posted new rules on this requirement, and has scheduled a public hearing January 4 on the proposed regulations.
  • SB 1160 also requires that all lien claimants file an original bill with their lien. This is a new requirement that is mandatory for all lien filings as of January 1, 2017.
  • To comply with the new requirements for the attorney fee disclosure statement introduced by AB 1244, DWC has made available a revised attorney fee disclosure statement form in compliance with recently amended Labor Code Section 4906. An amended form with the required information is now posted on DWC’s website.
• The Workers’ Compensation Appeals Board (WCAB) has extended the public comment period for proposed rulemaking changes mandated by Senate Bill 1160.  WCAB conducted a public hearing on January 4 regarding proposed rules in response to SB 1160 (Stats. 2016, Ch. 868), which amended Labor Code section 4903.05 to require that section 4903(b) lien claimants file a declaration that includes information regarding the type of services provided by the lien claimant. This rulemaking will mandate use of an e-filed form declaration to ensure uniform procedures for lien claimants who first file their liens after January 1, 2017 and current lien claimants who are required to file a declaration by July 1, 2017.    The Notice of Rulemaking stated written comments from the public on the proposed rules and amendments would be accepted until 5 p.m. on January 4. The WCAB is now extending the public comment period until 5 p.m. on January 31, 2017.  Comments may be submitted by e-mail to WCABRules@dir.ca.gov or mailed to:  Workers’ Compensation Appeals Board Attention: Annette Gabrielli, Regulations Coordinator P.O. Box 429459 San Francisco CA 94142-9459.
• The Division of Workers’ Compensation (DWC) has posted an order adjusting the Physician Services/Non-Physician Practitioner Services section of the Official Medical Fee Schedule (OMFS) to conform to relevant 2017 changes in the Medicare payment system as required by Labor Code section 5307.1.  The Physician and Non-Physician Practitioner Fee Schedule based on the federal Resource Based Relative Value Scale (RBRVS) was adopted pursuant to the requirements of Senate Bill 863 (SB 863) and became effective for services rendered on or after January 1, 2014. As mandated by SB 863, the fee schedule started with separate conversion factors for surgery, radiology, and “all other services” in 2014 and transitions to a single conversion factor (CF) in 2017, for all services except anesthesia, which has its own CF. The 2017 CFs were adjusted for the cumulative change in the Medicare Economic Index and the relative value scale adjustment factors.  The acting administrative director update order adopting the OMFS adjustments effective for services rendered on or after March 1, 2017, can be found athttp://www.dir.ca.gov/dwc/OMFS9904.htm.