DWC promulgates regs to reduce workers’ comp medical costs

By CMTA Staff

Capitol Update, Nov. 6, 2009 Share this on FacebookTweet thisEmail this to a friend

The Division of Workers' Compensation (DWC) has proposed a 12-point plan specifically aimed at medical costs to streamline and improve the state's workers’ compensation system

This regulatory plan “should help employers keep their costs down while still offering injured workers the treatment they need to get well and get back to work,” said John Duncan, director of the California Department of Industrial Relations, during an industry conference in Huntington Beach last week. “Major elements of the plan are already underway, including providing an additional health care network option, which saves costs and simplifies network rules.”

DWC’s plan includes: 

    1.  Tightening treatment guidelines

      •  Updating Medical Treatment Utilization Schedule rules on compounded drugs.

      •  The next revision will address low back injuries.

    2.  Providing a network option

      •  Reducing fees for Health Care Organizations (HCO) from about $10,000 a year to make HCOs more on par with medical provider networks and give employers another option for choosing a network of doctors and eliminating utilization review costs.

    3.  Simplifying Medical Provider Network (MPN) rules

      •  Updating the MPN rules to simplify and reduce the notice requirements.

    4.  Updating coding for doctor payments

      •  Converting from the current physician fee schedule, which was last updated 20 years ago, to Medicare's Resource Based Relative Value Scale.

    5.  Implementing electronic billing

      •  Medical e-billing regulations will encourage electronic billing and faster payments to physicians.

    6.  Creating pharmacy networks

      •  Will allow employers to contain pharmacy costs, which are rising at a higher rate than other medical costs.

      •  DWC is collecting names of interested stakeholders and intends to form advisory groups before the end of the year to collect information from current users of pharmacy networks.

    7.  Streamlining utilization review (UR)

      •  Amending the UR regulations will streamline procedures and reduce administrative costs.

    8.  Streamlining requests for medical authorization

      •  Revising PR-2 (Physician Review-2) and PR-4 so it is clear when physicians request approval for medical treatment.

    9.  Considering creation of a drug formulary

      •  Considering an additional revision to the MTUS or pharmaceutical fee schedules to include formulary restrictions.

    10. Improving medical cost reporting

      •  Updating Workers’ Compensation Information System regulations to clarify medical lien reporting, which will allow DWC to better monitor medical costs.

    11. Saving costs for ambulatory surgical centers

      •  Updating the Official Medical Fee Schedule (OMFS) to adopt Medicare’s 2008 ambulatory surgical centers fee schedule, which is expected to save $69 million annually.

    12. Eliminating spinal hardware pass-through

      •  Amending OMFS to eliminate the spinal hardware "pass-through," which allows hospitals to charge for the full cost of implants used in surgery, plus handling charges, on top of the facility fee billed for the procedure.

For more details on these proposed regulations follow this link:


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