New “Utilization Review” rules as of 1/1/18 to combat the rise in UR costs

New “Utilization Review” rules as of 1/1/18 to combat the rise in UR costs
What is an employer to do?

We have seen UR fees run anywhere from $98 to upwards of $9,500 per treatment.  

  • Routine treatment such as PT, diagnostics and consults are usually approved with an average UR fee up to $500 per review.
  • The UR cost drivers are surgeries and opioids/narcotics - whether approved, modified or denied. 
  • We recently saw a TPA charge $9,500 in UR fees for a request for spine surgery because of the unbundling of the Utilization Review and fees.  
    • For example, a doctor may submit a request for lumbar spine surgery. This treatment would also include assistant surgeon, pre-op clearance with cardiologist, hospital stay, post-op physical therapy and back brace, etc. Although this request is for one back surgery, there could be 6 or more Utilization Review charges as each step in the surgical process is unbundled and reviewed separately at the full charge.

We recommend that employers implement a pre-certification list to expedite medical care for the injured employees and reduce UR fees. The claims adjuster would directly approve basic medical requests including initial treatment, follow up visits/consults, physical therapy and diagnostics, without the cost and delays of sending these treatment requests through Utilization Review.

However, it requires oversight of the carrier/TPA to ensure adherence to the pre-certification list. We have seen the following costly examples:

  • Treatment that is on the pre-certification list is still being referred by the adjuster to UR.

    • In some cases, adjusters are sending the treatment to Utilization Review and subsequently authorize the treatment before UR issues a decision.

  • Or, the adjuster will override UR and approve the treatment that was non-certified by UR.

  • Employers are charged the UR fee for treatment that should not have been referred to UR in the first place.

Common errors we see are adjusters continuing to refer treatment that was previously reviewed and denied by UR and in some cases, upheld by Independent Medical Review, or UR referral for treatment for disputed or denied body parts.  

With the passing of SB 1160, there should be savings in UR fees for initial treatment.

SB1160 approved and signed by the governor in 2016, dictates that routine treatment within the first 30- days following the injury shall be approved by the adjuster without Utilization Review. Labor Code 4610 (b) Section 4.

  • For injuries after 1/1/18 (for accepted injuries)

  • Provided by a doctor within the Medical Provide Network

  • With certain exceptions

Initial treatment we typically see for the first 30 days are office visits, physical/occupational therapy, chiropractic, acupuncture, Acetaminophen and NSAIDs.

The key to reducing UR costs to employers is to ensure adjusters are adhering to the agreed upon UR protocols.

What is your carrier’s/TPA’s plan for 1/1/18 to implement the UR changes as outlined in SB1160?

 ESM recommends the following:

  • Develop an agreed upon Pre-Certification List for common treatment that does not require UR

  • Negotiate a cap for UR fee per doctor’s Request For Authorization (RFA)

  • Conduct random audits of claim files to ensure compliance

  • Schedule quarterly UR reports provided by the TPA and reviewed by employer

  • Request TPA reimbursement of UR fees that should not be charged to the claim file per agreement

The goal of these practices is to deliver timely medical services to the injured employees and to get them back to work for early claim resolution. This will also save an employer money by reducing UR fees, while complying with the amended Labor Code per SB1160.