Legislative Update

Q2 2021 Legislative Updates

Here is a summary of legislative and regulatory developments and challenges for the second quarter of 2021 and their practical implications:

California MPN Legislation: Two bills that posed significant challenges to California’s Medical Provider Network (MPN) system have been defeated, at least for now.

Assembly Bill 399 would have mandated that MPNs pay participating providers at California’s Official Medical Fee Schedule and would have prohibited negotiated rates below the regulatory fee. The measure would also have restricted MPNs’ ability to review provider bills for mistakes, fraud and abuse. Through intense opposition by employers and WC payers, the bill was held in the Assembly Insurance Committee without being voted on and, as a consequence, is ineligible for further consideration until the next legislative session.

Assembly Bill 1465 would have required the Division of Workers’ Compensation to establish a state-run MPN (CAMPN) and would have permitted injured workers to select providers from this network in lieu of their employers’ MPNs. This measure is now a “study bill,” meaning that the California Commission on Health and Safety and Workers’ Compensation (CHSWC) will compare treatment delays and provider access issues between MPN and non-MPN claims and issue a report of its findings by January 1, 2023.

Implications: It is unlikely that either of these bills will be resurrected in the foreseeable future. Unlike SB 537, a similar measure that was enacted in a weakened form in 2019, AB 399 failed to gain any traction during the current legislative session, due in large part to the immediate increase in WC medical costs forced by the measure’s prohibition of network discounts. AB 1465 also met strong opposition from the business community, and the CHSWC study likely will counter the arguments of AB 1465 proponents that California injured workers lack access to high quality medical care via MPNs.

Arizona Telehealth Legislation: On May 5, Governor Doug Ducey signed into law HB 2454, which provides broad support for telehealth services in group health coverage. The measure clarifies existing law that Arizona endorsement of telehealth encounters applies to ancillary services and requires a carrier to reimburse health providers at the same level of payment for equivalent services, regardless of whether the services are provided in-person or via audio-visual telehealth.

Specifically in relation to workers’ compensation, the law allows medical examinations for workers’ compensation claims to be conducted via telehealth with the consent of both the employee and the requesting party.

Implications: HB 2454, which was effective on its enactment, continues the broad trend toward state endorsement of telehealth when those services are medically appropriate. WC payers should incorporate telehealth into their injured worker treatment options if they haven’t done so already.

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