Managed Physical Medicine

Q4 2016 Legislative Updates

Here is a summary of legislative and regulatory developments and challenges for the fourth quarter of 2016 and their practical implications:

Arizona

In October the Arizona Industrial Commission adopted the ODG treatment guidelines for chronic pain. The IC also adopted a fast-track process requiring payers to approve or deny preauthorization requests within 10 days, with reconsideration of denials also required within 10 days and an administrative review by the IC available thereafter.

  • Implications: The IC’s adoption of the ODG chronic pain guidelines fulfills a 2012 legislative requirement that the IC adopt evidence-based rules governing the appropriate use of opioids for treating chronic pain. Although the new regulation gives the IC discretion to add other medical treatment guidelines, it is unlikely to do so in the near future, taking a cautious and deliberate approach toward reforms that change medical dispute resolution processes.
Tennessee

The Bureau of Workers’ Compensation has published final revisions to its utilization review regulations, which become effective for reviews performed on or after January 29, 2017. These new rules make several changes to the UR administrative process, but Tennessee’s substantive fee schedule and utilization guidelines (e.g., UR after 12 PT/OT visits) remain unchanged. Here are the major changes:

  1. Preauthorization is clearly distinguished from utilization. Preauthorization is defined as prospectively or concurrently authorizing payment for medical benefits without accepting compensability. A claim agent may preauthorize medical services without going through the formal UR process.
  2. Medical services, including medications, which fall within the Bureau’s Treatment Guidelines, are presumed to be medically appropriate and can be rebutted “only by clear and convincing evidence that the treatment erroneously applies to the guidelines or that the treatment presents an unwarranted risk to the injured worker.” The Bureau adopted the ODG guidelines and formulary in January 2016. The formulary will apply to all current prescriptions after February 28.
  3. Any UR determinations that modify treatment recommendations are considered denials, triggering strict reporting, notification and appeal procedures.
  4. The Bureau’s Medical Director is authorized to determine whether a disputed treatment complies in whole or in part with the Treatment Guidelines.
  5. UR denials and the Medical Director’s determinations are effective for six months unless a material change in the patient or other pertinent information is documented. Appeals by any aggrieved party may be taken to the Court of Workers’ Compensation Claims.
  6. Fines and penalties for non-compliance by payers and UR organizations have been significantly increased.
  • Implications: The Bureau reportedly revised the UR regulations in response to complaints by providers and claimants’ attorneys that payers were unfairly using the UR process to deny or delay necessary treatment to injured workers. It is likely that Tennessee regulators will closely monitor activities of insurers, TPAs and UR agents in the near future to ensure strict compliance with the new rules.