California Senate Bill (SB) 636 could jeopardize the vitality and integrity of the independent utilization review process, and the National Association of Independent Review Organizations (NAIRO) stands firmly against the bill’s provisions pertaining to “duty of care” mandates.

The current version of SB 636 – “Workers’ Compensation: Utilization Review,” introduced by Senator Dave Cortese – would “require employers establishing a medical treatment utilization review process to ensure that utilization review physicians have the same duty of care to an employee as a treating physician.”

The bill, introduced in February and amended on April 10, also would “require physicians performing utilization review regarding private California workers to be licensed in California and subject to the Medical Board of California,” according to the bill’s full text.

These dual provisions, if enacted, would critically undermine the state’s utilization review process in workers’ compensation, creating an untenable situation for employers and utilization review providers by severely limiting access to qualified clinical reviewers and increasing costs for involved parties, among other concerns.

The current duty of care provisions contained in SB 636 amount to a breach in the purpose of California’s established utilization review system. In NAIRO’s view, the scope of duty of care is misapplied and misconstrued as it is currently laid out in the bill.

“A duty of care is a direct responsibility to care for a patient and intervene in their lives directly,” says Seth Lewin, M.D., with MedReview, a NAIRO member, and chair of NAIRO’s Accreditation Task Force. Duty of care provisions make sense when it concerns a treating physician and a patient, and current California law even has more general duty of care mandates for ordinary citizens.

However, it is entirely different within utilization review, where clinical reviewers, who are often physicians, “are making a decision about medical necessity and they’re making a decision based on medical records,” Lewin explains.

The proposed duty of care changes would disrupt utilization review in the state and place an undue burden on employers and review organizations. There are multiple reasons why NAIRO believes the duty of care proposal contained in SB 636 are misguided:

• It runs counter to current state standards and labor code. Under California’s utilization review system and consistent with Section 4610 of the Labor Code, the reviewing physician is required to review and approve or deny requests for authorization in a tight timeframe, is only permitted to view medical information relating to the specific authorization request, and is instructed to determine whether the request fits within published clinical review criteria or guidelines, i.e., CA Medical Treatment Utilization Standards (MTUS). The proposed duty of care changes would force the UR physician to become involved in the care of patients, which is contrary to Section 4610.
• It would severely limit access to clinical reviewers. If duty of care is imposed upon physician reviewers, liability would increase dramatically, and NAIRO believes that many reviewers would not be willing to incur the added liability. For example, duty of care triggers legal communication requirements associated with doctor/patient relationships. Despite never treating the patient, the reviewer would be required to update the patient about changes to their practice or they could be accused of patient abandonment. The duty of care proposal also may result in a significant increase in medical malpractice and related insurance expenses.
• It would drive a surge in total costs. As constructed, the bill would add time and expense for UR physicians in order to meet the proposed duty of care requirements. As a result, clinical reviewers would be likely to demand an increased rate of payment, which may be passed on directly to employees.

Due to the significant consequences of the proposed bill, NAIRO respectfully requests that California lawmakers remove the duty of care requirements from SB 636 in order to maintain the independence and integrity of the UR system.

About NAIRO
NAIRO is an association of URAC-accredited IROs collaborating on issues facing the rapidly changing workers’ compensation and healthcare arena. NAIRO leadership and its member-driven committees track legislative and regulatory developments at the federal and state level, advances in accreditation standards, and emerging themes such as cybersecurity, trust, compliance, and more.

About the NAIRO Annual Symposium 
Each year, NAIRO and its member companies stage an annual symposium discussing the latest developments and trends in independent medical review. The Symposium delivers in-depth educational content, along with networking opportunities to meet and exchange ideas with others in the industry.

This year the Symposium will be at the Hyatt Centric French Quarter New Orleans, February 27-29, 2024.

The theme for the three-day event is “The Next Generation of Clinical Review,” highlighting changes and advances in the healthcare clinical review landscape.

Registration will open later this Summer! We thank you for your interest and look forward to seeing you at the in-person NAIRO Symposium in February 2024! Click here for more information!