2009 California Labor Code - Section 4600-4614.1 :: Article 2. Medical And Hospital Treatment

4600.  (a) Medical, surgical, chiropractic, acupuncture, and
hospital treatment, including nursing, medicines, medical and
surgical supplies, crutches, and apparatuses, including orthotic and
prosthetic devices and services, that is reasonably required to cure
or relieve the injured worker from the effects of his or her injury
shall be provided by the employer. In the case of his or her neglect
or refusal reasonably to do so, the employer is liable for the
reasonable expense incurred by or on behalf of the employee in
providing treatment.
   (b) As used in this division and notwithstanding any other
provision of law, medical treatment that is reasonably required to
cure or relieve the injured worker from the effects of his or her
injury means treatment that is based upon the guidelines adopted by
the administrative director pursuant to Section 5307.27 or, prior to
the adoption of those guidelines, the updated American College of
Occupational and Environmental Medicine's Occupational Medicine
Practice Guidelines.
   (c) Unless the employer or the employer's insurer has established
a medical provider network as provided for in Section 4616, after 30
days from the date the injury is reported, the employee may be
treated by a physician of his or her own choice or at a facility of
his or her own choice within a reasonable geographic area.
   (d) (1) If an employee has notified his or her employer in writing
prior to the date of injury that he or she has a personal physician,
the employee shall have the right to be treated by that physician
from the date of injury if either of the following conditions exist:
   (A) The employer provides nonoccupational group health coverage in
a health care service plan, licensed pursuant to Chapter 2.2
(commencing with Section 1340) of Division 2 of the Health and Safety
Code.
   (B) The employer provides nonoccupational health coverage in a
group health plan or a group health insurance policy as described in
Section 4616.7.
   (2) For purposes of paragraph (1), a personal physician shall meet
all of the following conditions:
   (A) Be the employee's regular physician and surgeon, licensed
pursuant to Chapter 5 (commencing with Section 2000) of Division 2 of
the Business and Professions Code.
   (B) Be the employee's primary care physician and has previously
directed the medical treatment of the employee, and who retains the
employee's medical records, including his or her medical history.
"Personal physician" includes a medical group, if the medical group
is a single corporation or partnership composed of licensed doctors
of medicine or osteopathy, which operates an integrated
multispecialty medical group providing comprehensive medical services
predominantly for nonoccupational illnesses and injuries.
   (C) The physician agrees to be predesignated.
   (3) If the employer provides nonoccupational health care pursuant
to Chapter 2.2 (commencing with Section 1340) of Division 2 of the
Health and Safety Code, and the employer is notified pursuant to
paragraph (1), all medical treatment, utilization review of medical
treatment, access to medical treatment, and other medical treatment
issues shall be governed by Chapter 2.2 (commencing with Section
1340) of Division 2 of the Health and Safety Code. Disputes regarding
the provision of medical treatment shall be resolved pursuant to
Article 5.55 (commencing with Section 1374.30) of Chapter 2.2 of
Division 2 of the Health and Safety Code.
   (4) If the employer provides nonoccupational health care, as
described in Section 4616.7, all medical treatment, utilization
review of medical treatment, access to medical treatment, and other
medical treatment issues shall be governed by the applicable
provisions of the Insurance Code.
   (5) The insurer may require prior authorization of any
nonemergency treatment or diagnostic service and may conduct
reasonably necessary utilization review pursuant to Section 4610.
   (6) An employee shall be entitled to all medically appropriate
referrals by the personal physician to other physicians or medical
providers within the nonoccupational health care plan. An employee
shall be entitled to treatment by physicians or other medical
providers outside of the nonoccupational health care plan pursuant to
standards established in Article 5 (commencing with Section 1367) of
Chapter 2.2 of Division 2 of the Health and Safety Code.
   (e) (1) When at the request of the employer, the employer's
insurer, the administrative director, the appeals board, or a workers'
compensation administrative law judge, the employee submits to
examination by a physician, he or she shall be entitled to receive,
in addition to all other benefits herein provided, all reasonable
expenses of transportation, meals, and lodging incident to reporting
for the examination, together with one day of temporary disability
indemnity for each day of wages lost in submitting to the
examination.
   (2) Regardless of the date of injury, "reasonable expenses of
transportation" includes mileage fees from the employee's home to the
place of the examination and back at the rate of twenty-one cents
($0.21) a mile or the mileage rate adopted by the Director of the
Department of Personnel Administration pursuant to Section 19820 of
the Government Code, whichever is higher, plus any bridge tolls. The
mileage and tolls shall be paid to the employee at the time he or she
is given notification of the time and place of the examination.
   (f) When at the request of the employer, the employer's insurer,
the administrative director, the appeals board, or a workers'
compensation administrative law judge, an employee submits to
examination by a physician and the employee does not proficiently
speak or understand the English language, he or she shall be entitled
to the services of a qualified interpreter in accordance with
conditions and a fee schedule prescribed by the administrative
director. These services shall be provided by the employer. For
purposes of this section, "qualified interpreter" means a language
interpreter certified, or deemed certified, pursuant to Article 8
(commencing with Section 11435.05) of Chapter 4.5 of Part 1 of
Division 3 of Title 2 of, or Section 68566 of, the Government Code.
   (g) This section shall become operative on January 1, 2010.

4600.1.  (a) Subject to subdivision (b), any person or entity that
dispenses medicines and medical supplies, as required by Section
4600, shall dispense the generic drug equivalent.
   (b) A person or entity shall not be required to dispense a generic
drug equivalent under either of the following circumstances:
   (1) When a generic drug equivalent is unavailable.
   (2) When the prescribing physician specifically provides in
writing that a nongeneric drug must be dispensed.
   (c) For purposes of this section, "dispense" has the same meaning
as the definition contained in Section 4024 of the Business and
Professions Code.
   (d) Nothing in this section shall be construed to preclude a
prescribing physician, who is also the dispensing physician, from
dispensing a generic drug equivalent.

4600.2.  (a) Notwithstanding Section 4600, when a self-insured
employer, group of self-insured employers, insurer of an employer, or
group of insurers contracts with a pharmacy, group of pharmacies, or
pharmacy benefit network to provide medicines and medical supplies
required by this article to be provided to injured employees, those
injured employees that are subject to the contract shall be provided
medicines and medical supplies in the manner prescribed in the
contract for as long as medicines or medical supplies are reasonably
required to cure or relieve the injured employee from the effects of
the injury.
   (b) Nothing in this section shall affect the ability of
employee-selected physicians to continue to prescribe and have the
employer provide medicines and medical supplies that the physicians
deem reasonably required to cure or relieve the injured employee from
the effects of the injury.
   (c) Each contract described in subdivision (a) shall comply with
standards adopted by the administrative director. In adopting those
standards, the administrative director shall seek to reduce
pharmaceutical costs and may consult any relevant studies or
practices in other states. The standards shall provide for access to
a pharmacy within a reasonable geographic distance from an injured
employee's residence.

4600.3.  (a) (1) Notwithstanding Section 4600, when a self-insured
employer, group of self-insured employers, or the insurer of an
employer contracts with a health care organization certified pursuant
to Section 4600.5 for health care services required by this article
to be provided to injured employees, those employees who are subject
to the contract shall receive medical services in the manner
prescribed in the contract, providing that the employee may choose to
be treated by a personal physician, personal chiropractor, or
personal acupuncturist that he or she has designated prior to the
injury, in which case the employee shall not be treated by the health
care organization. Every employee shall be given an affirmative
choice at the time of employment and at least annually thereafter to
designate or change the designation of a health care organization or
a personal physician, personal chiropractor, or personal
acupuncturist. The choice shall be memorialized in writing and
maintained in the employee's personnel records. The employee who has
designated a personal physician, personal chiropractor, or personal
acupuncturist may change their designated caregiver at any time prior
to the injury. Any employee who fails to designate a personal
physician, personal chiropractor, or personal acupuncturist shall be
treated by the health care organization selected by the employer. If
the health care organization offered by the employer is the workers'
compensation insurer that covers the employee or is an entity that
controls or is controlled by that insurer, as defined by Section 1215
of the Insurance Code, this information shall be included in the
notice of contract with a health care organization.
   (2) Each contract described in paragraph (1) shall comply with the
certification standards provided in Section 4600.5, and shall
provide all medical, surgical, chiropractic, acupuncture, and
hospital treatment, including nursing, medicines, medical and
surgical supplies, crutches, and apparatus, including artificial
members, that is reasonably required to cure or relieve the effects
of the injury, as required by this division, without any payment by
the employee of deductibles, copayments, or any share of the premium.
However, an employee may receive immediate emergency medical
treatment that is compensable from a medical service or health care
provider who is not a member of the health care organization.
   (3) Insured employers, a group of self-insured employers, or
self-insured employers who contract with a health care organization
for medical services shall give notice to employees of eligible
medical service providers and any other information regarding the
contract and manner of receiving medical services as the
administrative director may prescribe. Employees shall be duly
notified that if they choose to receive care from the health care
organization they must receive treatment for all occupational
injuries and illnesses as prescribed by this section.
   (b) Notwithstanding subdivision (a), no employer which is required
to bargain with an exclusive or certified bargaining agent which
represents employees of the employer in accordance with state or
federal employer-employee relations law shall contract with a health
care organization for purposes of Section 4600.5 with regard to
employees whom the bargaining agent is recognized or certified to
represent for collective bargaining purposes pursuant to state or
federal employer-employee relations law unless authorized to do so by
mutual agreement between the bargaining agent and the employer. If
the collective bargaining agreement is subject to the National Labor
Relations Act, the employer may contract with a health care
organization for purposes of Section 4600.5 at any time when the
employer and bargaining agent have bargained to impasse to the extent
required by federal law.
   (c) (1) When an employee is not receiving or is not eligible to
receive health care coverage for nonoccupational injuries or
illnesses provided by the employer, if 90 days from the date the
injury is reported the employee who has been receiving treatment from
a health care organization or his or her physician, chiropractor,
acupuncturist, or other agent notifies his or her employer in writing
that he or she desires to stop treatment by the health care
organization, he or she shall have the right to be treated by a
physician, chiropractor, or acupuncturist or at a facility of his or
her own choosing within a reasonable geographic area.
   (2) When an employee is receiving or is eligible to receive health
care coverage for nonoccupational injuries or illnesses provided by
the employer, and has agreed to receive care for occupational
injuries and illnesses from a health care organization provided by
the employer, the employee may be treated for occupational injuries
and diseases by a physician, chiropractor, or acupuncturist of his or
her own choice or at a facility of his or her own choice within a
reasonable geographic area if the employee or his or her physician,
chiropractor, acupuncturist, or other agent notifies his or her
employer in writing only after 180 days from the date the injury was
reported, or upon the date of contract renewal or open enrollment of
the health care organization, whichever occurs first, but in no case
until 90 days from the date the injury was reported.
   (3) For purposes of this subdivision, an employer shall be deemed
to provide health care coverage for nonoccupational injuries and
illnesses if the employer pays more than one-half the costs of the
coverage, or if the plan is established pursuant to collective
bargaining.
   (d) An employee and employer may agree to other forms of therapy
pursuant to Section 3209.7.
   (e) An employee enrolled in a health care organization shall have
the right to no less than one change of physician on request, and
shall be given a choice of physicians affiliated with the health care
organization. The health care organization shall provide the
employee a choice of participating physicians within five days of
receiving a request. In addition, the employee shall have the right
to a second opinion from a participating physician on a matter
pertaining to diagnosis or treatment from a participating physician.
   (f) Nothing in this section or Section 4600.5 shall be construed
to prohibit a self-insured employer, a group of self-insured
employers, or insurer from engaging in any activities permitted by
Section 4600.
   (g) Notwithstanding subdivision (c), in the event that the
employer, group of employers, or the employer's workers' compensation
insurer no longer contracts with the health care organization that
has been treating an injured employee, the employee may continue
treatment provided or arranged by the health care organization. If
the employee does not choose to continue treatment by the health care
organization, the employer may control the employee's treatment for
30 days from the date the injury was reported. After that period, the
employee may be treated by a physician of his or her own choice or
at a facility of his or her own choice within a reasonable geographic
area.

4600.35.  Any entity seeking to reimburse health care providers for
health care services rendered to injured workers on a capitated, or
per person per month basis, shall be licensed pursuant to the
Knox-Keene Health Care Service Plan Act of 1975 (Chapter 2.2
(commencing with Section 1340) of Division 2 of the Health and Safety
Code).

4600.4.  (a) A workers' compensation insurer, third-party
administrator, or other entity that requires, or pursuant to
regulation requires, a treating physician to obtain either
utilization review or prior authorization in order to diagnose or
treat injuries or diseases compensable under this article, shall
ensure the availability of those services from 9 a.m. to 5:30 p.m.
Pacific coast time of each normal business day.
   (b) For purposes of this section "normal business day" means a
business day as defined in Section 9 of the Civil Code.

4600.5.  (a) Any health care service plan licensed pursuant to the
Knox-Keene Health Care Service Plan Act, a disability insurer
licensed by the Department of Insurance, or any entity, including,
but not limited to, workers' compensation insurers and third-party
administrators authorized by the administrative director under
subdivision (e), may make written application to the administrative
director to become certified as a health care organization to provide
health care to injured employees for injuries and diseases
compensable under this article.
   (b) Each application for certification shall be accompanied by a
reasonable fee prescribed by the administrative director, sufficient
to cover the actual cost of processing the application. A certificate
is valid for the period that the director may prescribe unless
sooner revoked or suspended.
   (c) If the health care organization is a health care service plan
licensed pursuant to the Knox-Keene Health Care Service Plan Act, and
has provided the Managed Care Unit of the Division of Workers'
Compensation with the necessary documentation to comply with this
subdivision, that organization shall be deemed to be a health care
organization able to provide health care pursuant to Section 4600.3,
without further application duplicating the documentation already
filed with the Department of Managed Health Care. These plans shall
be required to remain in good standing with the Department of Managed
Health Care, and shall meet the following additional requirements:
   (1) Proposes to provide all medical and health care services that
may be required by this article.
   (2) Provides a program involving cooperative efforts by the
employees, the employer, and the health plan to promote workplace
health and safety, consultative and other services, and early return
to work for injured employees.
   (3) Proposes a timely and accurate method to meet the requirements
set forth by the administrative director for all carriers of workers'
compensation coverage to report necessary information regarding
medical and health care service cost and utilization, rates of return
to work, average time in medical treatment, and other measures as
determined by the administrative director to enable the director to
determine the effectiveness of the plan.
   (4) Agrees to provide the administrative director with
information, reports, and records prepared and submitted to the
Department of Managed Health Care in compliance with the Knox-Keene
Health Care Service Plan Act, relating to financial solvency,
provider accessibility, peer review, utilization review, and quality
assurance, upon request, if the administrative director determines
the information is necessary to verify that the plan is providing
medical treatment to injured employees in compliance with the
requirements of this code.
   Disclosure of peer review proceedings and records to the
administrative director shall not alter the status of the proceedings
or records as privileged and confidential communications pursuant to
Sections 1370 and 1370.1 of the Health and Safety Code.
   (5) Demonstrates the capability to provide occupational medicine
and related disciplines.
   (6) Complies with any other requirement the administrative
director determines is necessary to provide medical services to
injured employees consistent with the intent of this article,
including, but not limited to, a written patient grievance policy.
   (d) If the health care organization is a disability insurer
licensed by the Department of Insurance, and is in compliance with
subdivision (d) of Sections 10133 and 10133.5 of the Insurance Code,
the administrative director shall certify the organization to provide
health care pursuant to Section 4600.3 if the director finds that
the plan is in good standing with the Department of Insurance and
meets the following additional requirements:
   (1) Proposes to provide all medical and health care services that
may be required by this article.
   (2) Provides a program involving cooperative efforts by the
employees, the employer, and the health plan to promote workplace
health and safety, consultative and other services, and early return
to work for injured employees.
   (3) Proposes a timely and accurate method to meet the requirements
set forth by the administrative director for all carriers of workers'
compensation coverage to report necessary information regarding
medical and health care service cost and utilization, rates of return
to work, average time in medical treatment, and other measures as
determined by the administrative director to enable the director to
determine the effectiveness of the plan.
   (4) Agrees to provide the administrative director with
information, reports, and records prepared and submitted to the
Department of Insurance in compliance with the Insurance Code
relating to financial solvency, provider accessibility, peer review,
utilization review, and quality assurance, upon request, if the
administrative director determines the information is necessary to
verify that the plan is providing medical treatment to injured
employees consistent with the intent of this article.
   Disclosure of peer review proceedings and records to the
administrative director shall not alter the status of the proceedings
or records as privileged and confidential communications pursuant to
subdivision (d) of Section 10133 of the Insurance Code.
   (5) Demonstrates the capability to provide occupational medicine
and related disciplines.
   (6) Complies with any other requirement the administrative
director determines is necessary to provide medical services to
injured employees consistent with the intent of this article,
including, but not limited to, a written patient grievance policy.
   (e) If the health care organization is a workers' compensation
insurer, third-party administrator, or any other entity that the
administrative director determines meets the requirements of Section
4600.6, the administrative director shall certify the organization to
provide health care pursuant to Section 4600.3 if the director finds
that it meets the following additional requirements:
   (1) Proposes to provide all medical and health care services that
may be required by this article.
   (2) Provides a program involving cooperative efforts by the
employees, the employer, and the health plan to promote workplace
health and safety, consultative and other services, and early return
to work for injured employees.
   (3) Proposes a timely and accurate method to meet the requirements
set forth by the administrative director for all carriers of workers'
compensation coverage to report necessary information regarding
medical and health care service cost and utilization, rates of return
to work, average time in medical treatment, and other measures as
determined by the administrative director to enable the director to
determine the effectiveness of the plan.
   (4) Agrees to provide the administrative director with
information, reports, and records relating to provider accessibility,
peer review, utilization review, quality assurance, advertising,
disclosure, medical and financial audits, and grievance systems, upon
request, if the administrative director determines the information
is necessary to verify that the plan is providing medical treatment
to injured employees consistent with the intent of this article.
   Disclosure of peer review proceedings and records to the
administrative director shall not alter the status of the proceedings
or records as privileged and confidential communications pursuant to
subdivision (d) of Section 10133 of the Insurance Code.
   (5) Demonstrates the capability to provide occupational medicine
and related disciplines.
   (6) Complies with any other requirement the administrative
director determines is necessary to provide medical services to
injured employees consistent with the intent of this article,
including, but not limited to, a written patient grievance policy.
   (7) Complies with the following requirements:
   (A) An organization certified by the administrative director under
this subdivision may not provide or undertake to arrange for the
provision of health care to employees, or to pay for or to reimburse
any part of the cost of that health care in return for a prepaid or
periodic charge paid by or on behalf of those employees.
   (B) Every organization certified under this subdivision shall
operate on a fee-for-service basis. As used in this section, fee for
service refers to the situation where the amount of reimbursement
paid by the employer to the organization or providers of health care
is determined by the amount and type of health care rendered by the
organization or provider of health care.
   (C) An organization certified under this subdivision is prohibited
from assuming risk.
   (f) (1) A workers' compensation health care provider organization
authorized by the Department of Corporations on December 31, 1997,
shall be eligible for certification as a health care organization
under subdivision (e).
   (2) An entity that had, on December 31, 1997, submitted an
application with the Commissioner of Corporations under Part 3.2
(commencing with Section 5150) shall be considered an applicant for
certification under subdivision (e) and shall be entitled to priority
in consideration of its application. The Commissioner of
Corporations shall provide complete files for all pending
applications to the administrative director on or before January 31,
1998.
   (g) The provisions of this section shall not affect the
confidentiality or admission in evidence of a claimant's medical
treatment records.
   (h) Charges for services arranged for or provided by health care
service plans certified by this section and that are paid on a
per-enrollee-periodic-charge basis shall not be subject to the
schedules adopted by the administrative director pursuant to Section
5307.1.
   (i) Nothing in this section shall be construed to expand or
constrict any requirements imposed by law on a health care service
plan or insurer when operating as other than a health care
organization pursuant to this section.
   (j) In consultation with interested parties, including the
Department of Corporations and the Department of Insurance, the
administrative director shall adopt rules necessary to carry out this
section.
   (k) The administrative director shall refuse to certify or may
revoke or suspend the certification of any health care organization
under this section if the director finds that:
   (1) The plan for providing medical treatment fails to meet the
requirements of this section.
   (2) A health care service plan licensed by the Department of
Managed Health Care, a workers' compensation health care provider
organization authorized by the Department of Corporations, or a
carrier licensed by the Department of Insurance is not in good
standing with its licensing agency.
   (3) Services under the plan are not being provided in accordance
with the terms of a certified plan.
   (l) (1) When an injured employee requests chiropractic treatment
for work-related injuries, the health care organization shall provide
the injured worker with access to the services of a chiropractor
pursuant to guidelines for chiropractic care established by paragraph
(2). Within five working days of the employee's request to see a
chiropractor, the health care organization and any person or entity
who directs the kind or manner of health care services for the plan
shall refer an injured employee to an affiliated chiropractor for
work-related injuries that are within the guidelines for chiropractic
care established by paragraph (2). Chiropractic care rendered in
accordance with guidelines for chiropractic care established pursuant
to paragraph (2) shall be provided by duly licensed chiropractors
affiliated with the plan.
   (2) The health care organization shall establish guidelines for
chiropractic care in consultation with affiliated chiropractors who
are participants in the health care organization's utilization review
process for chiropractic care, which may include qualified medical
evaluators knowledgeable in the treatment of chiropractic conditions.
The guidelines for chiropractic care shall, at a minimum, explicitly
require the referral of any injured employee who so requests to an
affiliated chiropractor for the evaluation or treatment, or both, of
neuromusculoskeletal conditions.
   (3) Whenever a dispute concerning the appropriateness or necessity
of chiropractic care for work-related injuries arises, the dispute
shall be resolved by the health care organization's utilization
review process for chiropractic care in accordance with the health
care organization's guidelines for chiropractic care established by
paragraph (2).
   Chiropractic utilization review for work-related injuries shall be
conducted in accordance with the health care organization's approved
quality assurance standards and utilization review process for
chiropractic care. Chiropractors affiliated with the plan shall have
access to the health care organization's provider appeals process
and, in the case of chiropractic care for work-related injuries, the
review shall include review by a chiropractor affiliated with the
health care organization, as determined by the health care
organization.
   (4) The health care organization shall inform employees of the
procedures for processing and resolving grievances, including those
related to chiropractic care, including the location and telephone
number where grievances may be submitted.
   (5) All guidelines for chiropractic care and utilization review
shall be consistent with the standards of this code that require care
to cure or relieve the effects of the industrial injury.
   (m) Individually identifiable medical information on patients
submitted to the division shall not be subject to the California
Public Records Act (Chapter 3.5 (commencing with Section 6250) of
Division 7 of Title 1 of the Government Code).
   (n) (1) When an injured employee requests acupuncture treatment
for work-related injuries, the health care organization shall provide
the injured worker with access to the services of an acupuncturist
pursuant to guidelines for acupuncture care established by paragraph
(2). Within five working days of the employee's request to see an
acupuncturist, the health care organization and any person or entity
who directs the kind or manner of health care services for the plan
shall refer an injured employee to an affiliated acupuncturist for
work-related injuries that are within the guidelines for acupuncture
care established by paragraph (2). Acupuncture care rendered in
accordance with guidelines for acupuncture care established pursuant
to paragraph (2) shall be provided by duly licensed acupuncturists
affiliated with the plan.
   (2) The health care organization shall establish guidelines for
acupuncture care in consultation with affiliated acupuncturists who
are participants in the health care organization's utilization review
process for acupuncture care, which may include qualified medical
evaluators. The guidelines for acupuncture care shall, at a minimum,
explicitly require the referral of any injured employee who so
requests to an affiliated acupuncturist for the evaluation or
treatment, or both, of neuromusculoskeletal conditions.
   (3) Whenever a dispute concerning the appropriateness or necessity
of acupuncture care for work-related injuries arises, the dispute
shall be resolved by the health care organization's utilization
review process for acupuncture care in accordance with the health
care organization's guidelines for acupuncture care established by
paragraph (2).
   Acupuncture utilization review for work-related injuries shall be
conducted in accordance with the health care organization's approved
quality assurance standards and utilization review process for
acupuncture care. Acupuncturists affiliated with the plan shall have
access to the health care organization's provider appeals process
and, in the case of acupuncture care for work-related injuries, the
review shall include review by an acupuncturist affiliated with the
health care organization, as determined by the health care
organization.
   (4) The health care organization shall inform employees of the
procedures for processing and resolving grievances, including those
related to acupuncture care, including the location and telephone
number where grievances may be submitted.
   (5) All guidelines for acupuncture care and utilization review
shall be consistent with the standards of this code that require care
to cure or relieve the effects of the industrial injury.

4600.6.  Any workers' compensation insurer, third-party
administrator, or other entity seeking certification as a health care
organization under subdivision (e) of Section 4600.5 shall be
subject to the following rules and procedures:
   (a) Each application for authorization as an organization under
subdivision (e) of Section 4600.5 shall be verified by an authorized
representative of the applicant and shall be in a form prescribed by
the administrative director. The application shall be accompanied by
the prescribed fee and shall set forth or be accompanied by each and
all of the following:
   (1) The basic organizational documents of the applicant, such as
the articles of incorporation, articles of association, partnership
agreement, trust agreement, or other applicable documents and all
amendments thereto.
   (2) A copy of the bylaws, rules, and regulations, or similar
documents regulating the conduct of the internal affairs of the
applicant.
   (3) A list of the names, addresses, and official positions of the
persons who are to be responsible for the conduct of the affairs of
the applicant, which shall include, among others, all members of the
board of directors, board of trustees, executive committee, or other
governing board or committee, the principal officers, each
shareholder with over 5 percent interest in the case of a
corporation, and all partners or members in the case of a partnership
or association, and each person who has loaned funds to the
applicant for the operation of its business.
   (4) A copy of any contract made, or to be made, between the
applicant and any provider of health care, or persons listed in
paragraph (3), or any other person or organization agreeing to
perform an administrative function or service for the plan. The
administrative director by rule may identify contracts excluded from
this requirement and make provision for the submission of form
contracts. The payment rendered or to be rendered to the provider of
health care services shall be deemed confidential information that
shall not be divulged by the administrative director, except that the
payment may be disclosed and become a public record in any
legislative, administrative, or judicial proceeding or inquiry. The
organization shall also submit the name and address of each provider
employed by, or contracting with, the organization, together with his
or her license number.
   (5) A statement describing the organization, its method of
providing for health services, and its physical facilities. If
applicable, this statement shall include the health care delivery
capabilities of the organization, including the number of full-time
and part-time physicians under Section 3209.3, the numbers and types
of licensed or state-certified health care support staff, the number
of hospital beds contracted for, and the arrangements and the methods
by which health care will be provided, as defined by the
administrative director under Sections 4600.3 and 4600.5.
   (6) A copy of the disclosure forms or materials that are to be
issued to employees.
   (7) A copy of the form of the contract that is to be issued to any
employer, insurer of an employer, or a group of self-insured
employers.
   (8) Financial statements accompanied by a report, certificate, or
opinion of an independent certified public accountant. However, the
financial statements from public entities or political subdivisions
of the state need not include a report, certificate, or opinion by an
independent certified public accountant if the financial statement
complies with any requirements that may be established by regulation
of the administrative director.
   (9) A description of the proposed method of marketing the
organization and a copy of any contract made with any person to
solicit on behalf of the organization or a copy of the form of
agreement used and a list of the contracting parties.
   (10) A statement describing the service area or areas to be
served, including the service location for each provider rendering
professional services on behalf of the organization and the location
of any other organization facilities where required by the
administrative director.
   (11) A description of organization grievance procedures to be
utilized as required by this part, and a copy of the form specified
by paragraph (3) of subdivision (j).
   (12) A description of the procedures and programs for internal
review of the quality of health care pursuant to the requirements set
forth in this part.
   (13) Evidence of adequate insurance coverage or self-insurance to
respond to claims for damages arising out of the furnishing of
workers' compensation health care.
   (14) Evidence of adequate insurance coverage or self-insurance to
protect against losses of facilities where required by the
administrative director.
   (15) Evidence of adequate workers' compensation coverage to
protect against claims arising out of work-related injuries that
might be brought by the employees and staff of an organization
against the organization.
   (16) Evidence of fidelity bonds in such amount as the
administrative director prescribes by regulation.
   (17) Other information that the administrative director may
reasonably require.
   (b) (1) An organization, solicitor, solicitor firm, or
representative may not use or permit the use of any advertising or
solicitation that is untrue or misleading, or any form of disclosure
that is deceptive. For purposes of this chapter:
   (A) A written or printed statement or item of information shall be
deemed untrue if it does not conform to fact in any respect that is
or may be significant to an employer or employee, or potential
employer or employee.
   (B) A written or printed statement or item of information shall be
deemed misleading whether or not it may be literally true, if, in
the total context in which the statement is made or the item of
information is communicated, the statement or item of information may
be understood by a person not possessing special knowledge regarding
health care coverage, as indicating any benefit or advantage, or the
absence of any exclusion, limitation, or disadvantage of possible
significance to an employer or employee, or potential employer or
employee.
   (C) A disclosure form shall be deemed to be deceptive if the
disclosure form taken as a whole and with consideration given to
typography and format, as well as language, shall be such as to cause
a reasonable person, not possessing special knowledge of workers'
compensation health care, and the disclosure form therefor, to expect
benefits, service charges, or other advantages that the disclosure
form does not provide or that the organization issuing that
disclosure form does not regularly make available to employees.
   (2) An organization, solicitor, or representative may not use or
permit the use of any verbal statement that is untrue, misleading, or
deceptive or make any representations about health care offered by
the organization or its cost that does not conform to fact. All
verbal statements are to be held to the same standards as those for
printed matter provided in paragraph (1).
   (c) It is unlawful for any person, including an organization,
subject to this part, to represent or imply in any manner that the
person or organization has been sponsored, recommended, or approved,
or that the person's or organization's abilities or qualifications
have in any respect been passed upon, by the administrative director.
   (d) (1) An organization may not publish or distribute, or allow to
be published or distributed on its behalf, any advertisement unless
(A) a true copy thereof has first been filed with the administrative
director, at least 30 days prior to any such use, or any shorter
period as the administrative director by rule or order may allow, and
(B) the administrative director by notice has not found the
advertisement, wholly or in part, to be untrue, misleading,
deceptive, or otherwise not in compliance with this part or the rules
thereunder, and specified the deficiencies, within the 30 days or
any shorter time as the administrative director by rule or order may
allow.
   (2) If the administrative director finds that any advertisement of
an organization has materially failed to comply with this part or
the rules thereunder, the administrative director may, by order,
require the organization to publish in the same or similar medium, an
approved correction or retraction of any untrue, misleading, or
deceptive statement contained in the advertising.
   (3) The administrative director by rule or order may classify
organizations and advertisements and exempt certain classes, wholly
or in part, either unconditionally or upon specified terms and
conditions or for specified periods, from the application of
subdivision (a).
   (e) (1) The administrative director shall require the use by each
organization of disclosure forms or materials containing any
information regarding the health care and terms of the workers'
compensation health care contract that the administrative director
may require, so as to afford the public, employers, and employees
with a full and fair disclosure of the provisions of the contract in
readily understood language and in a clearly organized manner. The
administrative director may require that the materials be presented
in a reasonably uniform manner so as to facilitate comparisons
between contracts of the same or other types of organizations. The
disclosure form shall describe the health care that is required by
the administrative director under Sections 4600.3 and 4600.5, and
shall provide that all information be in concise and specific terms,
relative to the contract, together with any additional information as
may be required by the administrative director, in connection with
the organization or contract.
   (2) All organizations, solicitors, and representatives of a
workers' compensation health care provider organization shall, when
presenting any contract for examination or sale to a prospective
employee, provide the employee with a properly completed disclosure
form, as prescribed by the administrative director pursuant to this
section for each contract so examined or sold.
   (3) In addition to the other disclosures required by this section,
every organization and any agent or employee of the organization
shall, when representing an organization for examination or sale to
any individual purchaser or the representative of a group consisting
of 25 or fewer individuals, disclose in writing the ratio of premium
cost to health care paid for contracts with individuals and with
groups of the same or similar size for the organization's preceding
fiscal year. An organization may report that information by
geographic area, provided the organization identifies the geographic
area and reports information applicable to that geographic area.
   (4) Where the administrative director finds it necessary in the
interest of full and fair disclosure, all advertising and other
consumer information disseminated by an organization for the purpose
of influencing persons to become members of an organization shall
contain any supplemental disclosure information that the
administrative director may require.
   (f) When the administrative director finds it necessary in the
interest of full and fair disclosure, all advertising and other
consumer information disseminated by an organization for the purpose
of influencing persons to become members of an organization shall
contain any supplemental disclosure information that the
administrative director may require.
   (g) (1) An organization may not refuse to enter into any contract,
or may not cancel or decline to renew or reinstate any contract,
because of the age or any characteristic listed or defined in
subdivision (b) or (e) of Section 51 of the Civil Code of any
contracting party, prospective contracting party, or person
reasonably expected to benefit from that contract as an employee or
otherwise.
   (2) The terms of any contract shall not be modified, and the
benefits or coverage of any contract shall not be subject to any
limitations, exceptions, exclusions, reductions, copayments,
coinsurance, deductibles, reservations, or premium, price, or charge
differentials, or other modifications because of the age or any
characteristic listed or defined in subdivision (b) or (e) of Section
51 of the Civil Code of any contracting party, potential contracting
party, or person reasonably expected to benefit from that contract
as an employee or otherwise; except that premium, price, or charge
differentials because of the sex or age of any individual when based
on objective, valid, and up-to-date statistical and actuarial data
are not prohibited. Nothing in this section shall be construed to
permit an organization to charge different rates to individual
employees within the same group solely on the basis of the employee's
sex.
   (3) It shall be deemed a violation of subdivision (a) for any
organization to utilize marital status, living arrangements,
occupation, gender, beneficiary designation, ZIP Codes or other
territorial classification, or any combination thereof for the
purpose of establishing sexual orientation. Nothing in this section
shall be construed to alter in any manner the existing law
prohibiting organizations from conducting tests for the presence of
human immunodeficiency virus or evidence thereof.
   (4) This section shall not be construed to limit the authority of
the administrative director to adopt or enforce regulations
prohibiting discrimination because of sex, marital status, or sexual
orientation.
   (h) (1) An organization may not use in its name any of the words
"insurance," "casualty," "health care service plan," "health plan,"
"surety," "mutual," or any other words descriptive of the health
plan, insurance, casualty, or surety business or use any name similar
to the name or description of any health care service plan,
insurance, or surety corporation doing business in this state unless
that organization controls or is controlled by an entity licensed as
a health care service plan or insurer pursuant to the Health and
Safety Code or the Insurance Code and the organization employs a name
related to that of the controlled or controlling entity.
   (2) Section 2415 of the Business and Professions Code, pertaining
to fictitious names, does not apply to organizations certified under
this section.
   (3) An organization or solicitor firm may not adopt a name style
that is deceptive, or one that could cause the public to believe the
organization is affiliated with or recommended by any governmental or
private entity unless this affiliation or endorsement exists.
   (i) Each organization shall meet the following requirements:
   (1) All facilities located in this state, including, but not
limited to, clinics, hospitals, and skilled nursing facilities, to be
utilized by the organization shall be licensed by the State
Department of Health Services, if that licensure is required by law.
Facilities not located in this state shall conform to all licensing
and other requirements of the jurisdiction in which they are located.
   (2) All personnel employed by or under contract to the
organization shall be licensed or certified by their respective board
or agency, where that licensure or certification is required by law.
   (3) All equipment required to be licensed or registered by law
shall be so licensed or registered and the operating personnel for
that equipment shall be licensed or certified as required by law.
   (4) The organization shall furnish services in a manner providing
continuity of care and ready referral of patients to other providers
at any time as may be appropriate and consistent with good
professional practice.
   (5) All health care shall be readily available at reasonable times
to all employees. To the extent feasible, the organization shall
make all health care readily accessible to all employees.
   (6) The organization shall employ and utilize allied health
manpower for the furnishing of health care to the extent permitted by
law and consistent with good health care practice.
   (7) The organization shall have the organizational and
administrative capacity to provide services to employees. The
organization shall be able to demonstrate to the department that
health care decisions are rendered by qualified providers, unhindered
by fiscal and administrative management.
   (8) All contracts with employers, insurers of employers, and
self-insured employers and all contracts with providers, and other
persons furnishing services, equipment, or facilities to or in
connection with the workers' compensation health care organization,
shall be fair, reasonable, and consistent with the objectives of this
part.
   (9) Each organization shall provide to employees all workers'
compensation health care required by this code. The administrative
director shall not determine the scope of workers' compensation
health care to be offered by an organization.
   (j) (1) Every organization shall establish and maintain a
grievance system approved by the administrative director under which
employees may submit their grievances to the organization. Each
system shall provide reasonable procedures in accordance with
regulations adopted by the administrative director that shall ensure
adequate consideration of employee grievances and rectification when
appropriate.
   (2) Every organization shall inform employees upon enrollment and
annually thereafter of the procedures for processing and resolving
grievances. The information shall include the location and telephone
number where grievances may be submitted.
   (3) Every organization shall provide forms for complaints to be
given to employees who wish to register written complaints. The forms
used by organizations shall be approved by the administrative
director in advance as to format.
   (4) The organization shall keep in its files all copies of
complaints, and the responses thereto, for a period of five years.
   (k) Every organization shall establish procedures in accordance
with regulations of the administrative director for continuously
reviewing the quality of care, performance of medical personnel,
utilization of services and facilities, and costs. Notwithstanding
any other provision of law, there shall be no monetary liability on
the part of, and no cause of action for damages shall arise against,
any person who participates in quality of care or utilization reviews
by peer review committees that are composed chiefly of physicians,
as defined by Section 3209.3, for any act performed during the
reviews if the person acts without malice, has made a reasonable
effort to obtain the facts of the matter, and believes that the
action taken is warranted by the facts, and neither the proceedings
nor the records of the reviews shall be subject to discovery, nor
shall any person in attendance at the reviews be required to testify
as to what transpired thereat. Disclosure of the proceedings or
records to the governing body of an organization or to any person or
entity designated by the organization to review activities of the
committees shall not alter the status of the records or of the
proceedings as privileged communications.
   The above prohibition relating to discovery or testimony does not
apply to the statements made by any person in attendance at a review
who is a party to an action or proceeding the subject matter of which
was reviewed, or to any person requesting hospital staff privileges,
or in any action against an insurance carrier alleging bad faith by
the carrier in refusing to accept a settlement offer within the
policy limits, or to the administrative director in conducting
surveys pursuant to subdivision (o).
   This section shall not be construed to confer immunity from
liability on any workers' compensation health care organization. In
any case in which, but for the enactment of the preceding provisions
of this section, a cause of action would arise against an
organization, the cause of action shall exist notwithstanding the
provisions of this section.
   (l) Nothing in this chapter shall be construed to prevent an
organization from utilizing subcommittees to participate in peer
review activities, nor to prevent an organization from delegating the
responsibilities required by subdivision (i) as it determines to be
appropriate, to subcommittees including subcommittees composed of a
majority of nonphysician health care providers licensed pursuant to
the Business and Professions Code, as long as the organization
controls the scope of authority delegated and may revoke all or part
of this authority at any time. Persons who participate in the
subcommittees shall be entitled to the same immunity from monetary
liability and actions for civil damages as persons who participate in
organization or provider peer review committees pursuant to
subdivision (i).
   (m) Every organization shall have and shall demonstrate to the
administrative director that it has all of the following:
   (1) Adequate provision for continuity of care.
   (2) A procedure for prompt payment and denial of provider claims.
   (n) Every contract between an organization and an employer or
insurer of an employer, and every contract between any organization
and a provider of health care, shall be in writing.
   (o) (1) The administrative director shall conduct periodically an
onsite medical survey of the health care delivery system of each
organization. The survey shall include a review of the procedures for
obtaining health care, the procedures for regulating utilization,
peer review mechanisms, internal procedures for assuring quality of
care, and the overall performance of the organization in providing
health care and meeting the health needs of employees.
   (2) The survey shall be conducted by a panel of qualified health
professionals experienced in evaluating the delivery of workers'
compensation health care. The administrative director shall be
authorized to contract with professional organizations or outside
personnel to conduct medical surveys. These organizations or
personnel shall have demonstrated the ability to objectively evaluate
the delivery of this health care.
   (3) Surveys performed pursuant to this section shall be conducted
as often as deemed necessary by the administrative director to assure
the protection of employees, but not less frequently than once every
three years. Nothing in this section shall be construed to require
the survey team to visit each clinic, hospital, office, or facility
of the organization.
   (4) Nothing in this section shall be construed to require the
medical survey team to review peer review proceedings and records
conducted and compiled under this section or in medical records.
However, the administrative director shall be authorized to require
onsite review of these peer review proceedings and records or medical
records where necessary to determine that quality health care is
being delivered to employees. Where medical record review is
authorized, the survey team shall ensure that the confidentiality of
the physician-patient relationship is safeguarded in accordance with
existing law and neither the survey team nor the administrative
director or the administrative director's staff may be compelled to
disclose this information except in accordance with the
physician-patient relationship. The administrative director shall
ensure that the confidentiality of the peer review proceedings and
records is maintained. The disclosure of the peer review proceedings
and records to the administrative director or the medical survey team
shall not alter the status of the proceedings or records as
privileged and confidential communications.
   (5) The procedures and standards utilized by the survey team shall
be made available to the organizations prior to the conducting of
medical surveys.
   (6) During the survey, the members of the survey team shall offer
such advice and assistance to the organization as deemed appropriate.
   (7) The administrative director shall notify the organization of
deficiencies found by the survey team. The administrative director
shall give the organization a reasonable time to correct the
deficiencies, and failure on the part of the organization to comply
to the administrative director's satisfaction shall constitute cause
for disciplinary action against the organization.
   (8) Reports of all surveys, deficiencies, and correction plans
shall be open to public inspection, except that no surveys,
deficiencies or correction plans shall be made public unless the
organization has had an opportunity to review the survey and file a
statement of response within 30 days, to be attached to the report.
   (p) (1) All records, books, and papers of an organization,
management company, solicitor, solicitor firm, and any provider or
subcontractor providing medical or other services to an organization,
management company, solicitor, or solicitor firm shall be open to
inspection during normal business hours by the administrative
director.
   (2) To the extent feasible, all the records, books, and papers
described in paragraph (1) shall be located in this state. In
examining those records outside this state, the administrative
director shall consider the cost to the organization, consistent with
the effectiveness of the administrative director's examination, and
may upon reasonable notice require that these records, books, and
papers, or a specified portion thereof, be made available for
examination in this state, or that a true and accurate copy of these
records, books, and papers, or a specified portion thereof, be
furnished to the administrative director.
   (q) (1) The administrative director shall conduct an examination
of the administrative affairs of any organization, and each person
with whom the organization has made arrangements for administrative,
or management services, as often as deemed necessary to protect the
interest of employees, but not less frequently than once every five
years.
   (2) The expense of conducting any additional or nonroutine
examinations pursuant to this section, and the expense of conducting
any additional or nonroutine medical surveys pursuant to subdivision
(o) shall be charged against the organization being examined or
surveyed. The amount shall include the actual salaries or
compensation paid to the persons making the examination or survey,
the expenses incurred in the course thereof, and overhead costs in
connection therewith as fixed by the administrative director. In
determining the cost of examinations or surveys, the administrative
director may use the estimated average hourly cost for all persons
performing examinations or surveys of workers' compensation health
care organizations for the fiscal year. The amount charged shall be
remitted by the organization to the administrative director.
   (3) Reports of all examinations shall be open to public
inspection, except that no examination shall be made public, unless
the organization has had an opportunity to review the examination
report and file a statement or response within 30 days, to be
attached to the report.

4600.7.  (a) The Workers' Compensation Managed Care Fund is hereby
created in the State Treasury for the administration of Sections
4600.3 and 4600.5 by the Division of Workers' Compensation. The
administrative director shall establish a schedule of fees and
revenues to be charged to certified health care organizations and
applicants for certification to fully fund the administration of
these provisions and to repay amounts received as a loan from the
General Fund. All fees and revenues shall be deposited in the Workers'
Compensation Managed Care Fund and shall be used when appropriated
by the Legislature solely for the purpose of carrying out the
responsibilities of the Division of Workers' Compensation under
Section 4600.3 or 4600.5.
   (b) On and after July 1, 1998, no funds received as a loan from
the General Fund shall be used to support the administration of
Sections 4600.3 and 4600.5. The loan amount shall be repaid to the
General Fund by assessing a surcharge on the enrollment fee for each
of the next five fiscal years. In the event the surcharge does not
produce sufficient revenue over this period, the surcharge shall be
adjusted to fully repay the loan over the following three fiscal
years, with the final assessment calculated by dividing the balance
of the loan by the enrollees at the end of the final fiscal year.

4601.  (a) If the employee so requests, the employer shall tender
the employee one change of physician. The employee at any time may
request that the employer tender this one-time change of physician.
Upon request of the employee for a change of physician, the maximum
amount of time permitted by law for the employer or insurance carrier
to provide the employee an alternative physician or, if requested by
the employee, a chiropractor, or an acupuncturist shall be five
working days from the date of the request. Notwithstanding the 30-day
time period specified in Section 4600, a request for a change of
physician pursuant to this section may be made at any time. The
employee is entitled, in any serious case, upon request, to the
services of a consulting physician, chiropractor, or acupuncturist of
his or her choice at the expense of the employer. The treatment
shall be at the expense of the employer.
   (b) If an employee requesting a change of physician pursuant to
subdivision (a) has notified his or her employer in writing prior to
the date of injury that he or she has a personal chiropractor, the
alternative physician tendered by the employer to the employee, if
the employee so requests, shall be the employee's personal
chiropractor. For the purpose of this article, "personal chiropractor"
means the employee's regular chiropractor licensed pursuant to
Chapter 2 (commencing with Section 1000) of Division 2 of the
Business and Professions Code, who has previously directed treatment
of the employee, and who retains the employee's chiropractic
treatment records, including his or her chiropractic history.
   (c) If an employee requesting a change of physician pursuant to
subdivision (a) has notified his or her employer in writing prior to
the date of injury that he or she has a personal acupuncturist, the
alternative physician tendered by the employer to the employee, if
the employee so requests, shall be the employee's personal
acupuncturist. For the purpose of this article, "personal
acupuncturist" means the employee's regular acupuncturist licensed
pursuant to Chapter 12 (commencing with Section 4935) of Division 2
of the Business and Professions Code, who has previously directed
treatment of the employee, and who retains the employee's acupuncture
treatment records, including his or her acupuncture history.

4602.  If the employee so requests, the employer shall procure
certification by either the administrative director or the appeals
board as the case may be of the competency, for the particular case,
of the consulting or additional physicians.

4603.  If the employer desires a change of physicians or
chiropractor, he may petition the administrative director who, upon a
showing of good cause by the employer, may order the employer to
provide a panel of five physicians, or if requested by the employee,
four physicians and one chiropractor competent to treat the
particular case, from which the employee must select one.

4603.2.  (a) Upon selecting a physician pursuant to Section 4600,
the employee or physician shall forthwith notify the employer of the
name and address of the physician. The physician shall submit a
report to the employer within five working days from the date of the
initial examination and shall submit periodic reports at intervals
that may be prescribed by rules and regulations adopted by the
administrative director.
   (b) (1) Except as provided in subdivision (d) of Section 4603.4,
or under contracts authorized under Section 5307.11, payment for
medical treatment provided or authorized by the treating physician
selected by the employee or designated by the employer shall be made
at reasonable maximum amounts in the official medical fee schedule,
pursuant to Section 5307.1, in effect on the date of service.
Payments shall be made by the employer within 45 working days after
receipt of each separate, itemization of medical services provided,
together with any required reports and any written authorization for
services that may have been received by the physician. If the
itemization or a portion thereof is contested, denied, or considered
incomplete, the physician shall be notified, in writing, that the
itemization is contested, denied, or considered incomplete, within 30
working days after receipt of the itemization by the employer. A
notice that an itemization is incomplete shall state all additional
information required to make a decision. Any properly documented list
of services provided not paid at the rates then in effect under
Section 5307.1 within the 45-working-day period shall be increased by
15 percent, together with interest at the same rate as judgments in
civil actions retroactive to the date of receipt of the itemization,
unless the employer does both of the following:
   (A) Pays the provider at the rates in effect within the
45-working-day period.
   (B) Advises, in the manner prescribed by the administrative
director, the physician, or another provider of the items being
contested, the reasons for contesting these items, and the remedies
available to the physician or the other provider if he or she
disagrees. In the case of an itemization that includes services
provided by a hospital, outpatient surgery center, or independent
diagnostic facility, advice that a request has been made for an audit
of the itemization shall satisfy the requirements of this paragraph.
   An employer's liability to a physician or another provider under
this section for delayed payments shall not affect its liability to
an employee under Section 5814 or any other provision of this
division.
   (2) Notwithstanding paragraph (1), if the employer is a
governmental entity, payment for medical treatment provided or
authorized by the treating physician selected by the employee or
designated by the employer shall be made within 60 working days after
receipt of each separate itemization, together with any required
reports and any written authorization for services that may have been
received by the physician.
   (c) Any interest or increase in compensation paid by an insurer
pursuant to this section shall be treated in the same manner as an
increase in compensation under subdivision (d) of Section 4650 for
the purposes of any classification of risks and premium rates, and
any system of merit rating approved or issued pursuant to Article 2
(commencing with Section 11730) of Chapter 3 of Part 3 of Division 2
of the Insurance Code.
   (d) (1) Whenever an employer or insurer employs an individual or
contracts with an entity to conduct a review of an itemization
submitted by a physician or medical provider, the employer or insurer
shall make available to that individual or entity all documentation
submitted together with that itemization by the physician or medical
provider. When an individual or entity conducting a itemization
review determines that additional information or documentation is
necessary to review the itemization, the individual or entity shall
contact the claims administrator or insurer to obtain the necessary
information or documentation that was submitted by the physician or
medical provider pursuant to subdivision (b).
   (2) An individual or entity reviewing an itemization of service
submitted by a physician or medical provider shall not alter the
procedure codes listed or recommend reduction of the amount of the
payment unless the documentation submitted by the physician or
medical provider with the itemization of service has been reviewed by
that individual or entity. If the reviewer does not recommend
payment for services as itemized by the physician or medical
provider, the explanation of review shall provide the physician or
medical provider with a specific explanation as to why the reviewer
altered the procedure code or changed other parts of the itemization
and the specific deficiency in the itemization or documentation that
caused the reviewer to conclude that the altered procedure code or
amount recommended for payment more accurately represents the service
performed.
   (3) The appeals board shall have jurisdiction over disputes
arising out of this subdivision pursuant to Section 5304.

4603.4.  (a) The administrative director shall adopt rules and
regulations to do all of the following:
   (1) Ensure that all health care providers and facilities submit
medical bills for payment on standardized forms.
   (2) Require acceptance by employers of electronic claims for
payment of medical services.
   (3) Ensure confidentiality of medical information submitted on
electronic claims for payment of medical services.
   (b) To the extent feasible, standards adopted pursuant to
subdivision (a) shall be consistent with existing standards under the
federal Health Insurance Portability and Accountability Act of 1996.
   (c) The rules and regulations requiring employers to accept
electronic claims for payment of medical services shall be adopted on
or before January 1, 2005, and shall require all employers to accept
electronic claims for payment of medical services on or before July
1, 2006.
   (d) Payment for medical treatment provided or authorized by the
treating physician selected by the employee or designated by the
employer shall be made by the employer within 15 working days after
electronic receipt of an itemized electronic billing for services at
or below the maximum fees provided in the official medical fee
schedule adopted pursuant to Section 5307.1. If the billing is
contested, denied, or incomplete, payment shall be made in accordance
with Section 4603.2.

4603.5.  The administrative director shall adopt rules pertaining to
the format and content of notices required by this article; define
reasonable geographic areas for the purposes of Section 4600; specify
time limits for all such notices, and responses thereto; and adopt
any other rules necessary to make effective the requirements of this
article.
   Employers shall notify all employees of their rights under this
section.

4604.  Controversies between employer and employee arising under
this chapter shall be determined by the appeals board, upon the
request of either party.

4604.5.  (a) Upon adoption by the administrative director of a
medical treatment utilization schedule pursuant to Section 5307.27,
the recommended guidelines set forth in the schedule shall be
presumptively correct on the issue of extent and scope of medical
treatment. The presumption is rebuttable and may be controverted by a
preponderance of the scientific medical evidence establishing that a
variance from the guidelines reasonably is required to cure or
relieve the injured worker from the effects of his or her injury. The
presumption created is one affecting the burden of proof.
   (b) The recommended guidelines set forth in the schedule adopted
pursuant to subdivision (a) shall reflect practices that are evidence
and scientifically based, nationally recognized, and peer reviewed.
The guidelines shall be designed to assist providers by offering an
analytical framework for the evaluation and treatment of injured
workers, and shall constitute care in accordance with Section 4600
for all injured workers diagnosed with industrial conditions.
   (c) Three months after the publication date of the updated
American College of Occupational and Environmental Medicine's
Occupational Medicine Practice Guidelines, and continuing until the
effective date of a medical treatment utilization schedule, pursuant
to Section 5307.27, the recommended guidelines set forth in the
American College of Occupational and Environmental Medicine's
Occupational Medicine Practice Guidelines shall be presumptively
correct on the issue of extent and scope of medical treatment,
regardless of date of injury. The presumption is rebuttable and may
be controverted by a preponderance of the evidence establishing that
a variance from the guidelines reasonably is required to cure and
relieve the employee from the effects of his or her injury, in
accordance with Section 4600. The presumption created is one
affecting the burden of proof.
   (d) (1) Notwithstanding the medical treatment utilization schedule
or the guidelines set forth in the American College of Occupational
and Environmental Medicine's Occupational Medicine Practice
Guidelines, for injuries occurring on and after January 1, 2004, an
employee shall be entitled to no more than 24 chiropractic, 24
occupational therapy, and 24 physical therapy visits per industrial
injury.
   (2) Paragraph (1) shall not apply when an employer authorizes, in
writing, additional visits to a health care practitioner for physical
medicine services.
   (3) Paragraph (1) shall not apply to visits for postsurgical
physical medicine and postsurgical rehabilitation services provided
in compliance with a postsurgical treatment utilization schedule
established by the administrative director pursuant to Section
5307.27.
   (e) For all injuries not covered by the American College of
Occupational and Environmental Medicine's Occupational Medicine
Practice Guidelines or the official utilization schedule after
adoption pursuant to Section 5307.27, authorized treatment shall be
in accordance with other evidence-based medical treatment guidelines
that are recognized generally by the national medical community and
scientifically based.

4605.  Nothing contained in this chapter shall limit the right of
the employee to provide, at his own expense, a consulting physician
or any attending physicians whom he desires.

4606.  Any county, city and county, city, school district, or other
public corporation within the state which was a self-insured employer
under the "Workmen's Compensation, Insurance and Safety Act,"
enacted by Chapter 176 of the Statutes of 1913, may provide such
medical, and hospital treatment, including nursing, medicines,
medical and surgical supplies, crutches, and apparatus, including
artificial members, which is reasonably required to cure or relieve
from the effects of an injury to a former employee who was covered
under such act, without regard to the 90-day limitation of
subdivision (a) of Section 15 of such act for medical treatment. The
provisions of this section shall not be operative in any such county,
city and county, city, school district, or other public corporation
unless adopted by a resolution of the governing body of such public
entity.

4607.  Where a party to a proceeding institutes proceedings to
terminate an award made by the appeals board to an applicant for
continuing medical treatment and is unsuccessful in such proceedings,
the appeals board may determine the amount of attorney's fees
reasonably incurred by the applicant in resisting the proceeding to
terminate the medical treatment, and may assess such reasonable
attorney's fees as a cost upon the party instituting the proceedings
to terminate the award of the appeals board.

4608.  No workers' compensation insurer, self-insured employer, or
agent of an insurer or self-insured employer, shall refuse to pay
pharmacy benefits solely because the claim form utilized is
reproduced by the person providing the pharmacy benefits, provided
the reproduced form is an exact copy of that used by the insurer,
self-insured employer, or agent.

4609.  (a) In order to prevent the improper selling, leasing, or
transferring of a health care provider's contract, it is the intent
of the Legislature that every arrangement that results in any payor
paying a health care provider a reduced rate for health care services
based on the health care provider's participation in a network or
panel shall be disclosed by the contracting agent to the provider in
advance and shall actively encourage employees to use the network,
unless the health care provider agrees to provide discounts without
that active encouragement.
   (b) Beginning July 1, 2000, every contracting agent that sells,
leases, assigns, transfers, or conveys its list of contracted health
care providers and their contracted reimbursement rates to a payor,
as defined in subparagraph (A) of paragraph (3) of subdivision (d),
or another contracting agent shall, upon entering or renewing a
provider contract, do all of the following:
   (1) Disclose whether the list of contracted providers may be sold,
leased, transferred, or conveyed to other payors or other
contracting agents, and specify whether those payors or contracting
agents include workers' compensation insurers or automobile insurers.
   (2) Disclose what specific practices, if any, payors utilize to
actively encourage employees to use the list of contracted providers
when obtaining medical care that entitles a payor to claim a
contracted rate. For purposes of this paragraph, a payor is deemed to
have actively encouraged employees to use the list of contracted
providers if the employer provides information directly to employees
during the period the employer has medical control advising them of
the existence of the list of contracted providers through the use of
a variety of advertising or marketing approaches that supply the
names, addresses, and telephone numbers of contracted providers to
employees; or in advance of a workplace injury, or upon notice of an
injury or claim by an employee, the approaches may include, but are
not limited to, the use of provider directories, the use of a list of
all contracted providers in an area geographically accessible to the
posting site, the use of wall cards that direct employees to a
readily accessible listing of those providers at the same location as
the wall cards, the use of wall cards that direct employees to a
toll-free telephone number or Internet Web site address, or the use
of toll-free telephone numbers or Internet Web site addresses
supplied directly during the period the employer has medical control.
However, Internet Web site addresses alone shall not be deemed to
satisfy the requirements of this paragraph. Nothing in this paragraph
shall prevent contracting agents or payors from providing only
listings of providers located within a reasonable geographic range of
an employee. A payor who otherwise meets the requirements of this
paragraph is deemed to have met the requirements of this paragraph
regardless of the employer's ability to control medical treatment
pursuant to Sections 4600 and 4600.3.
   (3) Disclose whether payors to which the list of contracted
providers may be sold, leased, transferred, or conveyed may be
permitted to pay a provider's contracted rate without actively
encouraging the employees to use the list of contracted providers
when obtaining medical care. Nothing in this subdivision shall be
construed to require a payor to actively encourage the employees to
use the list of contracted providers when obtaining medical care in
the case of an emergency.
   (4) Disclose, upon the initial signing of a contract, and within
15 business days of receipt of a written request from a provider or
provider panel, a payor summary of all payors currently eligible to
claim a provider's contracted rate due to the provider's and payor's
respective written agreements with any contracting agent.
   (5) Allow providers, upon the initial signing, renewal, or
amendment of a provider contract, to decline to be included in any
list of contracted providers that is sold, leased, transferred, or
conveyed to payors that do not actively encourage the employees to
use the list of contracted providers when obtaining medical care as
described in paragraph (2). Each provider's election under this
paragraph shall be binding on the contracting agent with which the
provider has the contract and any other contracting agent that buys,
leases, or otherwise obtains the list of contracted providers.
   A provider shall not be excluded from any list of contracted
providers that is sold, leased, transferred, or conveyed to payors
that actively encourage the employees to use the list of contracted
providers when obtaining medical care, based upon the provider's
refusal to be included on any list of contracted providers that is
sold, leased, transferred, or conveyed to payors that do not actively
encourage the employees to use the list of contracted providers when
obtaining medical care.
   (6) If the payor's explanation of benefits or explanation of
review does not identify the name of the network that has a written
agreement signed by the provider whereby the payor is entitled,
directly or indirectly, to pay a preferred rate for the services
rendered, the contracting agent shall do the following:
   (A) Maintain a Web site that is accessible to all contracted
providers and updated at least quarterly and maintain a toll-free
telephone number accessible to all contracted providers whereby
providers may access payor summary information.
   (B) Disclose through the use of an Internet Web site, a toll-free
telephone number, or through a delivery or mail service to its
contracted providers, within 30 days, any sale, lease assignment,
transfer or conveyance of the contracted reimbursement rates to
another contracting agent or payor.
   (7) Nothing in this subdivision shall be construed to impose
requirements or regulations upon payors, as defined in subparagraph
(A) of paragraph (3) of subdivision (d).
   (c) Beginning July 1, 2000, a payor, as defined in subparagraph
(B) of paragraph (3) of subdivision (d), shall do all of the
following:
   (1) Provide an explanation of benefits or explanation of review
that identifies the name of the network with which the payor has an
agreement that entitles them to pay a preferred rate for the services
rendered.
   (2) Demonstrate that it is entitled to pay a contracted rate
within 30 business days of receipt of a written request from a
provider who has received a claim payment from the payor. The
provider shall include in the request a statement explaining why the
payment is not at the correct contracted rate for the services
provided. The failure of the provider to include a statement shall
relieve the payor from the responsibility of demonstrating that it is
entitled to pay the disputed contracted rate. The failure of a payor
to make the demonstration to a properly documented request of the
provider within 30 business days shall render the payor responsible
for the lesser of the provider's actual fee or, as applicable, any
fee schedule pursuant to this division, which amount shall be due and
payable within 10 days of receipt of written notice from the
provider, and shall bar the payor from taking any future discounts
from that provider without the provider's express written consent
until the payor can demonstrate to the provider that it is entitled
to pay a contracted rate as provided in this subdivision. A payor
shall be deemed to have demonstrated that it is entitled to pay a
contracted rate if it complies with either of the following:
   (A) Describes the specific practices the payor utilizes to comply
with paragraph (2) of subdivision (b), and demonstrates compliance
with paragraph (1).
   (B) Identifies the contracting agent with whom the payor has a
written agreement whereby the payor is not required to actively
encourage employees to use the list of contracted providers pursuant
to paragraph (5) of subdivision (b).
   (d) For the purposes of this section, the following terms have the
following meanings:
   (1) "Contracting agent" means an insurer licensed under the
Insurance Code to provide workers' compensation insurance, a health
care service plan, including a specialized health care service plan,
a preferred provider organization, or a self-insured employer, while
engaged, for monetary or other consideration, in the act of selling,
leasing, transferring, assigning, or conveying a provider or provider
panel to provide health care services to employees for work-related
injuries.
   (2) "Employee" means a person entitled to seek health care
services for a work-related injury.
   (3) (A) For the purposes of subdivision (b), "payor" means a
health care service plan, including a specialized health care service
plan, an insurer licensed under the Insurance Code to provide
disability insurance that covers hospital, medical, or surgical
benefits, automobile insurance, or workers' compensation insurance,
or a self-insured employer that is responsible to pay for health care
services provided to beneficiaries.
   (B) For the purposes of subdivision (c), "payor" means an insurer
licensed under the Insurance Code to provide workers' compensation
insurance, a self-insured employer, a third-party administrator or
trust, or any other third party that is responsible to pay health
care services provided to employees for work-related injuries, or an
agent of an entity included in this definition.
   (4) "Payor summary" means a written summary that includes the
payor's name and the type of plan, including, but not limited to, a
group health plan, an automobile insurance plan, and a workers'
compensation insurance plan.
   (5) "Provider" means any of the following:
   (A) Any person licensed or certified pursuant to Division 2
(commencing with Section 500) of the Business and Professions Code.
   (B) Any person licensed pursuant to the Chiropractic Initiative
Act or the Osteopathic Initiative Act.
   (C) Any person licensed pursuant to Chapter 2.5 (commencing with
Section 1440) of Division 2 of the Health and Safety Code.
   (D) A clinic, health dispensary, or health facility licensed
pursuant to Division 2 (commencing with Section 1200) of the Health
and Safety Code.
   (E) Any entity exempt from licensure pursuant to Section 1206 of
the Health and Safety Code.
   (e) This section shall become operative on July 1, 2000.

4610.  (a) For purposes of this section, "utilization review" means
utilization review or utilization management functions that
prospectively, retrospectively, or concurrently review and approve,
modify, delay, or deny, based in whole or in part on medical
necessity to cure and relieve, treatment recommendations by
physicians, as defined in Section 3209.3, prior to, retrospectively,
or concurrent with the provision of medical treatment services
pursuant to Section 4600.
   (b) Every employer shall establish a utilization review process in
compliance with this section, either directly or through its insurer
or an entity with which an employer or insurer contracts for these
services.
   (c) Each utilization review process shall be governed by written
policies and procedures. These policies and procedures shall ensure
that decisions based on the medical necessity to cure and relieve of
proposed medical treatment services are consistent with the schedule
for medical treatment utilization adopted pursuant to Section
5307.27. Prior to adoption of the schedule, these policies and
procedures shall be consistent with the recommended standards set
forth in the American College of Occupational and Environmental
Medicine Occupational Medical Practice Guidelines. These policies and
procedures, and a description of the utilization process, shall be
filed with the administrative director and shall be disclosed by the
employer to employees, physicians, and the public upon request.
   (d) If an employer, insurer, or other entity subject to this
section requests medical information from a physician in order to
determine whether to approve, modify, delay, or deny requests for
authorization, the employer shall request only the information
reasonably necessary to make the determination. The employer,
insurer, or other entity shall employ or designate a medical director
who holds an unrestricted license to practice medicine in this state
issued pursuant to Section 2050 or Section 2450 of the Business and
Professions Code. The medical director shall ensure that the process
by which the employer or other entity reviews and approves, modifies,
delays, or denies requests by physicians prior to, retrospectively,
or concurrent with the provision of medical treatment services,
complies with the requirements of this section. Nothing in this
section shall be construed as restricting the existing authority of
the Medical Board of California.
   (e) No person other than a licensed physician who is competent to
evaluate the specific clinical issues involved in the medical
treatment services, and where these services are within the scope of
the physician's practice, requested by the physician may modify,
delay, or deny requests for authorization of medical treatment for
reasons of medical necessity to cure and relieve.
   (f) The criteria or guidelines used in the utilization review
process to determine whether to approve, modify, delay, or deny
medical treatment services shall be all of the following:
   (1) Developed with involvement from actively practicing
physicians.
   (2) Consistent with the schedule for medical treatment utilization
adopted pursuant to Section 5307.27. Prior to adoption of the
schedule, these policies and procedures shall be consistent with the
recommended standards set forth in the American College of
Occupational and Environmental Medicine Occupational Medical Practice
Guidelines.
   (3) Evaluated at least annually, and updated if necessary.
   (4) Disclosed to the physician and the employee, if used as the
basis of a decision to modify, delay, or deny services in a specified
case under review.
   (5) Available to the public upon request. An employer shall only
be required to disclose the criteria or guidelines for the specific
procedures or conditions requested. An employer may charge members of
the public reasonable copying and postage expenses related to
disclosing criteria or guidelines pursuant to this paragraph.
Criteria or guidelines may also be made available through electronic
means. No charge shall be required for an employee whose physician's
request for medical treatment services is under review.
   (g) In determining whether to approve, modify, delay, or deny
requests by physicians prior to, retrospectively, or concurrent with
the provisions of medical treatment services to employees all of the
following requirements must be met:
   (1) Prospective or concurrent decisions shall be made in a timely
fashion that is appropriate for the nature of the employee's
condition, not to exceed five working days from the receipt of the
information reasonably necessary to make the determination, but in no
event more than 14 days from the date of the medical treatment
recommendation by the physician. In cases where the review is
retrospective, the decision shall be communicated to the individual
who received services, or to the individual's designee, within 30
days of receipt of information that is reasonably necessary to make
this determination.
   (2) When the employee's condition is such that the employee faces
an imminent and serious threat to his or her health, including, but
not limited to, the potential loss of life, limb, or other major
bodily function, or the normal timeframe for the decisionmaking
process, as described in paragraph (1), would be detrimental to the
employee's life or health or could jeopardize the employee's ability
to regain maximum function, decisions to approve, modify, delay, or
deny requests by physicians prior to, or concurrent with, the
provision of medical treatment services to employees shall be made in
a timely fashion that is appropriate for the nature of the employee'
s condition, but not to exceed 72 hours after the receipt of the
information reasonably necessary to make the determination.
   (3) (A) Decisions to approve, modify, delay, or deny requests by
physicians for authorization prior to, or concurrent with, the
provision of medical treatment services to employees shall be
communicated to the requesting physician within 24 hours of the
decision. Decisions resulting in modification, delay, or denial of
all or part of the requested health care service shall be
communicated to physicians initially by telephone or facsimile, and
to the physician and employee in writing within 24 hours for
concurrent review, or within two business days of the decision for
prospective review, as prescribed by the administrative director. If
the request is not approved in full, disputes shall be resolved in
accordance with Section 4062. If a request to perform spinal surgery
is denied, disputes shall be resolved in accordance with subdivision
(b) of Section 4062.
   (B) In the case of concurrent review, medical care shall not be
discontinued until the employee's physician has been notified of the
decision and a care plan has been agreed upon by the physician that
is appropriate for the medical needs of the employee. Medical care
provided during a concurrent review shall be care that is medically
necessary to cure and relieve, and an insurer or self-insured
employer shall only be liable for those services determined medically
necessary to cure and relieve. If the insurer or self-insured
employer disputes whether or not one or more services offered
concurrently with a utilization review were medically necessary to
cure and relieve, the dispute shall be resolved pursuant to Section
4062, except in cases involving recommendations for the performance
of spinal surgery, which shall be governed by the provisions of
subdivision (b) of Section 4062. Any compromise between the parties
that an insurer or self-insured employer believes may result in
payment for services that were not medically necessary to cure and
relieve shall be reported by the insurer or the self-insured employer
to the licensing board of the provider or providers who received the
payments, in a manner set forth by the respective board and in such
a way as to minimize reporting costs both to the board and to the
insurer or self-insured employer, for evaluation as to possible
violations of the statutes governing appropriate professional
practices. No fees shall be levied upon insurers or self-insured
employers making reports required by this section.
   (4) Communications regarding decisions to approve requests by
physicians shall specify the specific medical treatment service
approved. Responses regarding decisions to modify, delay, or deny
medical treatment services requested by physicians shall include a
clear and concise explanation of the reasons for the employer's
decision, a description of the criteria or guidelines used, and the
clinical reasons for the decisions regarding medical necessity.
   (5) If the employer, insurer, or other entity cannot make a
decision within the timeframes specified in paragraph (1) or (2)
because the employer or other entity is not in receipt of all of the
information reasonably necessary and requested, because the employer
requires consultation by an expert reviewer, or because the employer
has asked that an additional examination or test be performed upon
the employee that is reasonable and consistent with good medical
practice, the employer shall immediately notify the physician and the
employee, in writing, that the employer cannot make a decision
within the required timeframe, and specify the information requested
but not received, the expert reviewer to be consulted, or the
additional examinations or tests required. The employer shall also
notify the physician and employee of the anticipated date on which a
decision may be rendered. Upon receipt of all information reasonably
necessary and requested by the employer, the employer shall approve,
modify, or deny the request for authorization within the timeframes
specified in paragraph (1) or (2).
   (h) Every employer, insurer, or other entity subject to this
section shall maintain telephone access for physicians to request
authorization for health care services.
   (i) If the administrative director determines that the employer,
insurer, or other entity subject to this section has failed to meet
any of the timeframes in this section, or has failed to meet any
other requirement of this section, the administrative director may
assess, by order, administrative penalties for each failure. A
proceeding for the issuance of an order assessing administrative
penalties shall be subject to appropriate notice to, and an
opportunity for a hearing with regard to, the person affected. The
administrative penalties shall not be deemed to be an exclusive
remedy for the administrative director. These penalties shall be
deposited in the Workers' Compensation Administration Revolving Fund.

4610.1.  An employee shall not be entitled to an increase in
compensation under Section 5814 for unreasonable delay in the
provision of medical treatment for periods of time necessary to
complete the utilization review process in compliance with Section
4610. A determination by the appeals board that medical treatment is
appropriate shall not be conclusive evidence that medical treatment
was unreasonably delayed or denied for purposes of penalties under
Section 5814. In no case shall this section preclude an employee from
entitlement to an increase in compensation under Section 5814 when
an employer has unreasonably delayed or denied medical treatment due
to an unreasonable delay in completion of the utilization review
process set forth in Section 4610.

4610.3.  (a) Regardless of whether an employer has established a
medical provider network pursuant to Section 4616 or entered into a
contract with a health care organization pursuant to Section 4600.5,
an employer that authorizes medical treatment shall not rescind or
modify that authorization after the medical treatment has been
provided based on that authorization for any reason, including, but
not limited to, the employer's subsequent determination that the
physician who treated the employee was not eligible to treat that
injured employee. If the authorized medical treatment consists of a
series of treatments or services, the employer may rescind or modify
the authorization only for the treatments or services that have not
already been provided.
   (b) This section shall not be construed to expand or alter the
benefits available under, or the terms and conditions of, any
contract, including, but not limited to, existing medical provider
network and health care organization contracts.
   (c) This section shall not be construed to impact the ability of
the employer to transfer treatment of an injured employee into a
medical provider network or health care organization. This
subdivision is declaratory of existing law.
   (d) This section shall not be construed to establish that a
provider of authorized medical treatment is the physician primarily
responsible for managing the injured employee's care for purposes of
rendering opinions on all medical issues necessary to determine
eligibility for compensation.

4611.  (a) When a contracting agent sells, leases, or transfers a
health provider's contract to a payor, the rights and obligations of
the provider shall be governed by the underlying contract between the
health care provider and the contracting agent.
   (b) For purposes of this section, the following terms have the
following meanings:
   (1) "Contracting agent" has the meaning set forth in paragraph (2)
of subdivision (d) of Section 4609.
   (2) "Payor" has the meaning set forth in paragraph (3) of
subdivision (d) of Section 4609.

4614.  (a) (1) Notwithstanding Section 5307.1, where the employee's
individual or organizational provider of health care services
rendered under this division and paid on a fee-for-service basis is
also the provider of health care services under contract with the
employee's health benefit program, and the service or treatment
provided is included within the range of benefits of the employee's
health benefit program, and paid on a fee-for-service basis, the
amount of payment for services provided under this division, for a
work-related occurrence or illness, shall be no more than the amount
that would have been paid for the same services under the health
benefit plan, for a non-work-related occurrence or illness.
   (2) A health care service plan that arranges for health care
services to be rendered to an employee under this division under a
contract, and which is also the employee's organizational provider
for nonoccupational injuries and illnesses, with the exception of a
nonprofit health care service plan that exclusively contracts with a
medical group to provide or arrange for medical services to its
enrollees in a designated geographic area, shall be paid by the
employer for services rendered under this division only on a
capitated basis.
   (b) (1) Where the employee's individual or organizational provider
of health care services rendered under this division who is not
providing services under a contract is not the provider of health
care services under contract with the employee's health benefit
program or where the services rendered under this division are not
within the benefits provided under the employer-sponsored health
benefit program, the provider shall receive payment that is no more
than the average of the payment that would have been paid by five of
the largest preferred provider organizations by geographic region.
Physicians, as defined in Section 3209.3, shall be reimbursed at the
same averaged rates, regardless of licensure, for the delivery of
services under the same procedure code. This subdivision shall not
apply to a health care service plan that provides its services on a
capitated basis.
   (2) The administrative director shall identify the regions and the
five largest carriers in each region. The carriers shall provide the
necessary information to the administrative director in the form and
manner requested by the administrative director. The administrative
director shall make this information available to the affected
providers on an annual basis.
   (c) Nothing in this section shall prohibit an individual or
organizational health care provider from being paid fees different
from those set forth in the official medical fee schedule by an
employer, insurance carrier, third-party administrator on behalf of
employers, or preferred provider organization representing an
employer or insurance carrier provided that the administrative
director has determined that the alternative negotiated rates between
the organizational or individual provider and a payer, a third-party
administrator on behalf of employers, or a preferred provider
organization will produce greater savings in the aggregate than if
each item on billings were to be charged at the scheduled rate.
   (d) For the purposes of this section, "organizational provider"
means an entity that arranges for health care services to be rendered
directly by individual caregivers. An organizational provider may be
a health care service plan, disability insurer, health care
organization, preferred provider organization, or workers'
compensation insurer arranging for care through a managed care
network or on a fee-for-service basis. An individual provider is
either an individual or institution that provides care directly to
the injured worker.

4614.1.  Notwithstanding subdivision (f) of Section 1345 of the
Health and Safety Code, a health care service plan licensed pursuant
to the Knox-Keene Health Care Service Plan Act and certified by the
administrative director pursuant to Section 4600.5 to provide health
care pursuant to Section 4600.3 shall be permitted to accept payment
from a self-insured employer, a group of self-insured employers, or
the insurer of an employer on a fee-for-service basis for the
provision of such health care as long as the health care service plan
is not both the health care organization in which the employee is
enrolled and the plan through which the employee receives regular
health benefits.