Bypassing UR and the $10,000 Rule: A 60-Second Seminar in Workers’ Compensation Claims Handling

We believe it is fair to state that for the most part, workers’ compensation administrators are aware that injured workers are entitled up to $10,000 in medical treatment while compensability is under investigation. However, several rules apply before an injured worker qualifies for the $10,000, and some claims adjusters have only a partial understanding of those rules, a situation which certain medical providers are keen to take advantage of. For this reason, today’s blog provides a warning to claims administrators along with an explanation of what they need to beware of.

First, the $10,000 Rule is codified under Labor Code §5402(c) and applies when a claim is under investigation where all the following conditions are met:

1. The medical treatment was
   1. approved or directed by the employer, or
   2. for emergency services either at an MPN or non-MPN facility, or
   3. for medical care after the employer abandoned their obligation to provide medical treatment.
2. A DWC-1 Claim Form has been filed.
3. Non-emergency medical treatment was approved by utilization review (UR) and not rescinded prior the services rendered.
4. Employment is not a disputed issue.
5. Medical treatment does not pertain to a psychiatric mental stress claim if
   1. attributed to a non-discriminatory, good faith, personnel action, or
   2. the employee has worked for the employer less than 6 months, unless injury is caused by a sudden and extraordinary event of employment.

We wish to emphasize that UR is still required when compensability is under investigation.  In addition, the adjuster is required to:

1. advise the injured worker of the delay, the reason for the delay, what information, if any, is needed from the claimant, and provide an anticipated decision date,
2. provide MPN information, if applicable, and
3. explain the $10,000 Rule to the claimant. 

There is also a fourth requirement.  Administrators must:

4. abide by LC 4616.3(a) and Rule 9767.6(a), by timely scheduling an initial examination to enable the claimant to receive prompt medical treatment, even though liability may be under investigation.  Failure to do so is considered “abandonment of care” and allows the injured worker to seek medical treatment outside the MPN at the administrator’s expense.

Now that our readers are familiar with the law, we will issue a warning.  Our readers are probably aware that pursuant to LC § 4610(b) certain medical procedures are exempt from prospective utilization review during the first 30 days following injury.  One DME company is currently taking advantage of this law by providing durable medical equipment to injured workers during the first 30 days without seeking UR approval.  They then demand payment under the $10,000 Rule.  However, when UR is bypassed, the law specifically limits the value of medical equipment to an aggregate of no more than $500.  In addition, bypassing UR under LC § 4610(b) only applies to “admitted” injuries and not to claims under investigation.  Therefore, this DME company’s reliance on LC § 4610(b) to bypass UR and to charge up to $10,000 is completely misplaced.

We believe that the information set forth above should be of significant value to our readers.  Should you have any disputes or lien claims involving the matters discussed today please consider partnering with Friedman + Bartoumian to defend your interests.