California Workers’ Compensation Schedules

Chapter 2 of Part 2 of Division 4 of the Labor Code deals with compensation schedules for computing compensation under the California workers’ compensation laws. Article 1 contains general provisions.

Section 4550 provides that, where liability for compensation exists under this division, compensation must be furnished or paid by the employer and shall be as provided in this chapter.

Section 4551 states that, where the injury is caused by the serious and willful misconduct of the injured employee, the compensation otherwise recoverable is reduced one-half, except in four specified instances.

Section 4552 says that the reduction of compensation because of the serious and willful misconduct of an employee is not enforceable, valid, or binding in any respect until the appeals board has determined by its findings and award.

Section 4553 provides that the amount of compensation otherwise recoverable is increased one-half, together with costs and expenses not to exceed $250, where the employee is injured by reason of the serious and willful misconduct of any of the three specified actions.

Section 4553.1 states that, in order to support a holding of serious and willful misconduct by an employer based upon violation of a safety order, the appeals board must specifically find all three specified items.

Section 4554 says that, in case of the willful failure by an employer to secure the payment of compensation, the amount of compensation otherwise recoverable for injury or death as provided in this division is increased 10 percent. Failure of the employer to secure the payment of compensation is prima facie evidence of willfulness on his part.

Section 4555 provides that, in case of failure by an employer to secure the payment of compensation, the appeals board may award a reasonable attorney’s fee in addition to the amount of compensation recoverable. When a fee is awarded under this section, no further fee is allowed to secure the payment of any fee awarded under this section.

Section 4555.5 says that, whenever a petition to reduce an award, based upon a permanent disability rating which has become final, is denied, the appeals board may order the petitioner to pay to the injured employee all costs incident to the furnishing of X-rays, laboratory services, medical reports, and medical testimony incurred by an employee in connection with the proceeding on the petition.

Section 4556 explains that the increases provided for by this article are not limited by the provisions of Chapter 1 of this part relating to maximum amounts in the computation of average earnings.

Section 4557 states that, where the injury is to an employee under 16 years of age and illegally employed at the time of injury, the entire compensation otherwise recoverable is increased fifty percent (50%), and the additional sum is paid by the employer at the same time and in the same manner as the normal compensation benefits.

Section 4558 defines the terms “employer,” “failure to install,” “manufacturer,” “power press,” “removal,” and “specifically authorized.” An employee, or his or her dependents in the event of the employee’s death, may bring an action at law for damages against the employer where the employee’s injury or death is proximately caused by the employer’s knowing removal of, or knowing failure to install, a point of operation guard on a power press, and this removal or failure to install is specifically authorized by the employer under conditions known by the employer to create a probability of serious injury or death.

Article 2 deals with medical and hospital treatment.

Section 4600 explains that medical, surgical, chiropractic, acupuncture, licensed clinical social worker, and hospital treatment, that is reasonably required to cure or relieve the injured worker from the effects of the worker’s injury must be provided by the employer. In the case of the employer’s 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.

Unless the employer or the employer’s insurer has established or contracted with a medical provider network, after 30 days from the date the injury is reported, the employee may be treated by a physician of the employee’s own choice or at a facility of the employee’s own choice within a reasonable geographic area.

Section 4600.05 requires an employer to provide immediate support from a nurse case manager for employees injured by an act of domestic terrorism, whose injuries arise out of and in the course of employment, to assist injured employees in obtaining medically necessary medical treatment, and to assist providers of medical services in seeking authorization of medical treatment. This section applies only if the Governor has declared a state of emergency in connection with the act of domestic terrorism.

Section 4600.1 requires any person or entity that dispenses medicines and medical supplies to dispense the generic drug equivalent. A person or entity is not required to dispense a generic drug equivalent under either of the specified circumstances. The term “dispense” is defined.

Section 4600.2 provides that, if a self-insured employer, group of self-insured employers, insurer of an employer, or group of insurers contracts with a pharmacy, group of pharmacies, those injured employees that are subject to the contract must be provided medicines and medical supplies in the manner prescribed in the contract. Medicines provided pursuant to the contract are subject to the drug formulary adopted by the administrative director.

Section 4600.3 explains that, when a self-insured employer, group of self-insured employers, or the insurer of an employer contracts with a health care organization for health care services required by this article to be provided to injured employees, those employees who are subject to the contract are required to receive medical services in the manner prescribed in the contract.

Every employee is given an affirmative choice at the time of employment and at least annually to designate or change the designation of a health care organization or a personal physician, personal chiropractor, or personal acupuncturist. The choice must be memorialized in writing and maintained in the employee’s personnel records.

Section 4600.35 says that 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, must be licensed pursuant to the Knox-Keene Health Care Service Plan Act of 1975.

Section 4600.4 states that 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, must ensure the availability of those services from 9 a.m. to 5:30 p.m. Pacific standard time of each normal business day. The term “normal business day” is defined.

Section 4600.5 provides that any health care service plan licensed, a disability insurer licensed, or any entity, including workers’ compensation insurers and third-party administrators authorized by the administrative director, 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.

Section 4600.6 specifies that any workers’ compensation insurer, third-party administrator, or other entity seeking certification as a health care organization are subject to the specified rules and procedures. 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.

Section 4600.7 created the Workers’ Compensation Managed Care Fund in the State Treasury for the administration of Sections 4600.3 and 4600.5 by the Division of Workers’ Compensation. The administrative director must 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 must be deposited in the Workers’ Compensation Managed Care Fund and be used when appropriated by the Legislature solely for the purpose of carrying out the responsibilities of the Division of Workers’ Compensation.

Section 4601 requires the employer to 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 is five working days from the date of the request.

If an employee requesting a change of physician 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, must be the employee’s personal chiropractor. The term “personal chiropractor” is defined.

If an employee requesting a change of physician 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. The term “personal acupuncturist” is defined.

Section 4602 states that, if the employee requests, the employer procures 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.

Section 4603 provides that, 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.

Section 4603.2 explains that, upon selecting a physician, the employee or physician is required to notify the employer of specified information. The physician must submit a report to the employer within five working days from the date of the initial examination, and then submit periodic reports at intervals that may be prescribed by rules and regulations adopted by the administrative director.

If the employer objects to the employee’s selection of the physician on the grounds that the physician is not within the medical provider network used by the employer, and there is a final determination that the employee was entitled to select the physician, the employee is entitled to continue treatment with that physician at the employer’s expense in accordance with this division.

Also, the employer is required to pay from the date of the initial examination if the physician’s report was submitted within five working days of the initial examination. If the physician’s report was submitted more than five working days after the initial examination, the employer and the employee is not required to pay for any services prior to the date the physician’s report was submitted.

Section 4603.3 explains that, upon payment, adjustment, or denial of a complete or incomplete itemization of medical services, an employer provides an explanation of review in the manner prescribed by the administrative director that include six specified items of information.

Section 4603.4 required the administrative director to adopt rules and regulations to do seven specified actions.

Section 4603.5 requires the administrative director to adopt rules pertaining to the format and content of notices required by this article; define reasonable geographic areas; specify time limits for all notices and responses. Employers are required to notify all employees of their rights under this section.

Section 4603.6 provides that, if the only dispute is the amount of payment and the provider has received a second review that did not resolve the dispute, the provider may request an independent bill review within 30 calendar days of service of the second review. If the provider fails to request an independent bill review within 30 days, the bill is deemed satisfied, and neither the employer nor the employee is liable for any further payment.

If the employer has contested liability for any issue other than the reasonable amount payable for services, that issue is resolved prior to filing a request for independent bill review, and the time limit for requesting independent bill review cannot begin to run until the resolution of that issue becomes final.

A request for independent review is made on a form prescribed by the administrative director, and must include copies of the original billing itemization, any supporting documents that were furnished with the original billing, the explanation of review, the request for second review together with any supporting documentation submitted with that request, and the final explanation of the second review.

Section 4604 explains that controversies between employer and employee arising under this chapter are determined by the appeals board, upon the request of either party.

Section 4604.5 provides that the recommended guidelines set forth in the medical treatment utilization schedule adopted by the administrative director is 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.

The recommended guidelines set forth in the schedule adopted must reflect practices that are evidence and scientifically based, nationally recognized, and peer reviewed. The guidelines are designed to assist providers by offering an analytical framework for the evaluation and treatment of injured workers, and they constitute care for all injured workers diagnosed with industrial conditions.

Section 4605 explains that nothing contained in this chapter limits the right of the employee to provide, at his or her own expense, a consulting physician or any attending physicians whom he or she desires. Any report prepared by consulting or attending physicians pursuant to this section cannot be the sole basis of an award of compensation.

Section 4606 provides that 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” may provide medical, and hospital treatment, 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 for medical treatment.

Section 4607 states that, 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 the 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 the reasonable attorney’s fees as a cost upon the party instituting the proceedings to terminate the award of the appeals board.

Section 4608 provides that no workers’ compensation insurer, self-insured employer, or agent of an insurer or self-insured employer, is allowed to 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.

Section 4609 contains a statement of legislative intent. 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, or another contracting agent is required, upon entering or renewing a provider contract, do all of the seven specified actions. The following terms are defined: “contracting agent,” “employee,” “payor,” “payor summary,” and “provider.”

Section 4610 defines the term “utilization review.”

Section 4610.1 explains that an employee cannot be entitled to an increase in compensation for unreasonable delay in the provision of medical treatment for periods of time necessary to complete the utilization review process. A determination by the appeals board or a final determination of the administrative director pursuant to independent medical review that medical treatment is appropriate cannot be conclusive evidence that medical treatment was unreasonably delayed or denied for purposes of penalties.

Section 4610.3 provides that, regardless of whether an employer has established a medical provider network or entered into a contract with a health care organization, an employer that authorizes medical treatment cannot rescind or modify that authorization after the medical treatment has been provided based on that authorization for any reason. 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.

Section 4610.5 states that this section applies to three specified types of disputes. A dispute is resolved only in accordance with this section. The terms “disputed medical treatment,” “medically necessary,” “medical necessity,” “utilization review decision,” and “employer” are defined. If a utilization review decision denies or modifies a treatment recommendation based on medical necessity, the employee may request an independent medical review as provided by this section.

A utilization review decision may be reviewed or appealed only by independent medical review pursuant to this section. Neither the employee nor the employer have any liability for medical treatment furnished without the authorization of the employer if the treatment is modified or denied by a utilization review decision, unless the utilization review decision is overturned by independent medical review in accordance with this section.

Section 4610.6 provides that, upon receipt of a case, an independent medical review organization is required to conduct the review in accordance with this article and any regulations or orders of the administrative director. The organization’s review is limited to an examination of the medical necessity of the disputed medical treatment.

Following its review, the reviewer or reviewers is required to determine whether the disputed health care service was medically necessary based on the specific medical needs of the employee and the standards of medical necessity. The organization has to complete its review and make its determination in writing, and in layperson’s terms to the maximum extent practicable, and the determination is issued, as specified.

Section 4611 specifies that, when a contracting agent sells, leases, or transfers a health provider’s contract to a payor, the rights and obligations of the provider are governed by the underlying contract between the health care provider and the contracting agent. The terms “contracting agent” and “payor” are defined.

Section 4614 provides, 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 for a work-related occurrence or illness, can 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.

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, is to be paid by the employer for services rendered under this division only on a capitated basis.

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 must 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.

Section 4614.1 provides that a health care service plan is 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.

Section 4615 states that, upon the filing of criminal charges against a physician, practitioner, or provider for any crime, the specified actions occur.