California Names URAC as Designated Accreditor for Workers’ Comp Utilization Review

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WASHINGTON, DC – Recognizing the importance of utilization review in promoting high quality for workers’ compensation, a new California law now requires these programs receive an accreditation of their services.

SB 1160, signed by California Governor Jerry Brown on September 30, amends existing California statute to require that all organizations that conduct utilization review for workers’ compensation in the state be accredited by July 1, 2018. The new law names URAC as the initial designated accreditation organization.

“URAC is focused on driving the cost of poor quality out of healthcare,” said URAC Director of Government Relations Aaron Turner-Phifer. “We applaud California’s commitment to its injured workers, and we look forward to working with regulators and stakeholders to support efforts aimed at delivering quality healthcare services that every Californian deserves.”

In 2014, California had the highest worker’s compensation premiums in the nation – 188 percent over the median. The state’s Workers’ Compensation Insurance Rating Bureau reported that $5 billion, or 60 percent, of loss payments were for “analogous medical services” in areas such as physician services, payments to injured workers, hospitals, and pharmaceutical purchases. Additionally, it is estimated the cost of workers’ compensation fraud in California ranges between $1 billion and $3 billion.

Utilization review is the process healthcare providers use to determine proper treatment options by assessing factors that can include medical necessity, access, location, and duration of care. The author of SB 1160, State Senator Tony Mendoza, said the new law “will crack down on the billions of dollars in fraudulent medical billing and improve timely delivery of appropriate medical treatment and benefits so injured workers can get back to work.”

Accreditation of a utilization review program is important because it recognizes that the accredited organization is adhering to quality standards reflecting best practices in areas such as clinical review, access, timeliness, and the handling of appeals. An independent accreditation organization is important because it is not tied to any one segment of the healthcare industry and often seeks input from a broad array of stakeholders. URAC, the designated accreditation organization in SB 1160, offers an accreditation program specifically designed to address the unique aspects of a workers’ compensation environment. It is meant to help an organization demonstrate its quality and ethics in its processing of workplace injury claims.