What Is California Labor Code §139.5: Independent Review Organization Rules?

(a) (1) The administrative director shall contract with one or more independent medical review organizations and one or more independent bill review organizations to conduct reviews pursuant to Article 2 (commencing with Section 4600) of Chapter 2 of Part 2 of Division 4. The independent review organizations shall be independent of any workers’ compensation insurer or workers’ compensation claims administrator doing business in this state.

What Is Labor Code §139.5?

Labor Code 139.5 keeps the doctor who decides your IMR or bill dispute independent of your insurance company.

California's Division of Workers' Compensation, often called the DWC, does not decide medical treatment or billing disputes itself. Its administrative director hires outside companies to do that instead. Labor Code 139.5 sets the rules for that hiring. One kind of company handles Independent Medical Review, usually called IMR, for treatment disputes. A second kind handles Independent Bill Review, usually called IBR, for payment disputes. This section does not decide your specific case. It decides who is allowed to be hired to decide it.

Labor Code 139.5 applies to everyone connected to a California work injury review: injured workers, employers, insurers, claims administrators, and the independent companies and physicians the state contracts with. If you have ever wondered whether the doctor reviewing your file might favor the insurance company, this is the law written to stop that from happening.

How Does Labor Code 139.5 Affect My IMR or Bill Review Case?

It does not create your case; it decides who is allowed to be hired to review it.

Your right to ask for a medical review comes from Labor Code 4610.5, after a Utilization Review denial under Labor Code 4610. Your right to dispute a bill amount runs through the steps in Labor Code 4603.2. Labor Code 139.5 works behind those sections. It tells the administrative director which outside companies may be hired to actually decide an IMR case or a bill dispute, and what those companies must prove about their independence first.

What Must an Independent Review Organization Prove to Qualify in California?

It must show it has no ownership or financial ties to any insurer and file detailed paperwork with the state.

Before the administrative director signs a contract, a review organization must disclose its major owners. It must list any bondholder owed more than $100,000, every affiliated company, and the backgrounds of its directors and officers. It must also report what share of its revenue comes from review work, and name which insurers, claims administrators, or provider groups it already serves. It must describe how it picks and screens a reviewer for each case. The organization must employ a medical director, a licensed physician or surgeon, who advises it on clinical issues. It must show a quality assurance system that keeps reviews timely, credible, and confidential.

What Conflicts of Interest Are Review Organizations and Reviewers Barred From Having?

Neither the organization nor its reviewing doctor may have a financial, family, or work tie to anyone involved in your claim.

Labor Code 139.5 bars a material tie to your employer, your insurer, your claims administrator, or its medical provider network. It bars a tie to any officer or manager of those groups. It bars a tie to your treating physician, that physician's medical group, or the facility that would give the proposed care. It bars a tie to the maker of the drug, device, or therapy under review, and to you, your immediate family, or your attorney. A material financial affiliation means more than 5 percent of the organization's yearly revenue. The required payments employers make to fund the review system do not count toward that figure. Every organization is funded the same way, so that payment alone is not a conflict.

How Does Labor Code 139.5 Connect to Other Review Laws?

Section 139.5 picks who may referee your dispute; other sections write the rules of the game.

Labor Code 4600 creates the employer's duty to pay for reasonable medical care, the duty every later review protects. Labor Code 4610 lets the insurer's own reviewer approve, change, or deny a treatment request first. Labor Code 4610.5 gives you the right to send a timely denial to an independent reviewer under a Labor Code 139.5 contract. Labor Code 4603.2 sets the payment and review steps a medical bill follows before an independent bill review. One more connection matters. Since January 1, 2014, a physician who is a Qualified Medical Evaluator under Labor Code 139.2 cannot also serve as your IMR reviewer. The same doctor cannot hold both roles on your claim.

What Should I Ask If I Think My Review Was Biased?

Ask which organization decided your case and request its conflict of interest filing.

Save the name of the review organization and the reviewing physician listed on your IMR or bill review decision. Labor Code 139.5 lets any interested person request a copy of the nonproprietary information an organization filed with the state, though the division may charge a copying fee for it. If you believe a reviewer had an undisclosed tie to your insurer, your claims administrator, or the facility treating you, raise the concern with your attorney or the DWC before you treat the decision as final.

Labor Code 139.5 works in the background of almost every California treatment and bill dispute. It is not a form you file or a deadline you track yourself. If you are facing a Utilization Review denial, an IMR decision, or a bill dispute and you are unsure whether the review followed these independence rules, Yazdchi Law P.C. reviews each California workers' compensation matter individually. Call (661) 273-1780 or use the contact form to go over your paperwork.