PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following proposed rule:
Proposed Action:
Amendment of sections 325-1.5 and 325-2.1; and addition of Subpart 325-7 to Title 12 NYCRR.
Statutory authority:
Workers' Compensation Law, sections 13-a and 117
Subject:
Diagnostic Testing Networks.
Purpose:
To provide for employer and workers' compensation carrier contracts with diagnostic testing networks.
Substance of proposed rule (Full text is posted at the following State website:www.wcb.state.ny.us):
The proposed regulation amends Section 325-1.5 and 325-2.1 to provide for carrier contracts with a diagnostic testing network and adopts a new Subpart 325-7 setting forth the requirements for Diagnostic Testing Networks.
Subpart 325-7 is added regarding Diagnostic Testing Networks.
Section 325-7.1 defines terms used in the Subpart, such as "affiliated network provider," "diagnostic examinations and tests" and "reasonable distance."
Section 325-7.2 sets forth the requirements for insurance carriers to contract with a diagnostic testing network. The insurance carriers must file with the Chair a list of all diagnostic testing networks it has contracts with including the network's name and address, toll-free phone number, email address and website address, as well as contact name and information. The insurance carrier must notify the Chair within twenty days if there are any changes in the diagnostic testing network information and the Chair may request additional information and may inspect any diagnostic testing network facilities.
Section 325-7.3 sets forth the requirements to be authorized as a diagnostic testing network. These requirements include: status as a legal and proper business organization as defined in 325-7.1; filing with the Chair of the Board updated addresses, phone numbers, email and web addresses, and business locations; requiring affiliated network providers to obtain an injured workers consent and to be Board authorized to treat injured workers; prescribing the business hours of each affiliated network provider; and requiring that all tests be conducted within five (5) business days of the date requested or the date authorized by the carrier.
Section 325-7.4 describes the services that may be provided by diagnostic testing networks and affiliated network providers. These services include: scheduling of tests or examinations; providing notice to claimants; processing, paying and objecting to bills. This section also describes the procedure when a case is controverted and the carrier will not pay any medical bills until the controversy is resolved.
Section 325-7.5 sets forth the procedures that must be followed to require a claimant to obtain a diagnostic test or examination from a network facility. The claimant does not need to use an affiliated network provider when: the network does not have an affiliated network facility within a reasonable distance from the claimant's home or work; the network is unable to schedule the diagnostic test or examination within five (5) business days; when the case is controverted; prior to receiving notice; and in the event of a medical emergency. This section also prescribes the notice that must be given to an injured worker and to the injured worker's treating medical provider. This section requires that reports of a diagnostic test or examination be filed with all parties on the same day, and within three (3) business days of most tests. This section permits the claimant to choose any affiliated network provider to perform the diagnostic test or examination and to choose in consultation with his or her treating medical provider.
Section 325-7.6 provides that any diagnostic testing network or affiliated network facility that alters a report so as to misrepresent the injured worker's condition shall be ineligible from contracting with an insurance carrier as a diagnostic testing network.
Section 325-7.7 provides that no person or entity may interfere with the injured worker's selection of an affiliated network provider, and bars the insurance carrier from participation in the diagnostic testing or examination or the resulting reports.
Text of proposed rule and any required statements and analyses may be obtained from:
Heather MacMaster, Workers' Compensation Board, Office of General Counsel, 20 Park Street, Albany, New York 12207, (518) 486-9564, email: regulations@wcb.state.ny.us
Data, views or arguments may be submitted to:
Same as above.
Public comment will be received until:
45 days after publication of this notice.
Regulatory Impact Statement
1. Statutory authority: The Workers' Compensation Board (hereinafter referred to as Board) is authorized to amend 12 NYCRR 325-1.5 and 325-2.1, and to add a new 12 NYCRR Subpart 325-7. Workers' Compensation Law (WCL) Sections 13-a (7) and 117(1) authorize the Board to adopt reasonable rules consistent with and supplemental to the provisions of the WCL.
2. Legislative objectives: WCL Section 13-a (7) permits the State Insurance Fund, insurance carriers and self-insured employers to contract with diagnostic networks and require injured workers to utilize the networks for diagnostic testing. The proposed amendments to 12 NYCRR Sections 325-1.5 and 325-2.1 and the addition of 12 NYCRR Subpart 325-7 are in accordance with the legislative purpose of permitting the State Insurance Fund, insurance carriers and self-insured employers to contract with diagnostic networks and requiring injured workers to utilize the networks for diagnostic testing.
The statutory provisions regarding diagnostic testing networks are set forth in four subparagraphs of subdivision (7) of section 13-a.
Subparagraph (a) provides that an employer or carrier may contract with a legally and properly organized network or networks for the performance of diagnostic tests, x-ray examinations, magnetic resonance imaging or other radiological examinations or tests. The employer or carrier may require that injured workers use these diagnostic testing networks. There are two exceptions under WCL § 13-a(7)(a) when a claimant may not be required to use a diagnostic testing network: 1) when a medical emergency occurs; and 2) when the diagnostic testing network does not have an affiliated provider or facility "within a reasonable distance from the claimant's residence or place of employment, as defined by regulation of the Board."
Subparagraph (b) provides that when an employer or carrier requires use of a diagnostic testing network by a claimant, the claimant must be given notice of this requirement by the carrier or employer when it supplies the claimant with the written statement of claimant's rights.
Subparagraph (c) provides that when a carrier or employer approves a request for authorization for a diagnostic test costing $1000 or more, the employer or carrier, or if so delegated the diagnostic testing network, shall notify the physician requesting the authorization of the requirement regarding use of a diagnostic testing network, including contact information for the network and a list of affiliated facilities and providers, as defined by regulation of the Board. The claimant, in consultation with his or her treating physician, will determine the provider within the network to perform the diagnostic test.
Subparagraph (d) provides that the result of the diagnostic test must be sent to the requesting physician "immediately upon completion of the report detailing the results."
3. Needs and benefits: The purpose of the proposed rule is to 1) ensure that injured workers receive timely and proper notification that they will be required to utilize a network diagnostic provider; 2) ensure that injured workers receive diagnostic testing expeditiously; and 3) assist the State Insurance Fund, carriers and self-insured employers in reducing the cost of diagnostic testing, subsequently reducing premium costs for all employers in New York State. In addition, the proposed regulation clarifies and defines aspects of the statute in order to assist in its successful implementation.
The regulations identify what constitutes a "legally and properly organized" network or networks. There are a wide variety of business organization structures that may identify themselves as a diagnostic testing network. Such organizations may be a professional corporation or may be an independent practice association that contracts directly with providers to supply the diagnostic services. In addition, this provision attempts to address concerns regarding the corporate practice of medicine issues that may develop when physicians refer to a network that may then refer to a particular provider.
The regulations require and describe the notice to the claimant and requesting physician. The statute requires that the claimant receive notice when the employer supplies him or her with a written statement of claimant rights. This occurs at the commencement of the claim when the employer reports the accident to the Board. The statute requires that the requesting physician be given notice whenever he or she has requested prior authorization from the carrier or employer due to the cost of the test. The proposed regulations prescribe when notice is given, how notice is provided and prescribes the contents of the notice.
In addition, there were terms in the statute that were undefined and subject to differing interpretations. The proposed regulations define terms contained in the statute and relevant to the implementation of this process in an attempt to reduce friction between the parties. Examples of terms that are defined or explained in the proposed regulations are: reasonable distance from a claimant's house, medical emergency, and diagnostic examination and test.
In addition, the proposed regulations create an exception for use of a diagnostic testing network when a claim is controverted and the carrier is denying payment for medical treatment. The proposed regulations articulate that a claimant may not be required to use a diagnostic testing network when the carrier or employer controvert the claim.
4. Costs: There are no projected costs to regulated parties who may be affected by the proposed regulation. There are no projected costs to the Board, State and local governments.
However, there may be savings to regulated parties by controlling the cost of diagnostic testing. Diagnostic testing networks and SIF have advised that the contracts between them provide for a discount of up to 50% in the current Medical Fee Schedule price for the identified diagnostic examinations and tests. The steep discounts are made in exchange for a volume increase in the number of referrals the diagnostic testing networks receive.
The proposed regulations have reserved authority to the Chair to conduct audits to ensure that the savings are being passed to New York State employers.
5. Local government mandates: The proposed regulation does not impose any mandate, duty or responsibility upon any municipality or governmental entity. Self-insured municipalities may use a diagnostic testing network at their election to achieve cost savings.
6. Paperwork: The proposed regulations require workers' compensation carriers who use diagnostic testing networks to make annual reports to the Chair. The proposed regulations require diagnostic testing networks performing examinations and tests on injured workers to report annually to the Chair. Notice must be provided to the injured worker and treating medical providers by the carrier or the diagnostic testing network. There are no reporting or documentation requirements on insured employers, injured workers, or workers' compensation carriers electing not to use a diagnostic testing network.
7. Duplication: There is no duplication of State or federal regulations or standards.
8. Alternatives: There were no significant alternative proposals under consideration. However the Board considered alternative approaches and made changes based on comments received from stakeholder groups to various subdivisions of the proposed regulations.
The Board considered several different options for providing notice to injured workers of the requirement to use a diagnostic testing network. Also considered was requiring employers to send a general notice to all employees. This approach was thought to be expensive as only a small percentage of employees file workers' compensation claims, and it was thought that employees may forget about the notice if it is received before they are actually injured.
The Board considered not requiring insurance carriers to notify medical providers who prescribe diagnostic examinations and tests. However, medical providers often have a better understand of insurance requirements regarding networks than their patients, and thus it was determined that notice to medical providers and to claimant would create better compliance with the requirement to use diagnostic testing networks and thus achieve more savings for employers. Medical providers may receive notice in one of two ways: either when a bill for treatment of a particular claimant is received, or through general notification using carriers databases of medical providers who treat workers' compensation claimants.
Based on comments from medical professionals and in consultation with its Medical Director's Office, the Board added to the types of illness or injuries that may warrant in-office x-ray as part of the ongoing treatment. The Board declined add medical professionals, other than orthopedic specialists, to the medical providers who may perform the in-office x-ray.
With respect to EMG/NCS studies, the Board extended the time for production of the report from three to seven days, based on comments received from diagnostic testing networks. In consultation with its Medical Director's Office, the Board elected to require that EMG and NCS studies be performed by neurologists, and did not include orthopedic specialists or physical therapists a suggested by some stakeholder groups.
9. Federal standards: There are no applicable federal standards which address the standards contained in the proposed regulation.
10. Compliance schedule: The proposed regulation requires that carriers electing to use a diagnostic testing network provide the Board with information concerning the network and notify the affected parties prior to requiring use of the diagnostic testing network. In addition, diagnostic testing networks must supply the Board with the prescribed information prior to performing diagnostic examination and tests of workers' compensation claimants pursuant to an agreement with a workers' compensation carrier.
The proposed regulations will require claimant's who receive proper notification to obtain prescribed diagnostic examination and tests from an affiliated network provider. However the regulation requires that the affiliated network provider be located within a reasonable distance from the claimant's home or workplace.
Regulatory Flexibility Analysis
1. Effect of rule: The proposed regulation will not affect employers, as defined in WCL § 2(3), including the State, municipal corporations, fire districts, public authorities and political subdivisions, who appear before the Board on matters relating to Workers' Compensation claims. The rule doesn't directly impact small businesses or local governments as employers, though it is intended to bring down the cost of workers' compensation coverage by reducing diagnostic testing costs. It may also impact medical practices that are small businesses by directing diagnostic testing to established networks and precluding injured workers from going to providers who are not affiliated with the carrier's network.
2. Compliance requirements: The proposed regulation does not require any action by small businesses or local governments. The proposed regulation does not impose or require any reporting requirements or additional paperwork on the part of small businesses or local government. Local governments that are self-insured may elect to use a diagnostic testing network to reduce workers' compensation costs. Such local governments would need to comply with the filing requirements contained in subdivision 325-7.2 of 12 NYCRR.
3. Professional services: Small businesses and local governments will not have to engage any professional services as a result of the proposed regulation.
4. Compliance costs: Small businesses and local governments will not incur any compliance costs as a result of this proposed regulation. It is anticipated that small businesses and local governments will experience a decrease in the cost of their workers' compensation insurance premiums.
5. Economic and technological feasibility: Small businesses and local governments will not incur any capital costs or annual operating costs or be required to purchase or update technological equipment as a result of the proposed regulation.
6. Minimizing adverse impact: The proposed regulation will have no adverse economic impact on small businesses or local governments.
7. Small business and local government participation: Although the proposed regulation does not adversely impact on public or private entities, the Board requested comment on the proposed regulation from the Business Council of New York State, as well as the City of New York's workers' compensation division.
Rural Area Flexibility Analysis
1. Types and estimated numbers of rural areas: The proposed regulation should not affect employers, as defined in WCL § 2(3), in rural areas, including municipal corporations, fire districts, public authorities and political subdivisions, who appear before the Board on matters relating to Workers' Compensation claims.
2. Reporting, recordkeeping and other compliance requirements; and professional services: The proposed regulation does not require any action whatsoever by small businesses or local governments in rural areas. The proposed regulation does not impose or require any reporting requirements or additional paperwork on the part of small businesses or local governments in rural areas. Small businesses and local governments in rural areas will not have to engage any professional services as a result of the proposed regulation.
3. Costs: Small businesses and local governments in rural areas will not incur any capital costs, annual operating costs or any compliance costs as a result of the proposed regulation. It is anticipated that small businesses and local governments in rural areas will experience a decrease in the cost of their workers' compensation insurance premiums.
4. Minimizing adverse impact: The proposed regulation will have no adverse economic impact on small businesses or local governments in rural areas.
5. Rural area participation: Although the proposed regulation does not adversely impact on public or private entities in rural areas, the Board has requested comment from entities in rural areas on the proposed regulation.
Job Impact Statement
1. Nature of impact: The proposed regulation will not have an adverse impact on existing jobs or the development of new employment opportunities for New York residents. It is anticipated that the proposed regulation will not have an adverse impact on existing employees in the field of diagnostic testing. While the proposed regulation may impact where claimants have diagnostic examinations and tests performed, the proposed regulations should not impact the number of diagnostic examinations and testing performed overall, or the number of employees needed to conduct such examinations and tests.
2. Categories and numbers affected: The proposed regulation should have no affect on medical personnel currently employed in the diagnostic testing field. The Board is unable to determine what affect the proposed regulation may have on the employment of medical personnel in the future.
3. Regions of adverse impact: The proposed regulation does not have an adverse impact on jobs or employment opportunities anywhere in the State, therefore, no region is disproportionately affected by the proposed regulation.
4. Minimizing adverse impact: The proposed regulation will have no adverse impact on existing jobs or the development of new employment opportunities.
