CO Code § 8-43-501 (2021)
2021 Colorado Code|Title 8 - Labor and Industry|Article 43 - Procedure|Part 5 - Utilization Review Process - Independent Medical Examinations|§ 8-43-501. Utilization Review Process - Legislative Declaration - Cash Fund

  The general assembly hereby finds and determines that insurers and self-insured employers should be required to pay for all medical services pursuant to this article which may be reasonably needed at the time of an injury or occupational disease to cure and relieve an employee from the effects of an on-the-job injury. However, insurers and self-insured employers should not be liable to pay for care unrelated to a compensable injury or services which are not reasonably necessary or not reasonably appropriate according to accepted professional standards. The general assembly, therefore, hereby declares that the purpose of the utilization review process authorized in this section is to provide a mechanism to review and remedy services rendered pursuant to this article which may not be reasonably necessary or reasonably appropriate according to accepted professional standards.      and assess it against the insurer or self-insured employer. The state treasurer shall credit fees collected pursuant to this section to the utilization review cash fund, which fund is hereby created. Moneys in the utilization review cash fund are continuously appropriated to the division for the purpose of administering the utilization review program and may not revert to the general fund at the end of any fiscal year. The division shall mail to any claimant, insurer, or self-insured employer a notice that a case is to be reviewed and that the claimant may be examined as a result of such review. The claimant, insurer, or self-insured employer has thirty days from the date of mailing of such notice to examine the medical records submitted by the party who requested the review and may add medical records to the utilization review file that the party believes may be relevant to the utilization review. The division shall maintain a special file for utilization review cases. Such file shall be accessible only to interested parties in a utilization review case and shall not otherwise be open to any person.    Prior to submitting a request for a utilization review pursuant to this section, an insurer, self-insured employer, or claimant shall hire a licensed medical professional to review the services rendered in the case. A report of the review shall be submitted with all necessary medical records, reports, and the request for utilization review.    A claimant may request a utilization review pursuant to this section if the claimant has been refused a request pursuant to section 8-43-404 (5) to have a personal physician or chiropractor attend the claimant. A claimant requesting a utilization review pursuant to this paragraph (c) shall file the request on forms promulgated by the director by rule and shall pay the fee required by paragraph (a) of this subsection (2).    For purposes of this section only, “medical records” means documents and transcripts of information obtained from a patient or his or her medical professional that are related to the patient's medical diagnosis, treatment, and care.    When an insurer, self-insured employer, or claimant requests utilization review, no other party shall request a hearing pursuant to section 8-43-207 until the utilization review proceedings have become final, if such hearing request concerns issues about a change of physician or whether treatment is medically necessary and appropriate.    Once a utilization review proceeding has become final and no longer subject to appeal, the final disposition of the issues in such proceeding shall be binding on the parties and preclude a contrary ruling on such issues in a subsequent hearing under section 8-43-207 unless a preponderance of evidence is shown.         The director, with input from the medical director serving pursuant to section 8-42-101 (3.6)(n), shall appoint members of utilization review committees for purposes of this section and section 8-42-101 (3.6). The director shall establish committees based on the different areas of health-care practice for which requests for utilization review may be made. The director shall establish the qualifications for members of the different committees and the areas of health-care practice in which each such committee shall conduct requested utilization reviews. Cases of requested utilization review shall be referred to committees appointed pursuant to this subsection (3) by the director based upon the areas of health-care practice for which each committee is appointed.    Each committee established pursuant to paragraph (a) of this subsection (3) shall be composed of three members. Committee members shall be compensated for their time by the division out of moneys in the utilization review cash fund, created in paragraph (a) of subsection (2) of this section. Any member of a committee appointed pursuant to this subsection (3) shall be immune from criminal liability and from suit in any civil action brought by any person based upon an action of such a committee, if such member acts in good faith within the scope of the function of the committee, has made reasonable effort to obtain the facts of the matter as to which action is taken, and acts in the reasonable belief that the action taken is warranted by the facts. The immunity provided by this paragraph (b) shall extend to any person participating in good faith in any investigative proceeding pursuant to this section.      For each case, a committee may recommend by majority vote of such committee that no change be ordered or that a change of provider be ordered. (c) (I) For each case, a committee may recommend by majority vote of such committee that no change be ordered or that a change of provider be ordered.    A committee may also, by unanimous vote, recommend that the director order that payment for fees charged for services in the case be retroactively denied.    A committee may also, by unanimous vote, recommend that the director order that a physician's accreditation status under section 8-42-101 (3.6) be revoked.       In preparing and issuing an order in any case, the director shall review and give great weight to the reports and recommendations of the committee.    In appropriate cases pursuant to this section and section 8-42-101 (3.6), the director may order that an insurer, employer, or self-insured employer be permitted to deny reimbursement to a provider for any medical care or services rendered to a claimant; and such order may be effective for up to three years. Bills for services rendered during the effective period of any such order shall be unenforceable and shall not result in any debt of the claimant. In deciding whether to issue any such order, the director shall give great weight to the fact that:   The provider has, within any two-year period, been the subject of two or more orders removing the provider from the role of authorized treating physician; or    The provider has, within any two-year period, been the subject of two or more orders retroactively denying the payment of the provider's fees; or    The provider has, within any two-year period, been the subject of two or more orders either retroactively denying the payment of the provider's fees or removing the provider from the role of authorized treating physician.    Any public entity in the state that is participating in the federal prison industry enhancement certification program pursuant to the federal “Justice System Improvement Act of 1979”, 18 U.S.C. sec. 1761 (c), shall insure and keep insured the payment of compensation by electing one of the methods provided in subsection (1) of this section; except that the method for insuring the participants of such program need not be the same method selected by the public entity pursuant to subparagraph (I) of this paragraph (a).    (A) An advisory organization as defined in section 10-4-402 (1), C.R.S., or a rating organization as defined in section 10-4-402 (3), C.R.S., shall submit an annual report to the commissioner of insurance listing any policy forms as may be requested by the commissioner. The listing must be submitted no later than July 1 of each year and must contain a certification by an officer of the organization that, to the best of the officer's knowledge, each policy form listed complies with Colorado law. The commissioner shall determine the necessary elements of the certification.    If a carrier uses, in their entirety and without modification, forms prepared by an advisory organization as defined in section 10-4-402 (1), C.R.S., or a rating organization as defined in section 10-4-402 (3), C.R.S., the carrier shall notify the commissioner of insurance that it adopts the annual report filed by the advisory organization or rating organization under subparagraph (II) of this paragraph (a) and, if it so notifies the commissioner, it need not submit the certification required by subparagraph (I) of this paragraph (a). If a carrier uses forms that deviate from the forms listed by the advisory organization or rating organization, or if it uses forms other than those listed by the advisory organization or rating organization, the carrier shall submit the annual listing of forms and certification as required by subparagraph (I) of this paragraph (a).          If the director orders pursuant to subsection (3) of this section that a change of provider be made in a case or that the physician's accreditation status be revoked, the claimant, insurer, or self-insured employer shall have seven days from receipt of the director's order in which to agree upon a level I provider. If the claimant, insurer, or self-insured employer can not reach agreement within the seven day time period, the director shall select three providers. A new provider shall be chosen from the three providers so selected by the party who was successful in the request for review. If no appeal is filed, the successful party shall notify the division of the name of the new provider within seven days of the selection of the three potential providers. If the new health-care provider is not selected within such seven days, the director shall select the provider.      Any party, including the health-care provider, may appeal to an administrative law judge for review of an order specifying that no change occur or that a change of provider be made with respect to a case. Such review shall be limited to the record on appeal. The findings of a utilization review committee regarding the change of provider in a case shall be afforded great weight by the administrative law judge in any proceeding. A party disputing the finding of such utilization review committee shall have the burden of overcoming the finding by clear and convincing evidence.    If the director has entered an order specifying that the payment of fees in the case be retroactively denied, or permitting an insurer, employer, or self-insured employer to deny payments for medical services or care rendered pursuant to subsection (3)(e) of this section, the health-care provider may request a de novo hearing before an administrative law judge by filing an application for hearing within thirty days from the date of the certificate of mailing of the order. In a hearing held pursuant to this paragraph (b), the record upon which the director based the order shall be admissible in evidence. The findings of the utilization review committee regarding the retroactive denial of payment of fees in a case shall be afforded great weight by the administrative law judge in any proceeding. A party disputing the finding of such utilization review committee shall have the burden of overcoming the finding by clear and convincing evidence.    Any appeal filed pursuant to this subsection (5) must be filed within forty days from the date of the certificate of mailing of the director's order.    Any party dissatisfied with an order entered by an administrative law judge pursuant to paragraph (a) of this subsection (5) may file a petition to review the order pursuant to section 8-43-301.    (Deleted by amendment,L. 91, p. 1326, § 43, effective July 1, 1991.)        History. Source: L. 90: Entire article R&RE, p. 517, § 1, effective July 1. L. 91: (2)(a), (2)(b), (3)(c), (5)(a), and (5)(b) amended and (5)(c) to (5)(e) added, p. 1355, § 1, effective May 29; entire section amended, p. 1326, § 43, effective July 1. L. 92: (5)(c) amended, p. 1802, § 1, effective April 11. L. 94: (2) amended, p. 2818, § 1, effective June 3.    Editor's note:   This section is similar to former § 8-49-102 as it existed prior to 1990.   ANNOTATION   Law reviews. For article, “Medical Utilization Review Under Worker's Compensation”, see 17 Colo. Law. 1995 (1988).   The medical utilization review process created in this section is a separate and distinct proceeding from the compensation claim process, and records from such process are not admissible in compensation claims hearings. Reg'l Transp. Dist. v. Jackson, 805 P.2d 1190 (Colo. App. 1991).   This section provides a method to review and remedy medical services which may not be reasonably necessary or reasonably appropriate in light of accepted professional standards. Colo. Comp. Ins. Auth. v. Nofio, 886 P.2d 714 (Colo. 1994).   Subsection (2)(b) does not require the review of services to include an independent medical examination, medical opinion concerning services rendered, or a certificate of review addressing the necessity and appropriateness of provider's services. The medical utilization review (MUR) process contemplates that the substantive analysis of necessity and appropriateness of treatments will be provided by the three-member MUR panel. Rook v. Indus. Claim Appeals Office, 111 P.3d 549 (Colo. App. 2005).   Request for change of physician could proceed despite finding of maximum medical improvement (MMI), where request was based on allegations of professional misconduct and was made prior to the same physician's finding of MMI. Ames v. Indus. Claim Appeals Office, 89 P.3d 477 (Colo. App. 2003).   Although the medical utilization review committee may recommend a change in medical provider or a retroactive denial of fees for the present provider, the committee is not authorized to terminate a claimant's previously authorized medical benefits. Hargett v. Dir., Div. of Labor, 854 P.2d 1316 (Colo. App. 1992) (decided under former § 8-49-102 as it existed prior to the 1990 repeal and reenactment of the “Workers' Compensation Act of Colorado”, articles 40 to 47 of title 8).   The medical evidence, together with the findings of the utilization committee members that the claimant and her treating chiropractor had become business associates in the practice of chiropractic, provided ample support for the director's order, under former § 8-49-102 , requiring a change in the claimant's authorized health care provider. Hargett v. Dir., Div. of Labor, 854 P.2d 1316 (Colo. App. 1992) (decided under former § 8-49-102 as it existed prior to the 1990 repeal and reenactment of the “Workers' Compensation Act of Colorado”, articles 40 to 47 of title 8).   A party to the utilization review process appealing an order of the director of the division of labor is limited to an appellate standard of review by an administrative law judge in determining whether the director's order was supported by substantial evidence. Hargett v. Dir., Div. of Labor, 854 P.2d 1316 (Colo. App. 1992) (decided under former § 8-49-102 as it existed prior to the 1990 repeal and reenactment of the “Workers' Compensation Act of Colorado”, articles 40 to 47 of title 8).   However, if the director's order has terminated a particular type of benefit or if a party seeks to terminate medical benefits based on the review proceedings, the aggrieved party must request an evidentiary hearing under former § 8-53-103 (now § 8-43-207 ). Hargett v. Dir., Div. of Labor, 854 P.2d 1316 (Colo. App. 1992) (decided under former § 8-49-102 as it existed prior to the 1990 repeal and reenactment of the “Workers' Compensation Act of Colorado”, articles 40 to 47 of title 8).   When a party seeks a de novo hearing following the director's retroactive denial of payment, the insurer has the burden of proof to establish that the care provider's treatment was unreasonable under pertinent professional standards. Colo. Comp. Ins. Auth. v. Indus. Claim Appeals Office, 20 P.3d 1209 (Colo. App. 2000).   Mere change in health care provider does not give rise to de novo hearing. In order to be entitled to a de novo hearing under the rationale set forth in Hargett v. Dir., Div. of Labor, 854 P.2d 1316 (Colo. App. 1992), a claimant must show a termination of benefits rather than just a change of benefits. Colo. Comp. Ins. Auth. v. Nofio, 886 P.2d 714 (Colo. 1994).   If the issue in controversy involves the necessity and appropriateness of medical care, rather than industrial disability, the medical utilization committee reports and the director's order based thereon are admissible in hearings under former § 8-53-103 (now § 8-43-207 ), subject to the hearing officer's evidentiary rulings. Hargett v. Dir., Div. of Labor, 854 P.2d 1316 (Colo. App. 1992) (decided under former § 8-49-102 as it existed prior to the 1990 repeal and reenactment of the “Workers' Compensation Act of Colorado”, articles 40 to 47 of title 8).   The administrative rules establishing the types of committees for utilization review were neither arbitrary, unreasonable, nor inconsistent with the legislative purposes under former § 8-49-102 where such committee consisted of four general types: Joints/musculoskeletal, internal medicine, dental, and psychiatry. Hargett v. Dir., Div. of Labor, 854 P.2d 1316 (Colo. App. 1992) (decided under former § 8-49-102 as it existed prior to the 1990 repeal and reenactment of the “Workers' Compensation Act of Colorado”, articles 40 to 47 of title 8).   It was neither arbitrary nor unreasonable for the division of labor to require committee members to submit individual reports and recommendations where the committee votes needed for the respective committee recommendations were statutorily established. Hargett v. Dir., Div. of Labor, 854 P.2d 1316 (Colo. App. 1992) (decided under former § 8-49-102 as it existed prior to the 1990 repeal and reenactment of the “Workers' Compensation Act of Colorado”, articles 40 to 47 of title 8).   Collateral estoppel is applicable when an administrative adjudication and utilization review proceed contemporaneously and the same treatment is under consideration in each, so that a validation of the director's utilization review order is precluded. Williams v. Indus. Claim Appeals Office, 862 P.2d 1007 (Colo. App. 1993).   A claimant is not precluded from seeking redress after the issuance of a utilization review ruling and an administrative law judge has the authority to adjudicate a claimant's entitlement to past and ongoing medical benefits. Mason Jar Restaurant v. Indus. Claim Appeals Office, 862 P.2d 1026 (Colo. App. 1993).   A medical utilization review proceeding does not result in a binding adjudicatory decision and cannot provide the basis for application of res judicata or collateral estoppel in subsequent proceedings between the parties. Mason Jar Restaurant v. Indus. Claim Appeals Office, 862 P.2d 1026 (Colo. App. 1993).   A payment to a preferred provider cannot be retroactively denied as a matter of law because a medical utilization review order has no effect on a provider's status as an authorized treating physician prior to the effective date of the order. Mason Jar Restaurant v. Indus. Claim Appeals Office, 862 P.2d 1026 (Colo. App. 1993).   The statute does not authorize a permanent ban on treatment by a reviewed physician, as such ban would nullify a claimant's right to request a change in authorized provider at any time. Mason Jar Restaurant v. Indus. Claim Appeals Office, 862 P.2d 1026 (Colo. App. 1993).   Information that a party to a medical utilization review proceeding submits beyond the statutory deadline for submission may not be excluded from review if the party is unable to meet the deadline through no fault of his or her own. Donn v. Indus. Claim Appeals Office, 865 P.2d 873 (Colo. App. 1993).   Due process considerations apply to a medical utilization review proceeding since it may result in the termination of a previously authorized provider or treatment and recipients of statutorily created benefits have a property interest in the continued receipt of such benefits. Donn v. Indus. Claim Appeals Office, 865 P.2d 873 (Colo. App. 1993).   While an accredited provider is entitled to a hearing under certain circumstances, such entitlement does not create a property interest that independently entitles the provider to a hearing where his or her services have been terminated. Carlson v. Indus. Claim Appeals Office, 950 P.2d 663 (Colo. App. 1997).   Absent circumstances involving retroactive denial of fees or revocation of the provider's accreditation, there is no due process right to a hearing before a change of provider may be ordered. Carlson v. Indus. Claim Appeals Office, 950 P.2d 663 (Colo. App. 1997); Hall v. Indus. Claim Appeals Office, 74 P.3d 459 (Colo. App. 2003); Rook v. Indus. Claim Appeals Office, 111 P.3d 549 (Colo. App. 2005); Franz v. Indus. Claim Appeals Office, 250 P.3d 755 (Colo. App. 2010).   Application of statute governing medical utilization review proceeding, § 8-43-501 , does not constitute a retroactive application of law contrary to the Colorado Constitution, art. II, § 11, since claimant's right to treatment was always subject to statutory qualifications. Donn v. Indus. Claim Appeals Office, 865 P.2d 873 (Colo. App. 1993).   There is no conflict of interest if a member of a medical utilization review committee has a relationship with the insurer or a provider network, because the workers' compensation rule of procedure specifies that a conflict exists only if a committee member has a relationship with the authorized treating physician that involves a direct or substantial financial interest. Franz v. Indus. Claim Appeals Office, 250 P.3d 755 (Colo. App. 2010).   Injured worker has no standing to challenge statute governing medical utilization review proceeding as permitting an unconstitutional confiscation of property and impairment of contract. Donn v. Indus. Claim Appeals Office, 865 P.2d 873 (Colo. App. 1993).   Where the director's order terminates the claimant's care by a previously authorized health care provider, the claimant is entitled to have the matter adjudicated de novo by an administrative law judge under § 8-43-207 . McWhorter v. CNA Ins. Co., 868 P.2d 1128 (Colo. App. 1993).   While a provider may become authorized to treat a claimant's industrial injury as a result of a referral from an authorized treating physician where the referral is made in the normal progression of authorized treatment, the authorization to refer the claimant to the other provider ends when the treating physician loses his authorized status. Kilwein v. Indus. Claim Appeals Office, 198 P.3d 1274 (Colo. App. 2008).   The requirement that an appeal of a medical utilization review appeal be made within 40 days of the director's order is jurisdictional; it cannot be waived or eliminated by consent or avoided by estoppel. Cramer v. Indus. Claim Appeals Office, 885 P.2d 318 (Colo. App. 1994).   A medical utilization review order is not an award within the scope of § 8-43-303 and the director is not authorized to reopen such an order. Cramer v. Indus. Claim Appeals Office, 885 P.2d 318 (Colo. App. 1994).   Selection of an authorized treating physician as ordered by a medical utilization review committee was ripe for a hearing notwithstanding that the injured employee's appeal of the order was still pending, because the statute requires the parties to act quickly to select a new authorized treating physician regardless of whether an appeal has been filed. Franz v. Indus. Claim Appeals Office, 250 P.3d 1284 (Colo. App. 2010).   Subsection (3)(d) requires the director to give great weight to reports and recommendations of the MUR panel. Unless an assessment is entirely arbitrary or based on factors other than medical considerations, neither the director, the administrative law judge, nor a reviewing court may substitute its judgment for the assessment of provider's care made by a panel of physicians. Rook v. Indus. Claim Appeals Office, 111 P.3d 549 (Colo. App. 2005).