California Code of Regulations › Title 8 - Industrial Relations › Division 1 - Department of Industrial Relations › Chapter 4.5 - Division of Workers' Compensation › Subchapter 1 - Administrative Director-Administrative Rules › Article 4 - Certification Standards for Health Care Organizations › Section 9771.62 - Application for Authorization as a Workers' Compensation Health Care Provider Organization

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) An application for authorization as a
					 workers' compensation health care provider organization shall be filed in the
					 form specified in subsection (c) and contain the information specified in this
					 section.
(b) Applications will be
					 processed in the order in which they are filed; provided however, that
					 applications under Section
					 4600.5(f)(2) shall
					 have priority.
(c) Application Form
					 (WHWCPO-1).
DIVISION OF WORKERS' COMPENSATION
SUPPLEMENTARY APPLICATION
UNDER LABOR CODE SECTION
						4600.6.
Date of Application:
WORKERS' COMPENSATION HEALTH CARE
						PROVIDER
ORGANIZATION AUTHORIZATION
						APPLICATION
LABOR CODE SECTION
						4600.6 (EXECUTION
						PAGE)
Identification of Organization.
Name of Applicant.
___________________________
a. Legal name:
b. Please list all fictitious names you
					 intend to use
A. Type of Filing: Indicate the
					 type of filing by checking and completing the appropriate items:
1. ( ) Original application for organization
					 authorization.
2. ( ) Amendment
					 #___ to a pending application dated __________ for organization authorization.
					 (Complete Item A-5 below.)
3. ( )
					 Notice of a proposed material modification (Complete Item A-5 below.)
4. ( ) Amendment filed by an organization
					 because of a change in the information contained in the original application.
					 (Complete Item A-5 below.)
5. Item
					 numbers being amended
Exhibit numbers being amended
B. Other Agencies.
1. If applicant has made or intends to make
					 any filing relating to its plan of operation to any other state or federal
					 agency, check here ___, and attach Exhibit B-1 identifying each such agency,
					 and the nature, purpose and (projected) date of each such filing.
Additional Exhibits: An original application for
						organization authorization must include the completed form specified in this
						subsection and the exhibits required.
C. Summary of Information in Application.
1. Summary Description of Organization and
					 Operation. Provide as Exhibit C-1 a summary description of the organization and
					 operation of applicant's business as a workers' compensation health care
					 provider organization, covering the highlights and essential features of the
					 information provided in response to the other portions of this application
					 which is essential or desirable to an effective overview of the applicant's
					 workers' compensation health care business, including a summary of the
					 applicant's experience in the provision of workers' compensation health
					 care.
2. Summary Description of
					 Start-up. Provide as Exhibit C-2 a concise description of applicant's start-up
					 program and its assumptions, including such program's operating, capitalization
					 and financial assumptions. Indicate applicant's projected date for the
					 beginning of operations, and discuss the factors which require such
					 date.
D. Organization and
					 Affiliated Persons.
1. Type of Organization.
a. Corporation. If applicant is a
					 corporation, attach as Exhibits D-1-a-I, D-1-a-ii, D-1-a-iii and D-1-a-iv
					 respectively, the Articles of Incorporation, Bylaws, the Corporation
					 Information Form (Form WCHCPO 1-A) and any other organizational documents or
					 agreements relating to the internal affairs of the applicant.
b. Partnership. If applicant is a
					 partnership, attach as Exhibits D-1-b-I, D-1-b-ii and D-1-b-iii respectively,
					 the Partnership Agreement, the Partnership Information Form (Form WCHCPO 1-B)
					 and any other organizational documents or agreements relating to the internal
					 affairs of the applicant.
c. Sole
					 Proprietor. If applicant is a sole proprietorship, attach as Exhibit D-1-c the
					 Sole Proprietorship Information Form. (Form WCHCPO 1-C)
d. Other Organization. If applicant is any
					 other type of organization, attach as Exhibit D-1-d Articles of Association,
					 trust agreement, or any other applicable documents, and any other
					 organizational documents or agreements relating to the conduct of the internal
					 affairs of the applicant, and attach as Exhibit D-1-d-ii the Information Form
					 for other than Corporations, Partnerships, and Sole Proprietorships. (Form
					 WCHCPO 1-D)
e. Individual
					 Information Sheet. Attach as Exhibit D-1-e, an Individual Information Sheet
					 (Form WCHCPO 2) for each natural person named in any exhibit in Item
					 D-1.
2. Contracts with
					 Affiliated Persons, Principal Creditors and Providers of Administrative
					 Services.
a. Persons to Be Identified. Attach
					 as Exhibit D-2-a, a list identifying each individual or entity who is a party
					 to a contract with applicant, if such contract is one for the provision of
					 administrative services to the applicant or any such party is an Affiliated
					 Person or Principal Creditor (Rule 9771.60(c) and (j)) of the applicant. As to
					 each such person, show the following information in columnar form:
(i) The names in alphabetical
					 order.
(ii) The exhibit and page
					 number of the contract (including loans and other obligations).
(iii) The type of contract or loan.
(iv) Each relationship which such individual
					 or entity bears to the applicant (officer, director, partner, trustee, member,
					 Principal Creditor, employee, administrative services provider, health care
					 services provider, or shareholder).
3. Other Controlling Persons. Does any
					 individual or entity not named as a contracting party in Item D-2 or any
					 exhibit thereto have any power, directly or indirectly, to manage, influence,
					 or administer the operation, or to control the operations or decisions, of
					 applicant?
If the appropriate response to this item is "yes," attach
						as Exhibit D-3 a statement identifying each such person or entity and
						explaining fully such person's power or control, and summarizing every contract
						or other arrangement or understanding (if any) with each such person. (Each
						such contract should be submitted pursuant to Subsection D-2.)
4. Criminal, Civil and Administrative
					 Proceedings. Within the preceding 10 years, has the applicant, its management
					 company, or any Affiliate of the applicant (Rule 9771.60(c)), or any
					 controlling person, officer, director or other person occupying a principal
					 management or supervisory position in such organization, management company or
					 Affiliate, or any person intended to hold such a relationship or position, been
					 convicted of or pleaded nolo contendere to a crime, or been held to have
					 committed any act involving dishonesty, fraud or deceit in a judicial or
					 administrative proceeding to which such person was a party?
If "yes," attach a separate exhibit as to each such
						person designated Exhibit D-4, identifying such person and fully explaining the
						crime or act committed. Also, attach a copy of the exhibit to any Individual
						Information Sheet required by Item D-1-e for such individual.
5. Employment of Barred Persons. Has the
					 organization engaged or does the organization intend to engage, as an officer,
					 director, employee, associate, or provider, any person named in (i) any order
					 of the Commissioner pursuant to Section
					 1386(c) or Section
					 1388(d) of the
					 Knox-Keene Health Care Service Plan Act of 1975, (ii) any similar order of the
					 Insurance Commissioner under the Insurance Code barring or otherwise
					 prohibiting such person from being employed or otherwise engaged as an officer,
					 director, employee, associate or provider of any entity subject to the
					 jurisdiction of the Insurance Commissioner, or (iii) any administrative orders
					 issued by a professional licensing board or by the Department of Industrial
					 Relations? If the appropriate response to this item is "yes," attach as Exhibit
					 D-5 a statement identifying each such person and explaining fully the scope of,
					 and the circumstances giving rise to, such order.
E. Contracts with Providers.
1. Compliance with Requirements. Attach as
					 Exhibit E a statement in tabular form for each provider contract, and for each
					 standard form contract and its variations, if any, specifying the provisions of
					 such contract which comply with the following provisions of the Act and rules:
Section
4600.6(g)
4600.6(I)(8)
4600.6(n)
Rules
9771.69
9771.70
9772
								through 9778
2. The provisions describing the mechanism by
					 which payments are to be rendered to the provider clearly identified by the
					 name of the provider.
F.
					 Workers' Compensation Health Care Contracts.
Compliance with Requirements. Attach as Exhibit F a
						schedule in tabular form for each workers' compensation health care contract
						and each standard form workers' compensation contract, identifying the
						particular provision of such contract which complies with the sections listed
						below, covering also any variations made in standard form contracts. As to any
						provision which varies from the applicable provision of the Act or rules,
						identify such provision in Exhibit F.
Section
4600.5(e)(7)(B)
4600.6(e)
Rules
9771.67
9771.69
9772 -
								9778
G. Advertising.
Attach as Exhibit G a copy of any advertising which is
						subject to Section
						4600.6 of the Code and which
						applicant proposes to use. With respect to each proposed advertisement indicate
						the contract(s) by name and by exhibit number(s) to which such advertisement
						relates and identify the employer segment to which the advertisement is
						directed.
H. Marketing of
					 Workers' Compensation Health Care Contracts.
Attach as Exhibit H a statement describing the methods by
						which applicant proposes to market workers' compensation health care contracts,
						including the use of employees, or contracting solicitors or solicitor firms,
						their method or form of compensation, and the methods by which applicant will
						obtain compliance with Rules 9771.64, 9771.65, and 9771.83.
I. Supervision of Marketing.
Attach as Exhibit I a statement setting forth applicant's
						internal arrangements to supervise the marketing of its workers' compensation
						health care contracts, including the name and title of each person who has
						primary management responsibility for the employment and qualification of
						solicitors, advertising, contracts with solicitors and solicitor firms and for
						monitoring and supervising compliance with contractual and regulatory
						provisions.
J. Solicitation
					 Contracts.
1. Attach as Exhibit J-1 a list of
					 all persons (other than any employee of the organization whose only
					 compensation is by salary) soliciting or agreeing to solicit the sale of
					 workers' compensation health care contracts on behalf of the applicant. For
					 each such person, identify by exhibit number that person's contract furnished
					 pursuant to Item K-2 and, if such contract does not show the rate of
					 compensation to be paid, specify the person's rate of compensation.
2. Attach as Exhibit J-2, a copy of each
					 contract or proposed contract between applicant and the persons named in
					 Exhibit J-1 for soliciting the sale of or selling workers' compensation health
					 care contracts on behalf of applicant. If a standard form contract is used,
					 furnish a specimen of the form, identify the provision and terms of the form
					 which may be varied and include a copy of each variation.
K. Workers' Compensation Health Care Contract
					 Enrollment Projections.
NOTE: All projections are to cover the period commencing
						from the applicant's commencement of operations as an authorized and certified
						workers' compensation health care provider organization for two years.
1. Projections. Attach as Exhibit K-1
					 projections of applicant's enrollments under workers' compensation health care
					 provider contracts with self-insured employers, groups of self-insured
					 employers, or insurers of employers (individually, "Employer"; collectively,
					 "Employers") for the periods specified in the above note. Exhibit K-1 is to
					 contain the following information with respect to each anticipated workers'
					 compensation health care contract:
a. The name
					 of the Employer.
b. The number of
					 potential employees eligible to receive workers' compensation health care from
					 the organization who are employed by the Employer.
c. The locations within and around
					 applicant's service area in which the potential employees live and
					 work.
d. The estimated date (or
					 period after authorization by the Administrative Director and certification by
					 the Workers' Compensation Division of the Department of Industrial Relations)
					 for entry into the workers' compensation health care contract.
e. Identification of the workers'
					 compensation health care contract anticipated with the Employer, by reference
					 to Exhibit F. If more than one type of workers' compensation health care
					 contract is expected with an Employer, each contract must be covered
					 separately.
f. The projected number
					 of employees on a monthly basis for the initial period specified in the Note,
					 above, and quarterly for the following year.
2. Substantiation of Projections. Attach as
					 Exhibit K-2 for each workers' compensation health care contract specified in
					 Exhibit K-1 a description of the facts and assumptions used in connection with
					 the information specified in that exhibit and include documentation of the
					 source and validity of such facts and assumptions.
3. Letters of Interest. Attach as Exhibit K-3
					 letters of interest or intent from each Employer listed in Exhibit K-1, on the
					 letterhead of the Employer and signed by its
					 representative.
L.
					 (Reserved for future use.)
M.
					 Current Viability.
1. Financial Statements.
a. Attach as Exhibit M-1-a the most recent
					 audited financial statements of applicant, accompanied by a report,
					 certificate, or opinion of an independent certified public accountant, together
					 with all footnotes to such financial statements.
b. If the financial statements attached as
					 Exhibit M-1-a are for a period ended more than 60 days before the date of
					 filing of this application, also attach as Exhibit M-1-b financial statements
					 prepared as of date no later than 60 days prior to the filing of this
					 application consisting of at least a balance sheet, a statement of income and
					 expenses, and any accompanying footnotes; these more recent financial
					 statements need not be audited, so long as they are prepared in accordance with
					 generally accepted accounting principles.
2. Provision for Extraordinary Losses. The
					 following requirements require an initial applicant to submit legible copies of
					 the actual policies of insurance (including any riders or endorsements) or
					 specimen copies of the policies of insurance which show all of the terms and
					 conditions of coverage, or with respect to those items expressly allowing for
					 self-insurance, allow applicant to provide evidence of self-insurance at least
					 as adequate as insurance coverage.
a. Attach
					 as Exhibit M-2-a evidence of adequate insurance coverage or self- insurance to
					 respond to claims for damages arising out of furnishing workers' compensation
					 health care (malpractice insurance).
b. Attach as Exhibit M-2-b evidence of
					 adequate insurance coverage or self-insurance (e.g., appropriate reserve set
					 aside to fund likely liabilities associated with uninsured costs) to respond to
					 claims for tort claims, other than with respect to claims for damages arising
					 out of furnishing health care services.
c. Attach as Exhibit M-2-c evidence of
					 adequate insurance coverage or self-insurance to protect applicant against
					 losses of facilities upon which it has the risk of loss due to fire or other
					 causes. Identify facilities covered by individual policies and indicate the
					 basis upon which applicant believes that the insurance thereon is
					 adequate.
d. Attach as Exhibit
					 M-2-d, evidence of fidelity bond coverage for at least the amounts specified in
					 Rule 9771.74, in the form of a primary commercial blanket bond or a blanket
					 position bond written by an insurer licensed by the California Insurance
					 Commissioner, providing 30 days' notice to the Administrative Director prior to
					 cancellation, and covering each officer, director, trustee, partner and
					 employee of the organization, whether or not compensated.
e. Attach as Exhibit M-2-e evidence of
					 adequate workers' compensation insurance coverage against claims which may
					 arise against applicant.
N. Fiscal Arrangements.
1. Maintenance of Financial Viability. Attach
					 as Exhibit N-1 a statement describing applicant's arrangements to comply with
					 Section 4600.6(m) of the
					 Code and Rule 9771/73.
2. Provider
					 Claims. Attach as Exhibit N-2 a statement describing applicant's system for
					 processing claims from providers for payment, including the rules defining
					 applicant's obligation to reimburse, the standards and procedures for
					 applicant's claims processing system (including receipt, identification,
					 handling, screening, and payment of claims), the timetable for processing
					 claims, and procedures for monitoring the claims processing system.
3. Other Business. If the applicant is or
					 will engage in any business other than as a workers' compensation health care
					 provider organization, attach as Exhibit N-3 a statement describing such other
					 business, its relationship to applicant's business as an organization, and the
					 anticipated financial risks and liabilities of such other business. If the
					 financial statements and projections in Exhibits M-1-a, do not include such
					 other business, explain.