(a) The administrator of the bureau of workers' compensation shall establish a system of utilization review of selected outpatient and inpatient healthcare providers for employees claiming benefits under this chapter, to be performed by utilization review organizations accredited by either the Utilization Review Accreditation Commission (URAC) or the National Committee for Quality Assurance (NCQA). Utilization review organizations shall be required to provide proof of such accreditation beginning July 1, 2016.

(b) The administrator shall also establish a system of pre-admission review of all hospital admissions, except for emergency services; however, utilization review pursuant to subsection (a) and this subsection (b) shall begin within one (1) working day of all emergency hospital admissions.

(c) Pursuant to the administrator's established system of utilization review, the administrator may contract with an independent utilization review organization, not owned by or affiliated with any carrier authorized to write workers' compensation insurance in the state, to provide utilization review, including peer review.

(d) Nothing in this section shall prevent an employer from electing to provide utilization review; however, if the employee, provider or any other party not contractually bound to the employer's utilization review program disagrees with that employer's utilization review, then that employee, provider or other party shall have recourse to the administrator's utilization review program, as provided for in this section.

(e) Pursuant to the utilization review conducted by the administrator, including providing an opportunity for a hearing, any health care provider who is found by the administrator to have rendered excessive or inappropriate services may be subject to:

(1) A forfeiture of the right to payment for those services that are found to be excessive or inappropriate;

(2) A civil penalty of not less than one hundred dollars ($100) nor more than one thousand dollars ($1,000); or

(3) A temporary or permanent suspension of the right to provide medical care services for workers' compensation claims if the health care provider has established a pattern of violations.

(f) It is the intent of the general assembly to ensure the availability of quality medical care services for injured and disabled employees and to manage medical costs in workers' compensation matters by eradicating prescription drug abuse through the employment of the system established by subsection (a) to review any healthcare provider prescribing one (1) or more Schedule II, III, or IV controlled substances for pain management to an injured or disabled employee for a period of time exceeding ninety (90) days from the initial prescription of such controlled substances.

(g) In consultation with the administrator's medical advisory committee, the administrator shall, by rules to become effective on January 1, 2016, adopt guidelines for the diagnosis and treatment of commonly occurring workers' compensation injuries.

(h) Any treatment that explicitly follows the treatment guidelines adopted by the administrator or is reasonably derived therefrom, including allowances for specific adjustments to treatment, shall have a presumption of medical necessity for utilization review purposes. This presumption shall be rebuttable only by clear and convincing evidence that the treatment erroneously applies the guidelines or that the treatment presents an unwarranted risk to the injured worker.

(i) The administrator may assess a reasonable fee, not to exceed two hundred fifty dollars ($250), for an appeal of any utilization review decision.

(j)

(1) Except as otherwise provided in subdivision (j)(2), the system of utilization review established by the administrator or provided by an employer shall not apply to:

(A) Diagnostic procedures ordered in accordance with the treatment guidelines by the authorized treating physician or chiropractor in the first thirty (30) days after the date of injury; or

(B) Diagnostic studies recommended by the treating physician in the event the initial treatment regimen is nonsurgical, without diagnostic testing, and is not successful in returning the injured worker to employment.

(2) A recommended invasive procedure shall be subject to utilization review at any time.

(3) For purposes of this subsection (j):

(A) “Diagnostic procedures” includes, but is not limited to, routine and specialty radiography, magnetic resonance imaging that is not for low back pain without radiculopathy, a computerized tomography scan, a myelogram, an arthrogram, an ultrasound, and electromyogram and nerve conduction velocity testing; and

(B) “Initial treatment” means the first series of treatments or therapies or first two (2) medication trials ordered by the authorized treating physician in accordance with the adopted treatment guidelines within sixty (60) days of a reported injury.