August 8, 2025 | Sacramento, CA — MedLegalNews.com — DWC utilization review regulations suffered a major setback when the Office of Administrative Law (OAL) disapproved the California Division of Workers’ Compensation’s proposed updates on July 22, citing procedural flaws, regulatory ambiguity, and formatting issues. DWC now has a 120‑day window to revise and resubmit the rules ahead of the January 1, 2026 target implementation.
Factual Overview
On July 22, 2025, the OAL issued a formal disapproval of the proposed DWC utilization review regulations, identifying multiple procedural and substantive deficiencies. These included ambiguous language in several key provisions, inconsistencies in terminology, and failure to apply the proper formatting—such as underlining and strike-out markup—required by the Administrative Procedure Act (APA). Without these elements, the revisions do not meet the legal standards necessary to advance into the California Code of Regulations. The disapproval means the current DWC utilization process remains unchanged for now, placing added pressure on the agency to correct and resubmit the proposal within the required 120-day timeframe.
Next Steps for DWC and Stakeholders
DWC now faces a 120‑day deadline to correct the identified issues and formally resubmit a revised UR rule package, including fresh public notice and comment periods. The agency has affirmed its commitment to meet the original implementation timeline, aiming to finalize rules by January 1, 2026.
Why This Matters to the Claims Community
Uncertainty in medical decision timelines: Until new rules are approved, stakeholders continue operating under legacy UR protocols—including ambiguous provisions from SB 1160 and AB 1124.
- Compliance and litigation risk: Employers and payers using ambiguous UR practices may face challenges during disputes or IMR appeals.
- Opportunity for input: The mandated revision allows stakeholders to monitor changes and provide feedback during public notice cycles.
Access the OAL disapproval notice listing DWC’s UR rule package: Office of Administrative Law – Disapproval Decisions.
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FAQs: DWC Utilization Review Rules Rejection
Why were the DWC utilization review rules rejected by OAL?
The OAL found ambiguous language, procedural inconsistencies, and failure to use required formatting in parts of the rule package—necessitating revision before approval.
What is the next step after OAL rejected the UR rules?
DWC now has 120 days to revise the regulations and reissue them for public comment. A revised draft will then be submitted for OAL approval before a potential January 1, 2026 effective date.
What happens in the meantime for utilization review cases?
Until final rules are adopted, claims administrators, providers, and payers continue operating under existing UR protocols, relying on earlier statutes (like SB 1160 and AB 1124) and case law.