BILL NUMBER: AB 550 AMENDED
BILL TEXT
AMENDED IN SENATE AUGUST 29, 2007
AMENDED IN SENATE AUGUST 1, 2007
AMENDED IN SENATE JULY 18, 2007
AMENDED IN SENATE JUNE 28, 2007
AMENDED IN ASSEMBLY JUNE 1, 2007
AMENDED IN ASSEMBLY APRIL 16, 2007
INTRODUCED BY Assembly Member Ma
( Coauthor: Assembly Member
De La Torre )
FEBRUARY 21, 2007
An act to add Part 6.7 (commencing with Section 12739.50)
to Division 2 of the Insurance Code, relating to health care
coverage. An act to add and repeal Article 2.4
(commencing with Section 4617) of Chapter 2 of Part 2 of Division 4
of the Labor Code, relating to workers' compensation.
LEGISLATIVE COUNSEL'S DIGEST
AB 550, as amended, Ma. Managed Risk Medical Insurance
Board: health care service plans. Workers'
compensation: Integrated 24-Hour Occupational Medical Care Pilot
Project.
Existing law establishes a workers' compensation system,
administered by the Administrative Director of the Division of
Workers' Compensation, to compensate an employee for injuries
sustained in the course of his or her employment.
This bill, until January 1, 2013, would establish the Integrated
24-Hour Occupational Medical Care Pilot Project for the purpose of
demonstrating and evaluating the effectiveness of providing medical
treatment for occupational injuries through the same medical care
delivery system that delivers treatment and services for
nonoccupational injuries and illnesses. The bill would require the
administrative director, on or before July 1, 2008, to adopt
regulations containing specified requirements and criteria for
participation in, and for the implementation and administration of,
the pilot project, as prescribed. The bill would require the
administrative director, on or before July 1, 2010, to prepare and
submit to the Governor and the Legislature an interim report
evaluating the pilot project, and, on or before July 1, 2012, to
submit to the Governor and the Legislature a final report with a full
analysis and evaluation of the effectiveness of the pilot project,
as specified.
Existing law provides for the licensure and regulation of health
care service plans by the Department of Managed Health Care. Existing
law establishes the Managed Risk Medical Insurance Board and makes
it responsible for administering programs, such as the Healthy
Families Program, to provide health care coverage to persons meeting
specified eligibility criteria.
This bill would authorize the board to operate a health care
service plan and would require it to comply with provisions
regulating health care service plans.
This bill would create the Managed Risk Medical Insurance Board
Health Care Service Plan Fund in the State Treasury where all revenue
relating to the plan's operation would be deposited and made
available to the board upon appropriation by the Legislature. The
bill would authorize an appropriation to the board for implementation
of the health care service plan and would provide that any moneys
appropriated by the state for those costs shall be reimbursed to the
state, with accrued interest, within 10 years.
This bill would not become operative until the Legislature
appropriates funds for its implementation.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares all
of the following:
(a) Group health coverage and workers' compensation are separate
but overlapping systems that operate independently with limited
communication among different health care providers providing care
for the same patient. This lack of communication often results in the
duplication of medical tests and services, difficulties in
coordinating medical treatment among different providers, and creates
obstacles in ensuring the continuity of patient care.
(b) Injuries covered by workers' compensation historically have
resulted in significantly higher medical expenditures across the
nation than expenditures for similar injuries covered by group health
insurance plans. Studies indicate that the cost of treating injuries
covered under a workers' compensation system is approximately twice
as high as the cost of treating the same injuries under a group
health plan.
(c) An integrated 24-hour care benefits program would combine and
coordinate the health care component of workers' compensation with
traditional group health coverage, using the same set of health care
providers. Such a streamlined program offering integrated treatment
for occupational and nonoccupational care should also result in
greater patient and employer satisfaction, better medical outcomes
and administrative efficiency, an increased quality of care, and an
improved return-to-work experience for injured workers.
SEC. 2. Article 2.4 (commencing with Section 4617)
is added to Chapter 2 of Part 2 of Division 4 of the
Labor Code , to read:
Article 2.4. Integrated 24-Hour Occupational Medical Care
Pilot Project
4617. This article may be known, and shall be cited, as the
Integrated 24-Hour Occupational Medical Care Pilot Project.
4617.1. The purpose of the pilot project is to demonstrate and
evaluate the effectiveness of a project in which medical treatment
for occupational injuries is provided through the same medical care
delivery system that delivers treatment and services for
nonoccupational injuries and illnesses.
4617.2. On or before July 1, 2008, the administrative director
shall adopt regulations for the implementation and administration of
the pilot project in accordance with the following requirements:
(a) Notwithstanding any other provision of law, any employee who
sustains a compensable injury while covered under the pilot project
shall receive medical treatment and services required under Section
4600, in accordance with the following requirements:
(1) An employee who sustains an injury or illness while covered
under the pilot project program shall obtain treatment exclusively
from the employer-arranged health care service plan that is in effect
for the employee on the date the employee's injury or illness
commences.
(2) An employer and a health care service provider providing
medical care to an injured employee covered under the pilot project
may negotiate the terms of an employer's financial responsibility,
and the extent of any risk-sharing for work-related employee
injuries. In no case may the cost of the treatment for a work-related
injury be shifted to the employee, and an injured employee shall not
be responsible for copayments or deductibles to offset the cost of
that treatment.
(3) Treatment for any injury or illness sustained by an employee
who has received medical treatment under the pilot project after the
employer ceases to participate in the project shall be obtained in
accordance with the requirements of Article 2.3 (commencing with
Section 4616). If transfer of care is required because the employer
has ceased to participate in the pilot project or because the
employee ceases coverage under a participating health care service
plan, the transfer shall be subject to Section 4616.2 or equivalent
continuity of care regulations adopted by the administrative
director.
(4) Nothing in this subdivision shall limit or otherwise affect
the right of an employee to be treated by a personal physician
predesignated in accordance with the requirements of subdivision (d)
of Section 4600.
(b) (1) All medical treatment, utilization review of medical
treatment, access to medical treatment, and other medical treatment
issues covered under this article shall be governed by Chapter 2.2
(commencing with Section 1340) of Division 2 of the Health and Safety
Code. Disputes regarding the provision of medical treatment shall be
resolved pursuant to Article 5.55 (commencing with Section 1374.30)
of Chapter 2.2 of Division 2 of the Health and Safety Code.
Determinations of medical necessity, including determinations
concerning medical treatment necessary to cure and relieve a
work-related injury or illness made pursuant to this article shall
not be subject to the requirements of Section 4062, 4604.5, or 4610.
(2) Within 20 days after service of the decision of the Director
of the Department of Managed Health Care pursuant to subdivision (f)
of Section 1374.33 of the Health and Safety Code, an aggrieved party
may file an appeal of that decision with the administrative director.
Within five days from the date of filing the appeal, the
administrative director shall assign the appeal to an arbitrator. The
appeal shall not be consolidated with other issues for trial by a
workers' compensation administration law judge. The burden of proof
shall be on the party objecting to the decision of the Director of
the Department of Managed Health Care. Arbitration proceedings shall
be conducted pursuant to regulations adopted by the administrative
director, and the decision of the arbitrator shall be served on the
parties within 45 days of the date of filing the appeal. The findings
of fact, order, or decision of the arbitrator shall have the same
force and effect as an order or decision of a workers' compensation
administrative law judge.
(c) An employer shall be eligible to participate in the pilot
project only if the employer has secured the payment of workers'
compensation insurance, and the employer's workers' compensation
insurer agrees to insure the employer in accordance with the
requirements of this article.
(d) An employer is eligible to participate in the pilot project
only if the employer provides health care coverage for
nonoccupational injuries and illnesses for its employees through a
health care service plan licensed pursuant to the Knox-Keene Health
Care Service Plan Act of 1975 (Chapter 2.2 (commencing with Section
1340) of Division 2 of the Health and Safety Code), or through a
Taft-Hartley health and welfare fund that contracts with a health
care service plan. The employer is eligible to participate in the
pilot project only if the health care service plan agrees to
participate in the project. An employer shall be deemed to have
health care coverage if the employer pays at least 80 percent of the
cost of health care coverage for nonoccupational injuries and
illnesses for the employee, or if the health care coverage plan is
established through collective bargaining.
(e) An employer may elect to participate in the pilot project with
only a limited number or percentage of its total number of employees
if the administrative director approves the designation of which
employees are selected to be included or excluded from the pilot
project and the participating employees are designated in accordance
with one of the following:
(1) Employees who are principally employed at one or more
geographic locations, or one or more specific business units,
designated by the employer.
(2) Employees who are represented by an exclusive bargaining agent
or certified bargaining agent in accordance with the National Labor
Relations Act or other state or federal law establishing collective
bargaining rights for employees.
(3) Employees who are enrolled in a particular health care service
plan as part of the pilot project.
(4) Employees who are subject to the workers' compensation
provisions of this division.
(f) No employer that is required to bargain with an exclusive or
certified bargaining agent that represents employees of the employer
in accordance with the National Labor Relations Act or other state or
federal law establishing collective bargaining rights for employees
shall participate in the pilot project with respect to its
represented employees unless authorized to do so by mutual agreement
between the bargaining agent and the employer. When an employer's
workforce includes groups of employees represented by separate
bargaining agents, the employer may separately elect to participate
with respect to each group of employees in accordance with the
employer's agreement with each groups' bargaining agent.
(g) The administrative director shall issue regulations specifying
the information that must be provided by employers applying to
participate in the pilot project. The administrative director shall
establish criteria for approval of applications that are consistent
with the purposes and goals of the pilot project. No application fee
shall be required. The regulations shall also consider whether to
approve any medical care delivery system that has already been
approved as a health care organization pursuant to Section 4600.5 or
a medical provider network pursuant to Article 2.3 (commencing with
Section 4616). The administrative director shall not approve an
application that designates a certain number or percentage of an
employer's total number of employees for inclusion in the pilot
project unless the designation complies with subdivision (e) and the
employer demonstrates to the satisfaction of the administrative
director all of the following:
(1) The designation of employees is not unfairly discriminatory.
(2) The designation of the employer furthers the purposes of the
pilot project and is not based on age, gender, workers' compensation
claim history, health history, health condition, or other similar
individual characteristics.
(3) The designation of employees serves a legitimate business
purpose of the employer, which may include the creation of
experimental groups and control groups for the purpose of evaluating
the pilot project.
(4) The designation of employees will not cause undue confusion or
uncertainty over whether an employee is assigned to the pilot
project.
(5) The employer proposes an adequate means to inform each
designated employee that he or she is assigned to the pilot project.
(h) Workers' compensation insurers and self-insured employers
participating in the program shall inform the administrative director
of the inception of coverage or group membership for any employee in
the project in accordance with the regulations required to be
adopted by the administrative director pursuant to this article.
(i) An approval of the application shall expire upon the
expiration of the term of the agreement by the health care service
plan providing medical treatment required under Article 2 (commencing
with Section 4600), unless the contract between the employer and the
health call service plan is renewed for another year and the
administrative director is notified of the renewal of coverage.
(j) An employer shall give a notice to every employee who is
subject to the pilot project no later than the date of hire or the
effective date of the employer's participation in the pilot project,
whichever occurs later, and within one working day after an employee
files a claim form under Section 5401. The administrative director
may, by regulation, require an additional notice when the employee's
enrollment in a health care service plan is changed or when the
employee ceases to be covered by the pilot project. The notice shall
be given in the form and manner prescribed by the administrative
director. The administrative director shall prescribe the mandatory
contents of the notice informing employees of the means of obtaining
medical treatment for occupational injuries, including the means of
obtaining medical treatment that may be required when the employee is
no longer covered by the employer-provided health care coverage or
the employer no longer participates in the pilot project. The notice
shall also inform employees of their right to treatment for
occupational injuries and illnesses without deductible or copayment;
and the method of receiving reimbursement of any copayment or
deductible that has been paid by the employee for treatment to which
the employee was entitled pursuant to this section to receive without
copayment or deductible.
(k) The 90-day period prescribed in subdivision (b) of Section
5402 shall not begin to run following the filing of a claim form
under Section 5401 until one of the following occurs:
(1) The employee is disabled from work for more than three days as
a result of the injury.
(2) The employee is medically restricted to modified or
alternative work for more than 90 days as a result of the injury.
(3) The employer fails or refuses to furnish medical treatment in
accordance with this article.
(4) The employer has notice that the injury has resulted in
permanent impairment.
(l) Treatment provided for an occupational injury or illness under
the pilot project shall not be considered for the purposes of
subdivision (c) of Section 5405 if the treatment was provided prior
to the filing of a claim form pursuant to Section 5401, within 90
days following the filing of the claim form pursuant to Section 5401,
or after the rejection of liability pursuant to subdivision (b) of
Section 5402.
(m) The administrative director shall provide for separate data
reporting requirements and may provide for exemption from statutory
or regulatory requirements for the reporting of injuries and related
claims data to the extent that exemptions are necessary or convenient
for the operation of the pilot program.
(n) The administrative director shall monitor the pilot project
commencing with the adoption of regulations, providing updates at
least annually to the Governor, the Insurance Commissioner, and the
Legislature.
(o) (1) The Commission on Health and Safety and Workers'
Compensation shall contract with an independent research organization
to conduct a study of the effects of the project, including the
costs and savings to employers, access to medical care for workers,
impact on return-to-work rates, and other appropriate measures of the
effect of the pilot project.
(2) Researchers employed by, or under contract to, the commission
shall be granted access to information pursuant to subparagraph (B)
of paragraph (3) of subdivision (b) of Section 138.7 and information
from the following additional sources under equivalent guarantees of
confidentiality:
(A) The administrative director shall make available all
information obtained from participants in connection with the pilot
program.
(B) The administrative director and the Insurance Commissioner and
the Workers' Compensation Insurance Rating Bureau, as applicable,
shall make information available about self-insured employers and
insured employers, including, as applicable, payroll and premium and
incurred losses and paid losses and other information maintained by
the director or the bureau that is required to complete the study.
4617.3. On or before July 1, 2010, the administrative director
shall prepare and submit to the Governor and the Legislature an
interim report evaluating the pilot project. On or before July 1,
2012, the administrative director shall also submit a final report
with a full analysis and evaluation of the effectiveness of the pilot
project to the Governor and the Legislature containing information
on the estimated cost savings realized by the pilot project.
4617.4. This article shall remain in effect until January 1,
2013, unless a later enacted statute, which is enacted on or before
January 1, 2013, deletes or extends that date.
SECTION 1. Part 6.7 (commencing with Section
12739.50) is added to Division 2 of the Insurance Code, to read:
PART 6.7. Managed Risk Medical Insurance Board Health Care
Service Plan
12739.50. For the purposes of this part, "board" means the
Managed Risk Medical Insurance Board.
12739.51. (a) The board may operate a health care service plan,
as defined in subdivision (f) of Section 1345 of the Health and
Safety Code, that shall comply with all requirements of the
Knox-Keene Health Care Service Plan Act of 1975 (Chapter 2.2
(commencing with Section 1340) of Division 2 of the Health and Safety
Code) and regulations adopted under that chapter.
(b) The board shall operate the plan separately from other
programs that it administers, including the Healthy Families Program
(Part 6.2 (commencing with Section 12693)), the Access for Infants
and Mothers Program (Part 6.3 (commencing with Section 12695)), the
County Health Initiative Matching Fund (Part 6.4 (commencing with
Section 12699.50)), and the California Major Risk Medical Insurance
Program (Part 6.5 (commencing with Section 12700)). The board shall
not share personnel or plan or contract information, including
financial data, between any of these programs and the plan it
operates.
12739.52. All premiums and any other funds collected by the board
pursuant to its operation of a health care service plan shall be
used for providing health care services to the plan's enrollees and
subscribers and for administering the plan. If the premiums and other
funds collected by the board exceed these costs, the board shall
reduce the premium amount it charges subscribers and shall not
realize a profit from its operation of the plan.
12739.53. The Managed Risk Medical Insurance Board Health Care
Service Plan Fund is hereby created in the State Treasury. All
premiums and other funds received by the board pursuant to this part
shall be deposited into the fund and made available to the board upon
appropriation by the Legislature.
12739.54. (a) The board may adopt rules and procedures for the
offering and rating of health care coverage through a health care
service plan that it operates. The rules and procedures shall be
consistent with requirements that apply to health insurers and health
care service plans.
(b) The board may, at its discretion, pay insurance agents and
brokers a commission for referring a person to the board to obtain
coverage through its health care service plan.
12739.55. The Legislature may appropriate funds to the board for
costs the board incurs in implementing this part. Those funds shall
be repaid, including interest at the rate accruing to moneys in the
Pooled Money Investment Account, within 10 years of the date of the
appropriation.
12739.56. Notwithstanding any other provision of law, the state
shall not be liable for any obligations relating to the provisions of
this part in excess of the amount of funds in the Managed Risk
Medical Insurance Board Health Care Service Plan Fund.
12739.57. This part shall not become operative until the
Legislature appropriates funds to the board for its implementation
pursuant to Section 12739.55.