BILL ANALYSIS ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 1115| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: SB 1115 Author: Migden (D) Amended: As introduced Vote: 21 SENATE LABOR & INDUSTRIAL RELATIONS COM. : 3-2, 2/27/08 AYES: Migden, Kuehl, Padilla NOES: Wyland, Ackerman SUBJECT : Workers compensation: permanent disability reports SOURCE : California Applicant Attorneys Association DIGEST : This bill adds to the Labor Code language prohibiting various forms of discrimination in the apportionment of industrial disabilities. The bill bars the consideration of race, national origin, gender, sex, genetic predisposition, and certain other factors in the determination of an apportionment of the causes of an industrial disability. ANALYSIS : Existing law: 1.Generally requires employers to secure the payment of workers' compensation for injuries incurred by their employees that arise out of, and in the course of, employment. Benefits to which an injured worker may be CONTINUED SB 1115 Page 2 entitled include permanent disability indemnity (payment for loss) benefit payments for long-term permanent injuries. The amount and duration of such payments are determined by a schedule in law that is in turn dependent upon a permanent disability rating reached through an evaluation by a physician of the injured worker's bodily impairment. (The impairment rating is converted into a disability rating through a formula devised by regulation.) 2.Requires that a physician make an "apportionment determination" with respect to the permanent disability. That is, the physician must find (a) what approximate percentage of the permanent disability is caused by the direct result of the injury arising out of and in the course of employment, and (b) what approximate percentage of the permanent disability is caused by other factors both before and subsequent to the industrial injury. If the physician determines that the disability is partially the result of these "other factors" the (degree of) impairment rating must be reduced by the relevant percentage, ultimately resulting in a lower permanent disability rating and reduced permanent disability indemnity payments. 3.Provides that no person in the State of California shall, on the basis of race, national origin, ethnic group identification, religion, age, sex, sexual orientation, color, or disability, be unlawfully denied full and equal access to the benefits of, or be unlawfully subjected to discrimination under, any program or activity that is conducted, operated, or administered by the state or by any state agency, is funded directly by the state, or receives any financial assistance from the state. This bill provides that race, religious creed, color, national origin, age, gender, marital status, sex, or genetic predisposition shall not be considered a cause or other factor of disability with regard to any workers' compensation apportionment determination. This language would, if the bill is approved, be placed in the Labor Code. Comments SB 1115 Page 3 What is going wrong with apportionments ? Since the passage of SB 899 (Poochigian), Chapter 34, Statutes of 2004, there have been increasing reports that physicians, reading the law as requiring apportionment in all workers' compensation cases, have been apportioning disabilities on the basis of "risk factors" such as age, race, sex, and genetic predisposition - rather than basing the apportionment on actual documented and evaluated evidence of pre-existing medical condition. In a recent State Court of Appeals case ( Vaira v Workers Comp. Appeals Board ), for example, which was widely reported in the public media, the court sent the case back to the Workers' Compensation Appeals Board, stating that the physician who had done the apportionment failed to base the apportionment on actual medical evidence. The physician based the apportionment to the "other factors" on the grounds that the individual in the case was an elderly woman at high risk of osteoporosis and showing some evidence of the condition. However, the physician did not demonstrate, with substantial medical evidence, the link between any actual condition and the disability. Dean Calbreath, in a February 17 article in the San Diego Union Tribune, cited a number of similar instances of improper apportionment procedures. He highlighted one case where a medical examiner cut a man's workers' compensation payments in half because, as an African-American, he had a "genetic" predisposition to high blood pressure or hypertension. There are numerous additional examples. Why does the language in this bill need to be placed in the Labor Code, given that very similar language is currently in Government Code 11135 ? In the workers' compensation arena, which involves thousands of persons and which is governed primarily by the Labor Code, there seems to be substantial misunderstanding of the proper, legal procedures for apportionment. Placing this language in the Labor Code will help to clarify the law prohibiting discrimination and make the specified language more evident to those who look to the Labor Code for guidance in making decisions relating to workers' compensation. In addition, this bill adds the term "genetic predisposition" to the protected classes, a term that is not in existing code. SB 1115 Page 4 Does this bill place new responsibilities on employers, making them responsible for medical conditions (with associated costs) for which they are not currently responsible ? No. This bill prohibits discrimination on the basis of generalized "risk factors," which is almost certainly currently illegal under G.C. 11135. Apportionments determined through an evaluation of the actual medical evidence, establishing a clear, causal link between the condition and the disability are, and will continue to be appropriate and lawful. FISCAL EFFECT : Appropriation: No Fiscal Com.: No Local: No SUPPORT : (Verified 3/3/08) California Applicant Attorneys Association (source) American Federation of State, County, and Municipal Employees California Labor Federation, AFL-CIO California Professional Firefighters California Society of Industrial Medicine and Surgery California Society of Physical Medicine and Rehabilitation California State Conference of the National Association for the Advancement of Colored People Gray Panthers, California Service Employees International Union OPPOSITION : (Verified 3/3/08) The following groups oppose unless amended: Acclimation Insurance Management Services Allied Managed Care American Insurance Association Association of California Insurance Companies California Association of Joint Power Authorities California Chamber of Commerce California Coalition on Workers' Compensation California Farm Bureau Federation California Grocers Association California Hospital Association California Hotel and Lodging Association SB 1115 Page 5 California Independent Grocers Association California League of Food Processors California Manufacturers and Technology Association California Restaurant Association League of California Cities National Federation of Independent Business Wine Institute ARGUMENTS IN SUPPORT : Supporters of this bill believe that since the apportionment provisions were rewritten in SB 899 (Poochigian), Chapter 34, Statutes of 2004, employers, carriers, and physicians have been misinterpreting and misapplying the new language to deny injured workers the civil rights protections that all other persons enjoy. Supporters argue that an apportionment determination that is based on supposed "risk factors" such as age, gender, or genetic predisposition, rather than an evaluation of the medical evidence linking actual medical conditions to a disability, is patently inappropriate and unfair. Such a formula results in discriminatory practices, lowering disability ratings and reducing benefits for particular individuals. The proponents state further that this bill will not increase employers' liability but simply clarifies and conforms the Labor Code to Government Code sections that bar unfair discrimination. ARGUMENTS IN OPPOSITION : Opponents argue the bill weakens the apportionment statute and allows judges to overrule apportionment even when based on findings of actual previous disability. They argue the bill should be "amended to prohibit the use of risk factors to defeat apportionment when an injured worker has a previous disability that affects the degree of disability arising from the workplace injury or illness." Opponents argue that apportionment to pre-existing disability is fundamentally an issue of fairness. "Just as an injured worker deserves to be compensated for disability arising from an industrial injury, an employer deserves to be protected from paying increased compensation for disability that does not arise from an industrial injury." NC:do 3/4/08 Senate Floor Analyses SB 1115 Page 6 SUPPORT/OPPOSITION: SEE ABOVE **** END ****