BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 1115
                                                                  Page  1


          SENATE THIRD READING
          SB 1115 (Migden)
          As Introduced January 22, 2008
          Majority vote 

           SENATE VOTE  :23-13  
           
           INSURANCE           7-3                                         
           
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          |Ayes:|Coto, Berg, Charles       |     |                          |
          |     |Calderon, Carter De Leon, |     |                          |
          |     |Lieber, Para              |     |                          |
          |     |                          |     |                          |
          |-----+--------------------------+-----+--------------------------|
          |Nays:|Benoit, Duvall, Garrick   |     |                          |
          |     |                          |     |                          |
          |     |                          |     |                          |
           ----------------------------------------------------------------- 
           SUMMARY  :  Prohibits discrimination on the basis of race,  
          religious creed, color, national origin, age, gender, marital  
          status, sex or genetic predisposition in the process of  
          apportioning medical causation for purposes of determining an  
          employer's liability for the permanent disability of an employee  
          injured on the job.

           EXISTING LAW  :

          1)Provides for a comprehensive system of workers' compensation  
            benefits for workers who are injured on the job, including  
            payments to compensate an injured worker for the permanent  
            disability caused by an on-the-job injury.

          2)Establishes a formula that is used to determine the extent of  
            permanent disability, which is expressed as a percentage, and  
            compensates the injured worker based on the percentage to  
            which he/she is permanently disabled.

          3)Allows a permanent disability to be "apportioned" to the  
            various causes of the disability so that an employer is only  
            liable for the portion of the disability attributable to  
            employment by that employer.

          4)Requires a physician, when making a report on permanent  








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            disability, to make an apportionment determination by  
            providing an approximation of the percentage of the disability  
            that is caused by the injury at work, and an approximation of  
            the percentage of the disability that is caused by other  
            factors, whether industrial or nonindustrial, and whether  
            occurring before or after the workplace injury.

           FISCAL EFFECT  :  To the extent the bill results in higher  
          permanent disability ratings, the state's costs would increase  
          for the payment of higher permanent disability awards to state  
          employees.

           COMMENTS  :   

          1)Purpose  :  According to the author, physicians are making  
            discriminatory generalizations, rather than examining actual  
            medical conditions or facts, when they are carrying out the  
            mandate that they assign percentages to the various causes of  
            a permanent disability.  Specifically, the author seeks to  
            prevent physicians from using "risk factors" as opposed to  
            actual medical conditions, when making these apportionment  
            determinations.

           2)Discrimination in apportionment  :  Proponents point to several  
            examples of inappropriate discrimination in application of the  
            apportionment laws.  In an  unpublished  appellate decision  
            (Vaira v. WCAB), the Court of Appeal returned a case to the  
            Workers' Compensation Appeals Board (WCAB) because the record  
            was insufficient to determine whether the physician had based  
            his apportionment decision on medical facts that showed the  
            older female claimant suffered from osteoporosis, or on the  
            basis that the risk factor alone was sufficient to assign a  
            percentage of the causation to osteoporosis.  Among the cases  
            reported in the media is a case of an African-American man who  
            had his permanent disability rating cut in half because of the  
            fact that African-American males have a higher incidence of  
            high blood pressure, and thus there was a genetic  
            predisposition to hypertension, aside from his workplace's  
            contribution to hypertension.  These scenarios, among numerous  
            other potential fact patterns, are examples of unfair  
            reductions in permanent disability ratings that the bill is  
            designed to remedy.

           3)Opposition  :  The opponents do not disagree that discrimination  








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            based on risk factors associated with the bill's protected  
            categories is wrong.  They respond, however, by arguing that  
            the law already provides protections, and the bill only serves  
            to open a Pandora's Box of problems.  

          Opponents argue that the Vaira case proves that the law is not  
            in need of change.  The Court essentially determined that it  
            is improper to use risk factors, and sent the case back to the  
            WCAB to make sure that medical facts supported the  
            apportionment.

          With respect to unintended consequences, the opponents believe  
            that the effect of the bill would be to prohibit apportionment  
            even when there is an actual preexisting condition, if that  
            condition is in some way connected to one of the protected  
            categories.

          The opposition initially took an "oppose unless amended"  
            position, hoping to craft language that defined the  
            distinction between inappropriate use of risk factors and  
            proper use of preexisting medical conditions.  However, the  
            employer community was unable to reach any agreement on  
            amendments due to the consistent concerns expressed by their  
            various counsel that changes in the apportionment statute  
            would result in unintended consequences.  Because they believe  
            Vaira evidences how the Courts view the issue, and because  
            that decision held that actual medical facts are required to  
            support apportionment, they argue this bill is unnecessary.  


           Analysis Prepared by  :    Mark Rakich / INS. / (916) 319-2086 


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