BILL ANALYSIS AB 664 Page 1 Date of Hearing: April 22, 2009 ASSEMBLY COMMITTEE ON INSURANCE Joe Coto, Chair AB 664 (Skinner) - As Introduced: February 25, 2009 SUBJECT : Workers' compensation: presumptions SUMMARY : Provides that back or neck injuries, MRSA, and other blood-borne infectious diseases are presumed to be job related if suffered or contracted by a hospital employee. Specifically, this bill : 1)Specifies that the term "injury" as used in the workers' compensation law with respect to a hospital employee shall include blood-borne infectious disease, neck or back impairment, and methicillin-resistant Staphylococcus aureus (MRSA) that develops or manifests itself during a person's employment at a hospital. 2)Provides that these diseases or conditions shall be presumed to arise out of and in the course of employment. 3)Allows the employer to dispute the presumption, requiring the employer to prove by evidence that the disease or condition is NOT related to employment. 4)Extends the period during which a hospital employee may rely on this presumption beyond separation from hospital employment for three months based on a formula of every year employed at the hospital, but in no case longer than 5 years. EXISTING LAW : 1)Establishes a comprehensive system of workers' compensation benefits for injuries, including diseases, that arise out of and in the course of employment. The benefits include full medical benefits to treat the injury or condition, indemnification for temporary and permanent disability, death benefits, among other benefits. 2)Requires in most cases that the employee establish that the injury or condition underlying the claim arose out of and in the course of employment. AB 664 Page 2 3)Provides safety officers (specified police, sheriff, firefighter employees) with a presumption that certain injuries or conditions are related to employment. These conditions or injuries are more extensive than, but include, the three conditions included in this bill. FISCAL EFFECT : Undetermined but potentially significant costs to the State's workers' compensation program. COMMENTS : 1)Purpose . The author states that this bill is needed for the following reasons: "Registered nurses and hospital workers by the nature of their work, which involves ill patients and medical equipment, are in constant danger of being exposed to a variety of illnesses and becoming injured by lifting and mobilizing patients and by medical equipment. Because of the physical nature of patient care, California's aging nursing workforce, combined with rising patient acuity and obesity, more work related injuries to the neck and back and higher levels of exposure to infectious diseases are occurring. According to the 2007 Bureau of Labor Statistics, healthcare workers, 95% women, lead the nation in the highest musculoskeletal (MSD) injury rates. As a whole, the Healthcare sector suffered 66,060 MSDs. In addition, the nursing sector ranks 3rd with the number of work days missed from illness and injury. In 2002, the University of California's 5 medical centers had over 700 such injuries with a cost to the State of $11 million. Additionally, blood-borne diseases and methicillin-resistant Staphylococcus aureus (MRSA) are contact work related hazards for hospital employees. Particularly, MRSA is increasingly infecting hospital workers and their patients. MRSA is one of the most virulent types of antibiotic-resistant staph infections. Although infection control measures help to stop the spread of MRSA and other blood-borne diseases they do not eliminate the job related threat of contracting MRSA or other blood- borne diseases completely." AB 664 Page 3 2)Presumption of compensability . Under current law, the only type of employees (subject to two exceptions discussed below) who receive the benefit of presumptions that injuries or conditions are job-related are police and firefighters - public safety employees. This bill would extend this special benefit to private sector employees, and to non-safety employees. The bill is therefore extending the concept of presumptions in two novel respects. The two exceptions to the "only public employees" and "only safety officers" rules for presumptions involve somewhat unique circumstances. Last year, a small group of firefighters who happen to be employed by a private contractor due to a quirk in federal law were granted the same status with respect to presumptions afforded public employee firefighters. (SB 1271 (Cedillo) of 2008, Statutes 2008, Chapter 747.) The other exception is for public employee lifeguards, and that presumption is limited to skin cancer. Cancer was the initial condition where the notion of presumptions was applied. The policy is that it is a condition that intuitively is job related, but due to the long latency period and uncertain medical causation issues, difficult for the employee to prove. 3)Support . Supporters point to the statistics surrounding injuries to nurses and other hospital workers, including back injuries and the consequences of disease due to needle pricks, and argue that these employees are providing critical services to their communities and deserve the protection that a presumption of compensability would afford them. 4)Are claims being denied for these injuries ? A presumption has historically been adopted when employees have had difficulty proving that the injury or condition at issue is job-related, while at the same time it is intuitively logical that it is, in fact, job-related. The Committee has not received information indicating that hospital workers suffering from the conditions or injuries that the bill would presume to be job-related have had difficulty in the workers' compensation system establishing that the injuries or conditions were in fact job-related. 5)Opposition . The opponents point out that the bill applies to all hospital employees, and argue that there is no rationale to extend the concept of presumptions to employees who are not AB 664 Page 4 in the traditional group - public safety officers - who have received this special benefit due to the special dangers of the work they do. Because of the unique role that public safety officers play in our society, they have historically received several different and unique benefits, including enhanced retirement rules, special disability retirement rules, enhanced temporary disability rules, and presumptions of compensability. While these enhanced benefits may be appropriate for public safety employees, it does not follow that these rules should be expanded to other classes of employee. Opponents argue that there is no evidence that the normal rules governing how injuries or conditions are proven to be job-related are not working properly with respect to the employees and the conditions being addressed by the bill. 6)Statute of Limitations issue . The bill provides that the presumptions established by the bill apply for a period subsequent to the employee leaving hospital employment. It adopts a formula for calculating the period of 3 months for each year of service. This has been the period applicable for other presumptions for other employees. However, the MRSA presumption enacted last Session adopted a much shorter time period, in recognition of the fact that MRSA has a short incubation period. The bill should be amended to establish a 90 post-employment period for MRSA consistent with Labor Code Section 3212.8, subdivision (b)(3). REGISTERED SUPPORT / OPPOSITION : Support California Applicants' Attorneys Association (CAAA) California Nurses Association/National Nurses Organizing Committee (Sponsor) California Professional Firefighters California State Employees Association (CSEA) San Bernardino Public Employees Association United Nurses Associations of California/Union of Health Care Professionals (UNAC/UHCP) Opposition Alpha Fund AB 664 Page 5 Alvarado Hospital American Insurance Association (AIA) Association of California Insurance Companies (ACIC) Banner Lassen Medical Center California Association of Joint Powers Authorities (CAJPA) California Chamber of Commerce California Coalition on Workers' Compensation (CCWC) California Hospital Association California Special Districts Association (CSDA) California State Association of Counties (CSAC) Community Memorial Health System Cottage Health System CSAC-Excess Insurance Authority (CSAC-EIA) Encino Hospital Medical Center Garden Grove Hospital and Medical Center Huntington Beach Hospital John F. Kennedy Memorial Hospital La Palma Intercommunity Hospital Methodist Hospital Mission Hospital Montclair Hospital Medical Center Orange Coast Memorial Medical Center Regional Council of Rural Counties (RCRC) Saddleback Memorial Medical Center San Antonio Community Hospital Sherman Oaks Hospital Sonora Regional Medical Center St. Joseph Health System West Anaheim Medical Center Analysis Prepared by : Mark Rakich / INS. / (916) 319-2086