BILL ANALYSIS                                                                                                                                                                                                    

                                                                  AB 375
                                                                  Page  1

          Date of Hearing:   May 4, 2011

                                Felipe Fuentes, Chair

                AB 375 (Skinner) - As Introduced:  February 14, 2011 

          Policy Committee:                              InsuranceVote:8 - 

          Urgency:     No                   State Mandated Local Program: 
          No     Reimbursable:              


          This bill establishes several workers' compensation presumptions 
          for direct patient care workers at acute care hospitals 
          statewide. Specifically, this bill: 

          1)Establishes presumptions that blood-borne infectious diseases, 
            neck or back impairment, and methicillin-resistant 
            Staphylococcus aureus (MRSA) arise from employment for the 
            purposes of workers' compensation benefits.

          2)Requires the workers' compensation benefits to include payment 

             a)   Full hospital
             b)   Surgical
             c)   Medical treatment
             d)   Disability indemnity
             e)   Death benefits 

          3)Extends to 180 days the period beyond separation from hospital 
            employment during which a hospital employee may rely on the 
            presumption relating to blood-borne infectious disease.

          4)Extends to 90 days the period beyond separation from hospital 
            employment during which a hospital employee may rely on the 
            presumption relating to MRSA or back and neck injuries.

           FISCAL EFFECT  

          Potential workers compensation cost increase in the range of 
          $2.5 million (various public funds). Those costs would be 


                                                                  AB 375
                                                                  Page  2

          partially offset by the minor administrative savings associated 
          with reducing the number of dispute resolutions.

          1)To the extent this legislation makes it easier for injured 
            employees to receive workers compensation benefits, hospitals 
            could experience increased workers' compensation costs by 
            application of the presumption to hospital employees who 
            provide direct patient care. Of the almost 150,000 employees 
            affected by this bill, 20% (30,000) are employed in public 
            hospitals. Public hospitals are self-insured for workers' 
            compensation claims, rather than paid through premiums. 
            Payments are treated in a pay-as-you-go manner. Therefore, an 
            increase in costs may have an impact on public and GF funds. 

          2)The fiscal impact of adding these presumptions is unknown.  
            Currently, back and neck injuries make up approximately 20% of 
            all workers compensation claims and infections account for 
            one-quarter of one percent. Given these low rates, it is 
            unlikely that adding these presumptions would increase costs 
            significantly.  However, for every 1% increase in the number 
            public health care employees who file workers' compensation 
            claims each year, it would increase workers compensation costs 
            by approximately $2.5million (various public funds).

          3)Minor administrative savings, likely less than $300,000 
            (various funds), to the extent adding these presumptions 
            simplifies the administration of these cases and reduces the 
            number of dispute resolutions, it would result in savings to 
            partially offset the increased costs. Based on Workers 
            Compensation Insurance Board (WCIB) data, self-insured 
            employers and the state spend over $800 million a year (20% of 
            program costs) in loss adjustment expenses and approximately 
            half of those expenses are for dispute resolution. Based on 
            this current expenditure data and the assumption that adding 
            these presumptions will significantly reduce, if not 
            eliminate, the need for dispute resolutions for workers with 
            these illnesses and injuries, at least $285,000 in savings 
            would result from the 1% increase in claims additional noted 

          4)Unknown cost pressure, to the extent this bill causes an 
            increase in workers compensation claims that impact the 
            overall costs for public and private hospitals, which could 
            increase pressure on the Medi-Cal program to increase 
            reimbursements rates. 


                                                                  AB 375
                                                                  Page  3


           1)Rationale  . This bill is sponsored by the California Nurses 
            Association to establish workers' compensation presumptions 
            for approximately 150,000 health care workers statewide. 
            Approximately 20% of those affected workers are employed by 
            public hospitals. Workers' compensation presumptions, 
            currently limited primarily to the public sector, have been 
            established to both account for increased risk in certain 
            types of work and to provide administrative simplification for 
            the most common work place injuries and illnesses in a 
            particular field. The author and sponsor of this bill indicate 
            nurses should join public safety professionals in having such 
            presumptions due to the hazardous nature of their work with 
            respect to musculoskeletal injuries and infection. 

           2)Background  . California workers' compensation law provides that 
            workers are provided compensation benefits when an injury or 
            illness arises out of and in the course of employment. Current 
            law specifies that certain medical conditions suffered by 
            public safety officers (e.g., cancer, hernia, heart trouble, 
            pneumonia, tuberculosis, blood-borne infectious disease, 
            meningitis, and exposure to biochemical substances) are 
            presumed to have arisen in the course of employment. 

           3)Policy Considerations for the Legislature  . This legislation 
            affects both public and private employees.  Current workers 
            compensation presumptions are provided only to public safety 
            employees (firefighters, police officers, life guards, etc.), 
            who for the most part are public sector employees.  The 
            Legislature should consider whether or not workers 
            compensation presumptions should be provided for private 
            sector employees. 

           4)Related Legislation  . AB 664 (Skinner) of 2009 and AB 1994 
            (Skinner) of 2010 proposed similar provisions to this bill. 
            Both bills were held on this committee's suspense file.

           Analysis Prepared by  :    Julie Salley-Gray / APPR. / (916) 


                                                                  AB 375
                                                                  Page  4