BILL ANALYSIS Ó
AB 947
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Date of Hearing: May 4, 2011
ASSEMBLY COMMITTEE ON INSURANCE
Jose Solorio, Chair
AB 947 (Solorio) - As Amended: April 29, 2011
SUBJECT : Workers' compensation: temporary disability benefits
SUMMARY : Allows payment of temporary disability (TD) benefits
for more than 104 weeks under certain circumstances.
Specifically, this bill :
1)Authorizes, for injuries occurring on or after January 1,
2012, payment of TD benefits for more than 104 weeks during a
period within five years of the date of injury, but in no case
more than 240 weeks of TD benefits.
2)Limits the circumstances where the extended TD benefits are
available to cases where medical treatment beyond 104 weeks is
needed to achieve maximum medical improvement (MMI), and where
the injured worker has not caused a delay in medical treatment
due to a willful failure to undergo recommended treatment that
is necessary to achieve MMI.
EXISTING LAW :
1)Provides for a comprehensive system of workers' compensation
benefits for employees who are injured on the job, including
TD benefits, which are a partial wage replacement benefit,
during the period of time that an injured worker is unable to
work while recovering from the injury.
2)Specifies that, for injuries on or after April 19, 2004, an
injured worker is entitled to TD benefits for up to 104 weeks
within a two year period commencing with the first payment of
TD benefits.
3)Specifies that, for injuries on or after January 1, 2008, an
injured worker is entitled to TD benefits for up to 104 weeks
within a five year period commencing with the date of injury.
4)Provides that workers with certain listed injuries or
conditions are not subject to the 104 week cap, but instead
may be compensated with TD benefits for up to 240 weeks during
the five year period commencing with the date of injury.
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5)Provides that TD benefits are payable until the injured worker
is permanent and stationary (P&S), which is the point where
the injured worker's medical condition is not likely to
improve with additional treatment.
FISCAL EFFECT : Undetermined but potentially significant costs
to the state's workers' compensation program if more injured
state employees receive TD benefits for a longer period of time
while recovering from their injuries.
COMMENTS :
1)Purpose . The author introduced this bill to address
circumstances where medical treatment that is required to cure
the injured worker's injuries takes longer, through no fault
of the injured worker, than the 104 weeks of TD benefits
allowed by law. These are cases involving substantial
injuries where the injured worker is simply not able to work
during the recovery period. The most common example would be
cases where conservative treatments are attempted for an
extended period, but ultimately surgery, with an extended
recovery period, is deemed the appropriate treatment.
2)Retroactivity concerns . In the prior version of the bill, the
extended TD benefits were not limited to injuries occurring on
or after the bill's effective date. Insurers expressed
concerns that they would be obligated to pay benefits for
injuries where they had not collected premium for the full
scope of the risk. The current version of the bill cures this
problem by ensuring that the new rules apply only for injuries
that occur on or after January 1, 2012.
3)P&S vs. MMI . The "permanent and stationary" standard has long
been the rule in California law to measure when TD ends, and
permanent disability and other benefits begin. In 2004, the
reform legislation adopted the AMA Guides to the Evaluation of
Permanent Impairment, 5th Edition, as the source for measuring
impairment suffered by an injured worker. The Guides use the
terminology "maximum medical improvement," defined as a
medical condition that "is well stabilized and unlikely to
change substantially in the next year with or without medical
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treatment." It is the functional equivalent of P&S.
4)Decisions left to physicians . The bill provides that it is up
to the physician treating the injured worker to determine
whether continued treatment is needed. If it is needed, the
injured worker can receive additional TD for the duration of
the treatment and related recovery period. While the 104 week
limitation was adopted as a hard cap, the specific duration
was viewed, in 2004, as a reasonable estimation of how long it
would take in most cases to reach P&S. It is clear, however,
that some cases are more complex, and longer medical treatment
is needed. In this regard, the bill also provides that
extended TD benefits are not available if the medical
treatment is continuing due to willful delays caused by the
injured worker.
5)Opposition . Employers are opposed to the bill, arguing that
the 104 week cap was one of the major reforms that have helped
control workers' compensation costs. In most cases, they
argue, extending the duration of TD benefits does little to
improve medical treatment, but rather causes cases to be
delayed, with negative implications for both injured workers
and employers. Employers also argue that the language of the
bill, even with the new amendments, is too open-ended and
would allow any physician to extend TD benefits in most cases.
In particular, the California Association of Joint Powers
Authorities (CAJPA) suggests that a study be conducted to
determine whether there are cases that require extended TD,
and to identify those types of cases.
REGISTERED SUPPORT / OPPOSITION :
Support
California Applicants' Attorneys Association
California Labor Federation
Opposition
California Chamber of Commerce
California Coalition on Workers' Compensation
CSAC Excess Insurance Authority
California Association of Joint Powers Authorities.
Analysis Prepared by : Mark Rakich / INS. / (916) 319-2086
AB 947
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