BILL ANALYSIS Ó
AB 947
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ASSEMBLY THIRD READING
AB 947 (Solorio)
As Amended April 27, 2011
Majority vote
INSURANCE 8-4
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|Ayes:|Solorio, Charles | | |
| |Calderon, Carter, Feuer, | | |
| |Hayashi, Skinner, Torres, | | |
| |Wieckowski | | |
| | | | |
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|Nays:|Hagman, Grove, Miller, |
| |Olsen |
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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
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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.
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.
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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 American Medical Association
(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 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.
Analysis Prepared by : Mark Rakich / INS. / (916) 319-2086
FN: 0000556
AB 947
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