BILL ANALYSIS                                                                                                                                                                                                    Ó






                 Senate Committee on Labor and Industrial Relations
                                 Ted W. Lieu, Chair

          Date of Hearing: June 22, 2011               20011-2012 Regular 
          Session                              
          Consultant: Gideon L. Baum                   Fiscal:No
                                                       Urgency: No
          
                                   Bill No: AB 947
                                   Author: Solorio
                         Version: As Amended April 27, 2011
          

                                       SUBJECT
          
                Workers' compensation: temporary disability payments.


                                      KEY ISSUE

          Should the Legislature extend additional temporary disability 
          indemnity benefits to injured workers who require additional 
          medical treatment?
          

                                       PURPOSE
          
          To increase the cap on the payment of temporary disability 
          benefits from up to 104 weeks to up to 240 weeks for injured 
          workers who require additional medical treatment.


                                      ANALYSIS
          
           Existing law  establishes a workers' compensation system that 
          provides benefits to an employee who suffers from an injury or 
          illness that arises out of and in the course of employment, 
          irrespective of fault.  This system requires all employers to 
          secure payment of benefits by either securing the consent of the 
          Department of Industrial Relations to self-insure or by securing 
          insurance against liability from an insurance company duly 
          authorized by the state.

           Existing law  provides for the payment of indemnity benefits if 
          the occupational injury causes temporary or permanent disability 
          which prevents the worker from returning to his or her job.  In 









          the case of temporary disability payments, the benefit is 
          two-thirds of the weekly loss in wages due to disability for up 
          to 104 weeks within 5 years (Labor Code §§4650, 4653, 4654 and 
          4656).

           Existing law  extends up to 240 weeks of temporary disability 
          benefits for workers who suffer from the following occupational 
          injuries:

             a)   Acute and chronic hepatitis B;
             b)   Acute and chronic hepatitis C;
             c)   Amputations;
             d)   Severe burns;

             e)   Human immunodeficiency virus (HIV);
             f)   High-velocity eye injuries;
             g)   Chemical burns to the eyes;
             h)   Pulmonary fibrosis;
             i)   Chronic lung disease.

          (Labor Code §4656)
           
          This bill  provides that, starting January 1, 2012, if an injured 
          worker requires medical treatment beyond 104 weeks to reach 
          maximum medical improvement may be extended up to 240 weeks by 
          the physician to complete treatment. 

           This  bill prohibits the extension of additional temporary 
          disability benefits if the need for the additional treatment was 
          caused by the willful failure of the worker to undergo 
          recommended medical treatment necessary to reach  maximum medical 
          improvement  .


                                      COMMENTS
          
          1.  Need for this bill?

            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 temporary disability 
          Hearing Date:  June 22, 2011                             AB 947  
          Consultant: Gideon L. Baum                               Page 2

          Senate Committee on Labor and Industrial Relations 
          








            (TD) benefits allowed by law.  The author's goal is that the 
            extension of additional TD benefits is for cases involving 
            substantial injuries where the injured worker is simply not 
            able to work during the recovery period.  Examples could 
            include cases where conservative treatments are attempted for 
            an extended period, but ultimately surgery is necessary, or 
            prolonged pain management challenges due to injury or surgery.
           
           2.  Possible Amendments:  

            The Committee may wish consider three amendments that would 
            clarify the intent of the bill.  

             1)   On page 3, line 13, the bill references additional TD 
               benefits for "a single injury".  On page 3, line 18, 
               however, the bill references "an injury".  The striking of 
               "an" on page 3, line 18, and the insertion of "a single" 
               before injury would make the usage of these two terms 
               consistent. 

             2)   On page 3, lines 19-20, the bill uses the term "maximum 
               medical improvement" (MMI).  While MMI is the functional 
               equivalent of "permanent and stationary", the traditional 
               term for medical stability, it is not used in the Labor 
               Code--- rather, it comes from the American Medical 
               Association Guides to the Evaluation of Permanent 
               Impairment.  For the purposes of consistency, the Committee 
               may wish to strike "maximum medical improvement" on page 3, 
               lines 19 and 20 and insert "permanent and stationary".

             3)   On page 3, line 20, the bill references that it would be 
               a physician which would make the determination of the need 
               for the extension of TD benefits, but does not clarify 
               which physician would make that call.  This is particularly 
               important for seriously injured workers, as they may see 
               several physicians prior to surgery, then specialists.  
               Therefore, the Committee may wish to strike physician on 
               page 3, line 20 and insert "primary treating physician, an 
               agreed medical evaluator, or a qualified medical 
               evaluator".  The amendment would provide specificity and 
               ensure that any specialists would need to report to the 
               initial treating doctors for the TD extension.
          Hearing Date:  June 22, 2011                             AB 947  
          Consultant: Gideon L. Baum                               Page 3

          Senate Committee on Labor and Industrial Relations 
          









          3.  Proponent Arguments  :
            
            Proponents note that since the passage of former Governor 
            Schwarzenegger's workers' compensation reforms in SB 899 
            (Poochigian) in 2004, temporary disability benefit awards and 
            durations have decreased significantly, placing the livelihood 
            and family life of injured workers in significant jeopardy.  
            Proponents note that the lack of temporary disability benefits 
            is particularly difficult for seriously injured workers who 
            have not been cured within a two year period.  These injured 
            workers, according to the proponents, are left without few 
            options are frequently must rely on California's safety net, 
            shifting costs to state and local governments that are more 
            appropriately absorbed by the workers' compensation system.

          4.  Opponent Arguments  :

            Opponents argue that the 104 week cap was one of the major 
            reforms that have helped control workers' compensation costs.  
            Opponents also argue that 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.  Opponents also believe 
            that the language of the bill is too open-ended and would 
            allow any physician to extend temporary disability 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. 

          5.  Prior Legislation  :

            AB 2397 (Solorio) of 2010 This bill would have permitted law 
            enforcement employees to extend paid leave of absence due to 
            temporary disability by up to an additional year by mutual 
            agreement with their employer through the collective 
            bargaining process.


                                       SUPPORT
          
          Hearing Date:  June 22, 2011                             AB 947  
          Consultant: Gideon L. Baum                               Page 4

          Senate Committee on Labor and Industrial Relations 
          








          California Applicants' Attorneys Association (Sponsor)
          California Labor Federation, AFL-CIO
          
                                     OPPOSITION
          
          Acclamation Insurance Management Services
          Allied Managed Care
          Alpha Fund
          California Association of Joint Powers Authorities
          California Special Districts Association































          Hearing Date:  June 22, 2011                             AB 947  
          Consultant: Gideon L. Baum                               Page 5

          Senate Committee on Labor and Industrial Relations