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