BILL ANALYSIS                                                                                                                                                                                                    Ó






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

          Date of Hearing: June 29, 2011               2011-2012 Regular 
          Session                              
          Consultant: Gideon L. Baum                   Fiscal:Yes
                                                       Urgency: No
          
                                  Bill No: AB 1168
                                     Author: Pan
                      Version: As Introduced February 18, 2011
          

                                       SUBJECT
          
               Workers' compensation: vocational expert fee schedule.


                                      KEY ISSUE

          Should the Legislature require the administrative director of 
          the Division of Workers' Compensation adopt, after public 
          hearings, a fee schedule that establishes reasonable maximum 
          fees paid for services provided by vocational experts?
          

                                       PURPOSE
          
          To set reasonable maximum fees for services provided by 
          vocational experts. 


                                      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  requires the administrative director of the 
          Division of Workers' Compensation (DWC) to adopt and 
          periodically revise an Official Medical Fee Schedule (OMFS) to 









          establish reasonable maximum medical fees for medical services, 
          including physician services and medical-legal expenses.  (Labor 
          Code §§ 5307.1 & 5307.6)
           
          This bill  would require the administrative director of the 
          Division of Workers' Compensation to adopt, after public 
          hearings, a fee schedule that establishes reasonable maximum 
          fees paid for services provided by vocational experts, 
          including, but not limited to, vocational evaluations and expert 
          testimony determined to be admissible by the appeals board.

           This bill  would also prohibit a vocational expert from being 
          paid, and the Workers' Compensation Appeals Board (WCAB) from 
          allowing, fees in excess of those set in the fee schedule.
                                          

                                      COMMENTS

          
          1.  Vocational Experts and Existing Fee Schedules

            Currently, the Labor Code is silent as to the fees for 
            vocational experts.  Prior to 2004, the Labor Code contained 
            vocational rehabilitation services provided by vocational 
            counselors.  They were covered by a fee schedule and their 
            services were cost contained through statute.  In 2004, the 
            Legislature passed SB 899 (Poochigian), Chapter 34, Statutes 
            of 2004, which completely overhauled the workers' compensation 
            system.  As part of that reform, the vocational rehabilitation 
            structure was dramatically altered, eventually sun-setting in 
            2009.

            As was discussed above, many medical professions have their 
            fees capped through a fee schedule.  These include physicians, 
            Qualified Medical Examiners (QME), Agreed Medical Examiners 
            (AME), chiropractors, and physical therapists.  

            The same is true of medical-legal evaluations, which are 
            evaluations done by either a primary treating physician, QME, 
            or AME which is to develop a narrative medical report for the 
            purposes of proving or disproving a contested medical fact or 
            workers' compensation benefit.  These evaluations usually 
          Hearing Date:  June 29, 2011                             AB 1168  
          Consultant: Gideon L. Baum                               Page 2

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            include face to face visit(s) with the injured worker, review 
            of records, and addressing medically complex issues, such as 
            causation and apportionment.  

          2.  Ogilvie and the Use of Vocational Experts:  
           
            In 2009, the Workers Compensation Appeals Board (WCAB) found 
            in Ogilvie v. City and County of San Francisco that permanent 
            disability ratings were rebuttable.  This successful rebuttal 
            of the permanent disability rating was successful in part due 
            to the expert testimony and reports provided by two certified 
            vocational rehabilitation counselors.  The Ogilvie case is 
            currently being appealed, and therefore the final details on 
            how and when a permanent disability rating can be disputed 
            remain unclear, but the use of vocational experts by injured 
            workers and employers to refute permanent disability rating 
            findings is almost certain to continue for the foreseeable 
            future.

            This bill does not touch upon the issues raised in Ogilvie or 
            any of the related cases.  Rather, AB 1168 seeks to provide a 
            fee schedule to set maximum fees if and when a vocational 
            expert is used by either an injured worker or an employer.  
            This would bring fee practices for vocational experts in line 
            with other workers' compensation services, as well as 
            historical norms.




          3.  Possible Amendments:  

            The opposition has raised several concerns (which will be 
            discussed in detail below) that the Committee may wish to 
            review.  First, the opposition is concerned that the 
            admissibility standard currently present in the bill will 
            prevent payment for services rendered due to attorney error or 
            legal issues outside of the scope of the report or testimony, 
            denying the expert payment.  Second, the opponents believe 
            that the use of the term "reasonable maximum fees paid for 
            services" is not present in other fee schedule statutes and 
            therefore is not appropriate here.
          Hearing Date:  June 29, 2011                             AB 1168  
          Consultant: Gideon L. Baum                               Page 3

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            Therefore, the committee may wish to do the following:

             1)   On page 2, line 5, strike "maximum" and insert "hourly";

             2)   On page 2, line 7, strike "admissible" and insert 
               "reasonable, actual, and necessary" and on page 2, line 10, 
               strike "set forth" and strike all of line 11 and insert 
               "allowed as reasonable, actual, and necessary".  

               The language on "reasonable, actual, and necessary" is 
               based on Costa v. Hardy Diagnostic and SCIF (2007), a case 
               where the WCAB dealt with reimbursement for rebutting 
               permanent disability ratings, and is therefore reflective 
               of existing case law.

          4.  Proponent Arguments  :
            
            Supporters note that fee schedules are the norm in workers' 
            compensation.  They also point out that allowing the AD to 
            adopt the schedule after public hearings, as opposed to 
            adopting a statutory schedule, provides the flexibility to 
            adjust compensation levels over time.  Delegation of this duty 
            to the AD is also common in the workers' compensation system.  
            Employer supporters also note that "Ýt]he imposition of fee 
            schedules in workers' compensation is an issue of fairness to 
            employers.  More importantly, controlling administrative costs 
            in the workers' compensation system ensures that workers' 
            compensation dollars are preserved for injured worker 
            benefits."

          5.  Opponent Arguments  :

            Opponents have taken an 'oppose unless amended' position, 
            arguing that that this bill places unreasonable and excessive 
            burdens in place for vocational experts to be paid 
            appropriately.  Opponents believe that the bill as currently 
            written will make it very difficult for a vocational expert to 
            be appropriately paid for services rendered, thereby hurting 
            injured workers and preventing them from receiving the expert 
            testimony they need.  Opponents request that: 

          Hearing Date:  June 29, 2011                             AB 1168  
          Consultant: Gideon L. Baum                               Page 4

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             1)   The requirement that they only be paid upon their 
               testimony being found admissible be removed;
             2)   That billing in excess of the medical the schedule be 
               allowed in the event of extraordinary circumstances, as is 
               currently allowed with medical-legal reports; and
             3)   Revising the fee schedule requirement so that charging 
               at the fee schedule is considered prima facie evidence that 
               the fees are reasonable.
          6.  Prior Legislation  :

            AB 228 (Alarcon), Chapter 639, Statutes of 2003, establishes 
            the existing fee schedule structure for medical services.


                                       SUPPORT
          
          Acclamation Insurance Management Services
          Allied Management care
          Alpha Fund
          Association of California Insurance Companies
          California Applicants' Attorneys Association
          California Association of Joint Powers Authorities
          California Chamber of Commerce
          California Coalition on Workers Compensation
          California Grocers Association
          California Joint Powers Authorities
          California Manufacturers & Technology Association
          California Special Districts Association
          California State Association of Counties
          CSAC Excess Insurance Authority
          League of California Cities
          

                                     OPPOSITION
          
          American Board of Vocational Experts (Unless Amended)
          Career Associates Inc. (Unless Amended)
          Cascade Disability Management (Unless Amended)
          Hall Associated Rehabilitation Consultants (Unless Amended)
          International Association of Rehabilitation 
          Professionals/California Chapter (Unless Amended)
          Work-Wise, Inc. (Unless Amended)
          Hearing Date:  June 29, 2011                             AB 1168  
          Consultant: Gideon L. Baum                               Page 5

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          Eight (8) Individuals








































          Hearing Date:  June 29, 2011                             AB 1168  
          Consultant: Gideon L. Baum                               Page 6

          Senate Committee on Labor and Industrial Relations