BILL ANALYSIS Ó Senate Appropriations Committee Fiscal Summary Senator Christine Kehoe, Chair SB 457 (Calderon) Hearing Date: 5/26/2011 Amended: 5/4/2011 Consultant: Bob Franzoia Policy Vote: L&IR 4-0 _________________________________________________________________ ____ BILL SUMMARY: SB 457 would require the Workers' Compensation Appeals Board (board) to determine, on the basis of liens filed, reimbursement for benefits paid or services provided by a health care service plan, a group disability policy, a hospital service contract, or a self-insured employee welfare benefit plan, notwithstanding the Official Medical Fee Schedule (OFMS), when an award is made for reimbursement for self-procured medical costs for the effects of an injury or illness arising out of and in the course of employment. This bill would state that its provisions are not to be deemed as modifying in any way the rights of any health care provider to file and prosecute a lien. _________________________________________________________________ ____ Fiscal Impact (in thousands) Major Provisions 2011-12 2012-13 2013-14 Fund Exemption from OMFS Unknown, potentially significant costsGeneral/ of self-procured medical ongoing Special treatment _________________________________________________________________ ____ STAFF COMMENTS: SUSPENSE FILE. The OMFS is promulgated by the administrative director of the Division of Workers' Compensation under Labor Code section 5307.1 and can be found in Sections 9789.10 et seq. of Title 8, California Code of Regulations. It is used for payment of medical services required to treat work related injuries and illnesses. Under this bill, the state would incur costs when an employee self-procures treatment of an injury or illness with his or her health care service plan, group disability policy, hospital service contract, or self-insured employee welfare benefit plan for an injury or illness that, upon review, is determined to be > (>) Page 1 work related. When that situation occurs under current law, a lien may be awarded for recovery of the amount billed as set by the OMFS. Under this bill, whenever the amount billed exceeds the OMFS, a lien for the difference between the amount billed and what is set forth in the OMFS, would become a workers' compensation cost and reimbursed to the health service plan, group disability policy, hospital service contract, or self-insured employee welfare benefit plan. The number of such liens and the amount such liens would exceed the OMFS is unknown. In aggregate, the annual increase in workers' compensation costs is potentially significant. State employee workers' compensation total costs in 2009-10 were approximately $500 million, split an estimated 55 percent General Funds and 45 percent special funds. Of that amount, approximately $100 million was for permanent disability benefits.