BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      



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          |SENATE RULES COMMITTEE            |                   SB 457|
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                              UNFINISHED BUSINESS


          Bill No:  SB 457
          Author:   Calderon (D)
          Amended:  8/26/11
          Vote:     21

           
           SENATE LABOR & INDUST. REL. COMMITTEE  :  4-0, 3/23/11
          AYES:  Lieu, Wyland, Padilla, Yee
          NO VOTE RECORDED:  DeSaulnier, Leno, Runner

           SENATE APPROPRIATIONS COMMITTEE  :  6-3, 5/26/11
          AYES:  Kehoe, Alquist, Lieu, Pavley, Price, Steinberg
          NOES:  Walters, Emmerson, Runner

           SENATE FLOOR  :  25-14, 6/1/11  
           AYES:  Alquist, Calderon, Corbett, De León, DeSaulnier, 
            Evans, Hancock, Hernandez, Kehoe, Leno, Lieu, Liu, 
            Lowenthal, Negrete McLeod, Padilla, Pavley, Price, Rubio, 
            Simitian, Steinberg, Vargas, Wolk, Wright, Wyland, Yee
          NOES:  Anderson, Berryhill, Blakeslee, Cannella, Correa, 
            Dutton, Fuller, Gaines, Harman, Huff, La Malfa, Runner, 
            Strickland, Walters
          NO VOTE RECORDED:  Emmerson
           
          ASSEMBLY FLOOR  :  75-0, 9/1/11 - See last page for vote


           SUBJECT  :    Workers compensation:  liens

           SOURCE  :     California Professional Firefighters


           DIGEST  :    This bill requires the Workers Compensation 
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          Appeals Board to determine, on the basis of liens filed, 
          reimbursement for benefits paid or services provided by a 
          self-insured employee welfare benefit plan, notwithstanding 
          the Official Medical Fee Schedule, 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 states that its provisions 
          do not modify in any way the rights of any health care 
          provider to file and prosecute a lien.

           Assembly Amendments  (1) state the changes made by this bill 
          are not intended to modify particular rights of health care 
          providers, payors and other parties in specific factual 
          situations, and (2) narrow the bill's scope from health 
          care service plans, group disability policies, hospital 
          service contracts and self-insured employee welfare benefit 
          plans to applying only to self-insured employee welfare 
          benefit plans.

           ANALYSIS  :    Existing law establishes a workers' 
          compensation system, administered by the Administrative 
          Director of the Division of Workers' Compensation, to 
          compensate an employee for injuries sustained in the course 
          of his/her employment.  Existing law authorizes a medical 
          provider to file a lien claim with the Workers' 
          Compensation Appeals Board (WCAB) for certain expenses 
          incurred by the provider.  Under existing law, the WCAB is 
          required to allow a lien to the extent of benefits paid or 
          services provided for reimbursement for self-procured 
          medical costs for the effects of an injury or illness 
          arising out of and in the course of employment.

          Existing law requires the administrative director, after 
          public hearings, to adopt and revise periodically an 
          official medical fee schedule that establishes reasonable 
          maximum fees paid for medical services, other than 
          prescribed goods and services, in accordance with specified 
          requirements.

          This bill requires the WCAB to determine, on the basis of 
          liens filed, reimbursement for benefits paid or services 
          provided by a self-insured employee welfare benefit plan, 
          notwithstanding the Official Medical Fee Schedule, when an 
          award is made for reimbursement for self-procured medical 

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          costs for the effects of an injury or illness arising out 
          of and in the course of employment.  This bill states that 
          its provisions do not modify in any way the rights of any 
          health care provider to file and prosecute a lien.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes   
          Local:  No

          According to the Assembly Appropriations Committee, the 
          state's share of medical spending for workers compensation 
          is in excess of $200 million per year. If this legislation 
          results in a one or two percent increase in those costs, it 
          would cost the state somewhere between $2 million and $5 
          million per year (General Fund and Special Fund). 

           SUPPORT  :   (Verified  9/1/11)

          California Professional Firefighters (source)
          California Federation of Labor, AFL-CIO

          ARGUMENTS IN SUPPORT  :    According to the bill's sponsor, 
          the California Professional Firefighters, if an employer or 
          its insurer denies a workers' compensation claim, case law 
          requires a non-industrial health program that is otherwise 
          available to the employee to provide coverage.  The law 
          allows that health plan to file a lien to recover its costs 
          "to the extent of benefits paid" in the event the injury is 
          later determined to be work-related.  However, the amount 
          the health plan may have paid in treatment may be greater 
          than the OMFS, and thus the health plan faces a loss of the 
          difference between what it paid, and what the OMFS covers.  
          The bill is intended to close this "loophole." 

          Proponents point to the scenario where there has been a 
          denial of the workers' compensation claim, and the denial 
          is overturned after being litigated, which may be resolved 
          in fairly short order, or may takes years to resolve, (as 
          in a case that resulted in over $1 million in treatment 
          costs for a firefighter who died of cancer) , and it is 
          clear that the Labor Code section being amended by the bill 
          applies only where there has been an adjudication of a 
          denied claim, and the adjudication results in a finding 
          that the claim was valid. 


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           ASSEMBLY FLOOR  :  75-0, 9/1/11
          AYES:  Achadjian, Alejo, Allen, Ammiano, Atkins, Beall, 
            Bill Berryhill, Block, Blumenfield, Bradford, Brownley, 
            Buchanan, Butler, Charles Calderon, Campos, Carter, 
            Cedillo, Chesbro, Conway, Cook, Dickinson, Donnelly, Eng, 
            Feuer, Fletcher, Fong, Fuentes, Furutani, Beth Gaines, 
            Galgiani, Garrick, Gatto, Gordon, Grove, Hagman, Hall, 
            Harkey, Hayashi, Hill, Huber, Hueso, Huffman, Jeffries, 
            Jones, Knight, Lara, Logue, Bonnie Lowenthal, Ma, 
            Mansoor, Mendoza, Miller, Mitchell, Monning, Morrell, 
            Nestande, Nielsen, Norby, Olsen, Pan, Perea, V. Manuel 
            Pérez, Portantino, Silva, Skinner, Smyth, Solorio, 
            Swanson, Torres, Valadao, Wagner, Wieckowski, Williams, 
            Yamada, John A. Pérez
          NO VOTE RECORDED:  Bonilla, Davis, Gorell, Halderman, Roger 
            Hernández


          PQ:mw  9/1/11   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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