BILL ANALYSIS Ó ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 457| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ 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 CONTINUED SB 457 Page 2 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 CONTINUED SB 457 Page 3 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. CONTINUED SB 457 Page 4 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 **** END **** CONTINUED