BILL ANALYSIS Ó
------------------------------------------------------------
|SENATE RULES COMMITTEE | SB 863|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
------------------------------------------------------------
THIRD READING
Bill No: SB 863
Author: Lieu (D), et al
Amended: 4/14/11
Vote: 21
SENATE LABOR & INDUSTRIAL REL. COMMITTEE : 7-0, 4/27/11
AYES: Lieu, Wyland, DeSaulnier, Leno, Padilla, Runner, Yee
SENATE APPROPRIATIONS COMMITTEE : 9-0, 5/9/11
AYES: Kehoe, Walters, Alquist, Emmerson, Lieu, Pavley,
Price, Runner, Steinberg
SUBJECT : Workers compensation: liens
SOURCE : California Association of Joint Powers
Authorities
DIGEST : This bill requires that workers compensation
liens are filed in writing and that their filing is bound
by a statute of limitations.
ANALYSIS :
Existing law :
1. 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
CONTINUED
SB 863
Page
2
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.
2. 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.
3. Permits the Workers' Compensation Appeals Board (WCAB)
to determine and allow liens against any sum to be paid
as compensation for a variety of services or expenses.
Allowable liens include a reasonable fee for legal
services, the reasonable expense incurred in the
provision of medical services, and the reasonable value
of living expenses of an injured employee subsequent to
the injury.
4. Provides that when a compromise of a workers'
compensation claim or an award is submitted to the
appeals board, arbitrator, or settlement conference
referee for approval, the parties shall file with the
appeals board, arbitrator, or settlement conference
referee any liens served on the parties.
5. Prohibits a lien claim for expense filed with the WCAB
six months from the final decision or order of the WCAB,
five years from the date of the injury, or one year from
the date services were provided, whichever is later.
6. Addresses allowance and payment of liens for
unemployment compensation benefits, and provides that if
a notice is given in writing to the insurer or employer
of a lien, the claim is a lien payable against any
amount payable as temporary or permanent disability
compensation, subject to the determination of the amount
and approval of the lien by the WCAB.
This bill:
1. Requires liens claimants to file its liens in writing
with the WCAB, accompanied by a full statement or
CONTINUED
SB 863
Page
3
itemized voucher supporting the lien and justifying the
right to reimbursement. The written lien filing must
also include proof of service on the injured worker,
employer, insurer, and other interested parties.
2. Prohibits the filing of a lien claim for expenses after
three years from the date services were provided, nor
more than 18 months after the date the services were
provided if the services were provided on or after July
1, 2012. This bill also automatically dismisses any
liens that were not filed and served within this time
period.
3. Clarifies that if a notice is given in writing to the
insurer or employer of a lien in favor of the Employment
Development Department (EDD), the claim is a lien
payable against any amount payable as temporary or
permanent disability compensation, subject to the
determination of the amount and approval of the lien by
the WCAB.
4. Contains technical language to ensure uniform
application of lien timelines and written lien filings.
5. Provides language clarifying legislative intent on lien
filings and those amendments clarifying EDD and workers'
compensation liens are declarative of existing law.
Comments
Within the workers' compensation system, liens involving
medical services or benefits are direct claims against the
defendant (either the employer or the insurer of the
employer) for medical benefits or services provided by the
lien claimant which the lien claimant believes the employer
was required to provide due to a worker's industrial
injury. The lien claimant may not pursue the lien against
an injured worker unless the injury is ruled to be
non-industrial, and therefore outside the workers'
compensation system.
In short, liens serve as a vehicle for contesting the
employer's determination (or the determination of the
employer's insurer) of the amount payable for medical goods
CONTINUED
SB 863
Page
4
or services.
Prior Legislation
AB 749 (Calderon), Statutes of 2002, Chapter 6, creates the
current statute of limitations of workers' compensation
liens filings discussed earlier in this analysis.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee analysis:
Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13
2013-14 Fund
Reform of workers' Unknown,
likely significant, Special*
Compensation lien processworkload reduction annually,
ongoing
Adoption of rules of Minor costs, likely less than $50,
Special*
Practice & procedure one time
*Workers' Compensation Administration Revolving Fund
SUPPORT : (Verified 5/11/11)
California Association of Joint Powers Authorities (source)
California Chamber of Commerce
California Coalition on Workers' Compensation
California Medical Association
California Special Districts Association
California State Association of Counties
CSAC Excess Insurance Authority
League of California Cities
ARGUMENTS IN SUPPORT : Proponents argue that there are
currently hundreds of thousands of liens clogging the
workers compensation appeals process, which prevents the
appeals process from operating appropriately and ensuring
that injured workers receive the benefits that they are
CONTINUED
SB 863
Page
5
constitutionally required to receive. Proponents also note
that these liens are frequently quite old and not
compensable because they are in excess of the fee schedule.
Proponents believe that this bill helps to clear the
appeals process from unnecessary liens by requiring that
liens be in writing and served on all parties, as well as
capped by a reasonable statute of limitations to ensure
that liens will be filed and processed in a timely manner.
PQ:do 5/11/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
**** END ****
CONTINUED