BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  SB 258
                                                                  Page  1


          SENATE THIRD READING
          SB 258 (Lieu)
          As Amended  May 2, 2013
          Majority vote 

           SENATE VOTE  :25-11  
           
           INSURANCE           8-4                                         
           
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          |Ayes:|Perea, Bradford, Ian      |     |                          |
          |     |Calderon, Cooley,         |     |                          |
          |     |Frazier, Gonzalez,        |     |                          |
          |     |Mitchell, Wieckowski      |     |                          |
          |     |                          |     |                          |
          |-----+--------------------------+-----+--------------------------|
          |Nays:|Hagman, Beth Gaines,      |     |                          |
          |     |Nestande, Olsen           |     |                          |
          |     |                          |     |                          |
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           SUMMARY  :  Clarifies that recently enacted limitations on  
          assignment of liens apply only to assignments occurring on or  
          after January 1, 2013, and requires that Workers' Compensation  
          Appeals Board (WCAB) members be attorneys.  Specifically,  this  
          bill  :   

          1)Provides that all seven members of the WCAB must be  
            experienced attorneys admitted to practice in the State of  
            California

          2)Clarifies that limitations on assignment of medical liens  
            apply only to assignments made on or after January 1, 2013. 

           EXISTING LAW  :

          1)Establishes the WCAB to administer the workers' compensation  
            dispute resolution system.  The WCAB oversees the trial court  
            administrative law judges (ALJs) who hear most contested  
            matters, but also has the discretion to re-hear cases on  
            "reconsideration" after an ALJ has ruled on a matter.

          2)Provides that five of the seven Board members, all of whom are  
            appointed by the Governor, must be attorneys, but that the  
            remaining two Board members need not be attorneys.








                                                                  SB 258
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          3)Authorizes a medical provider to file a lien in order to  
            secure payment of a disputed billing in the workers'  
            compensation system, including the right to assign (sell) the  
            lien rights, but limits the ability of a lien claimant to  
            assign the rights to the lien to a third party to  
            circumstances where the lien claimant is retiring or going out  
            of business.

           FISCAL EFFECT  :  Unknown.  This bill is keyed non-fiscal by the  
          Legislative Counsel.

           COMMENTS  :   

           1)Purpose  .  According to the author, the complexity involved in  
            the adjudication of workers' compensation cases is much  
            greater now than when the WCAB was established in 1965.   
            Evolving case law and increasing complexity of the statutes  
            governing workers' compensation makes it unlikely that  
            non-attorneys could effectively serve.  The author points out  
            that Governors have recognized this reality, as currently all  
            seven Board members are attorneys, and this has been the case  
            for a number of years.  This change, therefore, is little more  
            than conforming statute to reality.  With respect to the liens  
            issue, the bill is merely clarifying the intent of SB 863 (De  
            Leon), Statutes 2012, Chapter 863.  

           2)Lien assignment  .  SB 863, among a broad range of reforms to  
            the workers' compensation system, restricted the assignability  
            of medical liens.  Evidence suggested that a cottage industry  
            had developed whereby questionable services or billings would  
            be encouraged by third parties, who would immediately purchase  
            the lien rights from the providers of these services.  In  
            response to these practices, the Legislature adopted  
            limitations on the assignability of medical liens to  
            discourage the practices that were considered costly to  
            employers with little if any benefits to injured workers.   
            However, the bill did not clearly state that the new  
            limitations were to apply only to liens assigned after the  
            bill's effective date.  This bill clarifies this uncertainty.

           3)WCAB  .  The WCAB is a quasi-judicial body, part appellate  
            court, and part trial court.  When the WCAB issues en banc  
            decisions, it is acting in virtually all respects as an  








                                                                  SB 258
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            appellate court by issuing precedential decisions.  However,  
            when it exercises its discretion to grant "reconsideration" of  
            a decision of an ALJ, it is acting as a trial court, and can  
            make its independent judgment on the evidence.  In either  
            circumstance, it is acting as a court, and just like superior  
            and appellate court judges must be attorneys, it is  
            appropriate that WCAB Board members also be attorneys.   
            Notably, the ALJs over whom the WCAB has authority must be  
            attorneys.


           Analysis Prepared by  :    Mark Rakich / INS. / (916) 319-2086


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