BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 1244 (Gray) - Workers' compensation: providers: suspension
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|Version: August 1, 2016 |Policy Vote: L. & I.R. 5 - 0 |
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|Urgency: No |Mandate: No |
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|Hearing Date: August 8, 2016 |Consultant: Robert Ingenito |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: AB 1244 would make several changes to the workers'
compensation system.
Fiscal Impact:
The Department of Industrial Relations (DIR) estimates
cost of this bill to be $10.9 million initially and $10.2
million ongoing.
o The provisions relating to suspending doctors
from the workers compensation system would require
additional staff to (1) review whether providers
should be removed from the system, and (2) handle any
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due process issues, at a cost of $373,000 annually.
o The provisions requiring filing for attorney
disclosure forms at each local office would require
additional staffing in each office to handle the
filing, at a cost of $1.1 million annually.
o The provisions which would limit liability for
payment by employers for medical treatment for
cumulative trauma, as specified, would likely generate
a significant amount of new liens, requiring
additional staffing to handle the increase in lien
litigation. DIR estimates a cost of $9.4 million for
additional judge teams to accommodate the increased
workload.
The Department of Health Care Services (DHCS) would
incur minor and absorbable costs.
Background: Current law establishes a workers' compensation system that
provides benefits to an employee who suffers from an injury or
illness that occurs during the course of employment,
irrespective of fault. This system requires all employers to
secure payment of benefits by either (1) securing the consent of
DIR to self-insure, or (2) securing insurance against liability
from an insurance company authorized by the State.
Proposed Law:
This bill would, among other things, do the following:
Require the administrative director (AD) of DIR's
Division of Workers Compensation (DWC) to suspend medical
service providers from participating in any capacity in the
workers' compensation system if any of the following is
applicable:
o Convicted of a felony.
o Convicted of a misdemeanor involving fraud or
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abuse of the Medi-Cal program, Medicare program, or
workers' compensation system.
o Convicted of a misdemeanor involving fraud or
abuse of any patient, or otherwise substantially
related to the qualifications, functions, or duties of
a provider of service.
o Suspended from the federal Medicare or
Medicaid programs due to fraud or abuse.
o Lost or surrendered a license, certificate, or
approval to provide health care.
Require the AD to provide written notice to the medical
provider who has been identified as eligible for
suspension. The notice shall give information on how the
medical provider can request a hearing to contest his or
her eligibility for suspension. If the medical provider
does not respond to the notice within 30 days, he or she is
automatically suspended.
Require DWC to hold a hearing on the suspension of a
medical provider within 30 days of a request. Such a
request would stay any suspension of a medical provider.
If, during the hearing, the AD finds that the medical
provider is eligible for suspension due to the reasons
listed above, the AD must suspend the medical provider
immediately. Upon suspension, the AD must notify the
relevant licensing, certification, or registration board.
Prohibit a provider of medical services, whether an
individual, clinic, group, corporation, or other
association from submitting or pursuing a claim for payment
from a payor, unless the claim for payment has been reduced
to final judgment or the services or supplies are unrelated
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to a violation of the laws governing workers' compensation.
Require that the Director of DCHS notify the
Administrative Director of DWC if a medical provider is
added to the Suspended or Ineligible Provider List.
Establish new disclosure requirements and prohibit the
payment for any legal services or expenses incurred prior
to filing a written disclosure form with the Workers'
Compensation Appeals Board.
Exclude from existing employer liability limitations
claims for occupational disease or cumulative injury filed
on or after January 1, 2017, except under specified
circumstances, including when the treatment is provided by
a physician in a medical provider network established by
the employer or when the treatment is provided by the
employee's personal physician.
Staff
Comments: This bill's suspension process would reduce workers'
compensation fraud by modifying the incentives facing medical
providers in the State's workers' compensation system.
Specifically, the bill, modeled on a similar process for
Medi-Cal, would create a suspension process for medical
providers who (1) commit serious crimes, or (2) are involved in
fraudulent activity. Currently, the workers' compensation does
not contain a suspension process for medical providers beyond
removal from the Qualified Medical Examiner (QME) list.
Thus, the bill would follow the lead of Medi-Cal and require the
suspension of a medical provider if the medical provider is
convicted of a felony, a misdemeanor connected to fraud, a
misdemeanor connected to patient or privilege abuse, or the
medical provider's license is suspended or revoked. The bill
then would provide for a hearing process where the medical
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provider can contest the applicability of suspension - such
mistaken identity or a later plea deal that reduces a felony to
a non-eligible misdemeanor. If the medical provider does not
request a hearing, the suspension would take effect within 30
days of notice.
Similar to Medi-Cal, the bill would require that a suspended
medical provider be excluded from the system and denies further
payment for services. In the case of Medi-Cal, however, current
law allows for a suspension of any and all payments in the case
of a medical provider being charged with fraudulent activity.
This bill instead would suspend the provider and denies further
payment after conviction and the completion of the suspension
process, unless the suspension is for non-fraud related reasons
or payment was already provided.
The bill would require DHCS to communicate with DIR when a
medical provider is added to the Medi-Cal Suspended or
Ineligible Provider List. Depending on the reasons for a medical
provider being added to the Medi-Cal list, this could trigger a
suspension process by the DWC as well.
Current law requires an employer to authorize treatment for an
alleged injury within one working day after the employee (1)
files a specified claim for workers' compensations and (2)
requires the continuation of treatment until the date the
liability (limited to $10,000) for the claim is accepted or
rejected. This bill would exclude claims for occupational
disease or cumulative injury filed on or after January 1, 2017
(1) unless treatment is provided by the employee's personal
physician or a physician in a medical provider network
established by the employer, or (2) if the individual is
represented by an union that has a trust fund that would be
liable for the treatment if the employer as not liable for the
payment. The result of these provisions is that cumulative
injury costs and potential fraud would likely be curtailed.
However, they also could limit the ability for workers with
occupational disease and cumulative injury issues to have claims
accepted.
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Any local government costs resulting from the mandate in this
measure are not state-reimbursable because the mandate only
involves the definition of a crime or the penalty for conviction
of a crime.
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