BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 1643 (Gonzalez) - Workers' compensation: permanent
disability apportionment
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|Version: March 16, 2016 |Policy Vote: L. & I.R. 4 - 1 |
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|Urgency: No |Mandate: No |
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|Hearing Date: August 1, 2016 |Consultant: Robert Ingenito |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: AB 1643 would (1) prohibit apportionment in cases of
physical injury based on pregnancy, menopause, osteoporosis, and
carpal tunnel syndrome, and (2) require that breast cancer not
be less than the comparable impairment rating for prostate
cancer.
Fiscal
Impact:
The Department of Industrial Relations (DIR) indicates
that it would incur costs (special funds) of $6.4 million
in the first year, and $6 million annually thereafter to
implement the provisions of the bill.
As a direct employer, the State would incur increased
permanent disability costs due to breast cancer. Breast
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cancer permanent disability awards largely impact public
sector employees such as policy and firefighters, due to
presumptions of compensability, whereas in other employment
sectors it is tougher to demonstrate breast cancer is job
related. The magnitude of these costs is unknown, but
likely significant.
The bill also would result in increased litigation costs
to the State as a direct employer. The magnitude is
unknown, but potentially significant.
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.
Under current law, when doctors are determining the nature and
severity of an occupational injury, the American Medical
Association (AMA) Guides to the Evaluation of Permanent
Impairment (5th Edition) must be used to measure physical
impairment and determine an injured worker's whole person
impairment (WPI).
When physicians prepare a report regarding whether a claimed
workplace injury is permanently disabling, the physician must
determine both (1) causation, and (2) what percentage of the
injury is due to non-occupational issues, including prior
workplace injuries. An injured worker's permanent disability
(PD) award is then adjusted down by this percentage. Only a
physician can make the determination whether and to what extent
if apportionment is appropriate.
Additionally, current law creates the Permanent Disability
Ratings Schedule (PDRS), which increases the WPI by 40 percent
and adjusts for occupation and age to calculate a percentage of
permanent disability, also known as a PD rating. AMA Guides rate
the removal of female breasts at a WPI of zero percent, while
the removal of a prostrate generally rates at 16 to 20 percent
AB 1643 (Gonzalez) Page 2 of
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WPI. Thus, prostrate removal currently translates into a higher
PD rating than female breast removal.
Proposed Law:
This bill would (1) require that WPI ratings for breast cancer
and its sequelae shall in no event be less than comparable WPI
ratings for prostate cancer and its sequelae, (2) prohibit
apportionment in cases of physical injury occurring on or after
January 1, 2017 based on the following conditions: pregnancy,
menopause, osteoporosis, and carpal tunnel syndrome, and (3)
prohibit apportionment in cases of psychiatric injury caused by
any of the conditions listed above.
Related
Legislation: AB 305 (Gonzalez) of 2015 was very similar to this
bill. It was vetoed by the Governor.
Staff
Comments: The Office of the Legislative Counsel has keyed this
bill "non-fiscal." However, the purview of this Committee,
pursuant to Joint Rule 10.5, is to review and analyze bills that
would, among other things, result in a substantial expenditure
of state money. Thus, even though AB 1643 was keyed
"non-fiscal," the Committee requested the bill to examine the
extent to which it might potentially increase both workload and
state costs. AB 1643 has the potential to create significant
fiscal pressure on the state in the following ways: (1)
increased litigation, leading to higher Workers Compensation
Appeals Board (WCAB) utilization, (2) increased PD costs due to
breast cancer for the State of California as a direct employer
(particularly for peace officers), and (3) increased litigation
costs for the State of California as an employer.
As noted previously, DIR estimates that the additional workload
resulting from the bill would lead to increased costs of $6.4
million in the first year, and $6 million annually thereafter.
However, to the extent that the number of women who receive an
apportionment determination is reduced in light of the bill's
prohibition of apportionment to certain factors such as carpal
tunnel syndrome and osteoporosis, the DIR estimate could be
AB 1643 (Gonzalez) Page 3 of
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overstated.
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