BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 2407


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          Date of Hearing:  May 4, 2016


                           ASSEMBLY COMMITTEE ON INSURANCE


                                   Tom Daly, Chair


          AB 2407  
          (Chávez) - As Amended  ed  April 27, 2016


          SUBJECT:  Workers' compensation


          SUMMARY:  Restates existing workers' compensation law that  
          requires treatment decisions to be based on the Medical  
          Treatment Utilization Schedule (MTUS).  Specifically, this bill:  
           


          1)States that if an employee's injury affects his or her back,  
            the physician or other medical provider shall assess the  
            employee's level of risk for chronic back pain utilizing MTUS  
            regulations, and determine treatment based on these  
            regulations.


          EXISTING LAW:  


          1)Provides for a comprehensive system of employer-paid benefits  
            for employees who suffer injuries or conditions that arise out  
            of or occur in the course of employment, including the  
            provision of medical benefits designed to cure and relieve the  
            effects of the injury or condition.










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          2)Requires the Administrative Director (AD) of the Division of  
            Workers' Compensation (DWC) to establish an MTUS, which  
            governs the determination of the appropriate treatment to be  
            provided to injured workers.


          3)Limits, under most circumstances, the total number of  
            chiropractic treatments for a particular injury at 24 visits.


          4)Provides that, if the 24-visit cap has been reached, a  
            chiropractor may no longer serve in the role of primary  
            treating physician for an injured worker.


          FISCAL EFFECT:  Undetermined but potentially significant  
          increased litigation costs.  This would impact DWC and Workers'  
          Compensation Appeals Board (WCAB) operations, as well as direct  
          state costs for the state's workers' compensation program.


          COMMENTS:  


           1)Purpose  .  According to the author, ever since the 2004  
            workers' compensation reforms, which included a cap of 24  
            visits for chiropractic treatment, injured workers' have been  
            negatively impacted.  Coupled with the more recent limitation  
            on chiropractors serving as primary treating physicians, there  
            has been an alarming increase in opioid use and surgery for  
            injured workers, with negative results.


           2)MTUS  .  It is already the law that the MTUS is the set of  
            treatment guidelines that govern determinations of the  
            appropriate treatment for injured workers, and there is  
            general agreement that surgical intervention is a last resort.  
             The MTUS is structured, particularly with respect to back and  
            neck injuries, to default to conservative treatment in an  








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            effort to avoid the more serious consequences of surgery, and  
            the risk of permanent complications due to surgery.  According  
            to the sponsors of the bill, this default to conservative  
            treatment is frequently ignored, and surgical options are  
            provided far too soon and far too often.  They have pointed to  
            various academic and anecdotal indicators that surgery may not  
            provide the best long-term results for many back injuries.   
            The bill, they argue, merely reinforces the need to carefully  
            evaluate conservative treatment options before considering  
            surgical interventions.  



          This view of the system rushing toward surgery is not held by  
            all stakeholders.  Representatives of injured workers have  
            complained of a system that is far too slow to authorize  
            needed care, and too much reliance on less expensive  
            conservative care.  In any event, if an injured worker  
            believes that the particular care being recommended is not  
            appropriate, or is in violation of the MTUS, there are  
            administrative remedies to challenge that care.  In a similar  
            vein, if an employer believes that expensive or risky surgery  
            is being recommended that violates the MTUS or is not in the  
            injured worker's best interests, the utilization review  
            process is designed as a means to test the appropriateness of  
            the recommended  Schneider   care.   It is not clear how this  
            proposal improves any of these processes.

          The bill's premise appears to be that the MTUS is not being  
            followed, and workers' compensation health care providers, and  
            the utilization review systems, need to be reminded to do so.   
            However, it has not been established with any rigorous study  
            that the MTUS is being ignored, nor, if it is, what remedial  
            measures would be most effective.
           3)Rules of statutory construction  .  There is a great risk of  
            uncertainty, and resulting litigation, by enacting legislation  
            that appears to be a restatement of existing law.  As noted by  
            some of the bill's opponents, the bill could "cause a  
            statutory conflict that would have to subsequently be worked  








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            out in the courts.  That does not simplify the delivery of  
            medical treatment; it creates further delay for the employer  
            and the injured worker."



          One of the primary rules courts use in attempting to determine  
            the meaning of statutory changes is that the Legislature does  
            not engage in idle acts.  If there are statutory changes, they  
            must mean something, and courts will search to determine what  
            that meaning might be.  Thus, even a seemingly innocuous  
            restatement of existing law can generate litigation, and  
            potentially unintended results.

          Other rules of statutory construction may also generate  
            litigation and unintended results.  For example, one rule of  
            statutory construction is that a later enacted statute  
            controls over a previous enactment if there is conflict  
            between the two or if they both govern the same issue.  With  
            respect to AB 2407, the MTUS does not contain the 24 visit cap  
            on chiropractic care.  Does this bill impliedly trump the  
            earlier enacted cap?  Another rule of statutory construction  
            provides that a specific statute controls over a general  
            statute when both could be applicable.  Would the specific cap  
            would trump the general MTUS statute.  Would the specific  
            chronic back pain rule proposed by the bill trump the  
            generally applicable cap?  It is this very uncertainty that  
            leads opponents to raise the fear of unnecessary litigation as  
            a reason that AB 2407 does not propose an appropriate  
            amendment to current law.
           4)Opioid use  .  Proponents correctly assert that opioids should  
            not be the first line of treatment for chronic back pain.   
            Indeed, while opioids are an accepted treatment for  
            short-term, acute back pain, it is not considered an  
            appropriate treatment in most cases of chronic back pain.  It  
            is well documented that opioid use and abuse are serious  
            health issues, not only in workers' compensation, but  
            throughout the healthcare systems in this country.  For this  
            reason, the DWC has devoted substantial efforts over a long  








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            period of time to develop new pain guidelines designed to  
            better control over use of opioids.  But even as these  
            guidelines were being developed, opioid use appears to be  
            moving in the right direction.  According to recent  
            information from one of the largest pharmacy benefit managers,  
            opioid prescriptions in workers' compensation have been  
            declining.  This is not to argue that what some describe as an  
            epidemic of opioid abuse has been overcome, but it is not  
            clear how the bill's current proposal moves the issue forward.  
             On the other hand, the Legislature has recently enacted a  
            major tool to help control opioid abuse.  AB 1124 (Perea) from  
            last year requires the AD to develop a prescription drug  
            formulary.  That process is well underway at the DWC, and  
            there are strong reasons to believe this approach can have a  
            tremendously positive impact on inappropriate opioid use in  
            workers' compensation.


          REGISTERED SUPPORT / OPPOSITION:




          Support


          California Chiropractic Association (CCA), Sponsor


          Board of Chiropractic Examiners (BCE) 




          Opposition


          ALPHA Fund









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          California Association of Joint Powers Authorities (CAJPA)


          California Chamber of Commerce


          California State Association of Counties (CSAC)


          California Coalitition on Workers' Compensation (CCWC)


          California Medical Association


          California Orthopaedic Association




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