BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    SB 1160  


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          Date of Hearing:  August 3, 2016


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                               Lorena Gonzalez, Chair


          SB 1160  
          (Mendoza) - As Amended June 20, 2016


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          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No


          SUMMARY:


          This bill makes changes to the states workers' compensation  
          system, including the following:


          1)Requires, by July 1, 2018, entities that conduct utilization  
            review of medical treatment requests in the workers'  
            compensation system to be accredited by an independent  
            organization meeting specified criteria. 


          2)Modifies the 24-visit cap on chiropractic, physical therapy  
            and occupational therapy visits, by specifying that in cases  








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            involving physical medicine rehabilitative services, to the  
            extent the cap is inconsistent with evidence-based treatment  
            guidelines to be adopted by the Department of Industrial  
            Relations (DIR), the guideline adopted by the AD prevails.  


          3)Requires DIR to adopt rules to implement (1) and (2). 


          4)Enhances penalties for the failure to comply with workers'  
            compensation claim data filing requirements.


          FISCAL EFFECT:


          DIR will incur costs for additional staff to manage an increased  
          number of mandatory penalties, as well as staff and contract  
          costs to update medical treatment guidelines for rehabilitative  
          services and to implement an accreditation requirement.  
          First-year costs may range from $950,000 to $1.8 million, while  
          ongoing costs may be in the hundreds of thousands of dollars  
          annually (Workers' Compensation Administration Revolving Fund). 


          COMMENTS:


          1)Purpose and Background.   This bill addresses three separate,  
            related issues:


             a)   It increases penalties for entities who fail to report  
               workers' compensation data for use in the Workers'  
               Compensation Information System (WCIS) administered by DIR.  
                WCIS is an important database that allows researchers to  
               analyze claims in order to improve the workers'  
               compensation system.  The author indicates certain entities  
               prefer to simply pay the maximum $5,000 fine and ignore  








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               reporting requirements, and this will discourage such  
               behavior.  


             b)   It proposes a change to the 24-visit cap on  
               rehabilitative chiropractic, physical therapy and  
               occupational therapy visits.  There is already an exception  
               to the cap for post-surgical care.  In that case, DIR has  
               adopted specific treatment guidelines that control over the  
               hard caps in cases where the guidelines apply.  The bill  
               proposes a similar approach for a broader scope of  
               rehabilitation treatment.  The caps would remain in place,  
               but be supplanted only to the extent that an evidence-based  
               treatment guideline adopted by DIR is applicable.  


             c)   It requires accreditation of entities performing  
               utilization review. According to URAC, an accrediting  
               agency, accreditation ensures the adequacy of health  
               utilization management programs through evaluation against  
               broadly recognized standards and measures.  Some other  
               states already require such accreditation in their workers'  
               compensation program. 


          2)Support. This bill is sponsored by the California Professional  
            Firefighters, and supported by the California Labor Federation  
            and Small Business California.


          3)Opposition. Numerous business groups and insurance industry  
            groups expressed opposition to a prior version this bill,  
            largely based on provisions that were stripped from the bill  
            prior to today's hearing. Current opposition is unknown. 


          4)Related Legislation. SB 563 (Pan), also being heard today,  
            increases oversight of utilization review organizations by  
            DIR.








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          Analysis Prepared by:Lisa Murawski / APPR. / (916)  
          319-2081