BILL ANALYSIS Ó SB 1160 Page 1 Date of Hearing: August 3, 2016 ASSEMBLY COMMITTEE ON APPROPRIATIONS Lorena Gonzalez, Chair SB 1160 (Mendoza) - As Amended June 20, 2016 ----------------------------------------------------------------- |Policy |Insurance |Vote:|8 - 4 | |Committee: | | | | | | | | | | | | | | ----------------------------------------------------------------- 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 SB 1160 Page 2 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 SB 1160 Page 3 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. SB 1160 Page 4 Analysis Prepared by:Lisa Murawski / APPR. / (916) 319-2081