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