BILL ANALYSIS Ó
SB 1160
Page 1
SENATE THIRD READING
SB
1160 (Mendoza)
As Amended June 20, 2016
Majority vote
SENATE VOTE: 26-12
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Insurance |8-4 |Daly, Chu, Cooley, |Melendez, Travis |
| | |Cooper, Dababneh, |Allen, Bigelow, |
| | |Frazier, Gatto, |Dahle |
| | |Rodriguez | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Appropriations |14-5 |Gonzalez, Bloom, |Bigelow, Gallagher, |
| | |Bonilla, Bonta, |Jones, Obernolte, |
| | |Calderon, Daly, |Wagner |
| | |Eggman, Eduardo | |
| | |Garcia, Holden, | |
| | |Quirk, Santiago, | |
| | |Weber, Wood, McCarty | |
| | | | |
| | | | |
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SB 1160
Page 2
SUMMARY: Requires utilization review entities to be certified;
increases penalties for the failure to comply with data filing
requirements; and modifies a statutory treatment guideline.
Specifically, this bill:
1)Requires a utilization review (UR) entity to be accredited by
July 1, 2018, and every three years thereafter.
2)Authorizes the Administrative Director (AD) of the Division of
Workers' Compensation (DWC) to require more frequent
re-accreditation if he or she deems it necessary.
3)Specifies criteria that the accrediting organization will use
to evaluate UR processes.
4)Requires the AD to adopt rules governing the organization that
will provide the accreditation, and authorizes the AD to
expand the criteria that the organization will apply.
5)Modifies the 24-visit cap on chiropractic, physical therapy
and occupational therapy visits, by specifying that in cases
involving physical medicine rehabilitative services to the
extent the cap is inconsistent with evidence-based treatment
guidelines to be adopted by the AD, the guideline adopted by
the AD prevails.
6)Requires the AD to adopt regulations designed to create a more
efficient workers' compensation claim information system,
including specifying the data elements to be collected.
7)Requires the AD to publicly post the identities of those who
SB 1160
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fail to submit the claims data as required by law.
8)Establishes enhanced penalties for the failure to comply with
workers' compensation claim data filing requirements, as
follows:
a) Increases the basic fine for failure to file appropriate
data from up to $5,000 to up to $10,000.
b) Establishes enhanced penalties of between $15,000 and
$45,000 for mandated data filers that have incurred more
than $8,000 in fines in successive years.
EXISTING LAW:
1)Establishes a comprehensive system to provide benefits,
including medical treatment, to employees who are injured or
suffer conditions that arise out of or in the course of
employment.
2)Requires treatment to be evidence-based, as detailed in a
Medical Treatment Utilization Schedule adopted and maintained
by the AD.
3)Limits the number of chiropractic, physical therapy, or
occupational therapy visits to no more than 24.
4)Provides for a Workers' Compensation Information System
(WCIS), and mandates that specified claims data be filed by
entities that pay workers' compensation claims.
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5)Authorizes the AD to impose a fine of up to $5,000 per year
for a failure of a required filer to comply with the law.
6)Requires every employer or insurer to maintain a UR process,
which is the mechanism for the employer or insurer to review,
delay, modify or deny treatment requested by a treating
medical provider.
FISCAL EFFECT: According to the Appropriations Committee, the
DWC indicated, with respect to a much broader version of this
bill, that it would incur first-year costs ranging from $950,000
to $1.8 million (special fund) to administer the bill, while
ongoing costs may be in the hundreds of thousands of dollars.
COMMENTS:
1)Purpose. According to the author, UR has come under some
scrutiny by stakeholders, many of whom argue that it is
leading to a significant number of injured workers being
denied care. This claim, however, is not currently supported
by the data. The California Workers' Compensation Institute
(CWCI) found that only approximately 25% of medical treatment
requests go through UR, with approximately 75% of the medical
treatment requests approved. Once the approvals from UR and
Independent Medical Review (IMR) are included, more than 94%
of treatment is approved OVERALL in California's workers'
compensation system. However, there appear to be
discrepancies between payors at the rate they approve, modify,
delay, or deny treatment through UR. For example, in a recent
RAND presentation before the Commission on Health and Safety
and Workers' Compensation, a sample of payor data showed that
a public self-insured employer with an in-house UR process
approved treatment at the initial claims adjuster level about
90% of the time, while a Third Party Administrator (TPA) who
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also had an in-house UR process approved treatment at the
initial claims adjuster level only about 50% of the time.
While that same TPA eventually approved a similar level of
treatment, it is unclear why the TPA would send more treatment
through the full UR process. While the RAND study is
preliminary and the numbers above may change as the study is
finalized, these numbers suggest that the UR process
discrepancies between payors may explain stakeholder concerns
surrounding the UR process, and require exploration to
explain.
2)WCIS. It has recently become apparent that some entities that
are required to submit data to WCIS have simply decided to pay
the annual $5,000 fine and ignore filing requirements. WCIS
is an important data base because it allows researchers to
sort and analyze claim data in the ongoing effort to improve
efficiency the workers' compensation system, ensure better
care for injured workers, and control costs for employers.
The failure to submit the required data can create a
substantial impediment to that ongoing work. This is why this
bill proposes increased and, for ongoing recalcitrant
employers, stepped up penalties.
3)Physical medicine. This bill proposes a change to the
24-visit cap on physical medicine. There is already an
exception to the cap for post-surgical care. In that case,
the AD has adopted specific treatment guidelines that control
over the hard caps in cases where the guidelines apply. This
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 the AD is applicable.
4)Opposition. The bill has substantial opposition. In
response, the author has recently made substantial amendments
to the bill, deleting several provisions of the greatest
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concern to the opposition. While it may not be true for every
opponent, a number of the opposing organizations have
indicated that even though they cannot change their position,
they are comfortable working with the author as the bill moves
to the Assembly Floor.
Analysis Prepared by:
Mark Rakich / INS. / (916) 319-2086 FN: 0004122