BILL ANALYSIS Ó
SENATE COMMITTEE ON LABOR AND INDUSTRIAL RELATIONS
Senator Tony Mendoza, Chair
2015 - 2016 Regular
Bill No: SB 1175 Hearing Date: April 13,
2016
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|Author: |Mendoza |
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|Version: |February 18, 2016 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Gideon Baum |
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Subject: Workers' compensation: requests for payment
KEY ISSUE
Should the Legislature require that, for physicians treating
injured workers in California's workers' compensation system,
requests for payments for medical services or medical-legal
services must be submitted within 12 months, as specified?
ANALYSIS
Existing law establishes a workers' compensation system that
provides benefits to an employee who suffers from an injury or
illness that arises out of and in the course of employment,
irrespective of fault. This system requires all employers to
secure payment of benefits by either securing the consent of the
Department of Industrial Relations to self-insure or by securing
insurance against liability from an insurance company duly
authorized by the state.
Existing law provides that medical, surgical, chiropractic,
acupuncture, and hospital treatment, including nursing,
medicines, medical and surgical supplies, crutches, and
apparatuses, including orthotic and prosthetic devices and
services, that is reasonably required to cure or relieve the
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injured worker from the effects of his or her injury shall be
provided by the employer.
(Labor Code §4600)
Existing law requires that, if a medical provider who provides
any of the medical services described above for an injured
worker, the medical provider submit its request for payment with
an itemization of services provided and the charge for each
service, a copy of all reports showing the services performed,
the prescription or referral from the primary treating physician
if the services were performed by a person other than the
primary treating physician, and any evidence of authorization
for the services that may have been received. (Labor Code
§4603.2 (b))
Existing law requires that a physician who signs a medical-legal
report, or a report created for the purposes of proving or
disproving a disputed claim, must examine the patient or
participate in the preparation of the report. The preparation of
the report includes all of the following: taking a complete
history, reviewing and summarizing prior medical reports, and
composing and drafting the conclusions of the report. (Labor
Code §§4620 and 4628)
This bill requires that, for treatment provided on or after
January 1, 2017, the medical provider must submit the request
for payment within 12 months of the date of service or 12 months
of the date of discharge for inpatient facility services. Unless
otherwise allowed, any request for payment submitted after 12
months would be barred.
This bill requires that, for medical-legal services or expenses,
the request for payment must be submitted 12 months of the date
of service. Unless otherwise allowed, any request for payment
submitted after 12 months would be barred.
This bill requires the administrative director to adopt rules
and regulations to implement the 12 month limitation period for
both medical charges and medical-legal charges, including
circumstances that constitute good cause for an exception to the
12 month period.
COMMENTS
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1. Need for this bill?
Since 1913, the "grand bargain" that makes up California's
workers' compensation system is that employers pay for the
medical care of injured workers, and injured workers surrender
their ability to pursue a remedy through the tort system. For
this bargain to work, there needs to be medical providers that
will see injured workers, provide medical services, and be
paid accordingly. Without the ability of medical providers to
request and receive payment for services rendered, the
workers' compensation system simply will not work.
With that said, multiple stakeholders report persistent
fraudulent or unnecessarily belligerent billing activity by
some medical providers. One example is the submission of
medical bills more than a year after services were provided.
In some cases, the bills were old enough that the underlying
documentation may have been destroyed or would be difficult
for the employer to find. This can raise the possibility of a
medical employer being paid twice for providing the same
service. Additionally, processing old medical bills can create
frictional costs for payors, limiting resources to injured
workers and lawful medical providers.
In other medical systems, there are time limitations for when
a medical bill can be submitted for payment. In Medi-Cal, for
example, the limitation is 6 months. In Texas's workers'
compensation system, the medical bill submission time limit is
90 days.
SB 1175 would create a medical bill submission time limit of
12 months of date of service or 12 months of date of discharge
for inpatient facility services, which is the same as the
medical bill time limitations for Medicare. SB 1175 applies a
similar time limitation for medical-legal services, and
provides that the administrative director of the Division of
Workers' Compensation (DWC) create good-cause exceptions to
the 12 month limitation.
2. Staff Comments:
In discussions with stakeholders, one potential area of
concern that was raised on the creation of a 12 month billing
limitation was on the impact of the limitation on physicians
not accustomed to the workers' compensation system.
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Specifically, the California Medical Association (CMA) raised
the concern that a physician who provided treatment for what
he or she believe was a non-industrial injury, but then found
out that the injury had been accepted by the employer as an
industrial injury, could be forced to seek out payment in a
system he or she is unfamiliar with and on a limited timeline.
While it is unknown how frequently something like this could
occur, any barrier to legitimate medical payments could pose
financial difficulties for medical providers.
Noting this, the Committee may wish to consider the following
amendment to address this concern:
1) On page 3, line 23, strike "period," and insert
"period."
2) On page 3, line 23, strike "including rules to" and
insert "The rules shall"
3) On page 3, line 24, strike "period" and insert "period,
including provisions to address the circumstance of a
nonoccupational injury or illness later found to be a
compensable injury or illness."
3. Proponent Arguments :
Proponents argue that SB 1175 is a simple, straightforward
bill that will create a reasonable medical bill submission
timeline of 12 months. Proponents believe that SB 1175 will
promote the timely submission of medical bills, leading to
timely payments and a more efficient workers' compensation
system. Proponents note that many other health care systems
have a similar medical bill submission timeline as SB 1175,
including 6 months in Medi-Cal, 12 months for Medicare and the
federal workers' compensation system, and similar medical
billing limitations in the North Carolina, Ohio, Oregon, and
Texas workers' compensation systems.
4. Prior Legislation :
SB 863 (DeLeon), Chapter 363, Statutes of 2012, was a workers'
compensation reform bill that, among other things, clarified
that a copy of the prescription does not need to be included
with a request for payment.
SUPPORT
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Small Business California (Sponsor)
OPPOSITION
None on file.
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