BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 1175|
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THIRD READING
Bill No: SB 1175
Author: Mendoza (D)
Amended: 4/19/16
Vote: 21
SENATE LABOR AND IND. REL. COMMITTEE: 5-0, 4/13/16
AYES: Mendoza, Stone, Jackson, Leno, Mitchell
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
SUBJECT: Workers compensation: requests for payment
SOURCE: Small Business California
DIGEST: This bill requires 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:
1)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.
2)Provides that medical, surgical, chiropractic, acupuncture,
and hospital treatment, including nursing, medicines, medical
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and surgical supplies, crutches, and apparatuses, including
orthotic and prosthetic devices and services, that is
reasonably required to cure or relieve the injured worker from
the effects of his or her injury shall be provided by the
employer. (Labor Code §4600)
3)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))
4)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:
1)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.
2)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.
3)Requires the administrative director to adopt rules and
regulations to implement the 12 month limitation period for
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both medical charges and medical-legal charges, including
circumstances that constitute good cause for an exception to
the 12 month period.
Background
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 creates 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
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the 12 month limitation.
Prior Legislation
SB 863 (De León, 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.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
SUPPORT: (Verified5/3/16)
Small Business California (source)
OPPOSITION: (Verified5/3/16)
None received
ARGUMENTS IN SUPPORT: 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.
Prepared by:Gideon Baum / L. & I.R. / (916) 651-1556
5/4/16 14:58:03
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