BILL ANALYSIS Ó SB 1175 Page 1 Date of Hearing: June 22, 2016 ASSEMBLY COMMITTEE ON INSURANCE Tom Daly, Chair SB 1175 (Mendoza) - As Amended June 14, 2016 SENATE VOTE: 36-0 SUBJECT: Workers' compensation: requests for payment SUMMARY: Requires providers of medical services in the workers' compensation system to submit bills within 12 months of providing the services. Specifically, this bill: 1)Requires that, for treatment provided on or after January 1, 2017, a 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. 2)Requires that, for medical-legal services or expenses, the request for payment must be submitted within 12 months of the date of service. 3)Requires the administrative director (AD) of the Division of Workers' Compensation (DWC) to adopt rules and regulations to implement the 12 month limitation period for both medical charges and medical-legal charges, including circumstances SB 1175 Page 2 that constitute good cause for an exception to the 12 month period, including procedures for billing in cases when treatment of injuries thought to be non-industrial turn out, after 12 months, to be industrial injuries. 4)Provides that, absent good cause, a request for payment after the 12-month limitation period is barred. 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)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 injured worker from the effects of his or her injury, shall be provided by the employer. 3)Requires a medical provider who provides any of the medical services described above for an injured worker to 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. SB 1175 Page 3 FISCAL EFFECT: The Senate Appropriations Committee referred this bill to the Senate Floor pursuant to Senate Rule 28.8. COMMENTS: 1)Purpose. According to the author, 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. The bill would create a medical bill submission time limit of 12 months from 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. The bill applies a similar time limitation for medical-legal services, and provides that the AD create good-cause exceptions to the 12 month limitation. REGISTERED SUPPORT / OPPOSITION: SB 1175 Page 4 Support ALPHA Fund Small Business California Opposition None received. Analysis Prepared by:Mark Rakich / INS. / (916) 319-2086