BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    SB 1175  


                                                                    Page  1





          Date of Hearing:  June 29, 2016


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                               Lorena Gonzalez, Chair


          SB 1175  
          (Mendoza) - As Amended June 14, 2016


           ----------------------------------------------------------------- 
          |Policy       |Insurance                      |Vote:|13 - 0       |
          |Committee:   |                               |     |             |
          |             |                               |     |             |
          |             |                               |     |             |
           ----------------------------------------------------------------- 


          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No


          SUMMARY:


          This bill requires providers of medical and medical-legal  
          services in the workers' compensation system to submit bills  
          within 12 months of providing the services.  It also:  





          1)Requires the administrative director of the Division of  
            Workers' Compensation (DWC) to adopt rules and regulations to  
            implement the 12-month limitation period, including  
            circumstances that constitute good cause for an exception to  








                                                                    SB 1175  


                                                                    Page  2





            the 12-month period.



          2)Provides that, absent good cause, a request for payment after  
            the 12-month limitation period is barred.
          


          FISCAL EFFECT:


          Costs to the Department of Industrial Relations (DIR), in which  
          DWC is housed, are expected to be minor and absorbable.


          COMMENTS:


          1)Purpose. This bill is intended to improve administration of  
            workers' compensation benefits by guarding against charges  
            that are provided after excessive delays.  The author explains  
            such charges may be impossible to verify due to  
            record-keeping, which adds to the "frictional" cost of  
            providing workers' compensation benefits.  The author  
            indicates the practice of instituting time limits for billing  
            is common in other medical systems and states, and it would  
            provide greater certainty for employers and quicker, more  
            accurate resolution of charges billed. 


          2)Background.  The state workers' compensation system provides  
            benefits, including medical treatment, to employees who are  
            injured or suffer conditions that arise out of or in the  
            course of employment. Current law stipulates billing  
            requirements for medical providers in the workers'  
            compensation system.  










                                                                    SB 1175 


                                                                    Page  3





            According to the author, multiple stakeholders report  
            persistent fraudulent or unnecessarily belligerent billing  
            activity by some medical providers, including submission of  
            medical bills more than a year after services were provided.   
            The time limit imposed by the bill, with good-cause  
            exceptions, intends to address the issue of excessive delay. 


          Analysis Prepared by:Lisa Murawski / APPR. / (916)  
          319-2081