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