BILL ANALYSIS                                                                                                                                                                                                    




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                           764 (Negrete McLeod)
          
          Hearing Date:  5/18/2009        Amended: 4/22/2009
          Consultant:  Bob Franzoia       Policy Vote: Labor 5-0
          _________________________________________________________________ 
          ____
          BILL SUMMARY: SB 764 would do the following:
          - Delete the requirement that each application for certification  
          as a workers' compensation health care organization (HCO) to be  
          accompanied by a fee, sufficient to cover the actual costs of  
          processing the application. 
          - Delete the Workers' Compensation Managed Care Fund's purpose  
          of funding the cost of administering the certification process.
          - Delete the description of necessary information that must be  
          reported by various plans, insurers, administrators or other  
          entities as determined by the Administrative Director of the  
          Division of Workers' Compensation.
          - Conform provisions relating to services provided by HCOs to  
          those applicable to employers who have not entered into a  
          contract with an HCO for the provision of medical services.
          _________________________________________________________________ 
          ____
                            Fiscal Impact (in thousands)

           Major Provisions         2009-10      2010-11       2011-12     Fund
           Deletion of processing fee        $143        $285       
          $285Special*
          (loss of revenue)                             
           
          * Workers' Compensation Managed Care Fund
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          ____

          STAFF COMMENTS: This bill meets the criteria for referral to the  
          Suspense File.
          
          Employers may contract with HCOs for the provision of workers'  
          compensation related medical services.  Eligible HCOs must be  
          certified by the Division of Workers' Compensation for the  
          delivery of managed care services and may include health  
          maintenance organizations licensed by the Department of Managed  
          Health Care, disability insurers licensed by the Department of  
          Insurance and other workers' compensation health care provider  










          organizations.

          The Workers' Compensation Managed Care Fund was created by  
          Chapter 152/1994 for the deposit of fees charged to certified  
          health care organizations (HCOs) and applicants.  Those revenues  
          were used to fund administrative duties and repay a $1.7 million  
          General Fund loan.  In 2004, Chapter 34/2004 (SB 899,  
          Poochigian) created the Workers' Compensation Administration  
          Revolving Fund (7350-0223) and shifted workers' compensation  
          program funding from fees and General Funds to surcharges levied  
          upon all employers.  This bill would eliminate the HCO  
          certification fees which generate $285,000 annually (estimated  
          2008-09), down from a high of $701,000 in 2004-05.  HCOs pay  
          this certification fee as well as the surcharge all employer pay  
          to fund the workers' compensation program.