BILL ANALYSIS �
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THIRD READING
Bill No: AB 584
Author: Fong (D)
Amended: 4/6/11 in Assembly
Vote: 21
SENATE LABOR & INDUST. RELATIONS COMMITTEE : 4-1, 6/8/11
AYES: Lieu, DeSaulnier, Leno, Yee
NOES: Runner
NO VOTE RECORDED: Wyland, Padilla
SENATE APPROPRIATIONS COMMITTEE : 6-3, 8/25/11
AYES: Kehoe, Alquist, Lieu, Pavley, Price, Steinberg
NOES: Walters, Emmerson, Runner
ASSEMBLY FLOOR : 54-22, 4/28/11 - See last page for vote
SUBJECT : Workers compensation: utilization review
SOURCE : Author
DIGEST : This bill modifies workers compensation
requirements pertaining to licensed physicians who are
authorized to conduct utilization reviews in the state.
Specifically, this bill: (1) requires that a "physician,"
for purposes of workers' compensation, who is conducting
utilization review of proposed medical treatment for an
injured worker, be licensed in California; (2) makes a
technical change in the definition of "psychologist," for
purposes of workers' compensation, to make it consistent
with the definition of "physician," which requires that
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psychologists be California licensed; and (3) re-defines
the term "physician" and "health professional," for
Disability Insurance purposes, in order to allow Employment
Development Department to continue to receive claims for
disability from a claimant who receives treatment from a
physician or practitioner that is duly licensed or
certified by the state or foreign country.
ANALYSIS : Existing law establishes a workers'
compensation system, administered by the Administrative
Director (AD) of the Division of Workers' Compensation
(DWC), to compensate an employee for injuries that arise
out of, or in the course of, employment. Employers are
required to secure the payment of workers' compensation for
injuries incurred by their employees.
Existing law requires every employer to establish a medical
treatment utilization review (UR) process, in compliance
with specified requirements, either directly or through its
insurer or an entity with which the employer or insurer
contracts for these services.
Under existing law:
1. UR means utilization review or utilization management
functions that prospectively, retrospectively, or
concurrently review and approve, modify, delay, or deny
treatment recommendations by physicians, based on
medical treatment guidelines, as specified.
2. "Physician" means physicians or surgeons holding a
Medical Doctor, or Doctor of Osteopathic degree,
psychologists, acupuncturists, optometrists, dentists,
podiatrists, and chiropractic practitioners licensed by
California state law and within the scope of their
practice as defined by California state law.
3. No person other than a licensed physician who is
competent to evaluate the specific clinical issues
involved in the medical treatment services (and where
these services are within the scope of the physician's
practice) requested by the physician may modify, delay,
or deny requests for authorization of medical treatment
for reasons of medical necessity to cure and relieve.
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The existing Disability Insurance (DI) program,
administered by the Employment Development Department
(EDD), provides partial wage replacement to eligible
workers who are unable to work because of a disability. A
claimant must establish medical eligibility by filing a
claim for disability benefits supported by the certificate
of a treating physician or practitioner that establishes
the sickness, injury, or pregnancy of the employee, or the
condition of the family member that warrants the care of
the employee. To establish eligibility and benefits, EDD
depends on the accuracy of medical providers and their
diagnosis, while also taking into consideration treatment
and estimated recovery dates.
Existing law, for DI purposes, allows individuals to obtain
care and treatment outside of this state as long as the
claim for disability is supported by a certificate of a
treating physician or practitioner duly licensed or
certified by the state or foreign country in which the
claimant is receiving the care and treatment.
This bill modifies workers' compensation requirements
pertaining to licensed physicians who are authorized to
conduct URs in the state. Specifically, this bill:
1. Requires that a "physician," for purposes of workers'
compensation, who is conducting UR of proposed medical
treatment for an injured worker, be licensed in
California.
2. Makes a technical change in the definition of
"psychologist," for purposes of workers' compensation,
to make it consistent with the definition of
"physician," which requires that psychologists be
California licensed.
3. Re-defines the term "physician" and "health
professional," for DI purposes, in order to allow EDD to
continue to receive claims for disability from a
claimant who receives treatment from a physician or
practitioner that is duly licensed or certified by the
state or foreign country.
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Comments
Background on Physicians practicing UR in California under
the Workers' Compensation System . According to the Medical
Board, a decision to delay, modify or deny a medical
treatment constitutes the practice of medicine, and the
Medical Board would have jurisdiction over this act.
However, the Business and Professions Code (Section
2220.05) establishes an order of priority for the use of
the Medical Board's resources, and the five listed
priorities do not include any language that would refer to
violations of professional standards in the conduct of UR.
Because the Medical Board deems the performance of UR to be
the practice of medicine, and because the treatment at
issue is to be provided (in most cases) to a California
resident, many people have argued that by operation of the
Medical Practice Act only a California-licensed physician
can lawfully perform the UR function. The AD of the DWC,
however, declined to adopt this interpretation of the law
when the regulations to implement the UR statute were
adopted. Because there is logic to this analysis, it must
be inferred that the AD concluded that the new Labor Code
provision constituted a statutory exception to the general
Medical Practice Act rule. That issue has never been
litigated, but many supporters believe there was no intent
in the 2004 workers' compensation reforms to modify the
general rules governing the practice of medicine. In this
light, they argue this bill is clarifying existing
statutory law that has been misconstrued.
Need for this bill . Physicians not licensed in California
may be unfamiliar with the specifics of California workers'
compensation law and/or the details of the requirements of
UR; they may thus, be more likely to fail to follow
California work comp law. Proponents of this bill believe
that out-of-state UR physicians are making inappropriate
decisions at least in part because there is no regulatory
structure to hold them accountable. This bill requires
that a physician who is conducting UR be licensed in
California. This bill is intended to ensure that there is
a regulatory oversight body, the Medical Board, which can
discipline a utilization physician in the event the
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physician violates practice standards.
In addition, the law governing disability determinations by
EDD for purposes of the DI program requires the applicant
to establish disability with evidence from a medical
practitioner. The scope of who may perform this function
is defined by a cross reference to the workers'
compensation provision being amended by this bill. Because
the "must be licensed in California" requirement does not
work for EDD's purposes, that law is being amended to
retain the authority for out of state "physicians" to
continue to perform that function.
Prior Legislation
AB 933 (Fong), 2009-10 Session, would have required a
physician conducting UR in the workers' compensation system
to be licensed in California. The bill was vetoed by
Governor Schwarzenegger. In his veto message Governor
Schwarzenegger stated that, "Such a requirement would be
inconsistent with how UR is conducted in other areas of
medicine and not in line with best practices nationwide.
The proponents of this measure have not demonstrated a need
for this disparity in treatment."
AB 2969 (Lieber), 2007-08 Session, proposed the same rule
being proposed by this bill, that only a California
licensed physician would be authorized to conduct workers'
compensation URs. The bill was vetoed by Governor
Schwarzenegger.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13
2013-14 Fund
Restriction on Unknown, potentially minor
costs annually General/ administration of
Various
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workers' compensation
Special
program
SUPPORT : (Verified 8/25/11)
American Federation of State, County, and Municipal
Employees
Association for Los Angeles Deputy Sheriffs
Board of Chiropractic Examiners
California Applicants' Attorneys Association
California Chiropractic Association
California Medical Association
California Nurses Association
California Physical Therapy Association
California Society of Industrial Medicine and Surgery
California Society of Physical Medicine and Rehabilitation
Dr. Robert Weinmann
Glendale City Employees
International Chiropractors Association of California
Lawrence E. Stone, Santa Clara County Assessor
Medical Board of California
Organization of SMUD Employees
Peace Officers Research Association of California
Pfizer
San Bernardino Public Employees Association
San Luis Obispo County Employees Association
Santa Rosa City Employees Association
South Bay Labor Council
Union of American Physicians and Dentists / AFSCME-Local
206
OPPOSITION : (Verified 8/25/11)
Acclamation Insurance Management Services
Allied Managed Care
Alpha Fund
American Insurance Association
Association of California Insurance Companies
Association of California Water Agencies
California Association of Joint Powers Authorities
California Chamber of Commerce
California Coalition on Workers' Compensation
California Grocers Association
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California Special Districts Association
California State Association of Counties
California State Association of Counties Excess Insurance
Authority
League of California Cities
Liberty Mutual Group
Regional Council of Rural Counties
Santa Clara Chamber of Commerce
ARGUMENTS IN SUPPORT : Proponents believe that decisions
to modify, delay or deny medical treatment must be done by
healthcare providers that know and understand California's
rules and regulations with regard to UR. Proponents argue
that if an out-of-state physician makes errors or otherwise
requires discipline; neither the DWC nor the Medical Board
of California has any jurisdiction to remedy the situation.
Therefore, out-of-state physicians have no accountability
for medical malpractice.
According to proponents, this bill clarifies current law
and protects California workers by providing that
physicians performing workers' compensation services in the
State are held accountable for wrongful denials of medical
treatment, by requiring the physician to possess a
California license. Proponents also believe that having
reviewing physicians regulated by the Medical Board will
provide appropriate oversight and quality control that is
not available for non-California licensed physicians. Many
treating physicians have complained about the difficulty of
communicating with reviewers three time zones away, and
supporters believe this bill will improve the situation
(although it should be noted that an East Coast-based
physician can hold a California license). Supporters also
point out that many UR companies already employ only
California-licensed physicians, and assert that there is no
shortage of these physicians.
Lastly, proponents argue that California is not alone in
recognizing the need to regulate physicians who perform UR
on its citizens. In 2007, the State of Texas enacted
legislation similar to this bill that requires a Texas
license to perform UR in Texas workers' compensation cases.
Subsequently, the Tennessee Division of Workers'
Compensation adopted similar rules administratively.
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ARGUMENTS IN OPPOSITION : Opponents argue that there is
no evidence that requiring that only California licensed
physicians conduct UR will improve care to injured workers.
Opponents argue that California workers' compensation law
already contains strict requirements for physicians and all
decisions are required to be based on the medical treatment
UR schedule that has been adopted by the AD for the DWC.
They argue that if treatment varies from that schedule it
must be based on evidence-based, peer reviewed, nationally
recognized standards. According to opponents, because the
UR standards are nationally based, there is no scenario in
which a California physician would be more qualified to
make a UR decision.
Further, opponent argue that there is no specific knowledge
that is unique to California-licensed physicians, and to
limit URs to these physicians would only have the effect of
limiting the number of available reviewing physicians,
thereby creating a logjam of cases that need to be
reviewed. Additionally, the limitation to physicians
licensed in California would likely drive up the cost of UR
services because the demand for those services would
increase relative to the number of providers who are
legally able to perform them.
ASSEMBLY FLOOR : 54-22, 4/28/11
AYES: Alejo, Allen, Ammiano, Atkins, Beall, Block,
Blumenfield, Bonilla, Bradford, Brownley, Buchanan,
Butler, Charles Calderon, Campos, Carter, Cedillo,
Chesbro, Davis, Dickinson, Eng, Feuer, Fong, Fuentes,
Furutani, Gatto, Gordon, Halderman, Hall, Hayashi, Roger
Hern�ndez, Hill, Huber, Hueso, Huffman, Jeffries, Lara,
Bonnie Lowenthal, Ma, Mendoza, Mitchell, Monning, Pan,
Perea, V. Manuel P�rez, Portantino, Skinner, Solorio,
Swanson, Torres, Wagner, Wieckowski, Williams, Yamada,
John A. P�rez
NOES: Achadjian, Bill Berryhill, Conway, Cook, Donnelly,
Fletcher, Garrick, Grove, Hagman, Harkey, Jones, Knight,
Logue, Miller, Morrell, Nestande, Nielsen, Norby, Olsen,
Silva, Smyth, Valadao
NO VOTE RECORDED: Galgiani, Gorell, Mansoor, Vacancy
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PQ:kc 8/26/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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