BILL ANALYSIS �
Senate Committee on Labor and Industrial Relations
Ted W. Lieu, Chair
Date of Hearing: June 29, 2011 2011-2012 Regular
Session
Consultant: Gideon L. Baum Fiscal:Yes
Urgency: No
Bill No: AB 1168
Author: Pan
Version: As Introduced February 18, 2011
SUBJECT
Workers' compensation: vocational expert fee schedule.
KEY ISSUE
Should the Legislature require the administrative director of
the Division of Workers' Compensation adopt, after public
hearings, a fee schedule that establishes reasonable maximum
fees paid for services provided by vocational experts?
PURPOSE
To set reasonable maximum fees for services provided by
vocational experts.
ANALYSIS
Existing law establishes a workers' compensation system that
provides benefits to an employee who suffers from an injury or
illness that arises out of and in the course of employment,
irrespective of fault. This system requires all employers to
secure payment of benefits by either securing the consent of the
Department of Industrial Relations to self-insure or by securing
insurance against liability from an insurance company duly
authorized by the state.
Existing law requires the administrative director of the
Division of Workers' Compensation (DWC) to adopt and
periodically revise an Official Medical Fee Schedule (OMFS) to
establish reasonable maximum medical fees for medical services,
including physician services and medical-legal expenses. (Labor
Code �� 5307.1 & 5307.6)
This bill would require the administrative director of the
Division of Workers' Compensation to adopt, after public
hearings, a fee schedule that establishes reasonable maximum
fees paid for services provided by vocational experts,
including, but not limited to, vocational evaluations and expert
testimony determined to be admissible by the appeals board.
This bill would also prohibit a vocational expert from being
paid, and the Workers' Compensation Appeals Board (WCAB) from
allowing, fees in excess of those set in the fee schedule.
COMMENTS
1. Vocational Experts and Existing Fee Schedules
Currently, the Labor Code is silent as to the fees for
vocational experts. Prior to 2004, the Labor Code contained
vocational rehabilitation services provided by vocational
counselors. They were covered by a fee schedule and their
services were cost contained through statute. In 2004, the
Legislature passed SB 899 (Poochigian), Chapter 34, Statutes
of 2004, which completely overhauled the workers' compensation
system. As part of that reform, the vocational rehabilitation
structure was dramatically altered, eventually sun-setting in
2009.
As was discussed above, many medical professions have their
fees capped through a fee schedule. These include physicians,
Qualified Medical Examiners (QME), Agreed Medical Examiners
(AME), chiropractors, and physical therapists.
The same is true of medical-legal evaluations, which are
evaluations done by either a primary treating physician, QME,
or AME which is to develop a narrative medical report for the
purposes of proving or disproving a contested medical fact or
workers' compensation benefit. These evaluations usually
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Senate Committee on Labor and Industrial Relations
include face to face visit(s) with the injured worker, review
of records, and addressing medically complex issues, such as
causation and apportionment.
2. Ogilvie and the Use of Vocational Experts:
In 2009, the Workers Compensation Appeals Board (WCAB) found
in Ogilvie v. City and County of San Francisco that permanent
disability ratings were rebuttable. This successful rebuttal
of the permanent disability rating was successful in part due
to the expert testimony and reports provided by two certified
vocational rehabilitation counselors. The Ogilvie case is
currently being appealed, and therefore the final details on
how and when a permanent disability rating can be disputed
remain unclear, but the use of vocational experts by injured
workers and employers to refute permanent disability rating
findings is almost certain to continue for the foreseeable
future.
This bill does not touch upon the issues raised in Ogilvie or
any of the related cases. Rather, AB 1168 seeks to provide a
fee schedule to set maximum fees if and when a vocational
expert is used by either an injured worker or an employer.
This would bring fee practices for vocational experts in line
with other workers' compensation services, as well as
historical norms.
3. Possible Amendments:
The opposition has raised several concerns (which will be
discussed in detail below) that the Committee may wish to
review. First, the opposition is concerned that the
admissibility standard currently present in the bill will
prevent payment for services rendered due to attorney error or
legal issues outside of the scope of the report or testimony,
denying the expert payment. Second, the opponents believe
that the use of the term "reasonable maximum fees paid for
services" is not present in other fee schedule statutes and
therefore is not appropriate here.
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Senate Committee on Labor and Industrial Relations
Therefore, the committee may wish to do the following:
1) On page 2, line 5, strike "maximum" and insert "hourly";
2) On page 2, line 7, strike "admissible" and insert
"reasonable, actual, and necessary" and on page 2, line 10,
strike "set forth" and strike all of line 11 and insert
"allowed as reasonable, actual, and necessary".
The language on "reasonable, actual, and necessary" is
based on Costa v. Hardy Diagnostic and SCIF (2007), a case
where the WCAB dealt with reimbursement for rebutting
permanent disability ratings, and is therefore reflective
of existing case law.
4. Proponent Arguments :
Supporters note that fee schedules are the norm in workers'
compensation. They also point out that allowing the AD to
adopt the schedule after public hearings, as opposed to
adopting a statutory schedule, provides the flexibility to
adjust compensation levels over time. Delegation of this duty
to the AD is also common in the workers' compensation system.
Employer supporters also note that "�t]he imposition of fee
schedules in workers' compensation is an issue of fairness to
employers. More importantly, controlling administrative costs
in the workers' compensation system ensures that workers'
compensation dollars are preserved for injured worker
benefits."
5. Opponent Arguments :
Opponents have taken an 'oppose unless amended' position,
arguing that that this bill places unreasonable and excessive
burdens in place for vocational experts to be paid
appropriately. Opponents believe that the bill as currently
written will make it very difficult for a vocational expert to
be appropriately paid for services rendered, thereby hurting
injured workers and preventing them from receiving the expert
testimony they need. Opponents request that:
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Senate Committee on Labor and Industrial Relations
1) The requirement that they only be paid upon their
testimony being found admissible be removed;
2) That billing in excess of the medical the schedule be
allowed in the event of extraordinary circumstances, as is
currently allowed with medical-legal reports; and
3) Revising the fee schedule requirement so that charging
at the fee schedule is considered prima facie evidence that
the fees are reasonable.
6. Prior Legislation :
AB 228 (Alarcon), Chapter 639, Statutes of 2003, establishes
the existing fee schedule structure for medical services.
SUPPORT
Acclamation Insurance Management Services
Allied Management care
Alpha Fund
Association of California Insurance Companies
California Applicants' Attorneys Association
California Association of Joint Powers Authorities
California Chamber of Commerce
California Coalition on Workers Compensation
California Grocers Association
California Joint Powers Authorities
California Manufacturers & Technology Association
California Special Districts Association
California State Association of Counties
CSAC Excess Insurance Authority
League of California Cities
OPPOSITION
American Board of Vocational Experts (Unless Amended)
Career Associates Inc. (Unless Amended)
Cascade Disability Management (Unless Amended)
Hall Associated Rehabilitation Consultants (Unless Amended)
International Association of Rehabilitation
Professionals/California Chapter (Unless Amended)
Work-Wise, Inc. (Unless Amended)
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Senate Committee on Labor and Industrial Relations
Eight (8) Individuals
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Senate Committee on Labor and Industrial Relations