BILL ANALYSIS �
AB 1687
Page 1
Date of Hearing: May 9, 2012
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 1687 (Fong) - As Amended: March 12, 2012
Policy Committee: InsuranceVote:9 -
3
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill requires workers' compensation insurers to pay
attorneys' fees in connection with enforcing future medical
treatment orders when a dispute arises. Specifically, this bill:
1)Authorizes the Workers' Compensation Appeals Board to award
attorney's fees that are incurred by an applicant in
connection with the enforcement of a medical award following a
dispute that arises during the course of the utilization
review process.
2)Requires that any communications regarding decisions to
modify, delay, or deny medical treatment services in a
worker's compensation case that includes coverage for all
future medical treatment include a clear and concise
explanation of the available options for objecting to the
denial of treatment.
FISCAL EFFECT
1)Minor and absorbable costs for the Department of Industrial
Relations to include in their regulations options for injured
workers to challenge adverse utilization review decisions.
2)To the extent that this legislation increases the cost of
workers' compensation claims for those few individuals who
successfully challenge a utilization review denial and receive
attorney's fees for that challenge, the cost of premiums could
increase. However, these challenges are fairly rare. Data from
the Division of Workers' Compensation (DWC) suggests that
somewhere between 6% and 20% of all utilization review
AB 1687
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requests result in a denial and of those, only a portion will
be challenged.
COMMENTS
1)Rationale . According to the author, this bill is designed to
provide injured workers more information about how to navigate
the workers' compensation system in the event treatment
recommended by their treating physician is delayed, denied, or
modified, and to establish an appropriate incentive for
attorneys to take on "future medical" cases when the injured
worker requires the assistance of counsel.
2)Opposition . The Los Angeles County Board of Supervisors
argues that awarding attorneys' fees when an injured employee
is successful in overturning a utilization review decision
would increase workers' compensation costs. They further note
that the awarding of attorneys' fees would provide an
incentive litigate cases where treatment was denied based on a
legitimate use of the utilization review and the treatment
guidelines.
3)Workers' Compensation Coverage . The State of California, as an
employer, and many cities and counties are self-insured for
workers' compensation claims. Payments are treated in a pay as
you go manner. Therefore, any increase in costs has a direct
impact on state and local funds. For non-self-insured
employers, premiums are paid through a private insurer or the
State Compensation Insurance Fund (SCIF). Increased costs for
these employers would be evidenced through potentially higher
premiums.
Analysis Prepared by : Julie Salley-Gray / APPR. / (916)
319-2081