BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
SB 127 (Emmerson)
Hearing Date: 5/23/2011 Amended: 5/3/2011
Consultant: Bob Franzoia Policy Vote: L&IR 7-0
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BILL SUMMARY: SB 127 would require the Administrative Director
(AD) of the Division of Workers' Compensation, in order to keep
the official medical fee schedule (OMFS) for physician services
appropriately updated, to the annually to adopt the Current
Procedural Terminology (CPT) codes, descriptors, and modifiers
published by the American Medical Association. This bill would
require new procedures added by this update shall be coded By
Report (BR) until the AD, through public hearings, adopts and
revises, the OMFS for physician services.
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Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13 2013-14 Fund
Annual updating of Up to $200 Up to $50 to $100 ongoing
Special*
OMFS CPT codes
Change in reimbursementUnknown, potential increase or
decreaseGeneral/
rates for medical services over current reimbursement
rates paid Special
by employers, including the state
* Workers' Compensation Administrative Revolving Fund
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STAFF COMMENTS: This bill meets the criteria for referral to the
Suspense File.
The OMFS is promulgated by the AD under Labor Code section
5307.1 and can be found in Sections 9789.10 et seq. of Title 8,
California Code of Regulations. It is used for payment of
medical services required to treat work related injuries and
illnesses. There are specific schedules for ambulance fees,
durable medical equipment, inpatient hospital, medical-legal,
SB 127 (Emmerson)
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outpatient hospital, pathology and clinical laboratory,
pharmaceuticals, and physician services.
Existing law requires the AD to adopt and revise, no less than
biennially, an OMFS for physician services. If the AD fails to
adopt an OMFS by January 1, 2006, the existing OMFS shall remain
in effect until a new schedule is adopted or the existing
schedule is revised. CPT codes have not been updated since 1997
leading to disputes between providers and payors as some medical
procedures have become less expensive while some have become
more expensive.
Enactment of this bill would require the AD to engage in annual
rulemaking to adopt the most recent CPT codes. The AD may also
need to complete a "crosswalk" to link updated CPT codes with
those CPT codes in the existing OMFS for the purpose of
calculating reimbursement rates.
To perform the "crosswalk," it is estimated the AD would
contract for coding expertise at a cost of $50,000 to $100,000
one time. Some of the codes may require the input of persons
with medical expertise. Annual updates would be less expensive
but would require a rulemaking.
The AD could take no action and allow providers and payors to
perform this function, though that does not appear likely as the
result would be increased litigation over bills before Workers'
Compensation Administrative Law Judges and more liens, which are
currently a major problem in some areas of the state.
Staff notes also on the committee's agenda is SB 923 (De Leon)
which would require the AD to adopt an OMFS for physician
services based on the resource-based relative value scale
(RBRVS). RBRVS uses updated CPT codes. While the adoption of a
new OFMS has been problematic, updating CPT codes to the
exclusion of the other components of the OMFS requires a
significant amount of work and may not result in a more
efficient or more accurate physician fee schedule.