BILL ANALYSIS �
SB 127
Page 1
Date of Hearing: July 6, 2011
ASSEMBLY COMMITTEE ON INSURANCE
Jose Solorio, Chair
SB 127 (Emmerson) - As Amended: May 3, 2011
SENATE VOTE : 39-0
SUBJECT : Workers' compensation: physician services billing
codes
SUMMARY : Requires the Administrative Director (AD) of the
Division of Workers' Compensation (DWC) to annually adopt the
Current Procedural Terminology (CPT) codes, descriptors, and
modifiers published by the American Medical Association.
EXISTING LAW :
1)Establishes a comprehensive system of benefits for workers who
are injured on the job, including medical benefits.
2)Provides for an Official Medical Fee Schedule (OMFS), adopted
by the AD, that establishes the reimbursements to be paid to
physicians for medical services provided to injured workers.
3)Requires the AD to periodically revise the OMFS to maintain
the reasonable maximum fees for medical services provided to
injured workers. CPT codes are used in the OMFS to describe
the services that physicians are providing.
FISCAL EFFECT : According to the Senate Appropriations
Committee analysis of this bill, up to $200,000 special fund
expenditures in the first year, and between $50,000 and $100,000
special fund expenditures each year thereafter.
COMMENTS :
1)Purpose . The purpose of this bill is to obtain cost savings
in the workers compensation system for both medical providers
and payors by updating a key element of the billing system on
a regular basis.
2)Background . According to the author, hundreds of CPT codes
have been added since the last time the OMFS has been updated.
This results in providers having to maintain a separate
SB 127
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workers' compensation billing system, or, if the provider
bills using newer CPT codes the OMFS does not recognize,
confusion between the provider and payor over what services
were provided and how they should be compensated. The author
believes that having an updated system will save costs for
both providers and payors.
CPT codes are 5-digit identifies of medical, surgical and
diagnostic services that health care providers use in billing
for the services that they provide. Initially drafted by the
American Medical Association as an aid in standardizing the
descriptions of services, the codes are now mandated by
federal law as the procedural code set for the Health
Insurance Portability and Accountability Act (HIPPAA) for
purposes of electronic transmittal of health information about
patients. However, since the OMFS is so outdated, when
physicians' billing systems and payors' reviewing systems are
using up-to-date CPT codes, it creates challenges in complying
with the OMFS. The bill seeks to eliminate unnecessary
disputes and transaction costs by ensuring that the CPT codes
used in the OMFS are up to date.
REGISTERED SUPPORT / OPPOSITION :
Support
California Orthopedic Association
California Medical Association
California Physical Therapy Association
California Society of Industrial Medicine and Surgery
California Society of Physical Medicine and Rehabilitation
Opposition
None received.
Analysis Prepared by : Mark Rakich / INS. / (916) 319-2086