BILL ANALYSIS �
SB 127
Page 1
SENATE THIRD READING
SB 127 (Emmerson)
As Amended August 29, 2011
Majority vote
SENATE VOTE :39-0
INSURANCE 11-0 APPROPRIATIONS 17-0
-----------------------------------------------------------------
|Ayes:|Solorio, Hagman, Carter, |Ayes:|Fuentes, Harkey, |
| |Feuer, Grove, Hayashi, | |Blumenfield, Bradford, |
| |Miller, Olsen, Skinner, | |Charles Calderon, Campos, |
| |Torres, Wieckowski | |Davis, Donnelly, Gatto, |
| | | |Hall, Hill, Lara, |
| | | |Mitchell, Nielsen, Norby, |
| | | |Solorio, Wagner |
|-----+--------------------------+-----+--------------------------|
| | | | |
| | | | |
-----------------------------------------------------------------
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 Assembly Appropriations
Committee, minor and absorbable costs to the DWC.
COMMENTS :
SB 127
Page 2
1)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)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 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.
3)CPT codes are five-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.
Analysis Prepared by : Mark Rakich / INS. / (916) 319-2086
FN: 0002286