BILL ANALYSIS                                                                                                                                                                                                    �




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                          SB 457 (Calderon)
          
          Hearing Date: 5/9/2011          Amended: 5/4/2011
          Consultant: Bob Franzoia        Policy Vote: L&IR 4-0
          
















































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          BILL SUMMARY: SB 457 would require the Workers' Compensation 
          Appeals Board (board) to determine, on the basis of liens filed, 
          reimbursement for benefits paid or services provided by a health 
          care service plan, a group disability policy, a hospital service 
          contract, or a self-insured employee welfare benefit plan, 
          notwithstanding the  Official Medical Fee Schedule (OFMS), when 
          an award is made for reimbursement for self-procured medical 
          costs for the effects of an injury or illness arising out of and 
          in the course of employment.  This bill would state that its 
          provisions are not to be deemed as modifying in any way the 
          rights of any health care provider to file and prosecute a lien.
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                            Fiscal Impact (in thousands)

           Major Provisions         2011-12      2012-13       2013-14     Fund
           Exemption from OMFS    Unknown, potentially significant 
          costsGeneral/
          of self-procured medical          ongoing               Special
          costs                  
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          STAFF COMMENTS: This bill meets the criteria for referral to the 
          Suspense File. 

          The OMFS is promulgated by the administrative director of the 
          Division of Workers' Compensation 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. 

          Under this bill, the state would incur costs when an employee 
          self-procures treatment of an injury or illness with his or her 
          health care service plan, group disability policy, hospital 
          service contract, or self-insured employee welfare benefit plan 
          for an injury or illness that, upon review, is determined to be 
          work related.  When that situation occurs under current law, a 
          lien may be awarded for recovery of the amount billed as set by 
          the OMFS.  Under this bill, whenever the amount billed exceeds 
          the OMFS, a lien for the difference between the amount billed 
          and what is set forth in the OMFS, would become a workers' 
          compensation cost and reimbursed to the health service plan, 







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          group disability policy, hospital service contract, or 
          self-insured employee welfare benefit plan.  The number of such 
          liens and the amount such liens would exceed the OMFS is 
          unknown.  In aggregate, the annual increase in workers' 
          compensation costs is potentially significant. 

          State employee workers' compensation total costs in 2009-10 were 
          approximately $500 million, split an estimated 55 percent 
          General Funds and 45 percent special funds.  Of that amount, 
          approximately $100 million was for permanent disability 
          benefits.  

          Revised