BILL ANALYSIS �
------------------------------------------------------------
|SENATE RULES COMMITTEE | SB 457|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
------------------------------------------------------------
THIRD READING
Bill No: SB 457
Author: Calderon (D)
Amended: 5/4/11
Vote: 21
SENATE LABOR & INDUST. REL. COMMITTEE : 4-0, 3/23/11
AYES: Lieu, Wyland, Padilla, Yee
NO VOTE RECORDED: DeSaulnier, Leno, Runner
SENATE APPROPRIATIONS COMMITTEE : 6-3, 5/26/11
AYES: Kehoe, Alquist, Lieu, Pavley, Price, Steinberg
NOES: Walters, Emmerson, Runner
SUBJECT : Workers compensation: liens
SOURCE : California Professional Firefighters
DIGEST : This bill requires the Workers Compensation
Appeals 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, 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 states 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.
CONTINUED
SB 457
Page
2
ANALYSIS : Existing law establishes a workers'
compensation system, administered by the Administrative
Director of the Division of Workers' Compensation, to
compensate an employee for injuries sustained in the course
of his/her employment. Existing law authorizes a medical
provider to file a lien claim with the Workers'
Compensation Appeals Board (WCAB) for certain expenses
incurred by the provider. Under existing law, the WCAB is
required to allow a lien to the extent of benefits paid or
services provided for reimbursement for self-procured
medical costs for the effects of an injury or illness
arising out of and in the course of employment.
Existing law requires the administrative director, after
public hearings, to adopt and revise periodically an
official medical fee schedule that establishes reasonable
maximum fees paid for medical services, other than
prescribed goods and services, in accordance with specified
requirements.
This bill requires the WCAB 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, 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 states 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.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13 2013-14 Fund
Exemption from OMFS Unknown, potentially
significant General/
of self-procured medical costs ongoing Special
CONTINUED
SB 457
Page
3
costs
SUPPORT : (Verified 5/27/11)
California Professional Firefighters (source)
California Labor Federation, AFL-CIO
California Society of Industrial Medicine and Surgery
California Society of Physical Medicine and Rehabilitation
State Building and Construction Trades Council
OPPOSITION : (Verified 5/27/11)
Acclamation Insurance Management Services
Allied Managed Care
ALPHA Fund
Association of California Insurance Companies
California Association of Joint Powers Authorities
California Chamber of Commerce
California Coalition on Workers' Compensation
California Joint Powers Authority
California State Association of Counties
CSAC Excess Insurance Authority
League of California Cities
Los Angeles County
ARGUMENTS IN SUPPORT : The proponents write:
"This bill closes-off a loophole in existing law that
impedes the reimbursement for the actual costs associated
with providing for an employee's medical care in
instances where such are has been determined to be
related to an industrial injury or illness and therefore,
compensable under workers' compensation.
"This becomes a significant financial problem when the
non-industrial health plan is an employee funded health
benefits trust, whereby employees have to pay for a
portion of their care for a job related injury - a direct
violation of the constitution which obligates the
employer to provide a system of workers' compensation.
"Clarifying the law in the manner proposed by SB 457 not
only ensures that these health care trusts will be made
whole, which in turn sustains the ability for the trust
CONTINUED
SB 457
Page
4
to adequately provide for payment of services for
non-industrial care for worker, it will provide a much
needed incentive to workers' compensation system to
mitigate these disputes over compensability quickly."
ARGUMENTS IN OPPOSITION : The California Coalition on
Workers' Compensation (CCWC) argues:
"CCWC is opposed to your SB 457, which would increase
cost n the workers' compensation system by entitling
medical providers, health care service plans, and other
lien claimants to reimbursement above and beyond the
Official Medical Fee Schedule (OMFS) established under LC
Section 5307.1.
"The state purpose of the bill is to allow
employee-funded health care trusts to receive
reimbursement for their actual costs when medical
treatment has been provided to injured workers whose
claims where denied and later determined to be
compensable. However, the amended section of the labor
code is not specific to employee-funded health care
trusts and would impact other lien claimants.
"SB 457 appears to go beyond its stated purpose and
create a loophole that would allow for reimbursement
above and beyond the OMFS for self-procured medical
treatment. The amended LC Section 4903.1(a)(B) deals
with all liens for self-procured medical costs for a
"health care provider, a health care service plan, a
group disability policy, a self-insured employee welfare
benefit plan, or a hospital service contract". The scope
of this bill is clearly beyond employee-funded health
care trusts.
"Liens for medical treatment have become a huge problem
in California's workers' compensation arena. Liens
increase costs for employers and create unnecessary
litigation that clog the courts and slow down the process
of resolving claims for injured workers. SB 457 could be
interpreted to allow doctors and private health care
service plans to file liens demanding reimbursement for
self-procured medical treatment above the OMFS. This
modification to the Labor Code would compound the current
CONTINUED
SB 457
Page
5
lien problems being faced by California.
"SB 457 would weaken the protections for employers at a
time when medical costs are already escalating
substantially. For these reasons, CCWC must oppose your
SB 457."
PQ:mw:do 5/27/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
**** END ****
CONTINUED