BILL ANALYSIS �
SB 457
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SENATE THIRD READING
SB 457 (Ron Calderon)
As Amended August 26, 2011
Majority vote
SENATE VOTE :25-14
INSURANCE 10-0 APPROPRIATIONS 17-0
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|Ayes:|Solorio, Hagman, Carter, |Ayes:|Fuentes, Harkey, |
| |Feuer, Hayashi, Miller, | |Blumenfield, Bradford, |
| |Olsen, Skinner, Torres, | |Charles Calderon, Campos, |
| |Wieckowski | |Davis, Donnelly, Gatto, |
| | | |Hall, Hill, Lara, |
| | | |Mitchell, Nielsen, Norby, |
| | | |Solorio, Wagner |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : Provides that a self-insured employee welfare benefit
plan may recover from an employer or workers' compensation
insurer more than the amount for medical expenses provided by
the Official Medical Fee Schedule (OMFS), under certain
circumstances. Specifically, this bill provides that, for
purposes of awarding a lien claimant compensation for medical
expenses, if the lien claimant is a self-insured employee
welfare benefit plan, where the lien claimant has paid benefits
or provided services under its plan, the OMFS does not limit the
amount of the lien.
EXISTING LAW :
1)Establishes a comprehensive system of workers' compensation
benefits for workers injured on the job, including medical
benefits.
2)Establishes, based on a statutory delegation to the
Administrative Director (AD) of the Division of Workers'
Compensation (DWC) to develop and adopt, an OMFS that sets the
maximum reasonable reimbursement for medical services provided
to injured workers.
3)Authorizes service providers to file a lien with the Workers'
SB 457
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Compensation Appeals Board (WCAB) if a dispute arises about
the right to payment or the amount paid by the employer or
insurer.
4)Requires the WCAB to determine whether to allow the lien, and
how much should be paid on the lien, generally using the OMFS
when the lien is for medical services.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, the state's share of medical spending for workers
compensation is in excess of $200 million per year. If this
legislation results in a one or two percent increase in those
costs, it would cost the state somewhere between $2 million and
$5 million per year (General Fund and Special Fund).
COMMENTS :
1)According to the sponsor, the California Professional
Firefighters, if an employer or its insurer denies a workers'
compensation claim, case law requires a non-industrial health
program that is otherwise available to the employee to provide
coverage. The law allows that health plan to file a lien to
recover its costs "to the extent of benefits paid" in the
event the injury is later determined to be work-related.
However, the amount the health plan may have paid in treatment
may be greater than the OMFS, and thus the health plan faces a
loss of the difference between what it paid, and what the OMFS
covers. The bill is intended to close this "loophole."
2)Proponents point to the scenario where there has been a denial
of the workers' compensation claim, and the denial is
overturned after being litigated, which may be resolved in
fairly short order, or may takes years to resolve, (as in a
case that resulted in over $1 million in treatment costs for a
firefighter who died of cancer) , and it is clear that the
Labor Code section being amended by the bill applies only
where there has been an adjudication of a denied claim, and
the adjudication results in a finding that the claim was
valid.
Analysis Prepared by : Mark Rakich / INS. / (916) 319-2086
SB 457
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FN: 0002267