BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  SB 863
                                                                  Page  1

          Date of Hearing:   August 17, 2011

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                      SB 863 (Lieu) - As Amended:  June 6, 2011 

          Policy Committee:                              InsuranceVote:11 
          - 0 

          Urgency:     No                   State Mandated Local Program: 
          No     Reimbursable:              

           SUMMARY  

          This bill adopts reforms to the lien procedures in the workers' 
          compensation system.  Specifically, this bill:   

          1)Requires lien claimants to file their liens in writing with 
            the Workers' Compensation Appeals Board (WCAB), accompanied by 
            a statement or itemized voucher supporting the lien and 
            justifying the right to reimbursement.

          2)Requires the lien claimant to provide notice to all interested 
            parties.

          3)Prohibits filing a lien after three years from the date the 
            services were provided for services provided prior to July 1, 
            2012, and 18 months from the date the services were provided 
            for services provided on or after July 1, 2012.

          4)Provides that the limitation periods noted above apply to any 
            lien filed on or after the effective date of the bill, 
            regardless of the date the services were provided.

           FISCAL EFFECT  

          A three-year statute of limitations should reduce overall system 
          costs by $44 million per year assuming a five percent reduction 
          in litigation and a general decrease in medical costs.  The 
          state's share of that savings would be approximately $2 million 
          per year �General Fund and various special funds]. 

           COMMENTS  









                                                                  SB 863
                                                                  Page  2

           1)Purpose  . According to the author, this bill seeks to adopt 
            several of the less controversial recommendations made by the 
            Commission on Health and Safety and Workers' Compensation 
            (CHSWC) in its January, 2011 report on workers' compensation 
            liens.  Specifically, the bill would adopt a statute of 
            limitations that would provide certainty to employers, and 
            prevent the filing of liens on old billings.  The bill also 
            requires the lien claimant to actually file the lien, and do 
            so in writing, with accompanying documentation, eliminating 
            the uncertainty of implied liens.
           
          2)Background  . Within the workers' compensation system, liens 
            involving medical services or benefits are direct claims 
            against the defendant (either the employer or the insurer of 
            the employer) for medical benefits or services provided by the 
            lien claimant (the injured worker) which the lien claimant 
            thinks the employer was required to provide due to the 
            worker's industrial injury.  The lien claimant may not pursue 
            the lien against an injured worker unless the injury is ruled 
            to be non-industrial, and therefore outside the workers' 
            compensation system.  Liens are a process for contesting the 
            employer's determination (or the determination of the 
            employer's insurer) of the amount payable for medical goods or 
            services. 


           Analysis Prepared by  :    Julie Salley-Gray / APPR. / (916) 
          319-2081