BILL ANALYSIS �
AB 2616
Page 1
Date of Hearing: April 23, 2014
ASSEMBLY COMMITTEE ON INSURANCE
Henry T. Perea, Chair
AB 2616 (Skinner) - As Amended: April 3, 2014
SUBJECT : Workers' compensation: presumptions
SUMMARY : Extends to certain hospital employees the presumption
that methicillin-resistant Staphylococcus aureus (MRSA)
infections are presumed to be job related. Specifically, this
bill :
1)Contains findings and declarations concerning the incidence of
MRSA in health care settings that impact nurses.
2)Specifies that the term "injury" as used in the workers'
compensation law with respect to specified hospital employees
shall include MRSA that develops or manifests itself during a
person's employment at a hospital.
3)Provides that this infection shall be presumed to arise out of
and in the course of employment.
4)Extends this presumption for a period of 60 days after the
employee has terminated employment with the hospital.
5)Allows the employer to dispute the presumption by requiring
the employer to prove by evidence that the disease or
condition is NOT related to employment.
6)Specifies that the presumption applies only to hospital
employees who provide direct patient care at a general acute
care hospital.
EXISTING LAW :
1)Establishes a comprehensive system of workers' compensation
benefits for injuries, including diseases, that arise out of
and in the course of employment. The benefits include full
medical benefits to treat the injury or condition,
indemnification for temporary and permanent disability, and
death benefits.
2)Requires in most cases that the employee prove that the injury
AB 2616
Page 2
or condition underlying the claim arose out of and in the
course of employment.
3)Provides safety officers (specified police, sheriff, and
firefighter employees) with a presumption that certain
injuries or conditions are related to employment. The list of
conditions or injuries for which presumptions apply include
cancer, heart trouble, blood-borne pathogens, hernia,
tuberculosis, as well as MRSA.
FISCAL EFFECT : Undetermined
COMMENTS :
1)Purpose . According to the author, U.S. Department of Labor
data shows that health care is the second fastest growing
sector of the United States economy, employing over 12 million
workers, nearly 80 percent of whom are women. Nurses and
other hospital workers who provide direct patient care are in
constant danger of being exposed to a variety of illnesses by
the nature of their work. Because of the physical nature of
patient care, combined with rising patient acuity, higher
levels of exposure to infectious diseases are occurring. The
author states that MRSA is a work-related contact hazard for
hospital employees. In California, health care acquired
infections at hospitals account for thousands of infections,
some infections leading to death, annually, according to the
Department of Public Health. Although infection control
measures help slow the spread of MRSA, they do not eliminate
this job-related hazard, and the author believes these
employees are entitled that these infections be presumed
related to work.
2)Background on MRSA . MRSA is a staph infection that is
resistant to most antibiotics. Up to 1/3 of the population
may test positive for a staph bacteria, but only a few of
those people will actually suffer noticeable symptoms from the
infection, and antibiotics provide an effective treatment in
those cases. MRSA, which is much less prevalent than common
staph bacteria - it has been estimated that 2% of the
population might test positive for MRSA - cannot be so easily
treated. Of the small percentage of people who might test
positive for MRSA, many will experience no symptoms, and
AB 2616
Page 3
others only minor symptoms. However, especially for people
with weakened immune systems, MRSA can cause extremely
dangerous infections. These are often skin infections, but
this "super-bug" can also cause internal infections.
Amputations and death are possible consequences of severe MRSA
infections.
While it is true, as opponents of the bill point out, that
MRSA can be contracted from sources other than health care
facilities, the Centers for Disease Control data show that 78%
of MRSA cases are from health facility settings. This most
recent data shows an improvement from 2005 data, when 85% of
MRSA cases were connected to health care settings. The
non-health facility cases, termed "community-associated MRSA,"
tend to occur in people who live or work in crowded settings
where there is poor hygiene, such as prisons or locker rooms.
People with weak immune systems, such as intravenous drug
users, and people who live in settings with poor hygiene, are
also more likely to become infected with community-associated
MRSA.
3)Background on presumptions - who benefits from them . Under
current law, the only employees (subject to two exceptions
discussed below) who receive the benefit of presumptions that
injuries or conditions are job-related are police and
firefighters - public safety employees. This bill would
extend this special benefit to private sector employees, and
to non-safety employees. The bill is therefore extending the
concept of presumptions in two novel respects.
The two exceptions to the "only public employees" and "only
safety officers" rules for presumptions involve somewhat
unique circumstances. A small number of firefighters who
happen to be employed by a private contractor due to a quirk
in federal law were granted the same status with respect to
presumptions afforded public employee firefighters. The other
exception is for certain public employee lifeguards, and that
presumption is limited to skin cancer.
Proponents argue that nurses and other hospital employees who
provide direct patient care, while not necessarily placing
their lives on the line like safety officers, are nonetheless
front line workers protecting the public health under
challenging and dangerous conditions. Opponents of the bill
strongly object to the expansion of presumptions to private
AB 2616
Page 4
sector employees.
4)Presumptions of compensability -- rationale . The general rule
in workers' compensation is that the employee bears the burden
of proving that the injury or condition is work-related.
However, the law has recognized certain "presumptions" that
shift the burden of proof to the employer to prove that the
injury or conditions is NOT work-related. A presumption has
historically been adopted when employees have had difficulty
proving that the injury or condition at issue is job-related,
while at the same time it is intuitively logical that it is,
in fact, job-related. In this regard, there is substantial
logic to the conclusion that MRSA cases contracted by hospital
employees who provide direct patient care are likely to have
been the result of workplace exposure. This is the case for
several reasons: most MRSA cases do come from hospitals;
hospital employees are not very likely to visit many of the
locations, such as prisons, where community-associated MRSA
tens to occur; and these employees are likely to be relatively
healthy and not suffer compromised immune systems as compared
to the population that typically contracts
community-associated MRSA. On the other hand, proponents have
presented no evidence that nurses and other hospital employees
have had any difficulty pursuing MRSA claims in the workers'
compensation system.
5)Cost implications . Proponents point to data from the Workers'
Compensation Insurance Rating Bureau (WCIRB) indicating that
the workers' compensation system had only 200 cases involving
infections of any sort in 2009, and therefore dispute that the
bill would generate significant new costs for hospitals. It
should be noted that WCIRB data is compiled only from insured
employer data, as reported by insurance companies. Since most
hospitals obtain a certificate of self-insurance, the WCIRB
data may not be reflective of the total number of infection
cases system-wide. Opponents counter that the bill would
likely increase claims that involve community-associated MRSA,
and the hospitals would have little chance to rebut the
presumption. The hospitals note that many health care workers
work at more than one facility, which makes rebutting the
presumption even more difficult. They also argue that, as
hospitals are generally self-insured employers who are
required to maintain reserves on a worst-case scenario basis,
there will be a substantial increase in costs to meet that
requirement.
AB 2616
Page 5
6)MRSA workers' compensation claims . There is very little
published data relating to the incidence of MRSA in the
workers' compensation system. Proponents point to the recent
WCIRB study reflecting 2009 experience. The WCIRB has
reported to Committee staff that the latest data that will be
released shortly will show that for 2010 there were some 1400
infection cases. Again, this information does not
differentiate among infections, and does not include
self-insured. According to the WCIRB, the significant
increase from 200 to 1400 claims is explained by a change in
the reporting requirements. Since WCIRB is primarily looking
at data significant enough to impact insurance rates, prior to
loss year 2010, it did not require reporting of detail for
"all" claims, except in its aggregate data. Claims under
$5000 were not included in the 2009 data, but were included in
the 2010 data.
Committee staff also contacted the California Workers'
Compensation Institute (CWCI), a respected insurance industry
funded research and analysis organization. At the Committee's
request, CWCI drilled down into available claims data
contained in the Insurance Claim Information System (ICIS) to
attempt to get a better handle on the incidence of MRSA in the
workers' compensation system. This data base includes detailed
claims data - more detailed than the aggregate data used by
the WCIRB - from insured employers, but only limited data from
the self-insured sector. CWCI advises that there have been
393 MRSA cases reported to the ICIS since 2000. Of these
cases, 6% were initially rejected, but eventually accepted,
either by the employer changing its decision, or the employee
prevailing in challenging the denial. However, the data base
only captures paid claim data, so it is not possible to
capture the extent of claim denials that were not challenged
by the employee, or claim denials that were upheld after the
employee challenged the denial.
Nonetheless, the data shows that approximately 30% of the claims
were "medical only" - that is, they did not involve any lost
work time. These minor infection claims cost, on average,
$4500. The remaining 70% of claims were more serious,
involved lost work time to at least some degree, and had
average total claim costs, which include medical costs,
temporary and permanent disability costs, and potentially
death benefit costs, of $300,000.
AB 2616
Page 6
7)Prior legislation . AB 664 (Skinner) of 2009 and AB 1994
(Skinner) of 2010 proposed including nurses in the full range
of presumptions afforded safety officers. AB 664 and AB 1994
were held on the Assembly Appropriations Committee suspense
file. AB 375 (Skinner) of 2011 initially was similar to AB
664 and AB 1994, but was narrowed to include fewer of the
presumptions. It failed passage on the Senate Floor. AB 808
(Skinner) of 2012 was identical to AB 2616 in the form
currently before the Insurance Committee, but was held on the
Senate inactive file.
REGISTERED SUPPORT / OPPOSITION :
Support
California Nurses Association (sponsor)
California Professional Firefighters (CPF)
National Nurses United
Opposition
Acclamation Insurance Management Services (AIMS)
AIA
Allied Managed Care (AMC)
ALPHA Fund
American Insurance Association
Association of California Healthcare Districts (ACHD)
California Association of Joint Powers Authority
California Chamber of Commerce
California Coalition on Workers' Compensation
California Hospital Association (CHA)
California State Association of Counties Excess Insurance
Authority
Coalinga Regional Medical Center
Community Medical Centers
County of Los Angeles
Golden Oak Cooperative
Kaiser Permanente
Los Angeles Area Chamber of Commerce
Mercy San Juan Hospital
National Federation of Independent Business
Northbay Healthcare
Pioneers Memorial Healthcare District
Providence Health & Services
AB 2616
Page 7
Republic Indemnity
Safeway
Sedgwick Claims Management
Sutter Delta Medical Center
University of California (University)
Analysis Prepared by : Mark Rakich / INS. / (916) 319-2086