BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
AB 2616 (Skinner) - Workers' Compensation: Hospital Employers:
Compensation
Amended: April 29, 2014 Policy Vote: L&IR 5-0
Urgency: No Mandate: No
Hearing Date: August 14, 2014
Consultant: Robert Ingenito
SUSPENSE FILE. AS AMENDED.
Bill Summary: AB 2616 would provide that, with respect to
hospital employees who provide direct patient care in an acute
care hospital, the term "injury" includes methicillin-resistant
Staphylococcus aureus (MRSA) that develops or manifests itself
during the period of the person's employment with the hospital.
Fiscal Impact (as approved on August 14, 2014):
This bill would result in increased costs related to
disability benefits for impacted state health care
employees. The costs would be a minimum of $33,000 to
$65,000 per industrial disability benefit (up to one year),
and up to $53,000 per additional temporary disability
benefit (up to one additional year). Thus, costs could
range from $33,000 to $118,000 per individual.
Potentially major benefit and medical costs if a MSRA
injury results in permanent disability.
Background: MRSA is a bacterium responsible for
difficult-to-treat infections. MRSA are by definition strains
of Staphylococcus aureus that are resistant to a large group of
antibiotics, including penicillins and cephalosporins.
Originally, MRSA was confined to hospitals and long-term care
facilities. Many of these hospital-associated MRSA infections
caused very serious complications and were resistant to all oral
antibiotics. Currently, individuals at risk for MRSA include
workers in a healthcare setting, individuals visiting patients
in a healthcare setting, athletic facilities, dormitories,
military barracks, correctional facilities, and daycare centers.
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The general rule in workers' compensation is that the employee
bears the burden of proving that the injury or condition is
work-related. Currently, only public safety employees, such as
police and firefighters, can receive the benefit of presumptions
that injuries or conditions are job-related. The two exceptions
to the "only public employees" and "only safety officers" rules
for presumptions involve somewhat unique circumstances. First, a
small number of firefighters employed by a private contractor
due were granted the same status with respect to presumptions
afforded to public employee firefighters. The second exception
is for certain public employee lifeguards, and that presumption
is limited to skin cancer.
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Proposed Law: This bill would extend the presumption that MRSA
infections are presumed to be job-related to certain hospital
employees in an acute care hospital. Specifically, the bill
would do the following:
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.
Specifies that the presumption applies only to hospital
employees who provide direct patient care at a general
acute care hospital.
Provides that this infection shall be presumed to arise
out of and in the course of employment.
Extends this presumption for a period of 60 days after
the employee has terminated employment with the hospital.
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.
Related Legislation: AB 375 (Skinner) of 2011, which proposed
the term "injury" included a blood borne infectious disease, as
well as MSRA, failed passage on the Senate Floor.
Staff Comments: Under this bill, if a hospital employee who
provides direct patient care in an acute care hospital develops
a MRSA skin infection, it is presumed the injury arose out of
and in the course of employment and is therefore, compensable.
The state has general acute care hospitals operated by the
California Department of Corrections and Rehabilitation and the
Department of Development Services (4).
Most state employees receive industrial disability leave, which
is full gross pay less the amount deducted for taxes for the
first month and two-thirds of full gross pay thereafter. There
is no maximum on industrial disability leave and can be received
for up to one year. State hospital employees are eligible to
supplement their industrial disability leave benefits with any
paid leave credits they have to bring the amount up to their
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regular earnings amount. After one year, the state employee is
eligible for up to one year of temporary disability benefits.
Non state hospital employees may receive temporary disability
benefits for up to 104 weeks. In 2014, a year of workers'
compensation temporary disability benefits for an employee may
be up to $55,881, increasing to $57,371 ($1,103.29 x 52 weeks)
in 2015.
Staff notes there are potentially thousands of state employees
who provide direct patient care in settings other than acute
care hospitals. For example, in 2009, of the 3,891registered
nurses in Bargaining Unit 17, roughly two-thirds are "level of
care" nurses providing or supervising direct patient care in
mental health hospitals, youth and adult correctional
institutions, developmental centers, and the state's veterans'
homes.
Most persons recover from job injuries but some continue to have
medical problems. Permanent disability is any lasting disability
that results in a reduced earning capacity after maximum medical
improvement is reached. If a person's injury or illness results
in permanent disability the person is entitled to permanent
disability benefits, even if he or she is able to return to
work. Permanent disability benefits are limited. If a person
loses income, permanent disability benefits may not cover all
the income lost and if the person experiences losses unrelated
to ability to work, permanent disability benefits will not cover
those losses.
A doctor makes the determination if an injury or illness caused
permanent disability. The doctor also determines if any of the
disability was caused by something other than the work injury
(for example, a previous injury or other condition) in a process
known as apportionment. The disability is stated as a
percentage which equals a specific dollar amount, depending on
the date of the injury and the person's average weekly wages at
the time of injury. If the person was injured on or after Jan.
1, 2005, the permanent disability award may be increased or
decreased by 15 percent, depending on whether the person worked
for an employer with 50 or more employees and the employer
offers a salary continuation program and the person accepts or
declines regular, alternative or modified work. Permanent
disability benefits are normally paid when temporary disability
benefits end and a doctor has indicated the person has some
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permanent effects from a workplace injury. A person with a
disability rating of less than 70 percent would receive $270
weekly. A person with a disability rating of more than 70
percent would receive $290 weekly.
In addition to temporary and permanent disability benefits, a
person could incur medical costs. According to one estimate,
the cost to treat a MRSA infection can range from $1,000 to
$7,500 or more if extensive hospitalization is required.
This bill may result in increased Medi-Cal costs in non-contract
hospitals, because the allowable costs of hospital cost reports
include workers' compensation expenditures. The precise amount
is unknown; costs would be spread across all payors.
This bill could increase costs to the University of California
which operates five hospitals. There are an estimated 385
non-state acute care hospitals and 140,000 full time employees
subject to the bill. In general, the cost for a state hospital
employee and a non state hospital employee with a MRSA
presumption would be in the first year cost difference between
industrial disability leave benefits and temporary disability
benefits. The state and UC would likely appropriate additional
funding for increased workers' compensation costs and private
employers would likely experience higher workers' compensation
premiums.
Author's amendments prevent MRSA presumptions from
apportionment.