BILL ANALYSIS �
Senate Committee on Labor and Industrial Relations
Senator Ben Hueso, Chair
Date of Hearing: June 11, 2014 2013-2014 Regular
Session
Consultant: Gideon L. Baum Fiscal:Yes
Urgency: No
Bill No: AB 2732
Author: Assembly Committee on Insurance
As Introduced/Amended: March 28, 2014
SUBJECT
Workers' compensation.
KEY ISSUE
Should the Legislature make technical and clarifying changes to
the 2012 workers' compensation reform?
ANALYSIS
Existing law establishes a workers' compensation system that
provides benefits to an employee who suffers from an injury or
illness that arises out of and in the course of employment,
irrespective of fault. This system requires all employers to
secure payment of benefits by either securing the consent of the
Department of Industrial Relations to self-insure or by securing
insurance against liability from an insurance company duly
authorized by the state.
Existing law permits the Workers' Compensation Appeals Board
(WCAB) to determine and allow liens against any sum to be paid
as compensation for a variety of services or expenses.
Allowable liens include a reasonable fee for legal services, the
reasonable expense incurred in the provision of medical
services, and the reasonable value of living expenses of an
injured employee subsequent to the injury. (Labor Code �4903)
Existing law prohibits an order or award for payment of a lien
to an assignee, unless the person who provided the services has
ceased doing business in the capacity held at the time the
expenses were incurred and has assigned all right, title, and
interests in the remaining accounts receivable to the assignee.
(Labor Code �4903.8)
Existing law provides that, in the event over a dispute over a
utilization review decision on or after July 1, 2014, all
disputes must be submitted for Independent Medical Review (IMR).
IMR is requested through a one-page form. (Labor Code
��4610.5)
Existing law defines a "medical-legal expense" as any costs and
expenses incurred by or on behalf of any party, the
administrative director, or the board, for the purpose of
proving of disproving a contested claim. This can include
X-rays, laboratory fees, other diagnostic tests, medical
reports, medical records, medical testimony, and, as needed,
interpreter's fees by a certified interpreter. As per the rules
of the WCAB, the employee, or the dependents of a deceased
employee, must be reimbursed for his or her medical-legal
expenses and reasonably, actually, and necessarily incurred.
(Labor Code ��4620 & 4621)
Existing law provides that a lien claimant must entitled to an
order or award for reimbursement of a lien filing fee or lien
activation fee, together with interest at the rate allowed on
civil judgments under specified circumstances. (Labor Code
�4903.7)
Existing law requires that any order or award for payment of a
lien must be made for payment only to the person who was
entitled to payment for the expenses at the time the expenses
were incurred. (Labor Code �4903.8)
Existing law requires the administrative director of the
Division of Workers' Compensation (DWC) to create a priority
conference calendar for cases requiring an expedited hearing if
one of the issues involved is a medical treatment appointment or
medical legal examination.
(Labor Code �5502)
This bill would:
1) Permit the IMR request to be on a form up to two pages
Hearing Date: June 11, 2014 AB 2732
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Senate Committee on Labor and Industrial Relations
long;
2) Explicitly allow medical-legal expenses to be pursued
through the WCAB lien process;
3) Clarify that an employer must reimburse a lien claimant
for a lien filing fee or lien activation fee, together with
interest at the rate allowed on civil judgments under
specified circumstances;
4) Clarifies that the prohibition against lien assignment
only applies to lien filed prior to January 1, 2013 and
states it is declarative of existing law;
5) Strikes disputes regarding a medical treatment
appointment or medical legal examination as grounds for an
expedited hearing; and
6) Makes technical and non-substantive changes to existing
law.
COMMENTS
1. Need for this bill?
AB 2732 is designed to adopt technical and conforming changes
to the statutes that were part of the 2012 workers'
compensation reform package, SB 863 (DeLeon), Statutes of
2012, Chapter 363. These amendments correct some vague
drafting and erroneous cross-references, or update provisions
that have been rendered obsolete or otherwise require changes
due to implementation issues.
Specifically, AB 2732 addresses the following issues:
1) Independent Medical Review (IMR): Current law requires
that the request for be included on a physical, one page
form. As IMR has been implemented, the requirement of a
single physical page has been a source of frustration for
stakeholders, as a request can be sent on the wrong form or
an incomplete form, creating unnecessary delays. AB 2732
would allow for a form of up to two pages, which could
include a digital form.
2) Liens . SB 863, Statutes 2012, Chapter 363, among a
Hearing Date: June 11, 2014 AB 2732
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Senate Committee on Labor and Industrial Relations
broad range of reforms to the workers' compensation system,
restricted the assignability of medical liens. Evidence
suggested that a cottage industry had developed whereby
questionable services or billings would be encouraged by
third parties, who would immediately purchase the lien
rights from the providers of these services. In response
to these practices, the Legislature adopted limitations on
the assignability of medical liens to discourage the
practices that were considered costly to employers with
little if any benefits to injured workers. However, the
bill did not clearly state that the new limitations were to
apply only to liens assigned after the bill's effective
date. The bill clarifies this uncertainty.
3) Expedited Hearings: In the drafting of SB 863, medical
treatment appointments were inadvertently adding to a list
of legal issues that could be scheduled for expedited
hearings. That this inclusion was accidental is shown by
the erroneous numbering sequence that the item had in this
section, which has since corrected in a code maintenance
bill from 2013. The deletion addresses this error.
4) Clean-Up: AB 2732 also makes conforming and technical
changes to correct outdated references in Labor Code.
2. Proponent Arguments :
None on file.
3. Opponent Arguments :
None on file.
4. Prior Legislation :
SB 258 (Lieu) of 2013 contained many of the same provisions as
this bill. SB 258 was vetoed by Governor Brown due to
provisions not included in this bill regarding the Workers'
Compensation Appeals Board.
SUPPORT
Hearing Date: June 11, 2014 AB 2732
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Senate Committee on Labor and Industrial Relations
None on file.
OPPOSITION
None on file.
Hearing Date: June 11, 2014 AB 2732
Consultant: Gideon L. Baum Page 5
Senate Committee on Labor and Industrial Relations