Gino DiCaro

Employer-Backed Workers’ Compensation Bills Suffer Major Setback

By Gino DiCaro, VP, Communications

Capitol Update, May 2, 2003 Share this on FacebookTweet thisEmail this to a friend

Nine workers’ compensation bills backed by employers and authored by Republicans were scheduled to be heard in the Assembly Insurance Committee on April 30th. The committee approved two of the bills, refused passage of four, and three were withdrawn by the author.

Approved was AB 1483 by Assemblyman Keith Richman (R-Northridge) that requires physicians who treat and evaluate injured workers to be certified by the Industrial Medical Council. The Administrative Director (AD) would be required to contract with a vendor to develop physician utilization management, billing, quality of care, and outcome measurement data. The bill also requires mandatory management billing quality of care and outcome measurement data. Mandatory training would be required on the medical coordination of workers’ compensation claims.

AB 1579 by Assemblyman David Cogdill (R-Modesto) was also approved by the committee. It prohibits a physician from referring a workers’ compensation claimant for outpatient surgery services if the physician or his or her immediate family has a financial interest in the referral, subject to criminal sanctions. While the bills would not provide any significant reforms for employers, they keep Republicans and employers at the table.

On the other hand, major reform legislation backed by employers failed to pass out of committee on partisan votes.

AB 1480 (Richman) requires physicians to submit additional reports to employers of any significant changes in the employees’ condition or treatment plan. An employer would only be required to pay interest or increased compensation for contested delayed or denied payment if the provider objects in writing to the employer's written explanation for contested or denied billing within 45 days. A provider would have to file a lien within 45 days of receipt of payment, notice or explanation of review.

AB 1481 (Richman) requires physicians to use established medical guidelines when evaluating an injured worker. After January 1, 2004, all evaluations and reports prepared by a physician with regard to the degree of permanent whole body impairment that an employee has sustained be based upon demonstrable medical evidence that indicates how the impairment restricts the function of the body or its members, organs or psyche. The bill would prohibit disability ratings from being based on evaluations and reports that do not follow established medical guidelines, and would provide that failure by a physician to comply with these provisions may result in the physician not getting paid. Injured workers would not be able to collect a disability award exceeding 100%. It would prohibit the payment of permanent disability and death benefits unless the industrial injury has contributed at least 10% to the cause of the death or disability when compared to all other causes of injury in total.

AB 1482 (Richman) requires the AD of the Division of Workers’ Compensation to revise the Official Medical Fee Schedule to include an outpatient facility fee schedule, pharmacy services, ambulance services, and home health care services. The AD would have to use the resource-base relative value scale (RBRVS) and medical providers would be prohibited from balance billing above the fee schedule.

AB 431 (Dennis Mountjoy, D-Monrovia) tightens up the liberal construction rule as it applies to claims eligibility for compensation.

Assemblyman Robert Dutton (R-Rancho Cucamonga) pulled his bills off file to be heard at another time.
AB 595 authorizes the AD to develop durable medical equipment fee schedule.

AB 596 requires the pharmaceutical fee schedule to apply to all medicines and medical supplies dispensed or prescribed regardless of whether these medicines or medical supplies are dispensed or prescribed by a physician, pharmacist or by another source.

AB 597 requires the AD to adopt an outpatient surgery facility fee schedule on or before July 1, 2004.

However, the committee passed out four bills authored by Democrats including two by the committee chair, Assemblyman Juan Vargas (D-San Diego).

AB 227 (Vargas) requires the AD to adopt an interim outpatient surgery facility fee schedule.
AB 1578 (Vargas) increases the fine from $50,000 to $150,000 for committing workers’ compensation insurance fraud.

AB 1262 (Barbara Matthews, D-Tracy) requires insurer claim adjusters to be certified and requires a program to be developed to provide the training.

Several workers’ compensations bills have cleared policy committees in both houses including at least one Republican-authored bill. But the bills that passed still fall very short of addressing the major cost drivers in workers’ compensation. Large and small businesses are putting pressure on legislators to make immediate and meaningful reforms in the system to rein in escalating costs.
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