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The California Space Authority

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The California Space Authority

    The California Space Authority

    Bill Analysis

    As of Introduced Version of the Bill, November 18, 2003

ABX4- 1 (Maldonado)

    RE: Workers’ Compensation

SUMMARY

    A comprehensive workers’ compensation package that enhances benefits for the

    most severely injured while bringing under control the cost drivers that have

    burdened businesses with increasingly high premiums.

CURRENT LAW

    ? Establishes a workers’ compensation system to compensation an

    employee for injured sustained in the course of employment.

    ? Provides the Division of Workers’ Compensation is under the control of the

    Administrative Director and, as per AB 227 and SB 228 passed earlier this

    year, charges it to perform various functions and duties in connection with

    the provisions of medical services under the workers’ compensation

    program.

    ? Establishes the Industrial Medicine Fund and requires that specific fees be

    deposited into it.

    ? Authorizes collective bargaining agreements within construction and

    construction maintenance fields to establish a dispute resolution process

    in lieu of a hearing before the Workers’ Compensation Appeals Board.

    ? Defines acupuncturists and chiropractic practitioners as physicians for the

    purposes of the workers’ compensation program.

    ? Authorizes a process by which an individual employer may self-insure.

    ? Allows medical evaluations performed as a result of a dispute over the

    compensability of an injury to consider issues beyond the mere injury.

    ? Creates a presumption in certain circumstances surrounding disputes

    between employers and employees regarding the compensability of an

    injury that the treating physician on an employee, who has been

    predesignated by the employee, is correct.

    ? Requires an employer to provide to an employee who is injured on the job

    medical treatment that is reasonably required to cure or relieve from the

    effects of the injury.

    ? Authorizes an employee to be treated by a physician or at a facility of his

    own choice within a reasonable distance.

    ? Establishes certification requirements for health care organizations that

    offer health coverage for workers’ compensation.

    ? Requires an employer to allow an employee to change his physician and

    establishes various obligations of an employee and employer once a

    physician is selected.

? Requires the adoption of a medical treatment utilization schedule by

    December 1, 2004.

    ? Imposes disclosure and related requirements on contracting agents who

    sell, lease, assign, transfer, or convey a list of contracting providers and

    their contracting preferred reimbursement rates to other payors or

    contracting agents.

    ? Limits the amount of fees payable to medical providers under contracts

    with the employee’s health benefit program.

    ? Provides for certain methods of determining workers’ compensation

    benefits payable to a worker or his dependents for purposes of temporary

    disability, permanent total disability, permanent partial disability and in

    cases of death.

    ? Provides that if an injury causes permanent partial disability and the

    injured employee does not return to work for the employer within 60 days

    of the termination of the temporary disability indemnity payments, the

    injured employee shall receive a supplemental job displacement benefit. ? Authorizes the administrative director to update a schedule, from time to

    time, for the determination of the percentage of permanent disabilities in

    accordance with specified provisions.

    ? Provides that when determining the percentages of permanent disability,

    account shall be taken of various factors, including the nature of the

    physical injury or disfigurement and with consideration being given to the

    diminished ability of the injured employee to compete in an open labor

    market.

    ? Prescribes which party must bear the burden of proof in various aspects of

    workers’ compensation proceedings.

    ? Provides that when payment has been unreasonably delayed or refused,

    the full amount of the award shall be increased by 10% and existing law

    requires the appeals board to determine the question of delay and

    reasonableness and to award reasonable attorney’s fees incurred in

    enforcing the payment of compensation awarded.

    THIS BILL WOULD

    ? Make technical numbering changes to various provisions relative to

    procedures followed by physicians when evaluating the existence and

    extent of permanent impairment and limitations.

    ? Eliminate the Industrial Medicine Fund and require that specified fees be

    deposited, instead, into the Workers’ Compensation Administration

    Revolving Fund.

    ? Expand the option of using dispute resolution in lieu of a hearing before

    the Workers’ Compensation Appeals Board beyond merely the

    construction and construction maintenance fields.

    ? Provide that an injury sustained by a person while incarcerated or

    imprisoned in a county jail or the state prison is not compensable. ? Prohibit an acupuncturist or chiropractic practitioner from having the

    authority to determine disability for specified purposes.

? Establish procedures that would apply to private self-insurance groups

    upon certification by the Insurance Commissioner.

    ? Limits medical evaluations performed as a result of a dispute over the

    compensability of an injury to the injury only.

    ? Repeals the presumption that an employees’ predesignated physician is

    correct in matters of a dispute between an employer and employee

    relative to compensability of an injury.

    ? Provide for a definition of medical treatment that is reasonably required to

    cure or relieve from the effects of an injury.

    ? Provide that an employer must agree to a employees’ determination to be

    treated by a physician or at a facility of his own choice. ? Revise the certification requirement associated with obtaining health

    coverage for workers’ compensation from a health care organization.

    ? Repeal the provisions that require an employer, upon the request of an

    employee, to tender the employee one change of physician, that

    authorizes the employer to petition the administrative director for a change

    of physician, and that establishes various obligations of an employee and

    employer once a physician is selected.

    ? Limit the number of chiropractic and physical therapy visits by an

    employee per industrial injury.

    ? Repeals the provisions that impose disclosure requirements in contracts

    that provide for the payment of preferred reimbursement rates by payors

    for health care services rendered by health care providers. ? Establishes the Independent Medical Review System to resolve disputes

    involving any disputed health care service. The bill would authorize the

    Department of Industrial Relations to contract with one or more

    independent medical review organization to conduct reviews for this

    purpose. The cost of the independent medical review would be borne by

    the employer.

    ? Repeals the limitation on fees payable to medical providers under

    contracts with an employee’s health benefit program.

    ? Provide extended benefits in the case of an injury that causes permanent

    disability that would become operative upon a declaration from the

    Secretary of Labor and Workforce Development that certain conditions

    exist.

    ? Revise the exceptions provided in existing law relative to the receipt of

    supplemental job displacement benefits for an employee who fails to

    return to work after sustaining a permanent partial disability injury. ? Require, rather than allow, the administrative director to prepare, adopt,

    and amend the schedule for the determination of percentage of permanent

    disability.

    ? Require that the nature of a physical injury or disfigurement be established

    by a preponderance of medical evidence based upon objective findings

    and would require that consideration be given to the injured employee’s

    adaptability to perform a given job. The bill would also require that the

    physical injury or disfigurement be the sole factor to be considered under

    certain circumstances.

    ? Provide that the burden of proof for apportionment regarding permanent

    disability shall rest on the defendant and this bill would establish the

    standard of proof. This bill would also limit the number of permanent

    disability awards and it would prohibit the payment of permanent disability

    and death benefits unless the industrial injury is the predominant cause of

    the disability or death when compared to all causes of injury in total.

    ? Repeal the provisions establishing a 10% penalty for unreasonably delay

    or refusal to pay an order and instead prescribe procedures that would

    require a payment of up to 15% or $500, whichever is greater, for such

    unreasonable delay.

COMMENTS

    Not only are workers’ compensation rates in California the highest in the nation,

    but benefits to truly injured workers are markedly inferior considering the high

    costs associated with the program. We must bring affordability to the system so

    that costs are at or below the average rate and that injured workers receive the

    benefits they need. This legislation seeks to reduce the average cost per $100 of

    payroll from $5.85 to $2.46, an estimated $11.3 billion reduction in overall costs

    to California’s employers.

Costs associated with the workers’ compensation system can be equally divided

    into two cost centers: 1) Indemnity payments to compensate workers for lost

    wages and disabilities and 2) medical treatment.

1) Indemnity Costs

    California’s number of disability claims is almost 3 times the countrywide

    rate in 2002 California had 1,221 claims per 100,000 workers, while the

    countrywide average was only 434. The cost of permanent disability per

    injured worker in California is also three times the average of that in other

    states.

    2) Medical Costs

    California has developed two duplicative health care systems, each with

    their own administrative costs and each with their own set of rules.

    Employers who opt to provide health care to their workers are burdened

    with the expense of this duplication and employees find the dual systems

    confusing. Medical costs have been one of the fastest growing factors in

    the workers’ compensation system in recent years. Some injuries treated

    in the workers’ compensation system are up to five times more expensive

    than the same injury treated in the group health system.

KNOWN SUPPORTERS

KNOWN OPPONENTS

RECOMMENDATION BY CSA STAFF

    Support

CURRENT STATUS

    Pending action in the Assembly Insurance Committee

Prepared by:

    Eric A. Daniels

    Director, State and Local Governmental Relations 916-551-1543

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