Wednesday, August 8, 2012

CA Reform Can't Deliver ANY Savings Now

The suspense is killing me!

In 23 calendar days the California Legislature adjourns and presently there are three workers' compensation bills that have been determined to have "significant fiscal impact", meaning a projected fiscal impact of $50,000 or more on the General Fund or $150,000 or more on any other account or fund, and are sent to the appropriations suspense file. Bills can only be moved off the suspense file by a vote of the committee.

AB 808, by Nancy Skinner, D-Berkeley, could cost the state up to $108,000 for claims that are approved when a hospital worker contracts MRSA, according to the fiscal analysis. The state, which operates seven acute-care hospitals, could incur additional costs if a MRSA injury results in permanent disability, the analysis says.

AB 2493, by Roger Hernandez, D-San Gabriel Valley, authorizing the Department of Industrial Relations to certify interpreters and maintain a list of interpreters who can serve at administrative hearings and medical examinations, would cost up to $190,000 from the Workers’ Compensation Administrative Revolving Fund in fiscal years 2012 and 2013, according to the fiscal analysis. Charging interpreters certification fees could offset up to $120,000 a year, but the bill was still sent to the suspense file.

Also placed on the suspense file was AB 1687, by Paul Fong, D-Cupertino, which would authorize attorney fees when an injured worker with an award of future medical care hires an attorney who successfully appeals a utilization review determination to deny or modify treatment. The fiscal analysis says the bill would lead to an “unknown, likely significant increase annually in state workers’ compensation costs" based on 2011 stats reflecting that there were 206,000 utilization review decisions on 43,000 open cases, of which 34,500 were denied and 10,000 were modified.

In June AB 1145, by Gil Cedillo, D-Los Angeles, was added to the suspense file based on the potential to significantly increase benefit payments. The measure would make a $6,000 vocational retraining voucher available when the treating physician determines the worker is permanent and stationary and there will be some degree of permanent impairment.

Three measures by Sen. Ted Lieu, D-Torrance, are also currently in the Assembly inactive file, including:
  • SB 777 would designate the director of the DIR as the public official who determines the reasonableness of requests to share data among state agencies during investigations into whether employers are carrying workers’ compensation insurance.
  • SB 863 would prohibit filing a lien after three years from the date services were provided prior to July 1, 2012, and 18 months from the date services were provided after July 1.
  • SB 959 would eliminate the Labor Code section allowing hospitals to bill separately for the cost of equipment used in spinal fusion procedures.
In the meantime the California Workers’ Compensation Insurance Rating Bureau (WCIRB) believes advisory pure premium rates should be increased 7.63%, effective Jan. 1, but the organization says it will be ready to amend its filing if Gov. Jerry Brown signs a workers’ compensation reform bill this year.

While no legislation has been introduced to date, sources have told WorkCompCentral there is a possibility legislation could be ready as early as next week. If a reform bill is enacted, the next question is how much data the Rating Bureau will have available to accurately predict the impact because implementing new statutes often requires regulatory change, and that can take quite a bit of time.

So whatever does get served up to the Legislature and ultimately to the Governor's desk CAN'T deliver any cost savings, if any, for several years regardless of what the current Administration projects.

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