The Suspense is Killing Me

By: Mark Webb
Mark Webb
Mark Webb

This time of year is always a strange one for followers of California’s sometimes chaotic and other times opaque legislative process. Specifically, May 21st is the deadline for the Senate and Assembly Appropriations Committees to report fiscal bills introduced in the house of origin to their respective floors. The process is a two-tiered one. First, bills are heard on their substance. Then, if the cost of a bill is determined to be $50,000 or more to the General Fund or $150,000 or more to a special fund, the bill meets the criteria for referral to the Suspense File. Bills on the Suspense File will be placed on the agenda for vote only on the May 20 hearings of these committees.

It is on the Suspense File where most of the significant workers’ compensation bills moving this year are currently awaiting their fate. In the Senate, these bills are consequential. Senate Bill 213 (Cortese), which would enact presumptions of compensability for many injuries affecting workers who provide direct patient care in an acute care hospital, has been tagged with a cost in the tens of millions of dollars annually.

Senate Bill 335 (Cortese) shortens the time to investigate a claim from 90 days to 45 days for most injuries and from 90 days to 30 days for injuries that are presumptively compensable. The bill also increases penalties for unreasonably delayed or denied benefits to workers whose claims are subject to presumptions.

The latter amendment would turn the clock back to pre-2004 days in the circumstances in which it would apply. The Senate Appropriations Committee analysis of the bill notes, “the bill’s specified changes would result in higher workers compensation costs for state departments, as the State is a direct employer. The magnitude is unknown, but could minimally be in the hundreds of thousands of dollars annually across state departments.”

The third significant workers’ compensation bill awaiting action on the Suspense File is Senate Bill 788 (Bradford). This bill is the latest iteration of a long-standing effort to prohibit consideration of race, religious creed, color, national origin, age, gender, marital status, sex, sexual identity, sexual orientation, or genetic characteristics to determine the approximate percentage of the permanent disability caused by other factors than the injury for which benefits are being sought. The analysis of this bill stated there could be additional costs to the State based on higher litigation and indemnity costs but could not quantify those costs.

The Assembly Appropriations Committee Suspense File is far less suspenseful. Assembly Bill 404 (Salas) was amended into a benign bill requiring the Division of Workers’ Compensation to review the Medical-Legal Fee Schedule (MLFS) at least every two years to see if inflation adjustments are warranted. Assembly Bill 1465 (Reyes), which only recently created cardiac episodes for many in the payer and vendor communities by creating a state-run Medical Provider Network (MPN), now requests the Commission on Health and Safety and Workers’ Compensation (CHSWC) to study access to medical treatment. The Appropriations Committee staff found the $300,000 one-time expense of contracting for the study was sufficient to shuffle the bill off to the Suspense File.

So there you have it. By the end of the week, most of the major 2021 workers’ compensation legislation may be held in Appropriations Committees. It is also possible that some or all of these measures will be on their way to their respective floors. One thing is for certain – the Legislature does not recess until September 10. While on May 21, many may be breathing a sigh of relief, it is still way too early to relax.


Note: The opinions expressed herein may or may not be those of Workers’ Comp Executive. Mark Webb is a former Arizona insurance regulator, insurance company chief compliance officer, and is an expert in corporate governance, risk and compliance. He is the owner of Prop 23 Advisors.