SB 899 (for injuries occurring after 4/19/04)
Senate Bill 899 was enacted into law on April 19, 2004. The following is a summary of some of the important changes in the law resulting from this bill.
Pre-Designation of Physician
Any employee who is covered by a group health plan is allowed to pre-designate a treating physician (MD only) of his or her choice. The doctor must have previously been the worker’s primary care physician, and must agree to be pre-designated. A worker can begin treatment immediately after the injury with a pre-designated doctor. This section of the law expires in three years. The maximum number of employees who may pre-designate a treating physician at any one time in the state is 7 percent.
Claim Form/Immediate Medical Treatment
Employers must authorize medical treatment within 24 hours after an employee files a claim form, until the claim is accepted or rejected, up to a maximum of $10,000.
Medical Treatment if no Pre-Designation – Medical Provider Network (MPN)
As of Jan. 1, 2005, the law provides for indefinite control of treatment by an employer when it has set up an approved network of medical providers. There will be no free choice of doctor because an injured worker may only select an alternative doctor from within the network. If there is no approved network of medical providers, then the law provides for a 30-day period of treatment control by the employer.
Medical Disputes in Network
Employee may seek the opinion of two additional physicians within the network, if treatment is denied by the first physician. If disputes still exist, the employee may request an Independent Medical Review (IMR) from the Administrative Director (AD).
Repeal of Treating Physician’ Presumption of Correctness
The “presumption of correctness” for a treating physician was totally repealed for all cases regardless of the date of injury.
Treatment: “Cure and Relieve”
The definition of “cure and relieve” has been amended to mean treatment consistent with utilization guidelines adopted by the legislature last year. This will result in an increase in delays and denials of recommended medical treatment. The law now specifically limits the number of physical therapy, chiropractic care and acupuncture visits to a maximum of 24 each, for any injury that occurs after January 1, 2004.
Permanent Disability, Injury AOE-COE, and other Medical-Legal Disputes
Employees go through a revised medical dispute resolution process (AME/QME process). The process differs if an attorney represents the worker. If represented by an attorney, then the employee and the employer can agree to an Agreed Medical Examiner to resolve disputes. If the employer and employee cannot agree on an AME, then the Administrative Director will provide a panel of three Qualified Medical Examiners. Each side may strike one panelist, and the remaining doctor will make the determination.
Employees not represented by an attorney must pick from a random panel of three physicians. Watch out! If an employee does not choose a doctor from the panel within 10 days, then the employer picks the doctor. No other doctor’s report can be obtained, even if an attorney is hired later, limiting an injured worker’s’ right to obtain benefits.
Cap on Temporary Disability (TD) Benefits
The law now places a 2-year cap on TD benefits from the first date of payment, from most injuries on or after April 19, 2004. There are a few exceptions to this rule in the rare circumstances that a worker has one of a few specified injuries, such as an amputation or a severe burn. In those cases, temporary disability benefits will be limited to a total of 240 weeks, and even then are only payable within the first five years after the injury date.
Permanent Disability (PD) Schedule
The existing schedule for injuries after Jan. 1, 2005, or for injuries before April 30, 2004, without a report indicating the existence of permanent disability before 2005, has been revised. The new schedule incorporates the 5th Edition of the American Medical Association (AMA) Guidelines and empirical wage loss data from the RAND Institute study. The language pertaining to an employee’s “decreased ability to compete on an open labor market” has been eliminated and replaced with “diminished future earning capacity.” This new schedule will be released near the end of 2004.
Bump-Up/Bump-Down based on Return-to-Work Offer
If your employer has more than 50 employees, the following changes apply: PD benefits increase 15% for injured workers not offered a return-to-work and PD benefits decrease 15% for injured workers who are offered a return-to-work for 12 months. If terminated during those 12 months, the injured worker is entitled to his or her full PD award.
Permanent Disability Increase for Most Severely Disabled
Seven additional weeks per percentage of disability will be paid to those rated above 70%.
Permanent Disability Decrease for Least Severely Disabled
One less week per percentage of disability will be paid to those rated below 15%.
Apportionment of Permanent Disability
Doctors are now required to apportion to causation of permanent disability and injured employees must now disclose previous disabilities upon request. Employers are liable only for the portion of PD caused by the workplace injury. A prior compensable injury is now presumed to exist at the time of a subsequent injury, but that presumption is one that only affects the burden of proof. Total awards may not exceed 100% for any one region of the body.
Vocational Rehabilitation
Vocational rehabilitation is available (until January 2009) for injuries before Jan. 1, 2004. Vocational rehabilitation is abolished for injuries after Jan. 1, 2004, except for limited educational vouchers, significantly reducing return to work assistance through workers’ compensation.
Alternative Dispute Resolutions
Alternative Dispute Resolutions (ADRs) are allowed for all employees covered by a collective bargaining agreement. Attorneys are allowed at all stages of the proceeding.
Labor Code 5814 Penalties
These fines are imposed on employers and insurers that unreasonably delay or deny benefits. The existing penalty structure is substantially amended: Penalties are up to 25% with a $10,000 cap. (This penalty is based on the actual amount unreasonably delayed or denied, rather than the entire class of benefits. For example, the penalty would be imposed on the one late TD payment, rather than all TD benefits.) Late payments to a medical provider would constitute a 5814 penalty if they result in serious harm to the worker (such as not receiving necessary treatment). Employers can “self-correct” errors they discover by making the corrected payment – plus 10% – provided they act before a 5814 complaint was filed. 5814 penalties are now subject to a 2-year statute of limitations, and are presumed resolved when cases are resolved unless specifically noted. In most cases, penalties are greatly reduced.
Retroactivity
SB 899 takes effect immediately. Unless otherwise indicated in the statute, it applies prospectively from the date of enactment – April 19, 2004 – regardless of the date of injury.
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