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California Legislative Summary: Workers’ Compensation 2021 Mid-Session

This year we are seeing an uptick in the number of workers’ compensation bills as well as a worrying tendency for legislation that could erode the cost-saving reforms of SB 863. Below are the bills we are tracking for California schools, colleges, municipalities and hospitals workers’ compensation programs this year.

Keenan & Associates is not a law firm and no opinion, suggestion, or recommendation of the firm or its employees shall constitute legal advice. Clients are advised to consult with their own attorney for a determination of their legal rights, responsibilities and liabilities, including the interpretation of any statute or regulation, or its application to the clients’ business activities.

AB 399 – Workers’ Compensation

The most concerning legislation of these bills is AB 399, which would target many of the reforms that help injured workers obtain timely and appropriate care while saving costs. The bill would impose new requirements on medical provider networks (MPNs), requiring a participating provider to participate at each location at which they treat patients for 8 or more hours per week, on a monthly average. The bill would also prohibit authorizations or certifications issued by a carrier, claims administrator, MPN, or utilization review entity from providing instruction or imposing a requirement as to the location of where a treatment takes place or the provider who will perform the treatment. The bill would prohibit a vendor, provider, or group within the medical provider from being preferentially cited on an authorization or certification and would require the administrative director to impose a fine of $10,000 per authorization or certification that preferentially directs care within an MPN. The bill would also establish a new silo of review for medical bills not eligible for Independent Bill Review (IBR). The most potentially costly provision in the bill amends LC 3507.1 to provide that the official medical fee schedule (OMFS) establishes reasonable minimum fees (as opposed to maximum fees, as it currently provides). Minimum fees would be 120% of the estimated aggregate fees under Medicare (100% for pharmacy services). Moreover, the bill would prohibit an insurance carrier, agent or third-party contracting entity from contracting with providers for rates less than the OMFS.

SB 606 – Workplace Safety: Citations: Employer Retaliation

This bill would provide that if the Division of Occupational Safety and Health (DOSH) believes an “egregious employer” has willfully violated an occupational safety or health standard, order, special order or regulation, it must issue a citation for each violation, and each employee exposed to that violation shall be considered a separate violation for purposes of the issuance of fines and penalties. The bill defines an “egregious employer” as one that has demonstrated at least one of the following:

• Intentionally or through conscious voluntary action or inaction made no reasonable effort to eliminate a known violation
• A violation that resulted in worker fatalities, a worksite catastrophe, or a large number of injuries or illnesses
• Violations resulting in persistently high rates of worker injuries or illnesses
• An extensive history of prior violations
• Intentionally disregarding its health and safety responsibilities
• Conduct, taken as a whole, that amounts to clear bad faith in the performance of its health and safety duties
• Committing a large number of violations so as to undermine significantly the effectiveness of any safety and health program that may be in place

The bill would also establish a rebuttable presumption that an employer’s actions are retaliatory if an employer takes adverse action against an employee within 90 days of the employee doing certain things, including, but not limited to, disclosing a positive test or diagnosis resulting from an exposure at the place of employment or worksite or of a communicable disease, requesting testing as a result of an exposure at the place of employment or worksite, and reporting a possible violation of an occupational safety or health standard. This bill has the potential to significantly raise fines and penalties for violations.

Claims Administration

SB 335 – Workers’ Compensation: Liability

This is also concerning legislation as it has the potential to significantly compress the timeframe in which an employer/claims administrator has to determine compensability of a claim. As written, it would also increase costs. Existing law gives employers 90 days from the filing of a claim to reject liability for a claimed work-related injury or death. Except for certain specific injuries, if liability is not rejected within 90 days after the filing of the claim form, the injury is presumed compensable, and the presumption is rebuttable only by evidence discovered subsequent to this 90-day period. This bill would reduce the time period to 45 days for all injuries or illness. For some injuries or illnesses sustained in the course of employment by certain law enforcement or first responders, the time period would be reduced to 30 days. Existing law limits liability for medical treatment to $10,000 until the date the claim is accepted or rejected. This bill would increase that limit to $17,000. The bill would also increase the award by 10% if payment of compensation has been unreasonably delayed or refused for specified claims of injury or illness sustained in the course of employment of certain members of law enforcement and first responders. This increase in award would apply retroactively to injuries incurred before the bill is enacted.

Presumption Bills

AB 415 – Employment: Workers’ Compensation

This bill would define “injury,” for certain employees of a city, county, city and county, district, or other municipal corporation or political subdivision regularly exposed to active fires or health hazards directly resulting from firefighting operations, to include cancer that develops or manifests during a period in which the individual demonstrates that they were exposed to a known carcinogen while in the employment of the city, county, city and county, district, or other municipal corporation or political subdivision. The bill would establish a presumption that the cancer in those cases arose out of, and in the course of, employment, unless the presumption is controverted by evidence that the primary site of the cancer has been established and that the carcinogen to which the person has demonstrated exposure is not reasonably linked to the disabling cancer.

SB 213 – Workers’ Compensation: Hospital Employees

This bill would greatly expand the presumptions for hospital employees who provide direct patient care in an acute care hospital. For those employees, it creates rebuttable presumptions for certain injuries including infectious diseases, cancer, musculoskeletal injuries, post-traumatic stress disorder, and respiratory diseases. The bill would extend these presumptions for specified time periods after the hospital employee’s termination of employment. While current presumptions regarding COVID-19 expire on December 31, 2022, the bill would indefinitely extend the COVID-19 presumption for hospital employees providing direct patient care in acute care hospitals.

SB 284 – Workers’ Compensation: Firefighters and Peace Officers: Post-Traumatic Stress

Current law provides that, for certain state and local firefighting personnel and peace officers, the term “injury” includes post-traumatic stress that develops or manifests during a period in which the injured person is in the service of the department or unit. This bill would make that provision applicable to active firefighting members of the State Department of State Hospitals, the State Department of Developmental Services, the Military Department, and to additional peace officers, including security officers of the Department of Justice when performing assigned duties as security officers and the officers of a state hospital under the jurisdiction of the State Department of State Hospitals or the State Department of Developmental Services, among other officers.

SB 334 – Workers Compensation: Skin Cancer

Current law provides that skin cancer developing in active lifeguards is presumed to arise out of and in the course of employment, unless the presumption is rebutted. This bill would expand the scope of this presumption to certain peace officers of the Department of Fish and Wildlife and the Department of Parks and Recreation.

Medical-Legal Fee Schedule

AB 404 – Workers’ Compensation: Medical-Legal Expenses: Fee Schedule

In the last year, the Division of Workers’ Compensation has undertaken an effort to issue regulations updating the medical-legal fee schedule. This bill would upend that process by requiring that the medical-legal fee schedule be updated at least annually to increase the conversion factor by the percentage increase in the most recent federal Medicare Economic Index. The bill would require that the fee schedule not decrease in the event that the federal Medicare Economic Index decreases.

Changes to Employee Status

AB 275 – Classified Community College Employees

Current law requires the governing board of a community college district to prescribe written rules and regulations governing the personnel management of the classified service, whereby classified employees are designated as permanent employees of the district after serving a probationary period of no more than one year. This bill would shorten the maximum length of a prescribed period of probation to 6 months or 130 days of paid service, whichever is longer. This change would not apply to a conflicting collective bargaining agreement entered into before January 1, 2022, until the expiration or renewal of that collective bargaining agreement.

AB 1284 – Certificated School Employees: Permanent Status

This bill would authorize each person who, after being employed for three complete consecutive school years by a county superintendent of schools in a teaching position maintained by the county superintendent of schools requiring certification qualifications, is reelected for the next succeeding school year to a teaching position to be classified as a permanent employee of the county superintendent of schools. The bill would authorize the county superintendent of schools to offer an employee of the county superintendent of schools in a teaching position in schools or classes maintained by the county superintendent of schools requiring certification qualifications to continue for up to five complete consecutive school years as a probationary employee.

COVID-19 Bills

AB 654 – COVID-19: Exposure: Notification

This bill would require the State Department of Public Health to make workplace and industry information received from local public health departments available on its internet website in a manner that, among other things, allows the public to track the number of COVID-19 cases and outbreaks by both workplace and industry.

AB 845 – Disability Retirement: COVID-19: Presumption

Current law provides that participants in certain membership categories of California’s public retirement systems may be entitled to special benefits if death or disability arises in the course of employment. This bill, until January 1, 2023, would create a presumption that for certain members of a public retirement system who retire for disability on the basis of a COVID-19 related illness, that the disability arose out of or in the course of employment. The bill would authorize the presumption to be rebutted by evidence to the contrary, but unless controverted, the board of administration of the applicable retirement system would be required to find in accordance with the presumption.

AB 893 – Emergency Regulations: Division of Occupational Safety and Health: State Department of Public Health

This bill would require the Division of Occupational Safety and Health or the State Department of Public Health, within 14 calendar days of the release of a federal recommendation that conflicts with an emergency regulation related to COVID-19 issued by the division or the department, to review the conflicting emergency regulation and make a determination to either amend the regulation or submit a report to the Legislature on the decision not to amend the regulation. The bill would require the division or department, before determining whether to amend the emergency regulation, to provide public notice and an opportunity for public comment. The bill would repeal these provisions 90 days after the termination of the state of emergency related to the COVID-19 pandemic declared by the Governor.

Leaves of Absence

AB 872 – Leave of Absence: Firefighters

Among other workers’ compensation benefits, current law entitles a member of the Department of Justice who comes within the “state peace officer/firefighter” class, a law enforcement officer employed by the Department of Fish and Wildlife, and a harbor police officer employed by the San Francisco Port Commission, as specified, who is disabled by injury arising out of and in the course of the member’s duties, to a leave of absence while disabled without loss of salary, in lieu of disability payments, for a period not exceeding one year. This bill would make that benefit available to all rank-and-file and supervisory firefighters employed by the Department of Forestry and Fire Protection whose principal duties include active fire suppression or prevention services.

SB 205 – School and Community College Employees: Absences Due to Illness or Accident

This bill would require a certificated or classified school employee and an academic or classified community college employee who exhausts all available sick leave and continues to be absent from duties on account of illness or accident for an additional period of 5 months to receive the employee’s full salary during those 5 months.

MPNs

AB 1465 – Workers’ Compensation: Medical Treatment

This bill would require the Administrative Director of the Division of Workers’ Compensation to establish a statewide medical provider network, called the California Medical Provider Network (CAMPN). The bill would establish that an employee may choose to treat within their employer’s network or the CAMPN. The bill would require that the providers in the CAMPN be sufficient to enable treatment for a variety of injuries in all parts of the state. The bill would specify criteria physicians must meet to be included in the CAMPN and would require inclusion for those physicians that meet the criteria. The bill would require the administrative director to establish rules and procedures for the CAMPN and create and adopt a continuity of care policy.

Apportionment

SB 788 – Workers’ Compensation: Risk Factors

Current law requires a physician who prepares a report addressing the issue of permanent disability due to an industrial injury to address the cause of the permanent disability in the report, including what approximate percentage of the permanent disability was caused by other factors before and after the industrial injury, if the physician is able to make an apportionment determination. This bill would 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.

Keenan & Associates is not a law firm and no opinion, suggestion, or recommendation of the firm or its employees shall constitute legal advice. Clients are advised to consult with their own attorney for a determination of their legal rights, responsibilities and liabilities, including the interpretation of any statute or regulation, or its application to the clients’ business activities.