A new proposal by the president of the California state Senate would reduce the decision timeframe for defendants to accept or deny claims from 90 down to 60 days in most cases, which would arguably lead to more claim denials.
The bill, SB 1127, was proposed by Senate President Toni Atkins (D-San Diego). It would reduce the standard 90-day decision timeframe to accept or deny most claims down to 60 days, and reduce the decision timeframe for first responder presumption claims down to 30 days.
The Senate Committee on Labor, Public Employment, and Retirement approved the bill via a 4-1 vote on 3/21/22 according to our friends at WorkCompCentral. To be clear – the bill still has a long, long way to go before it would become law. In order to be come law, the bill would have to:
- first clear the remaining Senate committees
- be approved by the state Senate
- proceed through multiple Assembly committees
- be approved by the Assembly
- if the Assembly and Senate have differing language in the bill, they’d have to work it out via a “conference” between the two
- Gov. Gavin Newsom would then have to sign the bill into law
Last year, a similar bill died in the Assembly Insurance Committee, which we reported on here. The bill was Senate Bill 335, introduced by Sen. Dan Cortese (D-San Jose), which would have cut the decision timeframe from the current 90-day timeframe down to 45 days for most claims, and 30 days for first responder presumption claims. The bill died in the Assembly Insurance Committee after the California Workers’ Compensation Institute issued a data-driven report that confirmed the “gut” feelings of most defense attorneys and adjusters – that a reduction in decision timeframes results in more denials, not accepted claims.
SB 335 needed 8 votes to get through the Assembly Insurance Committee, but only had 7 “yes” votes – and the kicker is that those “yes” votes would have mandated a removal of the decision timeframe language from the bill.
The CWCI isn’t the only think tank to say that reducing decision timeframes results in more denials, not accepted claims. The RAND Corporation recently said the same thing about the reduced decision timeframes in the Covid-19 presumptions, which WorkCompCentral reported on here.
“However, we did not hear that shortened timelines and quicker initial claims decisions meaningfully assisted workers in any specific manner, suggesting that these changes did not do much to promote the typical objectives of a workers’ compensation system,” the RAND researchers wrote. “As discussed above in the context of workers’ compensation benefits in general, we heard that workers were able to obtain paid leave through other sources and access medical care regardless of whether a workers’ compensation claim was filed, or if filed, accepted. Meanwhile, we heard from claims administrators that the shortened timelines were challenging to administer, and some alleged that the shorter investigation period led to more reversals in claim outcomes and possibly more denials; we could not examine these questions in the scope of our quantitative analyses or estimate the impacts of these reported administrative burdens on expenses.”
Long story short, there’s no evidence that reducing the time for a TPA to make a decision results in more acceptances. If anything, it results in more denials. This is clearly not one of the ways to get more accepted claims, and the data we have so far proves it.
Because the Assembly Insurance Committee killed this bill in 2021 for that very reason, your humble blogger doesn’t see it surviving the 2022 legislative season either.
- California Legislature Mulling Presumption Bills
- Proposal to Reduce Decision Timeframe Fails in Assembly
Got a question about workers’ compensation defense issues or pending legislation? Feel free to contact John P. Kamin. Mr. Kamin is a workers’ compensation defense attorney and partner at Bradford & Barthel’s Woodland Hills location, where he monitors the recent legislative affairs as the firm’s Director of the Editorial Board. Mr. Kamin previously worked as a journalist for WorkCompCentral, where he reported on work-related injuries in all 50 states. Please feel free to contact John at firstname.lastname@example.org or at (818) 654-0411.
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