Defendants will only have 75-days to respond to decisions on first responder presumption claims as of Jan. 1, 2023, thanks to a new bill signed into law that could be indicative of future reforms.
Gov. Gavin Newsom concluded the 2022 legislative session by signing Senate Bill 1127 into law on Sept. 29, which was the second-to-last day for him to approve or veto bills sent to his desk. (Editor’s note: Summaries of other bills are listed below.)
The bill reduced the decision timeframe on first responder presumption claims from 90 days to 75 days, for presumptions including pneumonia, cancer, tuberculosis, bloodborne infections diseases, lumbar spine, and Lyme Disease. The bill also increases the penalty for an unreasonable denial to as high as $50,000, which is significantly higher than the current penalty of $10,000. The legislation also increases the number of weeks for temporary disability up to 240 weeks, for firefighters and peace officers who have cancer claims.
What’s interesting about this bill is that it could be a foreshock to a seismic change in the entire workers’ compensation system. Longtime practitioners are aware of the fact that comprehensive legislative changes are made to the workers’ compensation system approximately every 10 years, and the last major change took effect about a decade ago with the passage of SB 863.
Fast forward to July 2021, when Assembly Insurance Committee Chair Rep. Tom Daly (D-Anaheim) killed a prior attempt to increase the penalty for unreasonable denials on presumption claims, stating that it was “too high.”
“Without more evidence or data, a larger penalty in my view is not prudent, especially since the penalties are paid by public entities,” he said at the time. During that same meeting, Daly warned that if Gov. Newsom wins the 2021 recall election and the 2022 general election, then significant workers’ compensation reforms could be on the way in 2023.
“We will be living with workers’ comp reform in the coming months and years,” he said in July 2021.
Well, with Gov. Newsom currently enjoying a 21-point lead over his opponent during the current general election, it appears that we will have significant reforms to look forward to in 2023.
Some industry analysts are warning that lawmakers will try to reduce decision timeframes and increase penalties for all workers’ compensation claims of all types, not just presumption claims. One can often anticipate future legislative changes by looking to other bills that have failed in the past. Those include previous efforts to:
- Apply presumptions of all sorts to larger numbers of employees
- Force medical provider networks to accept all doctors
- Create a statewide MPN
- Increase penalties
- Shorten decision timeframes, which many have warned will actually increase denial rates
- Punish fraud in the system
- Call for fee schedule increases of all types
- Change how cumulative trauma claims are filed
- Tweak jurisdictional limits
- Create more regulatory processes for lien claimants
- Limit apportionment to nonindustrial injuries
- Clarify confusing or problematic existing legal issues, or inefficient systems
The problem with most of these proposals is that they will increase costs for insurers. And while those on the labor side of the aisle have said “carriers need to pay more,” those costs get passed onto businesses via increased premiums. Guess who the business owners pass those costs onto? The general public.
And that’s the problem for everybody when one considers that today’s leading topic in financial news is the escalating inflation crisis that hurts us all. That’s not a political talking point either, your humble blogger can think of hundreds of root causes of inflation in the last decade that led us to the inflation crisis of today.
Instead, it’s a realistic assessment of today’s economic and political climate – if Newsom wants to be a viable candidate for president someday, he can’t be seen as hiking costs during an inflation crisis and potential recession. Former Gov. Gray Davis was recalled for similar reasons, and it’s safe to assume that Newsom is fully aware of that and will do his best to avoid the same fate.
Okay, rant over. Let’s move onto other recent legislative action.
SUMMARY OF OTHER BILLS SIGNED INTO LAW
Here are summaries of other bills that Gov. Newsom signed into law:
- Assembly Bill 1751 – This bill extends the Covid-19 presumptions “sunset date” to Jan. 1, 2024. The presumptions had previously been scheduled to sunset at the end of 2022.
- Assembly Bill 152 – This is an extension of the “Covid sick pay bill” that Gov. Newsom signed into law in February 2022. The Covid sick pay was set to expire on 9/30/22, but the passage of AB 152 extends that type of Covid sick pay until 12/31/22. Please keep in mind that pursuant to Cal-OSHA rules and regs, employers must pay Covid sick pay to the employee as if they are still there anyways. For more on that topic, click here.
- Senate Bill 1242 – This legislation imposes reporting requirements for fraud. Among other things it:
- requires insurers to report suspected fraud within 60 days of it occurring.
- requires brokers or agents to report suspected fraudulent claims to the Fraud Division’s Consumer Fraud Reporting Portal.
- imposes protections on agents and brokers who report fraud from civil liability as long as they can show they acted in good faith.
- requires brokers, agents, and adjusters to take one hour of continuing education credits focused on the topic of insurance fraud.
- Senate Bill 1002 – This bill permits medical provider networks (MPNs) to list licensed clinical social workers in their MPNs. The bill does not permit social workers to determine permanent disability. The intent of this bill is to expedite mental health care to people who need it, in the event that psyche treatment is scarce. If more comprehensive care is required, the bill’s proponents argued that social workers are in a good position to be able to recommend more extensive treatment with a psychologist or psychiatrist.
- Assembly Bill 151 – AB 151 codified a collective bargaining agreement between the state and a union to extend salary continuation benefits to Department of Forestry and Fire Protection firefighters in Bargaining Unit 8. If a firefighter in that unit has a severe burn as defined by CalFire, the employee could receive up to three years of salary continuation benefits.
- Assembly Bill 2188 – AB 2188 bars employers from discriminating against employees who use cannabis away from the workplace. It exempts employers in the construction and building trades, as well as employers who are required to obtain federal background investigations. This bill does not appear to harm a defendant’s right to bring an intoxication defense because in order to bring an intoxication defense, defendants have the burden to prove that the employee was intoxicated at work anyways. In order to satisfy that burden of proof, additional evidence beyond a positive drug test is usually needed.
- Assembly Bill 1643 – This bill requires the state to create an advisory committee to write a report that studies and evaluates the effects of heat on workers, businesses, and the economy. The state must create the committee by July 1, 2023. The committee must create and submit the report by Jan. 1, 2026.
- Assembly Bill 2848 – AB 2848 requires the DWC to provide lawmakers with its official analysis of the utilization review changes implemented by SB 1160 back in 2016. SB 1160 was an omnibus bill from 2016 that had many provisions. One of those provisions had called for the DWC to hire an outside consultant to review and evaluate the provision of medical care during the first 30 days after a claim was filed for claims from 2017 through 2019. This bill expands the timeframe for claims subject to analysis to claims filed between 1/1/17-1/1/21. AB 2848 requires the DWC to present that report to the Assembly Committee on Insurance and the Senate Committee on Labor and Industrial Relations no later than July 1, 2023.
- Assembly Bill 1681 – This bill allows the Insurance Commissioner and their deputies to meet with insurers and employers to discuss suspected, anticipated, or completed acts of insurance fraud. It also has civil liability protections for meeting participants, as long as the parties to the meeting do not have fraud or malice.
- Senate Bill 216 – SB 216 requires all concrete, heating, air conditioning, HVAC, asbestos abatement, and tree service contractors to carry work comp insurance even if they have no employees.
VETOED BILLS
Here is a list of bills that were vetoed by the governor:
- Assembly Bill 334 – AB 334 would have expanded the presumption that skin cancer is presumed to be industrial in nature, unless the presumption is rebutted. The existing presumption currently applies to active lifeguards. This bill would have expanded the presumption to peace officers of the Department of Fish and Wildlife and the Department of Parks and Recreation.
- Senate Bill 284 – This bill would have expanded a PTSD presumption to include more first responders. The bill would have added firefighting members and security officers of various state and federal departments to the PTSD presumption.Well, that just about wraps up the most popular bills from this legislative session. Please keep an eye out for our upcoming webinar on legislative issues in November 2022, where we will revisit 2022’s statutory and regulatory changes and address any other bills that may have slipped through the cracks. Bradford and Barthel will also have reporting on the 2023 legislative session in the first quarter of 2023.
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 jkamin@bradfordbarthel.com or at (818) 654-0411.
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