A bill that would reduce the decision timeframe to accept or deny most claims down to a 45-day timeframe is perhaps the most controversial bill of the 2021 legislative session, but has a long ways to go before it could be signed into law.
Senate Bill 335, introduced by Sen. Dan Cortese (D-San Jose), would cut the decision timeframe from the current 90-day timeframe down to 45 days for most claims. First responders’ claims for conditions that have compensability presumptions would have a 30-day decision timeframe under the bill. The bill would also increase defendants’ liability for medical benefits during the decision timeframe to $17,000, which is $7,000 higher from the current figure of $10,000.
Of these proposals within the bill, the most controversial portion is reducing the current 90-day timeframe down to 45 days for most claims.
When I discuss that reduction with attorneys and workers’ compensation professionals both inside and outside B&B, they all say the same thing – that this bill is shortsighted because it would lead to more denials. That is problematic because the sponsors of the bill have stated that the bill’s purpose is to lead to more accepted claims.
Congratulations to the California Workers’ Compensation Institute (CWCI) for effectively identifying why this bill would lead to more denials.
“The CWCI analysis concludes that despite the intent of SB 335, it is unlikely that claims adjusters would be able to unilaterally expedite much of the investigation process, which requires a coordinated, cooperative effort on the part of all parties,” the CWCI wrote in a press release on its new deep dive into a dataset of claims from 2015 through 2019.
“Reducing the investigation period by half and increasing employers’ liability for medical treatment benefits during the investigation period by 70% is likely to generate unintended consequences. Decreasing the investigation period to 45 days would actually reduce access to medical treatment and would likely increase the number of provisional denials. Provisional denials due to lack of cooperation or available documentation, the inability to schedule a panel qualified medical evaluator, and other issues will likely trigger more litigation as well as increases in allocated and unallocated loss adjustment expenses related to the investigation process.”
Remember, defendants like medical control on claims where the injury is something that’s industrial. Smart defendants don’t just automatically deny everything for the heck of it.
I can think of a recent example where there was a questionable claim that many defendants would have denied, but my thoughtful client received a medical report around Day 50 that helped aid a decision to accept that claim. The acceptance kept that applicant with his doctor – whom the applicant likes – and everybody is happier all around with that claim being accepted.
Interestingly enough, the provider actually saw the applicant around Day 30, but delayed sending that important medical report to the client for almost three weeks.
Now take this claim and put it under the scope of SB 335. Because the defendant did not receive the report until Day 50 through no fault of their own, that claim would have probably wound up denied. The defendant had spotted some red flags about the claim, but that medical report answered some of those lingering questions to the extent that the defendant felt comfortable accepting the claim.
Could the defense have called the doctor’s office and hounded them for the report? Yes. Would that have made the doctor process their dictation quicker? Maybe, maybe not.
Remember, applicant’s attorneys frequently find themselves in the same spot when they try to get a rebuttal report from a primary treating physician. I have personally witnessed countless occasions where an applicant’s attorney has requested a continuance of a mandatory settlement conference (MSC) so they can get that rebuttal report, despite having called the PTP numerous times to urge them to hurry up. My point is – if an applicant’s attorney can’t get PTPs to expedite their dictation, it’s unreasonable to expect defendants to persuade PTPs to do the same.
IT’S STILL JUST A PROPOSAL
This bill has a long way to go. First, the Senate must approve it. Then the Assembly must approve it. Then both the Senate and Assembly would compare notes in “conference” if they passed two differing versions of the bill.
If they are able to work out the differences, they would approve a final version and send it to Gov. Gavin Newsom, who could decide to either approve it or veto it. Long story short, we will know sometime around September 2021 whether this bill is going to become law.
So where is the bill now, as I type this in mid-May 2021? It is currently winding its way through the state Senate, with its next stop being the suspense file committee. When a bill is placed into the “suspense file,” that means that a budgetary committee must take a closer look at it because it could cost the state and local governmental entities quite a bit of money.
Remember, the bill could arguably increase costs for self-insured counties, municipalities, and state governmental entities. Therefore, lawmakers must take these important constituents into consideration as well, as politicians and employees from those same governmental entities can help one get re-elected.
I’m aware of the fact that many carriers, state and local governments, employers, and administrators are concerned about this bill being signed into law. So let’s look at a hypothetical situation where this bill sails through the Senate and Assembly and gets sent to the governor – there is no guarantee that Gov. Newsom would sign this bill into law, especially amid the current political client. Angering employers during a recall election isn’t something that most governors would want to do, especially as the state recovers from a turbulent pandemic.
A third option could always occur – the bill could be drastically amended. We saw this with AB 1465, which was quite literally being amended as I typed up my blog post about that one.
What prompts amendments? Well, reports from intelligent data-driven think tanks (ahem, CWCI) that make compelling arguments as to why a bill doesn’t make much sense can result in a bill getting amended.
Strong lobbyist opposition could also create pressure to amend a bill. Also, if a pro-labor bill is only endorsed by some labor groups, that could also weaken support for a bill and result in an amendment.
In conclusion, I give this bill a 33% chance of being approved. Personally, I think this bill has too many hurdles to overcome, such as:
- The denial problem we mentioned.
- A recall election and employer opposition to the bill.
- Increased costs for local governments as their annual budgets still face pandemic-related challenges.
I have been wrong before – but don’t bet your mortgage payment on this bill becoming law. It is definitely worth watching, however, and we will continue to monitor it’s status throughout 2021, so please check back on our blog for updates.
Got a question about workers’ compensation defense issues involving the coronavirus? 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 email@example.com or at (818) 654-0411.
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