Workers’ Compensation Job Killer Bill Now Just Calls for Study

(April 30, 2021) Costly job killer legislation that would have reduced injured workers’ access to quality care was amended this week to remove the problematic provisions.

With the April 26 amendments, the California Chamber of Commerce has no position on AB 1465 (Reyes; D-San Bernardino).

Before the latest changes, AB 1465 would have mandated the creation of a state-run Medical Provider Network for workers’ compensation claims. Besides imposing millions of dollars of costs on the system and the state, the proposal would have reduced injured workers’ access to quality care.

Coalition Opposition

The CalChamber and a coalition of employer groups pointed out that AB 1465 would have reduced the quality of care in the workers’ compensation system while increasing costs by eliminating the ability of medical provider networks (MPN) to exclude inexperienced and low-quality providers.

A state-run MPN would have disrupted the balance achieved by the negotiated reforms that established the networks.

By requiring the state to establish its own MPN, AB 1465 would have further undermined the existing MPN system and cost California tens of millions of dollars annually given the extraordinary cost of establishing and maintaining an MPN.

For example, based on the current number of providers, the state Division of Workers’ Compensation would have been required to investigate, credential and contract with about 51,000 providers at an estimated cost of $12.8 million, according to the California Workers’ Compensation Institute (CWCI).

Developing the infrastructure and related technology for ongoing management of the state MPN would have cost as much as $65 million annually, the CWCI estimated.

No Evidence

The coalition also noted that there is no evidence to justify the cost and burden of overhauling the MPN system. Data from the previous two years demonstrates there is little material difference between the time to initial treatment or proximity to providers between claims treated by providers within an MPN and those outside of the MPN.

The use of MPNs since the most recent major reforms have kept costs in the workers’ compensation system relatively stable, the coalition stated.

As amended this week, AB 1465 requires a study about delays and access to care issues in MPNs, including comparing data on treatment for a worker by a provider within an MPN and a provider that is not part of an MPN.

Staff Contact: Ashley Hoffman