Senate Bill 335, recently approved in the Senate Labor, Public Employment and Retirement Committee and recently sent to the Appropriations Committee, is best known for its proposal to decrease the time for employers or claims examiners to accept or deny liability for an alleged work-related claim. However, SB 335 is set to make a total of four substantial changes, outlined as follows:
- Shorten the time an employer has to deny liability from 90 days to 45 days;
- Shorten the time an employer has to deny presumptive injuries for firefighters and first responders from 90 days to 30 days;
- Potentially increase compensation for claims “unreasonably delayed or refused” by 10% with no cap (changed from a 25% increase and cap at $10,000);
- Increase the amount of employer-funded medical care while the claim is being investigated to $17,000, up from $10,000.
Opponents of the bill point to conflicting existing law, including the fact the qualified medical evaluators have 60 days to schedule an evaluation and 30 days to complete a report. Additionally, opponents argue the bill attempts to resolve a non-existent problem and points to statistics by PRISM that 13% of claims are denied and 10% remain denied after investigation.
Undoubtedly, the shortened decision time of 30 and 45 days under SB 1159 for COVID-19 work-related claims is an unmentioned influencer of Senate Bill 335.
Schmelzer said SB 335 also wouldn’t change current laws that conflict with the proposed bill, including the fact that QMEs have 60 days to schedule an evaluation and 30 days to complete it. “We struggle to understand how employers would ever finish an investigation under the provisions of SB 335,” he said. Faith Borges, a legislative advocate representing the California Association of Joint Powers Authorities, said SB 335’s shortened investigation period could force compensability decisions prior to employers receiving medical records or evaluating doctors' reports, without which a claim “cannot conceivably be approved.” Borges agreed that the current workers’ comp system wouldn’t comply with SB 335 and that there is no data suggesting the legislation is necessary. “Ultimately, we’re concerned that the abbreviated time frame will increase denials, foster increased and unnecessary litigation, drive up claim costs and ultimately negatively impact injured workers,” she said.