California Workers’ Comp Bill Tabled

A bill aimed at closing a loophole in California’s workers’ compensation laws that allows doctors to profit from big markups on prescription drugs they sell to their patients appears has died in the current legislative session.

Assembly Speaker Fabian Nuñez, D-Los Angeles, said he had derailed SB 292, although it was passed by the state Senate on a 40-0 vote and received only one negative vote in the Assembly Insurance Committee. Nuñez said he wanted to hold the bill by Sen. Jackie Speier, D-Hillsborough—and all other workers’ comp bills—until next year because he wanted to pressure Gov. Arnold Schwarzenegger and California employers to revisit a compromise that led to a complete overhaul of the state’s troubled workers’ compensation system during Schwarzenegger’s first few months in office in early 2004. In particular, the speaker said he wanted the Schwarzenegger administration to redo its formula for calculating benefits for workers who suffer permanent disabilities while on the job.

“We’re going to do the bill next year, but we’re going to do it right,” Nuñez said. “And we’re going to look at doing a more comprehensive workers’ compensation reform.”

Schwarzenegger Spokesman Vince Sollitto said the administration found it “disappointing and a little disturbing” that Nuñez would use the Speier bill to gain political leverage on unrelated workers’ comp issues. The administration is considering fixing the problem by issuing regulations that put ceilings on fees charged by doctors for the prescription drugs they dispense, he said.

The Speier bill is backed by a coalition of labor unions, the California Chamber of Commerce and major retailers. But creating a similar compromise on permanent disability benefits is unlikely, chamber lobbyist Charles Bacchi said.

Unions and large employers have been working to convince lawmakers that the estimated $260 million spent annually on reimbursing doctors for high-priced medicines—some sold at markups exceeding $500 for a single bottle of pills—could be better used to lower workers’ comp insurance premiums or boost workers’ benefits.

However, those arguments didn’t sway Nuñez. He canceled a scheduled Aug. 25 Assembly Appropriations Committee hearing and vote on the bill. The cancellation all but ensured the bill will not be acted on before lawmakers adjourn on Sept. 9.

Nuñez, however, made one exception to his pledge to hold off action on all pending workers’ comp bill; He allowed a measure by Sen. Joe Dunn, D-Santa Ana, dealing with penalties against insurance companies for delaying claim payments, to pass out of the Assembly on Aug. 29, four days after he stalled action on Speier’s proposal.

Opponents of the Speier bill said they were pleased that the measure had been put on hold. “We’re happy to have more time to work on the issue,” said Tom Calderon, a consultant and legislative strategist for the Pharmacists & Physicians Alliance. Calderon.

Although legislation signed by former Gov. Gray Davis in 2003 put price caps on reimbursements for prescription drugs sold to injured workers by pharmacies, the limits did not apply to the same drugs sold directly by doctors. Speier’s bill would apply the price caps to doctor-sold drugs.

Topics California Legislation Workers' Compensation