Sacramento, CA – The California State Senate recently approved an important measure that will reduce costs, prevent the over utilization of spinal surgery devices and put an end to needless and duplicative payments in the workers’ compensation system, said the Association of California Insurance Companies (ACIC). SB 959, authored by Senator Ted Lieu (D-Torrance), eliminates the double payment of spinal surgery devices, instrumentation, and hardware.
“California Senators made a good decision today. With combined loss ratios of 126% and escalating medical costs, it is well known that California’s workers’ compensation system is struggling to identify and control cost drivers,” said Mark Sektnan, ACIC president. “SB 959 is a critical measure because it eliminates a costly provision that allows medical providers to charge double for implantable spinal hardware.”
California’s workers’ compensation system is generally controlled by statute. California law authorizes payment of 120% of the Medicare allowance for Diagnosis Related Groups. This amount is designed to reimburse for costs including a hospital stay, and any medical devices, instruments or hardware used in a surgical procedure. California law also currently allows for an additional separate payment for hardware used in complex spinal surgeries.
The Rand Institute for Civil Justice and Health (RAND) has conducted two comprehensive studies and they not only concluded that this statutorily-mandated double-payment is unnecessary but it also incentivizes bad behavior in the form of over utilization.
“RAND also found that usage rates of implantable devices for worker’s compensation patients are much higher than for Medicare patients. Over utilization of spinal implantable devices means some injured workers are receiving unnecessary spinal surgeries that can result in poor medical outcomes for the patient,” said Sektnan. “Injured workers should not receive inappropriate medical care in order to enable someone else to profit more. SB 959 is supported by a broad coalition of public entities, non-profits, local governments and businesses that want to stop this duplicative payment that not only increases costs, but more importantly jeopardizes the health of injured workers.”
SB 959 was approved by a vote of 34 to 2. The bill will now move over to the California State Assembly for consideration.