Bill Text: CA SB826 | 2011-2012 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Workers' compensation: data reporting requirement:

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2011-10-07 - Chaptered by Secretary of State. Chapter 568, Statutes of 2011. [SB826 Detail]

Download: California-2011-SB826-Amended.html

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BILL NUMBER: SB 826	AMENDED
	BILL TEXT

	AMENDED IN SENATE  MAY 3, 2011

INTRODUCED BY   Senator Leno

                        FEBRUARY 18, 2011

   An act to amend  Section 138.6   Sections
138.6 and 138.7  of the Labor Code, relating to workers'
compensation.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 826, as amended, Leno. Workers' compensation: data reporting
requirement: administrative penalties.
   Existing law establishes a workers' compensation system,
administered by the Administrative Director of the Division of
Workers' Compensation, to compensate an employee for injuries
sustained in the course of his or her employment. Existing law
requires the administrative director to develop a cost-efficient
workers' compensation information system and requires the
administrative director to adopt regulations specifying the data
elements to be collected by electronic data interchange.
   Existing law establishes the Workers' Compensation Administration
Revolving Fund in the State Treasury. Money in the fund may be
expended by the Department of Industrial Relations, upon
appropriation by the Legislature, for the administration of the
workers' compensation program, except as provided, and for the
Return-to-Work Program.
   This bill would require the administrative director to assess an
administrative penalty against a claims administrator for 
failing to comply with any data reporting requirement as prescribed.
This bill would require that a penalty not exceed $100 for each
violation or $5,000 in any calendar year and would require that the
annual maximum penalty be doubled for each consecutive year that the
same deficiency results in violations of the same type  
a violation of data reporting requirements. This bill would require
the administrative director to promulgate a schedule of penalties
providing for an assessment of no more than $5,000 against a claims
administrator in any single year, calculated by violation type and
excluding threshold rates of violations, as prescribed  . This
bill would provide that  this   any 
penalty is to be deposited in the Workers' Compensation
Administration Revolving Fund. 
   Existing law provides that a person who, or public or private
entity that, is not a party to a claim for workers' compensation
benefits may not obtain individually identifiable information, as
defined, that is obtained or maintained by the division on that
claim, except as specified.  
   This bill would require the administrative director to publish an
annual report disclosing the compliance rates of claims
administrators and would authorize the administrative director to
publish the identity of claims administrators for this purpose. 

   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    The Legislature finds and declares that
the goal of this act is to encourage compliance with existing law.

   SECTION 1.   SEC. 2.   Section 138.6 of
the Labor Code is amended to read:
   138.6.  (a) The administrative director, in consultation with the
Insurance Commissioner and the Workers' Compensation Insurance Rating
Bureau, shall develop a cost-efficient workers' compensation
information system, which shall be administered by the division. The
administrative director shall adopt regulations specifying the data
elements to be collected by electronic data interchange.
   (b) The information system shall do the following:
   (1) Assist the department to manage the workers' compensation
system in an effective and efficient manner.
   (2) Facilitate the evaluation of the efficiency and effectiveness
of the  benefit  delivery system.
   (3) Assist in measuring how adequately the system indemnifies
injured workers and their dependents.
   (4) Provide statistical data for research into specific aspects of
the workers' compensation program.
   (c) The data collected electronically shall be compatible with the
Electronic Data Interchange System of the International Association
of Industrial Accident Boards and Commissions. The administrative
director may adopt regulations authorizing the use of other
nationally recognized data transmission formats in addition to those
set forth in the Electronic Data Interchange System for the
transmission of data required pursuant to this section. The
administrative director shall accept data transmissions in any
authorized format. If the administrative director determines that any
authorized data transmission format is not in general use by claims
administrators, conflicts with the requirements of state or federal
law, or is obsolete, the administrative director may adopt
regulations eliminating that data transmission format from those
authorized pursuant to this subdivision.
   (d)  (1)    The administrative director shall
assess an administrative penalty against a claims administrator for
 failing to comply with any data reporting requirement
adopted pursuant to this section. The administrative director shall
promulgate regulations establishing categories of violations. A
penalty shall not exceed one hundred dollars ($100) for each
violation or five thousand dollars ($5,000) in any calendar year for
all violations resulting from any single deficiency in the procedures
adopted by a reporting entity to comply with the reporting
requirements. The annual maximum penalty shall be doubled for each
consecutive year the same deficiency results in violations of the
same type. Any penalty  a violation of data reporting
requirements adopted pursuant to this section. The administrative
director shall promulgate a schedule of penalties providing for an
assessment of no more than five thousand dollars ($5,000) against a
claims administrator in any single year, calculated as follows: 

   (A) No more than one hundred dollars ($100) multiplied by the
number of violations in that year that resulted in a required data
report not being submitted or not being accepted.  
   (B) No more than fifty dollars ($50) multiplied by the number of
violations in that year that resulted in a required report being late
or accepted with an error.  
   (C) Multiple errors in a single report shall be counted as a
single violation.  
   (D) No penalty shall be assessed pursuant to Section 129.5 for any
violation of data reporting requirements for which a penalty has
been or may be assessed pursuant to this section.  
   (2) The schedule promulgated by the administrative director
pursuant to paragraph (1) shall establish threshold rates of
violations that shall be excluded from the calculation of the
assessment, as follows:  
   (A) The threshold rate for reports that are not submitted or are
submitted but not accepted shall not be less than 3 percent of the
number of reports that are required to be filed by or on behalf of
the claims administrator.  
   (B) The threshold rate for reports that are accepted with an error
shall not be less than 3 percent of the number of reports that are
accepted with an error.  
   (C) The administrative director shall set higher threshold rates
as appropriate in recognition of the fact that the data necessary for
timely and accurate reporting may not be always available to a
claims administrator or the claims administrator's agents.  

   (D) The administrative director may establish higher thresholds
for particular data elements that commonly are not reasonably
available.  
   (3) The administrative director may estimate the number of
required data reports that are not submitted by comparing a
statistically valid sample of data available to the administrative
director from other sources with the data reported pursuant to this
section. 
   (4)     All penalties  assessed
pursuant to this section shall be deposited in the Workers'
Compensation Administration Revolving Fund. 
   (5) The administrative director shall publish an annual report
disclosing the compliance rates of claims administrators. 
   SEC. 3.    Section 138.7 of the   Labor Code
  , as amended by Section 1 of Chapter 611 of the Statutes
of 2010, is amended to read: 
   138.7.  (a) Except as expressly permitted in subdivision (b), a
person or public or private entity not a party to a claim for workers'
compensation benefits may not obtain individually identifiable
information obtained or maintained by the division on that claim. For
purposes of this section, "individually identifiable information"
means any data concerning an injury or claim that is linked to a
uniquely identifiable employee, employer, claims administrator, or
any other person or entity.
   (b) (1)  (A)    The administrative director, or
a statistical agent designated by the administrative director, may
use individually identifiable information for purposes of creating
and maintaining the workers' compensation information system as
specified in Section 138.6. 
   (B) The administrative director may publish the identity of claims
administrators in the annual report disclosing the compliance rates
of claims administrators pursuant to subdivision (d) of Section
138.6. 
   (2) (A) The State Department of Public Health may use individually
identifiable information for purposes of establishing and
maintaining a program on occupational health and occupational disease
prevention as specified in Section 105175 of the Health and Safety
Code.
   (B) (i) The State Department of Health Care Services may use
individually identifiable information for purposes of seeking
recovery of Medi-Cal costs incurred by the state for treatment
provided to injured workers that should have been incurred by
employers and insurance carriers pursuant to Article 3.5 (commencing
with Section 14124.70) of Chapter 7 of Part 3 of Division 9 of the
Welfare and Institutions Code.
   (ii) The Department of Industrial Relations shall furnish
individually identifiable information to the State Department of
Health Care Services, and the State Department of Health Care
Services may furnish the information to its designated agent,
provided that the individually identifiable information shall not be
disclosed for use other than the purposes described in clause (i).
The administrative director may adopt regulations solely for the
purpose of governing access by the State Department of Health Care
Services or its designated agents to the individually identifiable
information as defined in subdivision (a).
   (3) (A) Individually identifiable information may be used by the
Division of Workers' Compensation, the Division of Occupational
Safety and Health, and the Division of Labor Statistics and Research
as necessary to carry out their duties. The administrative director
shall adopt regulations governing the access to the information
described in this subdivision by these divisions. Any regulations
adopted pursuant to this subdivision shall set forth the specific
uses for which this information may be obtained.
   (B) Individually identifiable information maintained in the
workers' compensation information system and the Division of Workers'
Compensation may be used by researchers employed by or under
contract to the Commission on Health and Safety and Workers'
Compensation as necessary to carry out the commission's research. The
administrative director shall adopt regulations governing the access
to the information described in this subdivision by commission
researchers. These regulations shall set forth the specific uses for
which this information may be obtained and include provisions
guaranteeing the confidentiality of individually identifiable
information. Individually identifiable information obtained under
this subdivision shall not be disclosed to commission members. No
individually identifiable information obtained by researchers under
contract to the commission pursuant to this subparagraph may be
disclosed to any other person or entity, public or private, for a use
other than that research project for which the information was
obtained. Within a reasonable period of time after the research for
which the information was obtained has been completed, the data
collected shall be modified in a manner so that the subjects cannot
be identified, directly or through identifiers linked to the
subjects.
   (4) The administrative director shall adopt regulations allowing
reasonable access to individually identifiable information by other
persons or public or private entities for the purpose of bona fide
statistical research. This research shall not divulge individually
identifiable information concerning a particular employee, employer,
claims administrator, or any other person or entity. The regulations
adopted pursuant to this paragraph shall include provisions
guaranteeing the confidentiality of individually identifiable
information. Within a reasonable period of time after the research
for which the information was obtained has been completed, the data
collected shall be modified in a manner so that the subjects cannot
be identified, directly or through identifiers linked to the
subjects.
   (5) This section shall not operate to exempt from disclosure any
information that is considered to be a public record pursuant to the
California Public Records Act (Chapter 3.5 (commencing with Section
6250) of Division 7 of Title 1 of the Government Code) contained in
an individual's file once an application for adjudication has been
filed pursuant to Section 5501.5.
   However, individually identifiable information shall not be
provided to any person or public or private entity who is not a party
to the claim unless that person identifies himself or herself or
that public or private entity identifies itself and states the reason
for making the request. The administrative director may require the
person or public or private entity making the request to produce
information to verify that the name and address of the requester is
valid and correct. If the purpose of the request is related to
preemployment screening, the administrative director shall notify the
person about whom the information is requested that the information
was provided and shall include the following in 12-point type:
   "IT MAY BE A VIOLATION OF FEDERAL AND STATE LAW TO DISCRIMINATE
AGAINST A JOB APPLICANT BECAUSE THE APPLICANT HAS FILED A CLAIM FOR
WORKERS' COMPENSATION BENEFITS."
   Any residence address is confidential and shall not be disclosed
to any person or public or private entity except to a party to the
claim, a law enforcement agency, an office of a district attorney,
any person for a journalistic purpose, or other governmental agency.
   Nothing in this paragraph shall be construed to prohibit the use
of individually identifiable information for purposes of identifying
bona fide lien claimants.
   (c) Except as provided in subdivision (b), individually
identifiable information obtained by the division is privileged and
is not subject to subpoena in a civil proceeding unless, after
reasonable notice to the division and a hearing, a court determines
that the public interest and the intent of this section will not be
jeopardized by disclosure of the information. This section shall not
operate to restrict access to information by any law enforcement
agency or district attorney's office or to limit admissibility of
that information in a criminal proceeding.
   (d) It shall be unlawful for any person who has received
individually identifiable information from the division pursuant to
this section to provide that information to any person who is not
entitled to it under this section.
   (e) This section shall remain in effect only until January 1,
2017, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2017, deletes or extends
that date.
   SEC. 4.    Section 138.7 of the   Labor Code
  , as added by Section 2 of Chapter 611 of the Statutes of
2010, is amended to read: 
   138.7.  (a) Except as expressly permitted in subdivision (b), a
person or public or private entity not a party to a claim for workers'
compensation benefits may not obtain individually identifiable
information obtained or maintained by the division on that claim. For
purposes of this section, "individually identifiable information"
means any data concerning an injury or claim that is linked to a
uniquely identifiable employee, employer, claims administrator, or
any other person or entity.
   (b) (1)  (A)    The administrative director, or
a statistical agent designated by the administrative director, may
use individually identifiable information for purposes of creating
and maintaining the workers' compensation information system as
specified in Section 138.6. 
   (B) The administrative director may publish the identity of claims
administrators in the annual report disclosing the compliance rates
of claims administrators pursuant to subdivision (d) of Section
138.6. 
   (2) The State Department of Public Health may use individually
identifiable information for purposes of establishing and maintaining
a program on occupational health and occupational disease prevention
as specified in Section 105175 of the Health and Safety Code.
   (3) (A) Individually identifiable information may be used by the
Division of Workers' Compensation, the Division of Occupational
Safety and Health, and the Division of Labor Statistics and Research
as necessary to carry out their duties. The administrative director
shall adopt regulations governing the access to the information
described in this subdivision by these divisions. Any regulations
adopted pursuant to this subdivision shall set forth the specific
uses for which this information may be obtained.
   (B) Individually identifiable information maintained in the
workers' compensation information system and the Division of Workers'
Compensation may be used by researchers employed by or under
contract to the Commission on Health and Safety and Workers'
Compensation as necessary to carry out the commission's research. The
administrative director shall adopt regulations governing the access
to the information described in this subdivision by commission
researchers. These regulations shall set forth the specific uses for
which this information may be obtained and include provisions
guaranteeing the confidentiality of individually identifiable
information. Individually identifiable information obtained under
this subdivision shall not be disclosed to commission members. No
individually identifiable information obtained by researchers under
contract to the commission pursuant to this subparagraph may be
disclosed to any other person or entity, public or private, for a use
other than that research project for which the information was
obtained. Within a reasonable period of time after the research for
which the information was obtained has been completed, the data
collected shall be modified in a manner so that the subjects cannot
be identified, directly or through identifiers linked to the
subjects.
   (4) The administrative director shall adopt regulations allowing
reasonable access to individually identifiable information by other
persons or public or private entities for the purpose of bona fide
statistical research. This research shall not divulge individually
identifiable information concerning a particular employee, employer,
claims administrator, or any other person or entity. The regulations
adopted pursuant to this paragraph shall include provisions
guaranteeing the confidentiality of individually identifiable
information. Within a reasonable period of time after the research
for which the information was obtained has been completed, the data
collected shall be modified in a manner so that the subjects cannot
be identified, directly or through identifiers linked to the
subjects.
   (5) This section shall not operate to exempt from disclosure any
information that is considered to be a public record pursuant to the
California Public Records Act (Chapter 3.5 (commencing with Section
6250) of Division 7 of Title 1 of the Government Code) contained in
an individual's file once an application for adjudication has been
filed pursuant to Section 5501.5.
   However, individually identifiable information shall not be
provided to any person or public or private entity who is not a party
to the claim unless that person identifies himself or herself or
that public or private entity identifies itself and states the reason
for making the request. The administrative director may require the
person or public or private entity making the request to produce
information to verify that the name and address of the requester is
valid and correct. If the purpose of the request is related to
preemployment screening, the administrative director shall notify the
person about whom the information is requested that the information
was provided and shall include the following in 12-point type:
   "IT MAY BE A VIOLATION OF FEDERAL AND STATE LAW TO DISCRIMINATE
AGAINST A JOB APPLICANT BECAUSE THE APPLICANT HAS FILED A CLAIM FOR
WORKERS' COMPENSATION BENEFITS."
   Any residence address is confidential and shall not be disclosed
to any person or public or private entity except to a party to the
claim, a law enforcement agency, an office of a district attorney,
any person for a journalistic purpose, or other governmental agency.
   Nothing in this paragraph shall be construed to prohibit the use
of individually identifiable information for purposes of identifying
bona fide lien claimants.
   (c) Except as provided in subdivision (b), individually
identifiable information obtained by the division is privileged and
is not subject to subpoena in a civil proceeding unless, after
reasonable notice to the division and a hearing, a court determines
that the public interest and the intent of this section will not be
jeopardized by disclosure of the information. This section shall not
operate to restrict access to information by any law enforcement
agency or district attorney's office or to limit admissibility of
that information in a criminal proceeding.
   (d) It shall be unlawful for any person who has received
individually identifiable information from the division pursuant to
this section to provide that information to any person who is not
entitled to it under this section.
   (e) This section shall become operative on January 1, 2017.