California lawmakers have effectively closed the door on several workers' compensation proposals for the year, failing to advance bills addressing premium fraud, medical provider contracts and benefits eligibility for workers with subsequent injuries before a key Friday deadline.

Fiscal committees were required to pass all bills by Friday, with any measure not moved ahead of the deadline generally being out of consideration for the session that ends Aug. 31. 

The Assembly Appropriations Committee on Thursday held a premium fraud bill under submission, while the Senate Appropriations Committee held bills that would have required proof of entitlement to contractual discounts for medical services and modified eligibility criteria for claims with the Subsequent Injuries Benefits Trust Fund.

AB 1576, by Assemblymember Liz Ortega, D-San Leandro, would have required substantial evidence of a preexisting disability before the second injury and that the injury caused a loss of earnings or interfered with activities of work or daily life for SIBTF claims. It also would have ordered the Division of Workers' Compensation to create a database of qualified medical evaluators who specialize in SIBTF claims.

The committee analysis of AB 1576 notes that Gov. Gavin Newsom last year vetoed a similar bill by Ortega and ordered his administration to draft its own SIBTF reforms. Newsom in mid-July signed SB 171, a budget trailer bill that also includes reform provisions to tighten SIBTF criteria. 

SB 171, which applies to any claim filed after July 1, 2020, and that has not been set for trial or otherwise procedurally advanced by June 1, 2026, would require:

• That qualifying preexisting conditions be labor-disabling and documented in medical evidence at the time of the second injury.
• Medical-legal evidence supporting an SIBTF application to be collected during the claim process for the primary injury.
• Use of the combined values chart in the Permanent Disability Rating Schedule instead of adding multiple impairment ratings.
• Claims to be filed within five years from the date of the second injury or six months from when permanent disability is determined for that injury, whichever is later.

The Senate Appropriations Committee on Thursday also held AB 1048 under submission.

The bill, by Assemblymember Phillip Chen, R-Brea, would have required explanations of benefits or explanations of review to include the state-assigned medical provider network identification number and an email address that the provider can use to request a copy of the underlying contract that the payer is invoking to reduce payment.

The committee analysis for AB 1048 says the State Compensation Insurance Fund reports that its provider networks generally rely on contractual relationships between providers and preferred provider organizations rather than direct contracts with providers. As a result, SCIF reports that it may be unable to demonstrate its entitlement to negotiated reimbursement rates, which would increase workers' compensation claims costs for state agencies by about $27.5 million per year.

"State Fund further indicates that applying the bill's provisions to existing claims could increase outstanding workers' compensation liabilities by hundreds of millions of dollars," the analysis says.

Meanwhile, the Assembly Appropriations Committee held SB 536, a bill by Sen. Bob Archuletta, D-Pico Rivera, that proposed allowing the Employment Development Department and carriers to compare wage data.

The bill would have allowed carriers to submit wage records and employee counts to EDD. The department would have been required to identify discrepancies in the submitted information with information it maintained. Additionally, the bill would have required EDD to provide carriers with detailed payroll information upon request.

The Assembly Appropriations Committee analysis said the bill would saddle EDD with $9.7 million in one-time implementation costs, plus $6.5 million in ongoing annual costs.

While bills that failed to advance ahead of Friday's deadline are likely out of consideration for the rest of the year, provisions from them could still be amended into other measures that are still moving through the process.

The California Legislature will adjourn the 2026 session Aug. 31.