This Fiscal Note is not an official copy and should not be quoted or cited.
Fiscal Note - SB 0868 - Medical Reports in Workers' Compensation Cases
L.R. NO.  3296-01
BILL NO.  Perfected SB 868
SUBJECT:  Workers' Compensation
TYPE:     Original
DATE:     April 3, 1996



                              FISCAL SUMMARY
                    ESTIMATED NET EFFECT ON STATE FUNDS


FUND AFFECTED              FY 1997             FY 1998           FY 1999

Second Injury Fund    ($4,484,708)        ($5,342,905)      ($5,351,787)

Total Estimated
Net Effect on All
State Funds           ($4,484,708)        ($5,342,905)      ($5,351,787)


                   ESTIMATED NET EFFECT ON FEDERAL FUNDS


FUND AFFECTED              FY 1997             FY 1998           FY 1999

None

Total Estimated
Net Effect on All
Federal Funds                   $0                  $0                $0


                    ESTIMATED NET EFFECT ON LOCAL FUNDS


FUND AFFECTED              FY 1997             FY 1998           FY 1999

Local Government                $0                  $0                $0


                              FISCAL ANALYSIS

ASSUMPTION

The Attorney General (AGO) estimates costs related to the need for additional
staff (i.e., 5 assistant attorney generals, 1 paralegal and 2 secretaries).
The AGO assumes that the proposal would mainly affect partial disability
claims filed against the Second Injury Fund (SIF).  If SIF cases were allowed
to be submitted on medical reports cases previously settled or dismissed
would be taken to hearing, resulting in an additional 800 to 1,200 cases.
Along with this increase appeals would increase.  In order to adequately
defend these cases, SIF attorneys would have to cross-examine the claimant's
doctor.  Oversight adjusted expense and equipment in accordance with the
Office of Administration (OA) guidelines.  Costs would be $319,708 in FY97;
$342,905 in FY98; and $351,787 in FY99.

The State Treasurer (STO) assumes that this proposal would result in a
substantial loss to the SIF.  The STO indicates that it lacks sufficient data
to make an estimate and that the AGO would provide an estimate.  According to
information provided by the AGO, the estimated loss to the SIF would be $5.0
million annually.  Oversight prorated the FY97 loss to ten months.

The Department of Insurance (INS) does not expect this proposal to have a
significant fiscal impact.  However, the enactment of more than one similar
proposal resulting in a minimal fiscal impact to the INS could require an
increase in the INS's appropriation for such purposes.

The Department of Labor & Industrial Relations (DOL), Division of Workers'
Compensation (WC) does not expect to be fiscally impacted.

The Office of Administration (OA), Risk Management assumes that the language
of this proposal would strengthen the Central Accident Reporting Office's
ability to request an employee to submit to a medical examination.  Oversight
assumes the fiscal impact would be zero.

FISCAL IMPACT - State Government    FY 1997     FY 1998     FY 1999
                                   (10 Mo.)
SECOND INJURY FUND

Costs-Attorney General (AGO)
  Personal Service (8 FTE)       ($174,607)  ($214,853)  ($220,224)
  Fringe Benefits                 ($53,674)   ($66,046)   ($67,697)
  Expense and Equipment           ($91,427)   ($62,006)   ($63,866)
Total Costs-AGO                  ($319,708)  ($342,905)  ($351,787)

FISCAL IMPACT - State Government    FY 1997     FY 1998     FY 1999
                                   (10 Mo.)
Loss
Increased Claims               ($4,165,000) ($5,000,000) ($5,000,000)

ESTIMATED NET EFFECT ON
SECOND INJURY FUND             ($4,484,708) ($5,342,905) ($5,351,787)


FISCAL IMPACT  - Local Government   FY 1997      FY 1998      FY 1999
                                   (10 Mo.)

                                         $0           $0           $0

DESCRIPTION

The proposal would require an injured employee to submit to a reasonable
medical examination at the request of the state through the Central Accident
Reporting Office, Second Injury Fund or its' legal counsel.

The Second Injury Fund's exemption from a provision requiring parties to
object to medical reports or have objections waived would be removed.

This legislation is not federally mandated, would not duplicate any other
program and would not require additional capital improvements or rental
space.

SOURCES OF INFORMATION

Department of Labor & Industrial Relations
  Division of Worker's Compensation
Attorney General
Department of Insurance
Office of Administration
  Risk Management
State Treasurer