Battle lines being drawn over California reform efforts

A plan to reform the workers' comp system will either protect workers and employers or cause large groups of injured workers to lose compensation, depending on who is talking. California regulators and attorneys for injured workers are squarely on opposite sides of the plan.

Representatives of labor and business have "been working vigorously" to reform the system "before projected rate increases push California to a crisis situation," said Christine Baker, director of the California Department of Industrial Relations. "The result of this work is a comprehensive reform proposal that protects workers and employers by improving benefits and ending wasteful litigation."

Baker said stakeholder meetings over the last several months identified the following flaws in the system:

Low permanent disability benefits.
Unnecessary delays and disputes in medical delivery.
Lack of standard fee schedules.
Poor oversight of medical provider networks.
Liens overwhelming the courts.

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The reform plan being discussed would "redirect benefits to increase payments to disabled workers while standardizing the process to reduce unnecessary disputes and litigation," the DIR said.

Specifically, the proposal would save up to $1.3 billion by reducing expenses for liens, out-of-network treatment disputes, and other unnecessary expenses. An additional $750 million would be provided to injured workers in compensation while employers would save as much as $670 million.

Opposition. "The proposed legislation contains many provisions that are WORSE than Gov. Schwarzenegger's SB 899," said the California Applicants' Attorneys Association in a reference to prior legislation. In a blog posting, the organization disputed the contention that the plan would increase permanent disability compensation in return for efficiencies in the system, saying it contains provisions "that make it extremely difficult for injured workers to qualify for the disability ratings needed to access the increased compensation." Insurers will not pay the increased benefits, it said.

The association said seriously disabled workers who are unable to return to work and people who have psyche, sleep, and sex problems from their injuries would get less permanent disability compensation under the proposal.

Those least injured would get the most benefit from the plan, the association says, by increasing permanent disability compensation "for higher earning and less disabled workers."

Read more at the WorkersComp Forum homepage.

September 24, 2012

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