California: Reform bill signed into law; CWCI breaks down main parts
While many system participants are praising the process leading up to the measure, there remain questions about whether, when, and how much it will save workers' comp payers.
The governor's office said the bill "reverses a four-year trend of rate increases" and would "save hundreds of millions of dollars for California's employers while preventing an imminent crisis of skyrocketing rates that would have hurt both injured workers and businesses."
Brown's office also said the legislation will save California $40 million in insurance costs and help support the state's economic recovery.
Part of the cost savings to businesses is dependent on when and how the new regulations are implemented, according to the Association of California Insurance Companies. Insurers are concerned that the increased benefits provided in the bill may increase costs to businesses or not reduce system costs.
Nevertheless, many in the workers' comp community are touting the increased efficiencies and accountability that they expect to result from the measure.
Key components. The California Workers' Compensation Institute has produced an in-depth summary of the reform legislation. These are the key issues:
- The bill sets new minimum/maximum weekly permanent disability payments and revises the permanent disability rating formula.
- It eliminates the 15 percent permanent disability bump up/bump down return-to-work incentives.
- It provides a voucher of up to $6,000 for qualifying permanent disability claims with injury dates on or after January 2013.
- It mandates adoption of Medicare's Resource-based Relative Value Scale schedule for physician services to be phased in over four years starting in 2014 and to remain in effect until the Division of Workers' Compensation adopts an RBRVS schedule.
- It requires new fee schedules for home health care, certified interpreters, and copy services; modifies the Ambulatory Surgery Center fee schedule and the requirements for a vocational expert schedule.
- It calls for creation of a 30-day independent medical review process for medical disputes, which will not involve a physical exam of the worker.
- It deems DWC approved medical provider networks to be valid and sets forth new MPN rules.
- It repeals duplicate payment allowances for spinal surgery hardware but calls for the DWC administrative director to adopt a regulation by next July specifying additional fees sufficient to cover costs that include surgical hardware for some spinal surgery diagnostic groups.
- It eliminates the requirement to seek an agreed medical evaluator before obtaining a qualified medical evaluator, prohibits chiropractors from serving as a primary treating physician beyond the 24-visit treatment cap, and limits qualified medical evaluators to 10 office locations.
- Calls for an independent bill review process to handle medical billing disputes.
- Requires a $150 lien filing fee as of January 2013 for new liens and a $100 activation fee for existing liens, mandates a three-year filing time on liens for services provided on or after January and within 18 months of the service date for a service provided on or after July 2013.
Read more at the WorkersComp Forum homepage.
October 1, 2012
Copyright 2012© LRP Publications
