The workers' compensation reform law that went into effect on Jan. 1 in California will not have much impact on employers in the state.
The same cannot be said about its impact on insurers or third-party administrators.
The law, said attorney Michael Sullivan, Los Angeles-based principal of Michael Sullivan and Associates, "is the most ubiquitous change that California has ever seen. It changes so many different parts of the law."
"A lot of the changes," said Long Beach, Calif.-based Darrell Brown, managing director at Sedgwick Claims Management Services Inc., "will need to be managed by the claims administrator and will affect how we handle claims."
That includes the creation of independent medical review and independent bill review structures, which move those procedures from the Workers' Compensation Appeals Board and courtroom challenges.
While Brown believes that is, overall, a good change, it could result in "an incredible burden on the claims administrator." It's not just training employees on new procedures, he said, but involves being "dependent on different players" to make sure claims are handled in an effective and efficient manner.
Independent medical review, for example, is not initiated by a TPA, but would be the TPA's financial responsibility, he said. "We will have to watch it very closely to allow for the maximization of efficiency," Brown said.
Some observers believe the series of determinations and appeals that are part of the independent review processes could result in a logjam of claims.
"There could be a delay of 75 days [in the independent medical review process] from the time that somebody requires treatment and the time that an ultimate decision has to be made," said Bruce Albert, managing partner of Albert & Mackenzie in Agoura Hills, Calif.
The bill review process could result in a maximum of 287 days before a final determination, he said.
--By Anne Freedman
February 19, 2013
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