Daniel Weintraub: Governor should allow a fix to workers' comp bill

When Gov. Arnold Schwarzenegger, early in his first term, brokered a bipartisan compromise to overhaul California's troubled system for compensating workers injured on the job, many observers thought his claims of success might be overblown, an enthusiastic exaggeration of the kind for which he was already becoming famous.

But Schwarzenegger's claims turned out to be an understatement. The bill he signed in the spring of 2004 did everything he said it would and more. The legislation was so effective at reducing costs that Democrats soon began trying to repeal some of its provisions, arguing that they and the governor had gone too far. Truly injured workers, they said, were being damaged by the reforms.

Schwarzenegger ignored the protests throughout the rest of his first term, and the results were extraordinary. The latest estimates show that the legislation, combined with two bills former Gov. Gray Davis signed in a last-ditch effort to fight being recalled from office, have reduced costs by 70 percent from projected levels, saving $14.5 billion a year. Insurance premiums charged to employers have declined by 55 percent since January 2003.

But doubts persist about the fairness of the changes Schwarzenegger (and Davis) enacted. Those billions in savings were generated by reducing payments to doctors, hospitals, vocational counselors and physical therapists caring for injured workers, and in some cases by reducing cash benefits paid to those workers. It seems likely that, along with the waste, fraud and abuse the new laws targeted, some legitimate costs have been pared from the system.

Schwarzenegger relented in one such case last year, when he signed a bill extending the period during which injured workers can collect disability payments. It turned out that a two-year cap on these payments was penalizing workers who tried to return to work quickly but could not overcome their injury and later needed surgery. If their treatment extended more than two years from the date of their injury, these workers were barred from getting the benefits to which they were entitled.

Thanks to the fix Schwarzenegger signed, workers now get five years in which to collect those benefits.

Now advocates for injured workers are making another strong push to change one of the provisions the governor enacted in 2004, and they seem to have a good point.

This one involves the way in which the system divides financial responsibility for a worker's injuries. The intent of the original bill was to relieve employers of responsibility for disability payments for injuries a worker suffered before he or she came to work at a company.

Consider a worker who had injured his shoulder before coming to a job and then re-injures the same shoulder. Under the old system, the new employer could have been held 100 percent responsible for the worker's disability benefits, even though the worker's injury was due in part to the previous condition. Under the new system, a doctor estimates the degree to which the previous condition contributed to the injury, and the employer is absolved of responsibility for that portion of the benefits.

That seems fair. But in at least a handful of cases, doctors have interpreted the provision far more broadly. They have determined that workers' gender, race or age predisposed them to an injury – and they have used those factors to reduce a worker's benefits.

In a San Diego case, a black man who developed hypertension because of exposure to toxic chemicals lost half of his disability award after a doctor concluded that African Americans are more susceptible to hypertension, according to the California Applicant Attorneys Association, which represents injured workers.

A Los Angeles worker who was compensated for hypertension brought on by an abusive supervisor lost two-thirds of her award because her mother had hypertension, even though the woman had never previously suffered from the disease, the association said.

Female workers are receiving less compensation than men for carpal tunnel injuries – the kind that come from repetitive actions such as typing – because women are more likely to suffer from these injuries. And blacks who suffer heart attacks might receive lower benefits than white workers with the same injury.

The lawyers have sponsored a bill introduced by Sen. Carole Migden, D-San Francisco, to clarify the law by stating that race, religious creed, color, national origin, age, gender, marital status, sex or genetic predisposition could not be used as factors to reduce a worker's injury award.

Business lobbyists say they agree with the intent of Migden's bill, but they believe the lawyers are exaggerating the extent of the problem.

They say the courts have ruled that underlying conditions of the kind the lawyers cite can be used to reduce a disability award only in cases where the symptoms of the condition were present before the work-related injury.

Merely citing "risk factors" of age, gender or other characteristics is not sufficient to reduce an award, they say.

If so, then the difference among the parties on this issue seems to be quite small. Schwarzenegger and his representatives should step in and craft an agreement to clarify that California law does not allow discrimination based on age, gender or race in the awarding of disability payments.

About the writer:

• Call The Bee's Daniel Weintraub, (916) 321-1914. Readers can see his California Insider political blog at CapitolAlert.com.