Capitol Alert: Effects of California's workers compensation overhaul not yet certain

Published: Monday, May. 12, 2014 - 10:38 am

Two years ago, the Legislature and Gov. Jerry Brown gave their blessing to an overhaul of California's multi-billion-dollar system of compensating workers who sustain job-related illnesses and injuries.

The overhaul, billed as a reform, had been worked out privately by employers and labor unions and was opposed, in the main, by two other major workers compensation interest groups — attorneys who specialize in disability cases and medical care providers.

The legislation, Senate Bill 863, raised cash benefits to disabled workers and promised to offset their costs by clamping down on medical costs.

It's too early to tell whether the changes will have their intended effect, the Massachusetts-based Workers Compensation Research Institute says in a new study of California's system and those of 15 other states. The statistical compilation is aimed at setting benchmarks for the systems so that the impact of changes in benefits and costs can be more fully weighed.

In the absence of hard data, the study — which compares SB 863's changes to experiences in other states — suggests that the measure will, in fact, reduce medical and legal costs associated with claims for benefits in California. Prior to the overhaul, those costs were among the nation's highest, even though the prices paid for medical office visits in California were among the lowest.

The study attributes that anomaly to more frequent use of services, and fragmented billing practices in prior years, echoing complaints of employers.

SB 863 mandates the use of Medicare's medical fee schedule, drops fees for surgical procedures sharply, and puts new review processes in place. Those changes, the study said, will probably raise the incomes of primary care doctors who handle workers compensation cases but reduce incomes of surgeons and other specialists.

The study is available only by purchase here.

Read more articles by Dan Walters

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