Dan Walters

Opinion: Workers’ comp bill sparks new battle in California

California Gov. Jerry Brown, below, holds up a newly-signed bill aimed at worker's compensation costs during a signing ceremony at a printing company in San Diego, Tuesday, Sept. 18, 2012.
California Gov. Jerry Brown, below, holds up a newly-signed bill aimed at worker's compensation costs during a signing ceremony at a printing company in San Diego, Tuesday, Sept. 18, 2012. AP

Three years ago, the Legislature and Gov. Jerry Brown enacted a significant overhaul of California’s multibillion-dollar system of compensating workers for job-related injuries and illnesses.

It followed a well-established pattern in workers’ compensation politics.

About once a decade, the complex system undergoes revision, usually when several of the five major stakeholder groups make a private deal that takes something away from the others.

In 2012, employers and labor unions, with the friendly neutrality of insurers, ganged up on lawyers who specialize in disability cases and on providers of medical care and rehabilitation.

The bill’s major provisions tightened up standards for medical and rehabilitation services to save money and increased cash benefits for disabled workers.

By all accounts, it worked, at least from the standpoint of supporters. The Workers Compensation Research Institute reported recently that the average medical payment per claim declined by 5 percent in 2013, after several years of increases.

Meanwhile, the California Workers Compensation Insurance Rating Bureau recommended, and Insurance Commissioner Dave Jones approved, a 5 percent reduction in base premiums paid by employers for coverage – although their costs would remain the nation’s highest, averaging $3.48 per $100 of payroll in the latest survey.

Not surprisingly, those on the losing side three years ago want changes without waiting the traditional decade for another workers’ comp revision.

That attitude is expressed in Senate Bill 563, carried by Sen. Richard Pan, a Sacramento Democrat who is also a physician. It would partially undo the 2012 legislation by softening “utilization review” of medical treatments, aimed at approving only those deemed to be medically necessary. Sponsors contend that without changes, the current system denies injured workers badly needed treatment.

The bill zipped through the Senate Labor Committee, with all four Democrats voting for it, three of whom had voted for the 2012 overhaul.

Their change of heart might have something to do with the bill’s supporters, who include, as one would expect, medical providers and lawyers, but also, oddly, the California Labor Federation, a sponsor of the 2012 legislation.

Whatever the reasons for labor’s flip, the California Chamber of Commerce has tagged SB 563 as a “job killer,” saying it “undermines the entire medical treatment review process.”

It will be interesting to see what Kevin de León does. He carried the 2012 bill – and trumpeted it loudly – but has since become the Senate’s president pro tem with, shall we say, broader priorities.

And if the bill reaches Brown’s desk, would he be willing to undo, at least partially, something he’s already checked off his bucket list of accomplishments?

Call The Bee’s Dan Walters, (916) 321-1195. Back columns, sacbee.com/dan-walters. Follow him on Twitter @WaltersBee.

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