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| | Jungle Drums Beat That Major Work Comp Reform Is On The Horizon
By Jorge Alexandria - August 15, 2012
These past 48 hours have been abuzz with rumors that major work comp reform is imminent.
SB 863 was scheduled to be introduced by Senator Ted Lieu, (D-San Diego), Chairman of the Senate Labor and Industrial Relations Committee, Wednesday, August 15th. But the informational reform hearing that was also scheduled for today, was just cancelled.
Parts of the bill have been leaked and right now there is pandemonium between the CAAA (California Applicant Attorneys’ Association) and the medical community. They are in an uproar over both the proposed change in benefits as well as the secret environment in which all of this took place.
I mean, there were secret negotiations between organized labor and big business. Then there is the timing of its introduction with only three weeks left in the legislative session. In essence, the authors of the bill just planned to shove it down the legislature, where a poll suggested its passage was likely (as well as its signature by Governor Brown), thereby depriving the opposition any real mobilization or a voice.
Although a summary of the proposal and mock up language was released last Thursday to some in the employer and insurer community, this writer did not manage to get a copy of it. What I do know, from e-mail chatter, is that the bill would change quite a variety of things within the workers’ comp system. Among the changes would be:
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The creation of fees for filing medical liens
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The elimination of consideration of future earning capacity in the disability formula for injuries starting in 2013
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The elimination of sleep disorder, sexual dysfunction, and psychological issues as additions to primary injuries, when determining disability awards
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An increase of aggregate permanent disability benefits of $720 million per year, phased in over two years
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The creation of an Independent Medical Review system, or IMR, modeled after the IMR process of the state Department of Managed Health Care for resolving health insurance disputes.
On the surface, the plan would pour an additional $720 million annually into permanent disability benefits for injured workers. But it would also tighten up numerous rules that employers feel workers use to muddy the waters and cause mischief. For example, under current law, a worker who has hurt his knee can claim that the injury is causing him mental or sleep problems, or even sexual dysfunction. Under the new plan, employees could not claim psychological, sleep or sexual complications if it’s not primarily related to the underlying injury.
istockphoto
Another proposed change is how injured workers and insurance companies settle disputes over medical care. Today, if the doctor of an injured worker recommends a procedure but the employer’s insurance company thinks it is unnecessary, the dispute is taken before the WCAB — which, of course, takes time and carries the sort of expense you’d expect from a court appearance. Under the reform legislation, medical disputes would be settled by an “independent medical review,” basically a 3rd party doctor who will examine both sides and determine which is the proper course of action (without ever examining the patient). And that is it-- his decision is binding without any further appeals.
A third example of the sort of reforms being proposed involve doctors outside of an insurance carrier’s network. Under current law, injured workers are supposed to be treated by doctors in the insurance carrier’s network. Sometimes, however, and unbeknownst to the insurer, the worker will go to another doctor -- for months at a time-- and then the doctor will ask for payment. Under the proposal, an out-of-network doctor would have five days to report to the insurer that he has seen an injured worker in order to get paid. Wait longer than five days and the insurer doesn’t have to pay the doctor.
I don’t know about this bill. I hope CAAA can torpedo it. I mean, I – along with the majority of the adjusters out there- just got comfortable with the reforms enacted in 2004 to change our way of thinking and re-adjust cases.
Change is hard.
Jorge Alexandría is a U.S. Army veteran who received his B.A. in Political Science from Cal State Los Angeles, and graduated from Cal Poly Pomona with a Master’s in Public Administration. He holds both a California Workers Compensation Claims Professional (WCCP) designation and the State of California’s Self-Insured Administrator’s License. With more than 20 years industry experience, including various leadership positions, he is a leading expert in the field of risk management. He currently practices federal workers’ compensation of maritime interest. He can be reached at Riskletter@mail.com. The views and knowledge expressed in this article are Jorge Alexandría’s alone.
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