Sink or Swim Legislation?
By Robert Warne - September 11, 2003As the proposed work comp changes are parsed out under public scrutiny, some are calling it a lifesaver while others say it’s just smoke and mirrors. Below are some of the points addressed in SB 228 and AB 227 that haven’t been mentioned as much as the outpatient fee schedule and chiropractor reforms.
Right off the top the legislation stipulates that carriers’ rates by the first of the year can’t be any higher than they were July 1, 2003. Any deviations from this rule would need to be cleared by the insurance commissioner.
The state’s beleaguered general fund will receive some relief this coming year as a result of the new legislation. So instead of the general fund sponsoring 80 percent of the workers’ compensation system administration costs, employers through an assessment will pick up the complete tab.
The Legislature did give the anticipated green light on a plan to financially stabilize the California Insurance Guaranty Association by selling bonds.
And State Fund will no longer be subject to hiring freezes and staff cutbacks that may be imposed on other state agencies.
But Sen. Chuck Poochigian, one of members of the Workers' Compensation Conference Committee, doesn’t think the legislation will bring about any substantial changes to the cost drivers in the system.
He told the San Francisco Chronicle that the “bill only addresses half the problem, by tethering medical fees without raising the standard for permanent disability or capping litigation costs. He also contested the estimated $4.6 billion in savings from the reforms, because the Workers' Compensation Insurance Rating Bureau was unable to complete the cost analysis on short notice. He said the only confirmed savings are $2.5 billion.”
One of his suggestions that didn’t fly with the committee was to deny prisoners from receiving workers’ compensation.
Insurance Commissioner John Garamendi had nothing but praises yesterday for the committee’s legislative offering.
"This is a tremendous, superb start to a complete reform of this dysfunctional system," he said at a news conference. "I applaud the Conference Committee for its work, and I urge the Legislature to support these badly needed reforms. This is an important first step in making this system serve the injured worker and protect the employer - not feed the appetites of those who abuse it to further their own financial interests."
And according to the Chronicle Governor Gray Davis backed up Garamendi’s praises when he said, "Make no mistake about it -- this is not tinkering, this is a major overhaul of the worker's compensation system." | 
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