Democrats Say New Disability Ratings Don't Follow Law
By Steve Lawrence, Associated Press Writer - December 7, 2004SACRAMENTO (AP) _ Senate Democrats accused the Schwarzenegger administration Tuesday of developing regulations that would severely and improperly slash benefits for disabled workers.
The California Applicants Attorneys' Association, a group of lawyers who represent employees who suffer job-related injuries, predicted the cuts would average 70 percent.
"It appears to me my worst fears have been achieved," Sen. Richard Alarcon, D-Van Nuys, said after a two-and-a-half-hour hearing by the Senate Labor and Industrial Relations Committee.
Four Democrats on the committee spent most of that time grilling Andrea Hoch, the director of the Division of Workers' Compensation, about draft regulations altering how doctors rate the severity of workers' job-related disabilities.
The severity of the disability determines how much injured workers receive in compensation to help make up for their inability to earn a living.
Sen. Sheila Kuehl, D-Santa Monica, said lawmakers expected that the sweeping changes in workers' comp law adopted by the Legislature in April would result in some reductions in benefits but not to the extent indicated by Hoch's proposals.
"Nowhere in the legislation was there any intention to reduce whole hog benefits for workers," she said.
Hoch said that there most likely would be an overall decrease in benefits but that the regulations were a work in progress and that she would take into consideration the lawmakers concerns before filing a final version.
She predicted the new system would produce more accurate and less subjective ratings. Hoch planned to adjust the regulations after they take effect Jan. 1 and their impact can be determined based on "actual wage-loss data.''
"I view the new permanent disability system ... as a first step," she said. "Get this implemented on a timely basis and then the most important thing is to start monitoring data on the new system."
But the Democrats and other critics said that data gathering could take years. They questioned why Hoch hadn't done a study that would attempt to gauge the impact of the proposed changes before they take effect.
Hoch said she decided not to ask the Rand Corp., the Santa Monica-based think tank that helped develop the draft regulations, to do the study because of time constraints and the wide range of disability ratings that the current system can produce.
Robert Reville, a Rand researcher, said he told Hoch that the study would result in better data.
The applicants' attorneys said they based their prediction of a 70 percent average reduction in benefits on a study by J. Paul Leigh, a health economics professor at the University of California, Davis, School of Medicine.
In particular, they cited the case of Domenicio Argentino, a former San Diego shipyard worker who was rated 30 percent disabled because of knee and back injuries. Under the proposed regulations his benefits would drop from $23,800 to a total of $4,235, the attorneys said.
Leigh's study, which evaluated the impact of the draft regulations on 218 injury cases, was paid for by the attorneys, but Leigh stressed that it was scientifically rigorous.
David Schwartz, the association's president, said the draft regulations would be "absolutely devastating to injured workers."
"We're hoping that (Hoch) has listened to the senators that spoke today about legislative intent and she will make substantial changes," he said. "Our other recourse is to file a lawsuit."
Charles Bacchi, a lobbyist for the California Chamber of Commerce, said a survey of employers turned up at least a few cases in which workers would get higher disability ratings under the new regulations.
"It's not as clear-cut as some of the rhetoric would lead you to believe," he told the committee.
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