If you write workers’ compensation insurance in California, adjust workers’ compensation claims in California, or are a California work comp adjuster yourself, a massive burden has been placed on you to qualify to adjust workers’ compensation claims. The California Department of Insurance, effective February 22, 2006, has added a serious expense to your cost of doing business or getting employed, with little fanfare and a brief press-release.

The press release issued February 21, 2006 advised the public and workers’ compensation insurers and adjusters that compliance is required no later than July 1, 2006. The Regulations require that all people who are to adjust workers compensation claims must attend fifteen eight-hour days of classroom training and an additional five eight-hour-days of other training on a massive list of subjects that, to my knowledge, no training organization has prepared.

The press release follows:

INSURANCE COMMISSIONER JOHN GARAMENDI ANNOUNCES NEW WORKERS’ COMPENSATION REGULATIONS REQUIRING CERTIFICATION OF CLAIMS ADJUSTERS AND MEDICAL BILL REVIEWERS

Effective February 22, the new regulations require all insurers to meet minimum standards of training and/or experience and show certification to the Department by July 1

SACRAMENTO – Insurance Commissioner John Garamendi announced new workers’ compensation regulations Tuesday that will require all insurers to submit certification forms that verify that claims adjusters and medical bill reviewers meet the new minimum standards of training and/or experience.

Effective Wednesday, February 22, the new regulations are designed to help speed appropriate care to injured workers and eliminate dysfunction that adds cost to the system. The new regulations complement the workers’ compensation reforms of 2004 and are a result of AB 1262 (Matthews).

“These measures will ensure that the people who process claims have the knowledge and experience to make sure that our injured workers are not harmed by needless delays within the system,” said Insurance Commissioner John Garamendi. “This is the first time standards have been established for the handling of workers’ compensation claims. It is yet another important step in the overall reform of the California’s workers’ compensation system.”

All workers’ compensation insurers, including insurance companies, self-insured employers and third-party administrators, must certify annually to the Insurance Commissioner on or before July 1 that their staff are trained, in training or qualified with experience that meets the standards required by the new regulations. For those who do not meet the experience requirements, training courses are required.

The California Department of Insurance also advises:

• A Claims Adjuster is required to have at least 160 hours of training with 120 hours being conducted in a classroom with an instructor.
• A Medical-Only Claims Adjuster is required to have at least 80 hours of training with 50 hours being conducted in a classroom with an instructor.
• A Medical Bill Reviewer is required to have at least 40 hours of training with 30 hours being conducted in a classroom with an instructor.

The Regulations do not describe, nor do they justify, the expense of providing 120 hours of classroom study with a live instructor for each adjuster who does not qualify by experience and 40 additional hours of training by methods like computer based training. It may be difficult, in fact, to find sufficient knowledgeable, quality and qualified workers’ compensation educators to train in less than four months all of California’s workers’ compensation adjusters without sufficient experience. Insurers will be obligated to either train or fire their current adjusters. How this fact will effect service to the people seeking workers’ compensation benefits is yet to be seen.

Training Departments should gear up as fast as possible to comply with these onerous regulations.

Workers’ compensation insurers should note that the Regulations do not state a specific penalty for failure to comply. The usual penalty is a $55,000 fine for each violation.

Barry Zalma is a California Lawyer who specializes in insurance coverage disputes and the Investigation of Suspected Fraudulent Insurance Claims. Check him out at www.zalma.com