Legislature Enacts Workers’ Compensation Reform

By Lawrence Silver, Esq.

Legislature Enacts Workers Compensation Reform The California Legislature on the last day of the regular session, has passed massive workers compensation reforms. Months of negotiations between self-insured employers such as Disney, UPS, etc., and several labor unions including public safety representatives, the Teamsters, and the California Federation of labor, has resulted in the passage of Senate Bill 863 which affects the California workers compensation system through a combination of estimated savings in the range of 1 1/2 to 2 billion dollars, and, increased benefits in permanent partial disability ranging from $750 million-$1 billion.

This is accomplished with the following changes:

Permanent Partial Disability— shall be increased for dates of injuries commencing January 1, 2013, January 1, 2014, from the present $230 payment rate per week to $290. This increase has been quantified as a $750 million benefit increase. An additional $120 million fund per year shall be available to more seriously injured workers whose permanent disability ratings are considered inadequate in relation to the consequences of not being able to return to work as a result of their injuries. Studies and guidelines for this program are to be completed by January 1, 2016.

Guzman–this controversial Court of Appeal decision which enables injured workers more latitude in achieving an accurate permanent disability rating remains valid law.

Psychiatric, Sleep Loss, and Sexual Dysfunction--psychiatric, sleep loss, or sexual dysfunction permanent disability as a consequence of a physical injury is barred. The only exceptions are when there has been a catastrophic injury, or the injured worker is a victim of a violent crime.

Independent Medical Review–all medical treatment disputes shall be resolved by combination of utilization review and/or independent medical review. By July 1, 2013, all laws enabling a second medical opinion from a second medical exam are repealed. Thus, all medical disputes shall be resolved by independent medical doctors reviewing the relevant medical records only. There is no provision for judicial review.

Liens— all disputes regarding medical treatment liens, or medical legal liens such as interpreters, copy services shall be resolved through a combination of Independent Bill Review, Mediation, Arbitration. In addition there shall be a $150 filing fee for such liens. Fee schedules–regulatory fee schedules shall be created to cover services of interpreters, home healthcare services, physicians, ambulatory surgery centers, Medi-Cal fees, and, photocopy services.

Carve outs–the State of California has been added to the list of those employers who are eligible for alternate dispute resolution. Such programs enable these employers to be “carved out” of the Worker’s Compensation system, and, they maintain their own system of mediation and arbitration.

Supplemental Job Displacement Benefits–up to a maximum of $6000 in the form of vouchers is available to those injured workers who are not offered regular or alternate/modified work lasting at least 12 months.

This bill states that our present system is “excessively litigious, time-consuming, burdensome and unpredictable”. It states further that this bill will bring “uniformity, consistency and objectivity”. In conclusion, as a result of the negotiations mentioned above, the initial language of this bill was released approximately 3 weeks before the end of the legislative session. After a groundswell of opposition, many amendments to the original bill were made. Those critical of the bill in the last days of the session felt that it was still too overreaching especially with regard to those reforms involving the removal of the definition of permanent disability, the elimination of psychiatric consequences of physical injury, the vagaries of the $120 million fund, and the lack of judicial review of independent medical review.

Contact our Los Angeles workers’ compensation law firm

Goldschmid, Silver and Spindel, in the interests of our clients, shall maximize these needed new benefits whenever possible. To learn more about how our firm can help you, schedule a free consultation by calling 213-251-5900 or contacting our Los Angeles office online.