Report on California Workers’ Comp Reforms Touts Successes

The Department of Industrial Relations and its Division of Workers’ Compensation have released a report on progress implementing California’s workers’ compensation reforms.

The report details increased payments to injured workers and significant cost-saving benefits for employers.

The reforms are part of Senate Bill 863, which went into law on Jan. 1, 2013. These changes include the use of evidence-based medicine to guide treatment decisions, treatment dispute settlements by independent medical reviewers, and improving workers’ access to network physicians.

Workers’ compensation costs for employers have dropped, according to the report.

In May the California Department of Insurance adopted advisory pure premium rates for July 1, which on average are five percent less than the industry average for filed pure premium rates as of Jan. 1, and 10.2 percent less than the average of the approved Jan. 1 rates.

Benefits for injured workers have also increased, the report shows.

Prior to the reform legislation, the minimum weekly benefit payment for people with permanent disabilities was $130, and the maximum was $270. The new minimum weekly PD benefit is $160, and the maximum is $290. Also, the Return-to-Work-Supplement Program, which provides a one-time $5,000 supplement to eligible injured workers – became effective in April 2015. As of June, DIR has issued 370 checks totaling nearly $2 million, according to the report.

SB 863 also created an Independent Medical Review program, in which physicians use evidence to determine the necessity of requested treatments. This process eliminates treatments recommended on the basis of profit, habitual practice, misinformation or fraud, according to the report.

Findings of the report include:

• IMR decisions are being issued well within the 30-day statutory time frame from receipt of medical records.
• Lien filings have decreased by roughly 60 percent since the passage of SB 863.
• Commitment to evidence-based medicine is also demonstrated through recent adjustments to the Medical Treatment Utilization Schedule. The MTUS is a set of guidelines for appropriate medical care based on high-quality, unbiased scientific studies. However, the system allows for exceptions when treatment can be based on guidance other than the MTUS.
• SB 863’s revisions to the Medical Provider Network program went into effect on Aug. 27, 2014. More of these networks have been approved, and they are also now more accountable to DWC. Physician listings must be updated quarterly, and if a provider leaves the network, they are required to give 45 days’ notice.