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CA AFL-CIO Supported Workers Comp SB 863 "Reform" Screws Injured Workers Benefiting Crooks
The California pro corporate AFL-CIO head Art Pulaski and his political operative Angie Wei colluded with crooked insurance companies and labor supported Governor Brown to pass legislation that screws tens of thousands of injured workers. They have personally by support in this deal have helped caused the deaths of injured workers who have been refused healthcare due to this new "reform" deal. Wei who is the "legislative director" of the AFL-CIO has also been a big proponent of protecting insurance industry profits while cutting benefits for injured workers and healthcare providers
California AFL-CIO Supported Workers Comp SB 863 Reform Screws Injured Workers To Benefit Insurance Industry
Docs Call Workers Comp Law Unconstitutional "SB 863's implementation will deny California workers of the right to have their medical bills paid by employers and their workers' compensation carriers."
Docs Call Workers Comp Law Unconstitutional
http://www.courthousenews.com/2013/11/18/62965.htm
Courthouse News Service
Kirk Kancilia, who practices in San Diego, sued the state on behalf of medical providers who offer care to workers' compensation applicants on a lien basis.
SAN DIEGO (CN) - California's workers' comp reform will bar some medical providers from reimbursement for previously provided care unless they pay a "ransom," a chiropractor claims in a federal class action.
Kirk Kancilia, who practices in San Diego, sued the state on behalf of medical providers who offer care to workers' compensation applicants on a lien basis.
Senate Bill 863, which makes wide-ranging changes to California's workers' compensation system, was passed on Aug. 31, 2012 and signed into law by Gov. Brown on Sept. 18, 2012. The bill took effect on Jan. 1, 2013, but not all of its provisions were effective immediately.
The reform was touted as providing increased benefits to injured workers and creating cost-saving efficiencies. Among other things, SB 863 increased permanent disability benefits by 30 percent, reduced the costs of workers' compensation losses by nearly $1 billion, and saved California $40 million annually in insurance costs, according to the governor's statement the day he signed the bill.
But in his lawsuit, Kancilia claims that the reform "creates a multi-million dollar windfall for big workers' compensation insurance companies by canceling millions of unpaid medical bills of injured California workers on January 1, 2014 absent this Court's intervention. Put simply, SB 863's implementation will deny California workers of the right to have their medical bills paid by employers and their workers' compensation carriers."
Kancila claims the law violates the Constitution by canceling lien claims filed by medical providers before Jan. 1, 2013, unless the providers pay a $100 "lien activation fee" before Jan. 1, 2014.
Healthcare providers have the right to file liens for payment for their services against an award made in favor of the injured workers. But Kancila claims workers' comp insurance companies delay resolution of liens, ignore them or underpay them, resulting in a large volume of unresolved claims congesting the workers' compensation system.
SB 863 seeks to reduce the volume of lien filings by imposing a flat $100 lien-filing fee on medical providers who filed liens as of Jan. 1, 2013, and a flat fee of $150 on those who file liens after that date.
The fees "discourage the filing or pursuit of meritorious low-dollar-value liens by rendering them valueless, thereby violating the constitutional rights of independent service providers," Kancilia says in the lawsuit.
While the fees will make it infeasible for independent providers to pursue liens for low-dollar-value services, they will not have the same impact on service providers who are part of an insurer's affiliates or preferred group of providers, as these entities typically rely on contractual rights, not liens, to obtain compensation, according to the complaint.
The fees will not make as big an impact on larger providers who offer higher profit-margin services and multiple services on a per-workers basis. Nor will the lien filing fees affect insurance companies, HMOs, labor union benefit plans, and other large holders of workers' compensation liens because SB 863 specifically exempts any lien filed by most of these entities, Kancilia says in the lawsuit.
However, for independent providers, the law eliminates their ability "to obtain judicial and administrative enforcement of their vested property right to secure reasonable compensation for their services through the workers' compensation lien procedures," according to the complaint.
For example, Kancilia claims he has 300 to 500 liens with dollar amounts ranging from $500 to $1,500 per lien.
"This means that to collect between $75,000-100,000, Dr. Kancilia will have to pay $30,000-50,000 in activation fees and wait indefinitely. This is something he simply cannot do from his own personal reserves and, moreover, is unable to finance these sums in light of the current economic and lending environment. This means that, on January 1, 2014, bills for up to $100,000 of services provided by Dr. Kancilia will be voided for the benefit of big workers' compensation insurance companies and to Dr. Kancilia's detriment - threatening his ability to continue in practice," according to the complaint.
Kancilia wants the law declared unconstitutional for violating the Fifth and 14th Amendments. He wants the government enjoined from collecting the lien filing and activation fees.
He is represented by Matthew D. Rifat
http://www.courthousenews.com/2013/11/18/62965.htm
SB 863: Landmark Workers’ Comp Reform to Support Injured Workers
http://www.calaborfed.org/index.php/site/page/sb_863_landmark_workers_comp_reform_to_support_injured_workers
Statement by California Labor Federation Executive Secretary-Treasurer Art Pulaski
"Finally, there’s a solution to the growing workers’ compensation crisis – a bill that provides a system-wide benefit increase of $860 million for injured workers, while reducing delays and friction that waste time and money.
"SB 863 is a landmark proposal that achieves a true rarity in Sacramento. It finds a way to increase benefits while reducing costs. After months of negotiations between labor and management, and a statewide listening tour hosted by the Department of Industrial Relations, a comprehensive reform deal was struck that benefits both workers and employers.
"Under this proposal, workers receive a 30 percent benefit increase. Those injured on the job will receive faster, higher quality medical treatment. Workers on permanent disability will receive a benefit increase and quicker payments of benefits. Dispute resolution is expedited, freeing up hundreds of millions of dollars that go straight to injured workers and their families. By cutting waste in the system, benefit increases were made possible while overall costs were reduced.
"Injured workers have suffered enough under Arnold Schwarzenegger’s draconian cutbacks to workers’ compensation. SB 863 puts more money in the pockets of injured workers while strengthening the system for years to come. Doing nothing is not an option. Under the current system, insurance costs are expected to rise by 18% in January. SB 863 is the right reform at a critical time.
"Opponents of SB 863, many of whom profit from the system, have engaged in a campaign of misinformation in an effort to protect the failed status quo. Not only are the reforms proposed in SB 863 necessary, they’re literally a lifeline for the system and the workers it benefits.
"SB 863 tackles the toughest challenges facing the workers’ compensation system head on, providing fresh hope to injured workers that have suffered for eight years under the failed reforms of the Schwarzenegger Administration. It’s time for real reform that puts injured workers first. We urge the legislature to pass SB 863 today, sending it to Gov. Brown for his signature."
California workers' compensation bill faces difficulties-Secret Deal Between CA AFL-CIO & Safeway/Disney "further reduces disability compensation and access to medical care,"
"
By Marc Lifsher
August 27, 2012, 3:41 p.m.
http://www.latimes.com/business/money/la-fi-mo-california-comp-bill-difficulties-20120827,0,1832553.story
SACRAMENTO -- Advocates for low-income injured workers and the attorneys who represent them are furiously rejecting a proposed overhaul of the state's complex, costly workers' compensation insurance system.
"We oppose this last-minute rush to jam through workers' compensation legislation that further reduces disability compensation and access to medical care," said Jesse Ceniceros, president of VotersInjuredatWork.org.
The mammoth bill was negotiated behind closed doors over months by the California Labor Federation and large, self-insured employers, including Safeway Inc. and Walt Disney Co.
The 170-page bill was officially introduced in the state Legislature only late last Friday. Proponents argued that it provides about $700 million a year in new benefits to victims of on-the-job accidents. Money to pay for the boost would come out of an estimated $1 billion-plus in savings created by making the $16-billion system more efficient.
But an actuarial report released Monday that was commissioned by the administration of Gov. Jerry Brown questioned the level of predicted savings.
The Workers' Compensation Insurance Rating Bureau, a statistical agency financed by the insurance industry, concluded that savings generated by the overhaul would be only $400 million, which is $300 million less than the cost of the hike in benefits.
The rating bureau, however, cautioned that it lacked sufficient information, time and expertise to fully evaluate the costs of the proposed workers' compensation bill, SB 863 by Sen. Kevin de Leon (D-Los Angeles).
The proposal will be subject to an informational hearing in the Legislature on Tuesday morning. The bill to become law must be passed before the Legislature adjourns just before midnight Friday.
CA AFL-CIO Angie Wei Negotiating With Pols With Aim Of "Eliminating benefits for certain health conditions" for increase in permanent disability benefits
http://www.californiahealthline.org/articles/2012/8/15/unions-circulating-draft-of-bill-to-boost-workers-compensation-benefits.aspx#ixzz23lKAXZ7k
Wednesday, August 15, 2012
Unions Circulating Draft of Bill To Boost Workers' Compensation Benefits
Lobbyists for labor unions are circulating a summary of proposed legislation to increase workers' compensation benefits, the Sacramento Bee's "Capitol Alert" reports (Walters, "Capitol Alert," Sacramento Bee, 8/14).
On Wednesday, the Senate Industrial Relations Committee is scheduled to hold an informational hearing on language of the proposed bill (Johnson, Sacramento Business Journal, 8/14).
Background
Although there is less than a month left in the legislative session, California labor unions have pushed for the introduction of a bill that would increase workers' compensation payments to permanently injured workers and limit the fees that can be charged in processing claims.
Angie Wei -- a lobbyist with the California Labor Federation -- said that her group has been in talks with the chairs of the Senate Labor and Assembly Insurance committees about the issue and that unions and employers have been negotiating over workers' compensation for months (California Healthline, 8/9).
Details of Summary
According to a 45-point summary of proposed language, the bill would increase workers' compensation benefits by a total of about $700 million annually for individuals with permanent injuries ("Capitol Alert," Sacramento Bee, 8/14).
The legislation also would reduce costs in the workers' compensation system by a projected $1.2 billion to $1.4 billion (Sacramento Business Journal, 8/14).
The bill would cut costs by:
Eliminating benefits for certain health conditions; and
Scaling back considerations of future earning capacity while setting benefits.
The provisions detailed in the summary could be incorporated into a separate workers' compensation bill (SB 863) by Sen. Ted Lieu (D-Torrance), according to "Capitol Alert."
Reaction to Summary
The summary is drawing opposition from lawyers who specialize in workers' compensation cases. They argue that the bill is worse than workers' compensation reforms implemented by former Gov. Arnold Schwarzenegger (R), which the legislation seeks to undo.
According to "Capitol Alert," it is unknown how health care providers and health insurers would react to the bill ("Capitol Alert," Sacramento Bee, 8/14).
CA AFL-CIO Angie Wei Backs Anti-Injured Worker SB 863-Injured Workers Excluded From Secret Negotiations
SB 863: Real Workers’ Comp Reform to Reduce Costs and Help Injured Workers
By Angie Wei, California Labor Federation
http://www.calaborfed.org/index.php/page/sb_863_real_workers_comp_reform_to_reduce_costs_and_help_injured_workers
Arnold Schwarzenegger rode into the Governor’s office in 2004 on the campaign promise to “fix” the workers’ compensation system. Every day in 2004, the media hammered home Schwarzenegger’s talking points that California’s highest-in-the-nation workers’ compensation costs were driving employers, and jobs, out of the state.
In the face of a relentless media campaign and the threat of an extreme workers’ comp reform ballot measure, the Legislature passed SB 899 in 2004—a draconian bill that gutted the workers’ compensation system and created more pain and suffering for injured workers.
Since SB 899, permanently disabled workers have seen their benefits slashed to the bone. Medical treatment is delayed and denied by insurance companies, sometimes for over a year. As a result, injured workers are stuck at home battling insurance companies for the medical care they need, with no ability to return to work.
After eight years of watching injured workers struggle with a slashed permanent disability schedule, we say, “Enough is enough.” Enough of injured workers stuck in a system where medical treatment is delayed and benefits aren’t enough. Enough of workers’ comp costs rising because of administrative costs – money going to claims administration and NOT going to injured workers.
The Schwarzenegger “reform” has failed both employers and workers. The system is still unstable and costs are rising across the board. Now is the time for real reform that protects workers, eliminates waste and reins in costs for workers and businesses. This year, representatives from both labor and management came together to fix the system before we face another workers’ comp crisis. Admittedly, labor and management don’t agree often on many issues. But both sides see the crisis facing workers’ comp, and want to get ahead of the impending disaster before employers and injured workers are crushed by rising costs and no path to increased benefits.
After hundreds of hours of negotiations, a team from labor and management, with the support of the Department of Industrial Relations, has developed a workers’ comp reform package that drastically improves the system, increasing benefits and instituting savings throughout the system.
We have an opportunity, in the next five days, to pass significant workers’ comp reform (SB 863) that would (1) add $740 million in NEW permanent disability money into the pockets of injured workers, (2) mitigate the delays injured workers face getting medical treatment, (3) deliver savings to the employers and (4) actually bend the rising cost curve of workers’ comp.
Not only is this reform proposal good for injured workers and for employers, but it is good for all of us in the union movement. How many times have we been at the bargaining table only to hear employers say they can’t afford a raise or benefit increase, or that they have to cut benefits for family coverage, because workers’ comp rates are bleeding them dry? How much have union members given up in wages and benefits because comp rates are skyrocketing?
Labor and management’s reform puts $740 million into the pockets of injured workers and helps them get timely, appropriate medical care. We have a governor who will sign the deal and employers who negotiated it.
Still, opposition from vendors who profit from the status quo is steep. The question we ask the opposition is this -- what are YOU going to do to get $740 million in new dollars for injured workers? What is YOUR plan to stop the delays and denials of medical treatment? How will YOU stave off double digit increases in workers’ comp costs? What are YOU going to do when union members are at the bargaining table fighting for wage increases and health care, when workers’ comp costs increases have eaten up the money on the table?
Finally... opponents to reform are saying this deal does too much, too fast, too late in the session. The Federation has been fighting to get more money to injured workers for eight years. This year, the Assembly Insurance Committee and the Senate Labor Committee held an informational hearing in March to tee up labor-management negotiations. The Department of Industrial Relations and the Division of Workers’ Compensation held a statewide listening tour to take input from all stakeholders in the system before negotiations started. Many of the medical reform provisions have been passed by the labor-management Commission on Health and Safety and Workers Compensation, through public testimony, written feedback, and public votes to adopt the research.
Why anyone is surprised about this effort is a surprise to us.
This negotiated deal is not perfect, we don’t profess it to be so. But that is the nature of negotiations – no one gets everything they want. Yet, we have a proposal that garners the support of both unions and employers, meeting the fundamental goals of getting more money to injured workers, bending the cost curve, and saving employers money.
There is no other path to getting $740 million back in benefits to injured workers. The Legislature must pass SB 863
CA AFL-CIO Angie Wei Gets Carrie Nevans Community Service Award For Selling Injured Workers Down The River
Newsline No. 05-13
February 6, 2013
Twitter @CA_DIR
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2013 Carrie Nevans community service awards announced
The California Division of Workers’ Compensation (DWC), a division of the Department of Industrial Relations (DIR), is pleased to announce the recipients of the 2013 Carrie Nevans Community Service Award. This year’s award in Northern California goes to Angie Wei, Legislative Director of the California Federation of Labor, AFL-CIO. Sean McNally, president of KBA Engineering in Bakersfield is the Southern California recipient. Both are commissioners with the Commission on Health and Safety and Workers’ Compensation. The awards will be presented at the upcoming 20th annual DWC educational conference luncheons.
“We received many outstanding nominations but Ms. Wei’s and Mr. McNally’s collaborative contributions to the workers’ compensation community with their work on Senate Bill 863 were stellar” said DIR Director Christine Baker.
“Their exceptional efforts were instrumental in negotiating and developing a reform package that drastically improves the system. They personally spent hundreds of hours to craft a bill that increased benefits to injured workers and produced cost-saving efficiencies that both labor and management could agree to,” continued Ms. Baker.
Ms. Wei has been with the California Labor Federation since 2000. She previously worked as an advocate for the California Immigrant Welfare Coalition and served as a public policy director for the Northern California Coalition for Immigrant Rights. She received her undergraduate degree from UC Berkeley and a master’s degree in public policy from the Kennedy School of Government at Harvard University.
As is noted above, Mr. McNally is the President of KBA Engineering in Bakersfield. He is a licensed general contractor and serves as a trustee for the Self Insurer’s Security Fund and is very active in the community in leadership capacities. Sean has been certified by the State Bar of California as a specialist in workers’ compensation and was a partner at Hanna, Brophy, MacLean, McAleer and Jensen. He received his B.A. degree from the University of San Francisco and J. D. from the University of Pacific, McGeorge School of Law.
The DWC’s 20th annual educational conference is the largest workers’ compensation training in the state and allows claims administrators, attorneys, medical providers, return to work specialists, employers, and others to learn about the most recent developments in the system as well as on-going DWC programs. This year’s conference has many sessions devoted to SB 863 and its successful implementation. The Los Angeles conference (Feb. 28-March 1, 2013) has been sold out for several weeks, however registration is still open for the Oakland training, which take place March 4-5, 2013 at the Oakland Marriott City Center Hotel.
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CA SB 863: Why Are Worker Advocates In Opposition?
Posted on 28 August 2012
http://www.californiaprogressreport.com/site/sb-863-why-are-worker-advocates-opposition
By Julius Young
Boxer & Gerson, Oakland, CA
Publisher Of WorkersCompZone.com Blog
Today the legislature is holding an informational hearing on SB 863, a comprehensive workers’ comp reform bill.
Although the bill has some good elements, has been improved from recent versions and although any progressive workers’ comp reform effort may involve some compromises, SB 863 has too many takeaways for workers and should be rejected.
Supporters of SB 863 originally touted that SB 863 would result in $1.4 billion in system savings for employers while delivering $740 million in increased workers benefits, a 2:1 ratio in favor of employers. The California Labor Federation has touted that the bill would result in savings, relieving economic pressures of increasing workers’ comp costs.
But as late as yesterday, California’s Workers Compensation Insurance Rating Bureau questioned the long term savings effect of SB 863, projecting that it might increase workers comp costs. This has raised concern among members of the business community.
But why would worker advocates be concerned about SB 863?
Consider these issues:
Workers Lose Medical Rights
Under SB 863, workers would lose their right to a face to face medical exam as part of an appeal of treatment denials.
Judges Are Stripped Of Authority Over Medical Disputes
Workers comp judges would be stripped of ability to hear treatment denial appeals except under the most extreme circumstances.
Costly New Dispute Resolution System Is Added
Additional costs would be added to the system as a massive Independent Medical Review system would be put in place on top of the current utilization review system. Advocates for SB 863 have not produced detailed studies documenting the costs of an large IMR system and haw those costs would compare with the current system of face to face QME reviewers.
Cost Drivers Are Not Addressed
Despite studies showing that cost containment measures such as utilization review have been increasing “cost drivers” in the comp system, SB 863 does essentially nothing to control utilization review costs.
Benefits Likely Shifted From The More Disabled
SB 863 appears to shift benefit increases to less disabled workers rather than more disabled workers who by definition are likely to have higher earnings losses. SB 863 eliminates the concept of “diminished future earning capacity” from the Labor Code (a concept used in an important case known as Ogilvie), making it harder for workers with severe earnings losses to recoup fair awards.
Proving Disability Is Made More Difficult
SB 863 does increase monies paid for some percentages of disability but reduces the ability of workers to prove those levels of disability. For example, a 50% disability rating would receive more money under SB 863 than under current law but by eliminating the “diminished future earning capacity concept” and other criteria, SB 863 makes it less likely that the worker would be found 50% disabled. That’s one reason worker advocates have questioned the projections of supporters.
WCIRB Report Confirms Concerns About Accuracy Of Proponents’ Statistics
The recent WCIRB analysis seems to confirm these concerns. The report from the WCIRB’s chief actuary shows a decrease in permanent disability benefits of $130 million due to “elimination of the impact of the Ogilvie decision”. According to the WCIRB, that consists of an $80 million drop in benefits and an additional $50 million due to decreased claims filing. The WCIRB also projected further decreases in PD payments due to elimination of consideration of sleep disorders, sexual dysfunction and psychiatric residuals of physical injuries.
The bottom line is that the WCIRB analysis raises major questions about the accuracy of projections of labor advocates who claim SB will deliver large increases to workers.
Transparency Has Been A Problem
Advocates of SB 863, including the Department of Industrial Relations, have failed to produce their own studies and data showing the basis for their projections. The DIR failed to voluntarily reveal information about a memo that questioned the constitutionality of the Independent Medical Review provision s of the bill.
Injured workers suffered many losses under the Schwarzenegger-era SB 899. Since that time workers have seen a large drop in permanent disability payments and treatment delays have led to massive complaints about the system.
It would be a terrible development if the legislature rushes into a “fix” for SB 899 that results in further takeaways for workers.
There are many areas in California’s works comp system that need attention. Parts of SB 863 are a good start, but the bill needs more analysis, more work and should be rejected.
Let’s not have “foie gras” style California workers’ comp reform.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Starting in 1979, Julius Young has represented thousands of individuals who have sustained life-changing injuries or illnesses while on the job. A partner of Boxer&Gerson since 1988, he practices workers’ compensation and disability law in Oakland.
New California workers’ compensation law cuts mental health coverage, sparks concern among medical and legal communities
New worker's compensation laws would impact mental health benefits for injured workers.
By Stephen M. Pfeiffer, PhD
http://www.lajollalight.com/2012/09/16/new-california-worker’s-compensation-law-cuts-mental-health-coverage-sparks-concern-among-medical-and-legal-communities/
Earlier this month, lawmakers passed a newCalifornia workers’ compensation law that stands to enact a series of changes to the current system in an effort to cut insurance costs. According to CBS News, measure SB863 was approved in the California Senate by a 68-4 vote, and in the State Assembly by a similarly lopsided margin. However, while the vote went overwhelmingly in favor of the bill, the vast majority of those involved in the decision did not have an opportunity to even so much as read the measure prior to the floor vote, which was held on the last day of the Legislature’s session. The bill’s passage has thus prompted grave concern among those affected by the legislation — including injured workers, doctors, attorneys and psychologists – who view the vote as a back-room deal enacted without proper input and review.
CBS News reports that SB863 would alter the manner in which worker’s compensation benefits are calculated, including the elimination of coverage for mental health disorders secondary to physical injuries. Under the new law, the section dealing with the elimination of disability benefits for psychological injuries which are added as secondary disabilities to physical injuries constitutes what many critics of the bill call a terrible step backwards for the system. Additional concerns have been raised over the fact that most of those who voted on the measure did not in fact have the chance to read, no less fully understand the bill. As Democratic Assemblyman Ben Hueso of San Diego told CBS, “I can’t take a vote on something I can’t explain.” Hueso was one of several lawmakers who refused to participate in the vote; but with strong support and swift intervention from California Governor Jerry Brown, SB863 passed — despite initial voter resistance among members of the State Legislature — in a period of less than 24 hours.
As an experienced clinical and forensic psychologist and Qualified Medical Evaluator, I would argue that the SB863’s provisions regarding mental health coverage discriminate against workers who have sustained serious physical injuries and subsequently develop mental problems (depression, anxiety, PTSD, etc.) as a direct result of those injuries. While there are certainly some worker’s compensation cases in which claims of psychological injury are not valid, there are an abundance of cases in which significant psychological disability does in fact result directly from traumatic physical injury. To operate under a law that functions as if no such disabilities exist would, I believe, be a huge disservice to injured workers. Furthermore, this section of the law turns back the hands of time by re-establishing discrimination against individuals with mental disorders in not recognizing the validity of their injuries. This inequity was corrected several years ago at both the federal and state levels when mental health parity legislation required that private health insurance companies respond to and treat physical and mental disorders equally.
For more information about SB863 and the medical and legal communities’ efforts to challenge portions of the legislation, contact me via email at stephen [at] pfeifferphd.com or go online, to http://www.pfeifferphd.com.
Angie Wei, California Labor Federation Legislative Director:
Eight (8) years have passed since injured workers were royally screwed in SB899. I don't think a single person in this room are listening to this committee here today would disagree with that.
Eight (8) years the labor movement has been before this legislature and before this committee; raging about delays and denials and medical treatment. About injured workers living on benefits that were deeply deeply slashed. Finally, we have a plan to do something about it,
Finally, we can get out from under this yoke and do something to return money back into the pockets of injured workers.
We have an opportunity for once, since I've worked around this building, to actually beat back a crisis, because when crisis comes, too often in this legislature, we are bargaining from our knees.
We don't want to go there again.
We have an opportunity with the rating bureau now saying potentially an eighteen (18) percent increase, a meeting in September to review any legislative action.
We have an opportunity to bend that cost curve back; leaving more money on the table for workers, for their own retirement security, for their health care benefits, for their raises.
We have an opportunity today to try and save money for employers; as well as increasing benefits for injured workers.
How could it get... how could we say no to that?
Save costs and improve benefits, take the lead of the system?
How can we say no to that?
Our part of the panel is going to talk specifically about two issues; medical treatment and then permanent disability. We’re going to get a little bit into the weeds if the committee will allow us on permanent disability and then we’ll come back and close for the committee. [end]
[page 5]
Current law under SB899 absolutely cut at least 50% of the dollars out of the permanent disability system. SB899 actually took weeks of benefits away from people and it was a take-away.
This proposal would infuse at least Seven Hundred and Forty Eight Million ($748,000,000) new dollars back into the permanent disability system where we show; by category, by demographic category, by severity of injury, by wages, by age... that everybody wins under this proposed schedule. Everybody gets a raise.
I want to talk for a second about the permanent... the add-ons that have been a lot of discussion here. Just to walk through the thinking and the path that labor and management took together on this.
Current law adds for... to a compensable physical injury; add-ons for sleep, psych and sexual dysfunction.
This proposal eliminates these three add-ons and I’ll go into some detail here, but it maintains other add-ons that are in the AMA guides; pain, headaches, gait and others. So, there will be opportunity to pursue other add-ons.
The psychiatric add-on has been expanded now in the current language to include, not just being... you can get the psych add-on if you’re a victim of, or a witness to, a violent act. It’s now been expanded to also include catastrophic injuries. You can get the psychological add-on if you’re the victim of a catastrophic injury.
So what we did here, is we saw data that showed that two (2) percent of permanent disability claims were able to get these three (3) add-ons.
And we thought, you know what? As an injured worker you’re sitting at home and you’re not working... everybody suffers; from a little bit of psychological depression, a little bit of sexual dysfunction and a little bit of sleep disorder. Everybody does because it stinks being home as an injured worker.
Two (2) percent of the cases get these add-ons; they create more friction in the system, why don’t we book that savings, grab that money, socialize it across all injured workers and help pay for a benefit increase. Acknowledging that everybody suffers from these kinds of ailments when they’re an injured worker. That’s on the add-ons.
On the future earnings capacity issue; you’ve heard probably a lot of discussion and you’ll hear more; The current PD Schedule allows for future earnings capacity adjustment somewhere between a 1.1 and a 1.4. There is a lot of friction in litigation that says are you at 1.1 or a 1.3? And another piece that I’ll get to in a second.
Rather than have the system absorb that friction and that litigiousness; saying are you a 1.1 or a 1.3? This proposal maxes everybody's earnings capacity out at a 1.4. That means that everybody gets a forty 40 percent increase of their whole person impairment out of the AMA guides. Everybody gets a boost from that in and of itself.
What some of our good friends of the applicant attorneys who... we are grateful for their work in the system. They are some of the most vigorous advocates for injured workers and their cases and we appreciate that.
What they’ve been able to do is take people above even the 1.4 FEC factor and get people more money when they can show future earning capacity.
Here’s the thinking that we had here. If you look at the rating bureau numbers from today, yesterday, whenever... what you’ll see... What you'll see in the rating bureau numbers is that for benefit increase on the; what they call the Ogilvey cases, it’s a hundred thirty million dollars ($130,000,000) in benefits over the next two (2) years. But it costs eighty million dollars ($80,000,000) to administer that benefit. Eighty million dollars ($80,000,000) of adjustment expenses.
Why? Because to do those cases you have to bring in vocational experts, economists on the applicants side. Then the defense side brings in their experts. All the while, the injured worker's staying at home, case is not resolved, creates a lot of friction, litigation, delay in the system.
Let's put that money... let's give everybody a boost.
Let me close on two final points:
Number one, workers comp is a no fault system. It is the giant trade-off. Injured workers; we gave up our rights to sue the employer. The employer has to guarantee us adequate medical treatment and timely access to benefits. It's enshrined in our constitution.
It is supposed to be a no fault system.
Insurance companies have to be able to price predictably. And when the system becomes unpredictable that's when we start to see the roller coaster costs of workers comp insurance that's going to come back and be the albatross across our neck.
There is no perfect deal that comes out of this building. This is not a perfect deal. If our side were to write a bill it would look different than this bill; but, we've joined forces with the employers to say let's try to codify what this great trade-off is between labor and management; what we've given up; and each of us gave up things, each of of got things in this deal. It's not perfect. I would argue that nothing here is, but I would ask that this committee ask ourselves....
And I have my friend from the applicant...
I started out this journey earlier this year testifying at the... in the informational sharing in this committee saying we will not defend the indefensible. And I am here to say that the status quo is simply indefensible. We've an opportunity to make significant improvements from the status quo we'd ask for this committees and the legislation consideration. [END]
[page 8]
Just to be clear, that's for a total permanent disability, total disability, not partial disability. So there's a difference there and what is being argued and what may be the case is that this track of litigation will slow down... for partial. [END]
[page 10]
If I may. It is hard to say specifically what will happen in the litigation going forward. It seems as if after SB899 new case law and new pathways for litigation were created so I cannot tell you definitively what’s going to happen.
What I can tell you is that on this issue of diminished future earning capacity; if you look at labor code section 4660, and then the new section 4660.1 there is the deletion of the words diminished future earnings capacity. And some would argue that that would limit the opportunity to come in... voc... vocational experts an economist experts to argue for wage loss.
Two things there; one is, as Mr. Levi stated prior, there’s also language in the new 4660.1 that says nothing stops an injured worker from pursuing a permanent total disability case under 4660.2 of the labor code, which is called the Labouf standard.
So for the... partly Mr. Caldron’s question was, “What happens to the injured worker who cannot get back to work and is completely disabled?”. They still maintain their right to argue total disability under Labouf; under labor code section 4660.2 of the labor code. [END]
[page 11]
Categorically we can show that everybody by category gets a benefit increase. There are some specific examples that have come up in which people could argue that an earnings loss going forward happens. We believe that there are other things in the system that help to mitigate that including the occupational adjustment factor and other things. Litigation could continue in to the nooks and crannies of this proposal to bring some of that to bear.
It is a deal. It’s not a perfect deal. We’ve traded frankly guaranteed benefits to at lea... a hundred thousand (100,000) injured workers a year for what is hypothetically at risk going forward in to an expensive system that could come back and whipsaw against us in two (2) years.
The system the way it is now, with that lack of predictability and that frictional cost, is unsustainable. It’s not going to stay this way. It’s gonna come back and you... this legislature or the legislature after you will impose significant reforms like SB899 which we were very clear we knew was going to take away benefits, didn’t put any money back in the pockets.
We knew there that was bad for workers. And if we don’t do something today that’s gonna come back to us and we’re going to get our meager benefits slashed again. [END]
[page 11]
The system itself is unsustainable [END]
Arthur Levi, Applicant Attorney:
[page 7]
Under Labor Code section 4662 there is nothing to prevent that because that allows the judge to made a determination based on the fact. We're talking about significantly injured persons that basically have a total permanent future earning capacity of one hundred (100) percent loss. There's nothing in this statue that prevents that if you read the statue. [END]
[page 8 & 9]
I can respond and Senator I support everything you say; that there was a trade-off. Therefore, if you really want to fix it, we get rid of the AMA guides, we go back to the old schedule. But, they don’t want to do that.
The trade-off could be, in my vision of the whole reform because of the affordable healthcare act, everybody is going to
have health insurance. That’s one benefit of workers comp.
The other benefit of workers comp is temporary disability. When an injured worker has expired his one hundred and four (104) weeks of temporary disability or cannot return to work, he can tap into state disability.
Therefore, I have an employee... it costs me fift.. she makes sixty five thousand (65,000) dollars a year; it costs me fifteen dollars ($15) a week for SDI. If that was increased to forty five dollars ($45) so she would have have a hundred and fifty six (156) weeks, which is a hundred and four (104) that comp gives her plus fifty two (52) that the state gives her, she’s mandated... she has medical insurance, everybody has to have medical insurance, we take those two (2) benefits out of workers comp, the only benefit we have is permanent disability. I think there’d be a great savings to the employers because the employers presently are paying for... most of the employers.... like he has medical benefits to his employees, Safeway does; they’re paying twice for the same thing, which is medical benefits and they’re also paying indemnity... an indemnity for temporary disability, and they’re also paying in to state disability.
So, if you really want to do a reform look at the big picture and bring it into the twenty first century and don’t think a nineteenth century concept... [END]
Docs Call Workers Comp Law Unconstitutional "SB 863's implementation will deny California workers of the right to have their medical bills paid by employers and their workers' compensation carriers."
Docs Call Workers Comp Law Unconstitutional
http://www.courthousenews.com/2013/11/18/62965.htm
Courthouse News Service
Kirk Kancilia, who practices in San Diego, sued the state on behalf of medical providers who offer care to workers' compensation applicants on a lien basis.
SAN DIEGO (CN) - California's workers' comp reform will bar some medical providers from reimbursement for previously provided care unless they pay a "ransom," a chiropractor claims in a federal class action.
Kirk Kancilia, who practices in San Diego, sued the state on behalf of medical providers who offer care to workers' compensation applicants on a lien basis.
Senate Bill 863, which makes wide-ranging changes to California's workers' compensation system, was passed on Aug. 31, 2012 and signed into law by Gov. Brown on Sept. 18, 2012. The bill took effect on Jan. 1, 2013, but not all of its provisions were effective immediately.
The reform was touted as providing increased benefits to injured workers and creating cost-saving efficiencies. Among other things, SB 863 increased permanent disability benefits by 30 percent, reduced the costs of workers' compensation losses by nearly $1 billion, and saved California $40 million annually in insurance costs, according to the governor's statement the day he signed the bill.
But in his lawsuit, Kancilia claims that the reform "creates a multi-million dollar windfall for big workers' compensation insurance companies by canceling millions of unpaid medical bills of injured California workers on January 1, 2014 absent this Court's intervention. Put simply, SB 863's implementation will deny California workers of the right to have their medical bills paid by employers and their workers' compensation carriers."
Kancila claims the law violates the Constitution by canceling lien claims filed by medical providers before Jan. 1, 2013, unless the providers pay a $100 "lien activation fee" before Jan. 1, 2014.
Healthcare providers have the right to file liens for payment for their services against an award made in favor of the injured workers. But Kancila claims workers' comp insurance companies delay resolution of liens, ignore them or underpay them, resulting in a large volume of unresolved claims congesting the workers' compensation system.
SB 863 seeks to reduce the volume of lien filings by imposing a flat $100 lien-filing fee on medical providers who filed liens as of Jan. 1, 2013, and a flat fee of $150 on those who file liens after that date.
The fees "discourage the filing or pursuit of meritorious low-dollar-value liens by rendering them valueless, thereby violating the constitutional rights of independent service providers," Kancilia says in the lawsuit.
While the fees will make it infeasible for independent providers to pursue liens for low-dollar-value services, they will not have the same impact on service providers who are part of an insurer's affiliates or preferred group of providers, as these entities typically rely on contractual rights, not liens, to obtain compensation, according to the complaint.
The fees will not make as big an impact on larger providers who offer higher profit-margin services and multiple services on a per-workers basis. Nor will the lien filing fees affect insurance companies, HMOs, labor union benefit plans, and other large holders of workers' compensation liens because SB 863 specifically exempts any lien filed by most of these entities, Kancilia says in the lawsuit.
However, for independent providers, the law eliminates their ability "to obtain judicial and administrative enforcement of their vested property right to secure reasonable compensation for their services through the workers' compensation lien procedures," according to the complaint.
For example, Kancilia claims he has 300 to 500 liens with dollar amounts ranging from $500 to $1,500 per lien.
"This means that to collect between $75,000-100,000, Dr. Kancilia will have to pay $30,000-50,000 in activation fees and wait indefinitely. This is something he simply cannot do from his own personal reserves and, moreover, is unable to finance these sums in light of the current economic and lending environment. This means that, on January 1, 2014, bills for up to $100,000 of services provided by Dr. Kancilia will be voided for the benefit of big workers' compensation insurance companies and to Dr. Kancilia's detriment - threatening his ability to continue in practice," according to the complaint.
Kancilia wants the law declared unconstitutional for violating the Fifth and 14th Amendments. He wants the government enjoined from collecting the lien filing and activation fees.
He is represented by Matthew D. Rifat
http://www.courthousenews.com/2013/11/18/62965.htm
SB 863: Landmark Workers’ Comp Reform to Support Injured Workers
http://www.calaborfed.org/index.php/site/page/sb_863_landmark_workers_comp_reform_to_support_injured_workers
Statement by California Labor Federation Executive Secretary-Treasurer Art Pulaski
"Finally, there’s a solution to the growing workers’ compensation crisis – a bill that provides a system-wide benefit increase of $860 million for injured workers, while reducing delays and friction that waste time and money.
"SB 863 is a landmark proposal that achieves a true rarity in Sacramento. It finds a way to increase benefits while reducing costs. After months of negotiations between labor and management, and a statewide listening tour hosted by the Department of Industrial Relations, a comprehensive reform deal was struck that benefits both workers and employers.
"Under this proposal, workers receive a 30 percent benefit increase. Those injured on the job will receive faster, higher quality medical treatment. Workers on permanent disability will receive a benefit increase and quicker payments of benefits. Dispute resolution is expedited, freeing up hundreds of millions of dollars that go straight to injured workers and their families. By cutting waste in the system, benefit increases were made possible while overall costs were reduced.
"Injured workers have suffered enough under Arnold Schwarzenegger’s draconian cutbacks to workers’ compensation. SB 863 puts more money in the pockets of injured workers while strengthening the system for years to come. Doing nothing is not an option. Under the current system, insurance costs are expected to rise by 18% in January. SB 863 is the right reform at a critical time.
"Opponents of SB 863, many of whom profit from the system, have engaged in a campaign of misinformation in an effort to protect the failed status quo. Not only are the reforms proposed in SB 863 necessary, they’re literally a lifeline for the system and the workers it benefits.
"SB 863 tackles the toughest challenges facing the workers’ compensation system head on, providing fresh hope to injured workers that have suffered for eight years under the failed reforms of the Schwarzenegger Administration. It’s time for real reform that puts injured workers first. We urge the legislature to pass SB 863 today, sending it to Gov. Brown for his signature."
California workers' compensation bill faces difficulties-Secret Deal Between CA AFL-CIO & Safeway/Disney "further reduces disability compensation and access to medical care,"
"
By Marc Lifsher
August 27, 2012, 3:41 p.m.
http://www.latimes.com/business/money/la-fi-mo-california-comp-bill-difficulties-20120827,0,1832553.story
SACRAMENTO -- Advocates for low-income injured workers and the attorneys who represent them are furiously rejecting a proposed overhaul of the state's complex, costly workers' compensation insurance system.
"We oppose this last-minute rush to jam through workers' compensation legislation that further reduces disability compensation and access to medical care," said Jesse Ceniceros, president of VotersInjuredatWork.org.
The mammoth bill was negotiated behind closed doors over months by the California Labor Federation and large, self-insured employers, including Safeway Inc. and Walt Disney Co.
The 170-page bill was officially introduced in the state Legislature only late last Friday. Proponents argued that it provides about $700 million a year in new benefits to victims of on-the-job accidents. Money to pay for the boost would come out of an estimated $1 billion-plus in savings created by making the $16-billion system more efficient.
But an actuarial report released Monday that was commissioned by the administration of Gov. Jerry Brown questioned the level of predicted savings.
The Workers' Compensation Insurance Rating Bureau, a statistical agency financed by the insurance industry, concluded that savings generated by the overhaul would be only $400 million, which is $300 million less than the cost of the hike in benefits.
The rating bureau, however, cautioned that it lacked sufficient information, time and expertise to fully evaluate the costs of the proposed workers' compensation bill, SB 863 by Sen. Kevin de Leon (D-Los Angeles).
The proposal will be subject to an informational hearing in the Legislature on Tuesday morning. The bill to become law must be passed before the Legislature adjourns just before midnight Friday.
CA AFL-CIO Angie Wei Negotiating With Pols With Aim Of "Eliminating benefits for certain health conditions" for increase in permanent disability benefits
http://www.californiahealthline.org/articles/2012/8/15/unions-circulating-draft-of-bill-to-boost-workers-compensation-benefits.aspx#ixzz23lKAXZ7k
Wednesday, August 15, 2012
Unions Circulating Draft of Bill To Boost Workers' Compensation Benefits
Lobbyists for labor unions are circulating a summary of proposed legislation to increase workers' compensation benefits, the Sacramento Bee's "Capitol Alert" reports (Walters, "Capitol Alert," Sacramento Bee, 8/14).
On Wednesday, the Senate Industrial Relations Committee is scheduled to hold an informational hearing on language of the proposed bill (Johnson, Sacramento Business Journal, 8/14).
Background
Although there is less than a month left in the legislative session, California labor unions have pushed for the introduction of a bill that would increase workers' compensation payments to permanently injured workers and limit the fees that can be charged in processing claims.
Angie Wei -- a lobbyist with the California Labor Federation -- said that her group has been in talks with the chairs of the Senate Labor and Assembly Insurance committees about the issue and that unions and employers have been negotiating over workers' compensation for months (California Healthline, 8/9).
Details of Summary
According to a 45-point summary of proposed language, the bill would increase workers' compensation benefits by a total of about $700 million annually for individuals with permanent injuries ("Capitol Alert," Sacramento Bee, 8/14).
The legislation also would reduce costs in the workers' compensation system by a projected $1.2 billion to $1.4 billion (Sacramento Business Journal, 8/14).
The bill would cut costs by:
Eliminating benefits for certain health conditions; and
Scaling back considerations of future earning capacity while setting benefits.
The provisions detailed in the summary could be incorporated into a separate workers' compensation bill (SB 863) by Sen. Ted Lieu (D-Torrance), according to "Capitol Alert."
Reaction to Summary
The summary is drawing opposition from lawyers who specialize in workers' compensation cases. They argue that the bill is worse than workers' compensation reforms implemented by former Gov. Arnold Schwarzenegger (R), which the legislation seeks to undo.
According to "Capitol Alert," it is unknown how health care providers and health insurers would react to the bill ("Capitol Alert," Sacramento Bee, 8/14).
CA AFL-CIO Angie Wei Backs Anti-Injured Worker SB 863-Injured Workers Excluded From Secret Negotiations
SB 863: Real Workers’ Comp Reform to Reduce Costs and Help Injured Workers
By Angie Wei, California Labor Federation
http://www.calaborfed.org/index.php/page/sb_863_real_workers_comp_reform_to_reduce_costs_and_help_injured_workers
Arnold Schwarzenegger rode into the Governor’s office in 2004 on the campaign promise to “fix” the workers’ compensation system. Every day in 2004, the media hammered home Schwarzenegger’s talking points that California’s highest-in-the-nation workers’ compensation costs were driving employers, and jobs, out of the state.
In the face of a relentless media campaign and the threat of an extreme workers’ comp reform ballot measure, the Legislature passed SB 899 in 2004—a draconian bill that gutted the workers’ compensation system and created more pain and suffering for injured workers.
Since SB 899, permanently disabled workers have seen their benefits slashed to the bone. Medical treatment is delayed and denied by insurance companies, sometimes for over a year. As a result, injured workers are stuck at home battling insurance companies for the medical care they need, with no ability to return to work.
After eight years of watching injured workers struggle with a slashed permanent disability schedule, we say, “Enough is enough.” Enough of injured workers stuck in a system where medical treatment is delayed and benefits aren’t enough. Enough of workers’ comp costs rising because of administrative costs – money going to claims administration and NOT going to injured workers.
The Schwarzenegger “reform” has failed both employers and workers. The system is still unstable and costs are rising across the board. Now is the time for real reform that protects workers, eliminates waste and reins in costs for workers and businesses. This year, representatives from both labor and management came together to fix the system before we face another workers’ comp crisis. Admittedly, labor and management don’t agree often on many issues. But both sides see the crisis facing workers’ comp, and want to get ahead of the impending disaster before employers and injured workers are crushed by rising costs and no path to increased benefits.
After hundreds of hours of negotiations, a team from labor and management, with the support of the Department of Industrial Relations, has developed a workers’ comp reform package that drastically improves the system, increasing benefits and instituting savings throughout the system.
We have an opportunity, in the next five days, to pass significant workers’ comp reform (SB 863) that would (1) add $740 million in NEW permanent disability money into the pockets of injured workers, (2) mitigate the delays injured workers face getting medical treatment, (3) deliver savings to the employers and (4) actually bend the rising cost curve of workers’ comp.
Not only is this reform proposal good for injured workers and for employers, but it is good for all of us in the union movement. How many times have we been at the bargaining table only to hear employers say they can’t afford a raise or benefit increase, or that they have to cut benefits for family coverage, because workers’ comp rates are bleeding them dry? How much have union members given up in wages and benefits because comp rates are skyrocketing?
Labor and management’s reform puts $740 million into the pockets of injured workers and helps them get timely, appropriate medical care. We have a governor who will sign the deal and employers who negotiated it.
Still, opposition from vendors who profit from the status quo is steep. The question we ask the opposition is this -- what are YOU going to do to get $740 million in new dollars for injured workers? What is YOUR plan to stop the delays and denials of medical treatment? How will YOU stave off double digit increases in workers’ comp costs? What are YOU going to do when union members are at the bargaining table fighting for wage increases and health care, when workers’ comp costs increases have eaten up the money on the table?
Finally... opponents to reform are saying this deal does too much, too fast, too late in the session. The Federation has been fighting to get more money to injured workers for eight years. This year, the Assembly Insurance Committee and the Senate Labor Committee held an informational hearing in March to tee up labor-management negotiations. The Department of Industrial Relations and the Division of Workers’ Compensation held a statewide listening tour to take input from all stakeholders in the system before negotiations started. Many of the medical reform provisions have been passed by the labor-management Commission on Health and Safety and Workers Compensation, through public testimony, written feedback, and public votes to adopt the research.
Why anyone is surprised about this effort is a surprise to us.
This negotiated deal is not perfect, we don’t profess it to be so. But that is the nature of negotiations – no one gets everything they want. Yet, we have a proposal that garners the support of both unions and employers, meeting the fundamental goals of getting more money to injured workers, bending the cost curve, and saving employers money.
There is no other path to getting $740 million back in benefits to injured workers. The Legislature must pass SB 863
CA AFL-CIO Angie Wei Gets Carrie Nevans Community Service Award For Selling Injured Workers Down The River
Newsline No. 05-13
February 6, 2013
Twitter @CA_DIR
2013 Carrie Nevans community service awards announced
The California Division of Workers’ Compensation (DWC), a division of the Department of Industrial Relations (DIR), is pleased to announce the recipients of the 2013 Carrie Nevans Community Service Award. This year’s award in Northern California goes to Angie Wei, Legislative Director of the California Federation of Labor, AFL-CIO. Sean McNally, president of KBA Engineering in Bakersfield is the Southern California recipient. Both are commissioners with the Commission on Health and Safety and Workers’ Compensation. The awards will be presented at the upcoming 20th annual DWC educational conference luncheons.
“We received many outstanding nominations but Ms. Wei’s and Mr. McNally’s collaborative contributions to the workers’ compensation community with their work on Senate Bill 863 were stellar” said DIR Director Christine Baker.
“Their exceptional efforts were instrumental in negotiating and developing a reform package that drastically improves the system. They personally spent hundreds of hours to craft a bill that increased benefits to injured workers and produced cost-saving efficiencies that both labor and management could agree to,” continued Ms. Baker.
Ms. Wei has been with the California Labor Federation since 2000. She previously worked as an advocate for the California Immigrant Welfare Coalition and served as a public policy director for the Northern California Coalition for Immigrant Rights. She received her undergraduate degree from UC Berkeley and a master’s degree in public policy from the Kennedy School of Government at Harvard University.
As is noted above, Mr. McNally is the President of KBA Engineering in Bakersfield. He is a licensed general contractor and serves as a trustee for the Self Insurer’s Security Fund and is very active in the community in leadership capacities. Sean has been certified by the State Bar of California as a specialist in workers’ compensation and was a partner at Hanna, Brophy, MacLean, McAleer and Jensen. He received his B.A. degree from the University of San Francisco and J. D. from the University of Pacific, McGeorge School of Law.
The DWC’s 20th annual educational conference is the largest workers’ compensation training in the state and allows claims administrators, attorneys, medical providers, return to work specialists, employers, and others to learn about the most recent developments in the system as well as on-going DWC programs. This year’s conference has many sessions devoted to SB 863 and its successful implementation. The Los Angeles conference (Feb. 28-March 1, 2013) has been sold out for several weeks, however registration is still open for the Oakland training, which take place March 4-5, 2013 at the Oakland Marriott City Center Hotel.
###
CA SB 863: Why Are Worker Advocates In Opposition?
Posted on 28 August 2012
http://www.californiaprogressreport.com/site/sb-863-why-are-worker-advocates-opposition
By Julius Young
Boxer & Gerson, Oakland, CA
Publisher Of WorkersCompZone.com Blog
Today the legislature is holding an informational hearing on SB 863, a comprehensive workers’ comp reform bill.
Although the bill has some good elements, has been improved from recent versions and although any progressive workers’ comp reform effort may involve some compromises, SB 863 has too many takeaways for workers and should be rejected.
Supporters of SB 863 originally touted that SB 863 would result in $1.4 billion in system savings for employers while delivering $740 million in increased workers benefits, a 2:1 ratio in favor of employers. The California Labor Federation has touted that the bill would result in savings, relieving economic pressures of increasing workers’ comp costs.
But as late as yesterday, California’s Workers Compensation Insurance Rating Bureau questioned the long term savings effect of SB 863, projecting that it might increase workers comp costs. This has raised concern among members of the business community.
But why would worker advocates be concerned about SB 863?
Consider these issues:
Workers Lose Medical Rights
Under SB 863, workers would lose their right to a face to face medical exam as part of an appeal of treatment denials.
Judges Are Stripped Of Authority Over Medical Disputes
Workers comp judges would be stripped of ability to hear treatment denial appeals except under the most extreme circumstances.
Costly New Dispute Resolution System Is Added
Additional costs would be added to the system as a massive Independent Medical Review system would be put in place on top of the current utilization review system. Advocates for SB 863 have not produced detailed studies documenting the costs of an large IMR system and haw those costs would compare with the current system of face to face QME reviewers.
Cost Drivers Are Not Addressed
Despite studies showing that cost containment measures such as utilization review have been increasing “cost drivers” in the comp system, SB 863 does essentially nothing to control utilization review costs.
Benefits Likely Shifted From The More Disabled
SB 863 appears to shift benefit increases to less disabled workers rather than more disabled workers who by definition are likely to have higher earnings losses. SB 863 eliminates the concept of “diminished future earning capacity” from the Labor Code (a concept used in an important case known as Ogilvie), making it harder for workers with severe earnings losses to recoup fair awards.
Proving Disability Is Made More Difficult
SB 863 does increase monies paid for some percentages of disability but reduces the ability of workers to prove those levels of disability. For example, a 50% disability rating would receive more money under SB 863 than under current law but by eliminating the “diminished future earning capacity concept” and other criteria, SB 863 makes it less likely that the worker would be found 50% disabled. That’s one reason worker advocates have questioned the projections of supporters.
WCIRB Report Confirms Concerns About Accuracy Of Proponents’ Statistics
The recent WCIRB analysis seems to confirm these concerns. The report from the WCIRB’s chief actuary shows a decrease in permanent disability benefits of $130 million due to “elimination of the impact of the Ogilvie decision”. According to the WCIRB, that consists of an $80 million drop in benefits and an additional $50 million due to decreased claims filing. The WCIRB also projected further decreases in PD payments due to elimination of consideration of sleep disorders, sexual dysfunction and psychiatric residuals of physical injuries.
The bottom line is that the WCIRB analysis raises major questions about the accuracy of projections of labor advocates who claim SB will deliver large increases to workers.
Transparency Has Been A Problem
Advocates of SB 863, including the Department of Industrial Relations, have failed to produce their own studies and data showing the basis for their projections. The DIR failed to voluntarily reveal information about a memo that questioned the constitutionality of the Independent Medical Review provision s of the bill.
Injured workers suffered many losses under the Schwarzenegger-era SB 899. Since that time workers have seen a large drop in permanent disability payments and treatment delays have led to massive complaints about the system.
It would be a terrible development if the legislature rushes into a “fix” for SB 899 that results in further takeaways for workers.
There are many areas in California’s works comp system that need attention. Parts of SB 863 are a good start, but the bill needs more analysis, more work and should be rejected.
Let’s not have “foie gras” style California workers’ comp reform.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Starting in 1979, Julius Young has represented thousands of individuals who have sustained life-changing injuries or illnesses while on the job. A partner of Boxer&Gerson since 1988, he practices workers’ compensation and disability law in Oakland.
New California workers’ compensation law cuts mental health coverage, sparks concern among medical and legal communities
New worker's compensation laws would impact mental health benefits for injured workers.
By Stephen M. Pfeiffer, PhD
http://www.lajollalight.com/2012/09/16/new-california-worker’s-compensation-law-cuts-mental-health-coverage-sparks-concern-among-medical-and-legal-communities/
Earlier this month, lawmakers passed a newCalifornia workers’ compensation law that stands to enact a series of changes to the current system in an effort to cut insurance costs. According to CBS News, measure SB863 was approved in the California Senate by a 68-4 vote, and in the State Assembly by a similarly lopsided margin. However, while the vote went overwhelmingly in favor of the bill, the vast majority of those involved in the decision did not have an opportunity to even so much as read the measure prior to the floor vote, which was held on the last day of the Legislature’s session. The bill’s passage has thus prompted grave concern among those affected by the legislation — including injured workers, doctors, attorneys and psychologists – who view the vote as a back-room deal enacted without proper input and review.
CBS News reports that SB863 would alter the manner in which worker’s compensation benefits are calculated, including the elimination of coverage for mental health disorders secondary to physical injuries. Under the new law, the section dealing with the elimination of disability benefits for psychological injuries which are added as secondary disabilities to physical injuries constitutes what many critics of the bill call a terrible step backwards for the system. Additional concerns have been raised over the fact that most of those who voted on the measure did not in fact have the chance to read, no less fully understand the bill. As Democratic Assemblyman Ben Hueso of San Diego told CBS, “I can’t take a vote on something I can’t explain.” Hueso was one of several lawmakers who refused to participate in the vote; but with strong support and swift intervention from California Governor Jerry Brown, SB863 passed — despite initial voter resistance among members of the State Legislature — in a period of less than 24 hours.
As an experienced clinical and forensic psychologist and Qualified Medical Evaluator, I would argue that the SB863’s provisions regarding mental health coverage discriminate against workers who have sustained serious physical injuries and subsequently develop mental problems (depression, anxiety, PTSD, etc.) as a direct result of those injuries. While there are certainly some worker’s compensation cases in which claims of psychological injury are not valid, there are an abundance of cases in which significant psychological disability does in fact result directly from traumatic physical injury. To operate under a law that functions as if no such disabilities exist would, I believe, be a huge disservice to injured workers. Furthermore, this section of the law turns back the hands of time by re-establishing discrimination against individuals with mental disorders in not recognizing the validity of their injuries. This inequity was corrected several years ago at both the federal and state levels when mental health parity legislation required that private health insurance companies respond to and treat physical and mental disorders equally.
For more information about SB863 and the medical and legal communities’ efforts to challenge portions of the legislation, contact me via email at stephen [at] pfeifferphd.com or go online, to http://www.pfeifferphd.com.
Angie Wei, California Labor Federation Legislative Director:
Eight (8) years have passed since injured workers were royally screwed in SB899. I don't think a single person in this room are listening to this committee here today would disagree with that.
Eight (8) years the labor movement has been before this legislature and before this committee; raging about delays and denials and medical treatment. About injured workers living on benefits that were deeply deeply slashed. Finally, we have a plan to do something about it,
Finally, we can get out from under this yoke and do something to return money back into the pockets of injured workers.
We have an opportunity for once, since I've worked around this building, to actually beat back a crisis, because when crisis comes, too often in this legislature, we are bargaining from our knees.
We don't want to go there again.
We have an opportunity with the rating bureau now saying potentially an eighteen (18) percent increase, a meeting in September to review any legislative action.
We have an opportunity to bend that cost curve back; leaving more money on the table for workers, for their own retirement security, for their health care benefits, for their raises.
We have an opportunity today to try and save money for employers; as well as increasing benefits for injured workers.
How could it get... how could we say no to that?
Save costs and improve benefits, take the lead of the system?
How can we say no to that?
Our part of the panel is going to talk specifically about two issues; medical treatment and then permanent disability. We’re going to get a little bit into the weeds if the committee will allow us on permanent disability and then we’ll come back and close for the committee. [end]
[page 5]
Current law under SB899 absolutely cut at least 50% of the dollars out of the permanent disability system. SB899 actually took weeks of benefits away from people and it was a take-away.
This proposal would infuse at least Seven Hundred and Forty Eight Million ($748,000,000) new dollars back into the permanent disability system where we show; by category, by demographic category, by severity of injury, by wages, by age... that everybody wins under this proposed schedule. Everybody gets a raise.
I want to talk for a second about the permanent... the add-ons that have been a lot of discussion here. Just to walk through the thinking and the path that labor and management took together on this.
Current law adds for... to a compensable physical injury; add-ons for sleep, psych and sexual dysfunction.
This proposal eliminates these three add-ons and I’ll go into some detail here, but it maintains other add-ons that are in the AMA guides; pain, headaches, gait and others. So, there will be opportunity to pursue other add-ons.
The psychiatric add-on has been expanded now in the current language to include, not just being... you can get the psych add-on if you’re a victim of, or a witness to, a violent act. It’s now been expanded to also include catastrophic injuries. You can get the psychological add-on if you’re the victim of a catastrophic injury.
So what we did here, is we saw data that showed that two (2) percent of permanent disability claims were able to get these three (3) add-ons.
And we thought, you know what? As an injured worker you’re sitting at home and you’re not working... everybody suffers; from a little bit of psychological depression, a little bit of sexual dysfunction and a little bit of sleep disorder. Everybody does because it stinks being home as an injured worker.
Two (2) percent of the cases get these add-ons; they create more friction in the system, why don’t we book that savings, grab that money, socialize it across all injured workers and help pay for a benefit increase. Acknowledging that everybody suffers from these kinds of ailments when they’re an injured worker. That’s on the add-ons.
On the future earnings capacity issue; you’ve heard probably a lot of discussion and you’ll hear more; The current PD Schedule allows for future earnings capacity adjustment somewhere between a 1.1 and a 1.4. There is a lot of friction in litigation that says are you at 1.1 or a 1.3? And another piece that I’ll get to in a second.
Rather than have the system absorb that friction and that litigiousness; saying are you a 1.1 or a 1.3? This proposal maxes everybody's earnings capacity out at a 1.4. That means that everybody gets a forty 40 percent increase of their whole person impairment out of the AMA guides. Everybody gets a boost from that in and of itself.
What some of our good friends of the applicant attorneys who... we are grateful for their work in the system. They are some of the most vigorous advocates for injured workers and their cases and we appreciate that.
What they’ve been able to do is take people above even the 1.4 FEC factor and get people more money when they can show future earning capacity.
Here’s the thinking that we had here. If you look at the rating bureau numbers from today, yesterday, whenever... what you’ll see... What you'll see in the rating bureau numbers is that for benefit increase on the; what they call the Ogilvey cases, it’s a hundred thirty million dollars ($130,000,000) in benefits over the next two (2) years. But it costs eighty million dollars ($80,000,000) to administer that benefit. Eighty million dollars ($80,000,000) of adjustment expenses.
Why? Because to do those cases you have to bring in vocational experts, economists on the applicants side. Then the defense side brings in their experts. All the while, the injured worker's staying at home, case is not resolved, creates a lot of friction, litigation, delay in the system.
Let's put that money... let's give everybody a boost.
Let me close on two final points:
Number one, workers comp is a no fault system. It is the giant trade-off. Injured workers; we gave up our rights to sue the employer. The employer has to guarantee us adequate medical treatment and timely access to benefits. It's enshrined in our constitution.
It is supposed to be a no fault system.
Insurance companies have to be able to price predictably. And when the system becomes unpredictable that's when we start to see the roller coaster costs of workers comp insurance that's going to come back and be the albatross across our neck.
There is no perfect deal that comes out of this building. This is not a perfect deal. If our side were to write a bill it would look different than this bill; but, we've joined forces with the employers to say let's try to codify what this great trade-off is between labor and management; what we've given up; and each of us gave up things, each of of got things in this deal. It's not perfect. I would argue that nothing here is, but I would ask that this committee ask ourselves....
And I have my friend from the applicant...
I started out this journey earlier this year testifying at the... in the informational sharing in this committee saying we will not defend the indefensible. And I am here to say that the status quo is simply indefensible. We've an opportunity to make significant improvements from the status quo we'd ask for this committees and the legislation consideration. [END]
[page 8]
Just to be clear, that's for a total permanent disability, total disability, not partial disability. So there's a difference there and what is being argued and what may be the case is that this track of litigation will slow down... for partial. [END]
[page 10]
If I may. It is hard to say specifically what will happen in the litigation going forward. It seems as if after SB899 new case law and new pathways for litigation were created so I cannot tell you definitively what’s going to happen.
What I can tell you is that on this issue of diminished future earning capacity; if you look at labor code section 4660, and then the new section 4660.1 there is the deletion of the words diminished future earnings capacity. And some would argue that that would limit the opportunity to come in... voc... vocational experts an economist experts to argue for wage loss.
Two things there; one is, as Mr. Levi stated prior, there’s also language in the new 4660.1 that says nothing stops an injured worker from pursuing a permanent total disability case under 4660.2 of the labor code, which is called the Labouf standard.
So for the... partly Mr. Caldron’s question was, “What happens to the injured worker who cannot get back to work and is completely disabled?”. They still maintain their right to argue total disability under Labouf; under labor code section 4660.2 of the labor code. [END]
[page 11]
Categorically we can show that everybody by category gets a benefit increase. There are some specific examples that have come up in which people could argue that an earnings loss going forward happens. We believe that there are other things in the system that help to mitigate that including the occupational adjustment factor and other things. Litigation could continue in to the nooks and crannies of this proposal to bring some of that to bear.
It is a deal. It’s not a perfect deal. We’ve traded frankly guaranteed benefits to at lea... a hundred thousand (100,000) injured workers a year for what is hypothetically at risk going forward in to an expensive system that could come back and whipsaw against us in two (2) years.
The system the way it is now, with that lack of predictability and that frictional cost, is unsustainable. It’s not going to stay this way. It’s gonna come back and you... this legislature or the legislature after you will impose significant reforms like SB899 which we were very clear we knew was going to take away benefits, didn’t put any money back in the pockets.
We knew there that was bad for workers. And if we don’t do something today that’s gonna come back to us and we’re going to get our meager benefits slashed again. [END]
[page 11]
The system itself is unsustainable [END]
Arthur Levi, Applicant Attorney:
[page 7]
Under Labor Code section 4662 there is nothing to prevent that because that allows the judge to made a determination based on the fact. We're talking about significantly injured persons that basically have a total permanent future earning capacity of one hundred (100) percent loss. There's nothing in this statue that prevents that if you read the statue. [END]
[page 8 & 9]
I can respond and Senator I support everything you say; that there was a trade-off. Therefore, if you really want to fix it, we get rid of the AMA guides, we go back to the old schedule. But, they don’t want to do that.
The trade-off could be, in my vision of the whole reform because of the affordable healthcare act, everybody is going to
have health insurance. That’s one benefit of workers comp.
The other benefit of workers comp is temporary disability. When an injured worker has expired his one hundred and four (104) weeks of temporary disability or cannot return to work, he can tap into state disability.
Therefore, I have an employee... it costs me fift.. she makes sixty five thousand (65,000) dollars a year; it costs me fifteen dollars ($15) a week for SDI. If that was increased to forty five dollars ($45) so she would have have a hundred and fifty six (156) weeks, which is a hundred and four (104) that comp gives her plus fifty two (52) that the state gives her, she’s mandated... she has medical insurance, everybody has to have medical insurance, we take those two (2) benefits out of workers comp, the only benefit we have is permanent disability. I think there’d be a great savings to the employers because the employers presently are paying for... most of the employers.... like he has medical benefits to his employees, Safeway does; they’re paying twice for the same thing, which is medical benefits and they’re also paying indemnity... an indemnity for temporary disability, and they’re also paying in to state disability.
So, if you really want to do a reform look at the big picture and bring it into the twenty first century and don’t think a nineteenth century concept... [END]
For more information:
http://www.courthousenews.com/2013/11/18/6...
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