Calif. Senate Committee Investigates Workers’ Comp Reform Law

The California Senate Labor and Industrial Relations Committee is investigating whether a law (SB 863) that overhauled the state's workers' compensation program has met expectations, ProPublica reports.

The action comes after the state Department of Industrial Relations issued a warning to insurers about the law (Grabell, ProPublica, 3/26).

Background on SB 863

In September 2012, Gov. Jerry Brown (D) signed SB 863 into law.

The law -- by Sen. Kevin de León (D-Los Angeles) and former Assembly member Jose Solorio (D-Anaheim) -- changed the formula used to calculate benefits for injured workers, increasing their compensation by an average of 29%.

It also eliminated benefits for certain health conditions that often are subject to lawsuits, such as psychiatric problems, sexual dysfunction and sleep loss.

The State Compensation Insurance Fund predicted that employers would pay less for workers' compensation insurance under the law (California Healthline, 5/13/14).

According to ProPublica, the law applied retroactively, meaning requests for medical treatment are subject to review by insurance company physicians and more stringent guidelines.

Some stakeholders have said that the provision allows insurers to use minor treatment requests as a vehicle to revise pre-approved treatment plans.

Details of Notice

Last month, DIR issued a warning to insurers that SB 863 should not be used to revisit old cases and deny home health care services for injured workers that had previously been approved.

DIR issued the notice after a ProPublica/NPR investigation last month found that more than 30 states since 2003 have:

• Added barriers to accessing medical care;
• Reduced compensation for injured workers; and
• Made it more difficult for injured workers to qualify for compensation.

In the notice, DIR and its Division of Workers' Compensation wrote, "Many of [SB 863's] reforms have drawn praise from stakeholders, but others have raised concerns."

The department noted that previously approved medical care cannot be altered "unless a treating physician provides medical evidence of a change in the injured workers' condition." Otherwise, "agreed-upon medical treatment must be honored."

Details of Hearing

The state Senate committee scheduled last week's oversight hearing, following the DIR notice. Committee members heard testimony from several stakeholders as to whether SB 863 met expectations.

Specifically, Committee Chair Tony Mendoza (D-Artesia) said the hearing was set to determine whether the law had:

• Increased benefits for injured workers;
• Provided faster access to care; and
• Reduced workers' compensation costs for employers (Grabell, ProPublica, 3/24).

The committee heard testimony from more than a dozen stakeholders, including representatives from the:

• California Labor Federation;
• California Society of Industrial Medicine and Surgery; and
• California Workers' Compensation Institute (Hearing agenda, 3/25).

During the hearing, Angie Wei with CLF said the state needs to ensure that insurers are not using the law to deny medical care. She added that lawmakers should eliminate some steps in the medical review process that give insurers and employers opportunities to overrule workers’ doctors (ProPublica, 3/26).