Conference Committee Meets To Consider Workers’ Compensation Bills

Six members of a joint Senate-Assembly conference committee convened last week to sort through all the proposed legislation to reform California's workers' compensation program, the Los Angeles Daily News reports (Garza, Los Angeles Daily News, 8/26). The committee is reviewing 19 workers' compensation bills that passed the chambers during the spring session to draft compromise legislation (California Healthline, 8/18). The committee has three weeks to assemble a bipartisan package and pass it before the legislative session ends Sept. 15, the deadline Gov. Gray Davis (D) set earlier this month for workers' compensation reform. Sen. Richard Alarcon (D-Van Nuys), chair of the Senate side of the committee, said that he anticipates "significant reform" that will translate into a minimum of $2 billion in savings and a curb on future costs. He expects that the conference committee will spend two weeks working on reaching a compromise, which would leave one week to pass the package in the Legislature (Los Angeles Daily News, 8/26).

Insurance Commissioner John Garamendi (D) has proposed an 11-point overhaul proposal to cut workers' compensation costs by $7 billion, the Sacramento Bee reports. Details of the plan are provided below.

• The state would establish a medical fee schedule based on 120% of Medicare reimbursement rates. The measure would increase payments to medical facilities by about 1.5%, or $300 million annually, but save the state $1.3 billion annually by reducing payments to pharmacies and outpatient surgery centers, which currently do not have a fee schedule.
  
  
• A cap would be placed on chiropractic visits, and spinal surgery would be limited, which would add up to $740 million in annual savings.
  
  
• Guidelines for treating workers' injuries would be established, which could save an estimated $2 billion each year.
  
  
• The generic drug requirement would be expanded to hospitals, physicians and clinics to decrease costs by $347 million each year (Sacramento Bee, 8/27).

California Healthline rounds up additional workers' compensation coverage, summaries of which are provided below.

• Total workers' compensation premiums increased to about $32 billion in 2002 from about $9 billion in 1993, Dave Bellusci, chief actuary of the Workers' Compensation Insurance Rating Bureau, said at a conference committee hearing last week, the San Francisco Chronicle reports (Abate, San Francisco Chronicle, 8/27). Garamendi told the committee that workers' compensation costs for this year are about $29 billion (AP/Los Angeles Times, 8/27).
  
  
• State officials could have controlled the rising cost of care by setting caps on what insurers pay for medical services or on the number of visits injured workers may make to medical providers such as physicians, physical therapists and chiropractors, according to a 153-page report released Wednesday by State Auditor Elaine Howle, the Los Angeles Times reports (Vogel, Los Angeles Times, 8/28). The report also found that fee schedules for medical services and medications are outdated or nonexistent; there are no enforceable treatment guidelines; and no program to collect information to monitor medical costs or to evaluate the effectiveness of reforms currently exists (Chan, Sacramento Bee, 8/28). "Capital Public Radio" Wednesday reported on the auditor's report on workers' compensation (Kennedy, "Capital Public Radio," 8/27). The full segment is available online in RealPlayer.
  
  
• Chiropractors last week held a rally outside the Capitol to protest a proposal by Sen. Jackie Speier (D-San Mateo) that would cap the number of visits each injured worker can receive, the Chronicle reports (San Francisco Chronicle, 8/27). The measure would limit coverage to 15 visits per patient unless an injured worker obtains a physician's approval for more visits. Douglas Wilson, president of the California Chiropractic Association, said, "Chiropractic care is just 5% of the total costs in workers' compensation. It is impossible that we are responsible for the 300-plus percent increase in premiums that employers are experiencing" (AP/Los Angeles Times, 8/27).

• Riverside Press-Enterprise: The conference committee must produce "a tough solution" to the "brewing crisis" of workers' compensation, and Garamendi's reform package provides a "sensible framework for a realistic solution," a Press-Enterprise editorial states (Riverside Press-Enterprise, 8/24).
  
  
• San Diego Union-Tribune: Getting a workers' compensation reform package to the governor's desk is "crucial to California's economic health" because the system is a "$29 billion sink hole that is swallowing small and large businesses alike," a Union-Tribune editorial states (San Diego Union-Tribune, 8/25).