Davis Proposes Workers’ Compensation System Reform
Gov. Gray Davis (D) yesterday announced support for legislative proposals that he said would lower by at least $1.5 billion the estimated $15 billion to $20 billion annual cost of California's workers' compensation system, the Sacramento Bee reports (Talev, Sacramento Bee, 5/2). Davis supports a number of reforms proposed by both GOP and Democratic state lawmakers, who in recent weeks have agreed on the need for "significant changes" to the system, the Los Angeles Times reports (Jones, Los Angeles Times, 5/2). Davis' plan would:
- Adopt a bill (SB 228) introduced by Sen. Richard Alarcon (D-Los Angeles) that would enact workers' compensation fee schedules for pharmacies and outpatient surgery centers;
- Allow injured workers to choose an independent review process designed to resolve disputes between patients and HMOs;
- Create a pilot program in which employers could pay HMOs to provide both health insurance and manage work-related injuries;
- Prohibit doctors from referring workers' compensation patients to facilities in which the doctors have a financial stake; and
- Increase fines for fraudulent billing of the workers' compensation system (Lawrence, AP/Orange County Register, 5/2).
Insurance Commissioner John Garamendi (D) said the plan faces "significant opposition" from different groups that "don't want to see a smaller piece of the pie" (Lucas, San Francisco Chronicle, 5/2). But Davis said "every interest group will see something in this package that they will like" (Inland Valley Daily Bulletin, 5/1). It is unclear how Davis' proposal will fare in the Legislature, the Chronicle reports (San Francisco Chronicle, 5/2).
One opinion piece and one editorial today reacted to Gov. Davis' workers' compensation plans. Summaries of the articles appear below:
Fresno Bee: In an effort to determine which workers' compensation system reforms "could protect both the workers and the employers," California should assign a task force of "highly skilled people" from different interest groups, Deborah Nankivell, CEO of the Fresno Business Council, writes in Bee opinion piece. "We are all paying for the workers' comp mess," Nankivell writes, adding that a special task force could "craft an excellent system focused upon agreed goals" (Nankivell, Fresno Bee, 5/2).
- Los Angeles Times: Although "additional steps will be necessary" to reform the "dysfunctional" workers' compensation system, Davis' proposal would make the system "more efficient and speed the return of workers to their jobs," the editorial states. "Legislators should set aside their differences and deal with a problem that threatens to further damage the state's economic health," the Times concludes (Los Angeles Times, 5/2).