Workers’ Compensation Deal Near, Sticking Points Remain
Gov. Arnold Schwarzenegger (R) and legislative leaders on Friday reached an agreement on the "outline of a plant to overhaul" the state workers' compensation system, the Los Angeles Times reports. However, officials "stopped short of declaring a final deal" because some provisions of the reform package "need to be refined," according to the Times. The Times reports that staff members for Schwarzenegger and legislative leaders are drafting what is expected to be a 1,000-page bill. The package reportedly would:
- Use guidelines provided by the American Medical Association to establish "objective medical conditions" for determining the extent of a worker's disability. The degree of a worker's disability would be translated into a numerical rating based on the worker's estimated lifetime wage loss as calculated using a database created by Rand. The higher the rating, the larger the payout in benefits;
- Establish a two-tier system that would pay injured workers who can return to work less than those who cannot. In addition, employers would be encouraged to provide injured workers with alternate duties that would not aggravate their conditions;
- Require workers to visit the employer's choice of doctor three times before visiting their choice of doctor, instead of the current rule allowing workers to visit their own choice of doctor after receiving treatment for 30 days from the company's doctor. Workers' requests to see a personal doctors would be reviewed by an independent panel;
- Allow companies and their unions to agree to pilot programs that would combine workers' compensation coverage with traditional health insurance coverage. Such programs would allow injured workers to see their personal doctor and employers to save money by paying only one health insurance premium for both types of coverage; and
- Call for rate regulation of workers' compensation insurers only if "there were enough insurers willing to sell policies" in the state, the Times reports. If there are not enough, premiums would be capped, and the state would have to approve any increases. Maximum premiums would be based on medical costs plus a company's ratio of premiums to losses. Price controls would likely expire after one to three years.
Senate President Pro Tempore John Burton (D-San Francisco) said that the deal is "pretty well cooked." Burton said that legislation could be completed by April 8 and that public hearings could be held as soon as April 12, which would allow the Senate and Assembly to vote on the legislation soon after. Rob Stutzman, the governor's communications director, said that Schwarzenegger "feels good about the work that was done this week with the four legislative leaders," adding, "We're in a good place." However, differences over the proposed reform "have not yet narrowed to the point where the governor is ready to abandon his effort to gather enough signatures to put a workers' comp overhaul on the November ballot," the Times reports (Lifsher/Nicholas, Los Angeles Times, 4/3). According to the Orange County Register, assigning aides the job of turning the tentative deal into a bill is "as if aircraft executives sketched a new plane on a cocktail napkin and asked engineers to make something that could fly" (Gittelsohn, Orange County Register, 4/4). Incoming Senate Minority Leader Dick Ackerman (R-Tustin) said, "The governor thinks we have agreement on enough issues that he wants to get something out for review by Monday. But we have not seen the final package and, of course, this is a complicated issue and a lot will be determined on what those words actually say" (Chorneau, AP/Orange County Register, 4/4). The Los Angeles Times reports that California businesses have only "cautiously endorsed" the tentative reform deal and that many of them "doub[t] that the proposed measures would bring the kind of prompt and large premium reductions employers are seeking." According to some businesses, the proposed plan does not reform areas that have "been source[s] of abuse," such as ensuring that workers' compensation is not used to cover injuries primarily sustained while not on the job, the Times reports. In addition, labor groups are "circumspect" about the proposed deal, according to the Times (Lee/Lifsher, Los Angeles Times, 4/4). According to the Los Angeles Times, the legislation could still stall because the lawmakers disagree on "particularly divisive question" of insurer rate regulation. The Times reports that determining if and how to regulate insurer rates is expected to be "a major sticking point" in the talks between staff members for the governor and legislative leaders (Hirsch/Lifsher, Los Angeles Times, 4/5).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.