California officials say that a law to reform the state'sworkers' compensation system by introducing evidence-basedtreatment guidelines has paid major dividends since its implementationthree and a half years ago.

A report released by the state Department of IndustrialRelations says that the state has saved $600 million more thaninitially projected.

New treatment approach

The state attributes much of the savings to a new approach totreatment for workers who are injured on the job. Concerns aboutthe over-prescribing of opioids to injured employees prompted thestate to devise stricter guidelines for treating certainconditions. The state also created an independent board to hear andresolve disputes over treatment and is in the process of creating astandard drug formulary.

The state has had a Medical Treatment Utilization Schedule inplace since 2003, which is intended to guide physicians and otherproviders on the proper treatment of injuries. In addition, thestate has crafted a separate schedule that deals specifically withpainkillers. That schedule offers recommendations on the dosage andduration of an opioid prescription, as well as steps providersshould take to screen for abuse or addiction.

Average cost down 8%

As a result of the heightened scrutiny of treatment, stateofficials say, the average cost per injured worker has decreased 8percent, even as the minimum and maximum payments for permanentdisability claims increased by 30 percent.

“The primary goals of the 2012 workers' compensation reformswere to increase benefits and improve medical care for injuredworkers, and to control costs for employers,” Labor and WorkforceDevelopment Secretary David Lanier said in a statement. “Whilesignificant progress toward meeting the goals sought by theGovernor and the Legislature has been achieved, the department ispushing ahead to further reduce costs in the system by developingan evidence-based drug formulary and improved anti-fraudefforts.”

The report by the California Department of Industrial Relationsnevertheless contends that workers compensation fraud is still a majorconcern. The agency said it is crafting plans to pursue andprevent fraud in the hopes of pushing down system costsfurther.