Calif Comp Law Waits On Rules

By Michael Ha and Daniel Hays

NU Online News Service, Oct. 6, 12:57 p.m. EDT? California officials at this point have no idea when they will finish drawing up the regulations needed to implement the state's new workers' compensation law after it takes effect Jan. 1, 2004, an official said.

"We're not talking about this [set of regulations] being ready to go three months from now, but we are busy at work starting the process, said Richard Stevens, spokesperson for the California Division of Workers' Compensation, which has the task of drawing up rules required by the new statute.

In the interim, "It will take considerable time for the bills' cost savings to be achieved," noted Sam Sorich, president of the Association of California Insurance companies. The bills' supporters estimate the measures will result in an annual cost reduction of nearly $6 billion while the Workers' Compensation Insurance Rating Bureau figures the saving will be $4 billion.

Mr. Stevens said while the division has no timetable, it is developing an implementation plan. He explained that, "generally, what we've done before we propose new regulations is to go out to the community with an online form" of proposals.

Once the online scheme gets a reaction, he said, public hearings will be held and after a process of public comment and revisions, a package would go to the state's Office of Administrative law for up to 30 days of review.

The comp law reforms signed into law last week by Gov. Gray Davis seeks to reduce workers' comp-related costs with a variety of revisions including, establishing medical-fee schedules, limiting visits to chiropractors and physical therapists and repealing a vocational rehabilitation program for injured workers.

It also calls for a fee schedule for out-patient surgery centers. A pharmaceutical fee schedule is established, the presumption of correctness that was assigned to the treating physician's decisions is revoked and the California Insurance Guaranty Association is authorized to issue bonds to assure that workers' compensation claims are paid.

Mr. Stevens said the new laws will slash doctors' fees by 5 percent and then tie these fees to the federal Medicare schedule, plus 20 percent.

Other changes include placing a cap of 24 visits on chiropractor and physical-therapist services per claim; eliminating the system that offers up to $16,000 per year for retraining or up to $10,000 cash payment with the aid of a physician, and replacing it with a voucher program offering education benefits; and adopting experience-and-training standards for those who handle claims for insurers.

But industry representatives like Mr. Sorich, while welcoming the changes, said policymakers should consider more reforms in 2004. Mr. Sorich said they should address permanent partial disability benefits, legal costs and administrative costs. The degree of savings from the latest changes "remains to be seen," he said.

Mark Sektnan, assistant vice president of state affairs at American Insurance Association in Washington, D.C. said the reforms may dampen premium increases, but predicted "they will not result in widespread premium reductions."

Mr. Sektnan called for an independent review process for contested medical treatment. He added that policymakers "should revisit the problems on the indemnity side and look for ways to reform how permanent disability ratings are determined to bring more predictability and fairness to the system."

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Calif Comp Law Waits On Rules

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