California officials say that a law to reform the state's workers' compensation system by introducing evidence-based treatment guidelines has paid major dividends since its implementation three and a half years ago.

A report released by the state Department of Industrial Relations says that the state has saved $600 million more than initially projected.

New treatment approach

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

The state has had a Medical Treatment Utilization Schedule in place since 2003, which is intended to guide physicians and other providers on the proper treatment of injuries. In addition, the state has crafted a separate schedule that deals specifically with painkillers. That schedule offers recommendations on the dosage and duration of an opioid prescription, as well as steps providers should take to screen for abuse or addiction.

Average cost down 8%

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

“The primary goals of the 2012 workers' compensation reforms were to increase benefits and improve medical care for injured workers, and to control costs for employers,” Labor and Workforce Development Secretary David Lanier said in a statement. “While significant progress toward meeting the goals sought by the Governor and the Legislature has been achieved, the department is pushing ahead to further reduce costs in the system by developing an evidence-based drug formulary and improved anti-fraud efforts.”

The report by the California Department of Industrial Relations nevertheless contends that workers compensation fraud is still a major concern. The agency said it is crafting plans to pursue and prevent fraud in the hopes of pushing down system costs further.

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California sees savings from workers&rsquo; comp reforms

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California sees savings from workers’ comp reforms