Calif. Regulator Balks At Comp Increase Request

WCIRB has said that 6 percent of the requested increase is attributable to two decisions by the Workers' Compensation Appeals Board that went against employers, which permit more challenges to the process of setting disability payment amounts based on the extent of worker injuries.

But since that decision in the Almaraz and Ogilvie cases, the WCAB has agreed to hear motions to reconsider those decisions.

"WCIRB should withdraw the portion of the increase related to the Almaraz and Ogilvie cases," Mr. Poizner said in his statement.

He noted that Gov. Arnold Schwarzenegger "has said that he believes the ruling will not survive the appellate process in its current form, and that his administration supports the effort to overturn the decisions. I believe that any increase should be considered after the judicial process has concluded."

WCIRB said medical inflation is responsible for 16.9 percent of its request.

"While increased medical treatment costs may be justified, information provided at today's hearing did not adequately support the request," according to Mr. Poizner.

"Insurers have the ability to control costs through medical treatment guidelines, utilization review and medical provider networks," he added. "So rather than explain why costs are going up, all I heard is that they are going up and we should pass them along in the form of rate increases. This is unacceptable and the public deserves better."

Mr. Poizner remarked that "five years ago, skyrocketing workers' compensation costs were the bane of the economy. Many jobs left our state and countless companies expanded elsewhere because of the high costs of workers' compensation in California."

However, he added, "since legislative reforms, costs in the California workers' comp system have fallen by more than 60 percent," noting that the current cost increase factors include "the recent WCAB ruling in the Almaraz and Ogilvie cases and medical treatment costs."

"Because of this, I have decided to continue this matter to a special investigative hearing to examine medical inflation. I will call all parties–including insurers and medical service providers–to the table to get a clear answer to why costs are spiraling," he said.

"When we get those answers, I will ask the governor and the legislature to make the necessary changes to ensure a stable and effective workers' compensation system," he concluded.

WCAB, in its Alvarez ruling, said that "AMA Guides can be rebutted by showing that an impairment rating based on the AMA Guides would result in a permanent disability award that would be inequitable, disproportionate, and not a fair and accurate measure of the employee's permanent disability."