How California Workers’ Compensation Reform (SB 863) May Affect Your Claim

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How California Workers’ Compensation Reform (SB 863) May Affect Your Claim

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Posted By DAM Firm | June 12 2017 | English, Workers Rights

Back in 2012, the California State Legislature undertook a dramatic reform of the state’s Workers’ Compensation system. The new law, SB 863, which took effect the following year, contained provisions designed to reduce costs to the employer/insurer, while offering a mix of improved benefits and unfortunate restrictions to the injured claimant.

As a result, while the total amount paid out per claim has increased significantly across the nation, it has remained fairly static in California, largely due to a reduction in the amount of medical benefits paid for claims involving more than seven days of time lost from work, which offset other increases in payouts. In a recent issue of The Insurance Journal, Ramona Tanabe of the Workers’ Compensation Research Institute (WCRI) says she believes that this reduction can be credited to the new law. Some of the provisions of SB 863 to reduce costs per claim included:

  • A reduction in the fee schedule rates for ambulatory surgery centers;
  • Elimination of separate increments for implantable medical devices, hardware, and instruments used in spinal surgeries;
  • Implementation, over a period of years, of a professional services fee schedule, based on a resource-based relative value scale.

Permanently Disabled Workers Enjoy Higher Payouts

At the same time, SB 863 increased the amount of permanent disability benefits for injured workers, which Tanabe speculates was partially responsible ─ along with a trend toward higher wages in the state─ for a per claim growth in benefits of 5 to 6 percent each year in 2014 and 2015.

Independent Medical Review is No Longer Subject to Dispute

So, you may benefit from the reform if you are permanently disabled; however, you may run up against some obstacles when it comes to getting the medical care that your doctor feels is appropriate. Under the new law, any dispute concerning what medical treatment your Workers’ Compensation carrier will pay are now to be determined by an independent medical review process, the Utilization Review (UR), in which an outside physician will determine, without the benefit of examining or even meeting you, whether a particular treatment will or will not be paid. Any medical treatment that has been denied by UR may only be resolved solely by an Independent Medical Review (IMR), again by an outside physician who has never examined you. Th IMR determination is not subject to further dispute. While legislators expected this new process to reduce per claim expenses, this has yet to be demonstrated, according to the WCRI.

Another California law, AB 2411, passed in 2015 and mandated to be in effect by July 2017, will establish an evidence-based drug formulary designed to ensure that injured workers are prescribed the most effective and medically current treatment for their particular condition and to reduce the number of disputes.

Exclusion of Certain Categories of Ad-ons

Another of the many changes to the law is that add-ons, which in the past could increase the amount of your lump sum payout for a permanent disability, have been limited to exclude impairment ratings for psychiatric disorders, sleep problems, or sexual dysfunction that you have suffered as a consequence of your injury.

An Evolving Law

The law is evolving, as some of its provisions that were scheduled for implementation over an extended period come into effect, and as claimants and their attorneys turn to the courts for rulings on how various provisions are to be interpreted. The law is complex and, at times, confusing, especially for the claimant who is trying to navigate the process without the benefit of legal counsel. Your best bet at is to keep your lawyer involved at each step of the process, to ensure that you are getting everything the law allows.

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