Who wins in workers’ comp reform?
Gov. Schwarzenegger has characterized the recent “reform” of workers’ compensation (SB899) as another victory. Who will benefit from the reform of workers’ compensation?
Injured workers: There is no good news for injured workers. They will be forced to see only company doctors. The governor calls this “choice” of doctors, but choosing from a pool of company doctors is no choice! SB899 eliminates job-retraining benefits for injured workers who cannot return to work because of their work injury and reduces benefits to those workers who do return. SB899 implements the American Medical Association guidelines for rating disability despite the AMA’s own admonishment that it should not be used for such purposes. The effects of utilizing AMA guidelines will be to severely reduce benefits for injured workers.
Employers: Don’t expect a rebate! SB899 requires immediate medical treatment up to $10,000 for injuries until the claim is denied. If someone has a heart attack at work, the employer will now pay for the medical care up to $10,000, even if the heart attack is not work-related. If the claim is eventually denied, the employer will not recoup the $10,000.
Doctors: Doctors can provide injured workers only with medical treatment that is to cure or relieve the effects of their work injuries if provided in the American College of Occupational and Environmental Medicine occupational-medicine practice guidelines. The state Legislature is now practicing medicine by telling doctors what medical treatment is necessary for a given injury, or cookbook medicine.
Taxpayers: The changes in SB899 shift the burden for work injuries to taxpayers, as injured workers who lose disability payments or medical treatment will seek these benefits from government programs.
Insurance companies: SB899 does not require a reduction in workers’ compensation premiums. The 2003 reforms should have produced premium reductions of 14.9 percent. The average rate reduction was 3.6 percent. Insurance carriers pocketed the savings. The governor’s prediction of a 30 percent premium reduction is ridiculous. SB899 will not yield immediate reductions for business owners. In addition, SB899 reduced penalties for late payments. With state audit data consistently showing that late payments and unreasonable withholding of benefits are widespread, penalties should be increased, not decreased.
The governor: The governor has accepted piles of insurance money exceeding seven figures after he promised to refuse such donations. He has forced legislation putting the burden of workers’ compensation reform on the backs of injured workers, leaving insurance carriers unscathed.