The California legislature adjourned just about midnight on Friday night. The final hours saw frantic activity as lawmakers worked to pass a number of bills including a last minute overhaul of the workers' compensation system. The CCA Governmental Affairs department, CCA Governmental Affairs Committee and CCA's lobbying firm worked diligently to combat this unfair legislation. CCA also issued a full grassroots attack which resulted in hundreds of calls and letters.
SB 863, introduced less than two weeks ago, was a "gut and amend" bill cobbled together by large self insured employer groups and representatives from the California Labor Federation.
An informational hearing was held August 28th in the Assembly Insurance committee. Four panels were invited to address the committee, representing the Department of Industrial Relations and Employers, Labor-Management, Applicant's Attorneys and Industrial Physicians and Other Physicians followed by a short period of public comment. The day prior to the hearing the Department of Workers' Compensation released a statement saying that SB 863 would add $300 million dollars in costs to the workers' compensation system. The following morning their chief actuary testified that, due to amendments taken the night before, they now believed there to be a $700 million dollar savings to the system with implementation of this bill. It became clear following questions from the Insurance committee members that the actual affect on costs of SB 863 is unknown. Labor and employer groups called the bill a win for both the injured workers with increases in permanent disability payments and faster access to medical treatment and for employers by keeping premiums down.
CCA, the California Applicants Attorneys Association and other groups argued that it was not at all certain that injured workers would benefit from the changes and that reforming a complex, multi billion dollar system should be done in a thoughtful, transparent manner with all the stakeholders at the table. For a while that message seemed to resonate with lawmakers and the bill appeared to be dead.
However, on Thursday night the Governor got involved and began calling legislators asking them to vote for the reform package. It is unusual for this Governor to take a position on legislation that has not formally gotten to his desk, but on Friday his office issued a statement supporting the passage of SB 863. It has been circulated that he is hoping for support by business and labor for his tax initiative. The bill was heard late on Friday evening in two policy committees and was voted off the Senate and Assembly floors with only a handful of no votes.
SB 863 makes significant changes to the workers' compensation system:
- For doctors of chiropractic, SB 863 leaves only one pathway for qualifying to sit for the QME examination and it removes doctors of chiropractic as Primary Treating Physicians after the 24-visit cap.
- SB 863 supposedly increases the amount paid for permanent disability, however it also alters how disability is determined.
- SB 863 creates Independent Medical Review (IMR) panels to address utilization review. The reviews will be paper reviews and presumed correct.
- SB 863 creates Independent Bill Review (IBR) panels. The Official Medical Fee Schedule (OMFS) will now be based upon the Resource-Based Relative Value Scale (RBRVS). Fees paid to Ambulatory Surgical Centers will be reduced.
- Permanent disability ratings will no longer consider "diminished future earning capacity" and "add-ons" such as sleep disorders and sex disorders and to some degree psychological disorders will no longer be considered.
- SB 863 assigns a new lien filing fee of $150.00 as well as a $100 lien activation fee on liens filed before January 1, 2013.
These are only a handful of the changes to be implemented with the passage of SB 863. CCA will share more information as soon as possible.
Thank you to everyone who took the time to make our voices heard. We will continue to be as strong as our