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California Workers’ Compensation:. The Latest from Sacramento. June 28, 2011. Welcome. Jerry Azevedo, Workers’ Compensation Action Network APCO Worldwide Jason Schmelzer , California Coalition on Workers’ Compensation Shaw / Yoder / Antwih , Inc. Who We Are.

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Jerry Azevedo, Workers’ Compensation Action Network

APCO Worldwide

Jason Schmelzer, California Coalition on Workers’ Compensation

Shaw / Yoder / Antwih, Inc.

who we are
Who We Are

Workers’ Compensation Action Network

  • Broad-based, statewide coalition of employers

and insurers dedicated to defending and advancing

reform of California's workers' compensation system

          • Includes every major employer trade association in California
          • Insured, private and public self-insured employers
          • Nonprofit organization
    • Educate lawmakers, the business community and members of the media on workers’ compensation issues
          • Track outcomes of recent legislative reforms
          • Disseminate original material
          • Provide media commentary
          • Conduct annual Legislative Education Day
  • Mobilize grassroots network to support/oppose legislative proposals
who we are1
Who We Are

California Coalition on Workers’ Compensation

  • Statewide association of employers committed

to maintaining a workers’ compensation system

that provides quality benefits at a reasonable

cost to employers

        • Founded in 1985 and governed exclusively by CA employers
  • Advocacy
        • Intimately involved in the development and passage of 2004 reforms
        • Serve as the voice of California employers in legislative and regulatory venues
        • Unrivaled experience and knowledge of workers’ compensation policy in Sacramento
  • Education
        • Annual conference on workers’ compensation trends, strategies, and public policy
        • Coordinate annual Legislative Education Day
what we ll cover today
What We’ll Cover Today

Who’s Making Decisions in Sacramento

How and Why Decisions Are Being Made

Pending Legislation

What You Can Do

context for decisions

State Budget Deficit

    • Tax extension negotiations have sputtered
    • All cuts budget and legislator pay
  • Economy and Jobs
    • Tax receipts up in early 2011
    • Employment continues to lag
      • CA unemployment at 11.7%
      • US Average is 9.1%
      • Nevada only state higher at 12.1%
  • Redistricting and Open Primary
    • Final maps from redistricting commission not yet released
    • Electoral uncertainty because of modified districts
    • Impact of open primary undetermined

Five States with Highest Unemployment Rate

Context for Decisions
context for decisions2

California Workers’ Compensation Costs Per Indemnity Claim












Context for Decisions
context for decisions4

WCIRB Accident Year Combined Loss & Expense Ratios



California regulators seize SF’s Majestic Insurance, propose rehab plan

April 22,2011









Context for Decisions
context for decisions6


  • Declined by 5th District Court of Appeal

“California's non-partisan Legislative Analyst's Office has concluded that these rulings could lead to (1) changes in PD ratings, (2) increased incentive for litigation, and (3) decreased uniformity in determining PD. Ultimately, these effects would likely lead to increased benefits for workers and higher costs for businesses and governments.”

  • Guzman
  • Affirmed by 6th District Court of Appeal, Declined by Supreme Court
  • Ogilvie
  • Oral arguments held last week by 1st District Court of Appeal
Context for Decisions
assembly bill 378

Unusual coalition pushes for restrictions on compounded drugs

December 28, 2010

Compounded drugs bring big profits to California doctors, study finds

January 29, 2011

Assembly Bill 378
assembly bill 3781
Assembly Bill 378

Compound Drugs, Co-Packs and Medical Foods

assembly bill 3782
Assembly Bill 378
  • AB 378 removes the profit motive for prescribing compound drugs
      • Ban on self-referral
      • Imposition of temporary fee schedule
  • Recent reports indicate that the increase in utilization of compound drugs may be driven by profit-motive instead of medicine
      • Utilization spike following repackaged drugs regulations
      • Suspect arrangements with compound drug manufacturers
      • Physician dispensing spike
  • Hearing in Senate Labor & Industrial Relations Committee

July 6, 2011

      • Strong opposition by medical community
      • Partnership with labor, employers, and insurers.

Compound Drugs, Co-Packs and Medical Foods

senate bill 863

State Senator Sees Zombie Liens

as a Grave Issue

June 6, 2011

Senate Bill 863


senate bill 8631
Senate Bill 863
  • SB 863 reforms the medical lien process
      • Time limits on when liens can be filed
        • 18 months for medical providers
        • 5 years for third party payers (insurers)
      • Requires documentation for liens to be valid
      • Implementation 7/1/2012
  • LIENS have become a major cost driver
      • Clogging the WCAB
      • Increasing litigation costs
      • Increasing medical costs
  • SB 863 passed Senate Labor and Industrial Relations on 6/2/2011
      • Currently in the Senate Appropriations Committee
      • No hearing scheduled


assembly bill 947

Employers balk at bill to extend temporary disability payments

June 10, 2011

Assembly Bill 947

Temporary Disability Benefits

assembly bill 9471
Assembly Bill 947
  • AB 947 would eliminate the 104 week cap on TD benefits
      • Creates broad new exception for claims not P&S by 104 weeks
      • New Exception captures any claim where treatment extends beyond 104 weeks
  • Temporary Disability is a major cost-driver in WC
      • The current cap drives RTW
      • Cap elimination allows for gamesmanship in WC by medical providers and attorneys seeking to profit off of injured workers
  • Passed Senate Labor & Industrial Relations on 6/22/2011
      • Sent to Senate Rules Committee
      • Will be referred to Senate Appropriations for evaluation of fiscal impact

Temporary Disability Benefits

assembly bill 3751
Assembly Bill 375
  • AB 375 creates a presumption for hospital employees
      • Neck and Back injuries removed from the bill
      • MRSA and blood-borne pathogens are presumed to be industrial
      • Applies to hospital employees who engage in direct patient care
  • Presumptions increase cost in WC
      • Overcoming the presumption is almost impossible
      • Proliferation of presumptions in a problem
      • Cost increases to counties and University of California, which run public hospitals
  • AB 375 passed Senate Labor & Industrial Relations on 6/22/2011
      • The bill has been referred to the Senate Appropriations Committee, but no date is set for the hearing

Hospital Worker Presumption

assembly bill 1155
Assembly Bill 1155
  • AB 1155 would reopen litigation on the validity of apportionment
      • The bill prohibits apportionment when the prior non-industrial disability is caused by age, race, gender, or another protected class
      • Amendments have been offered by the opposition
  • Apportionment is a fundamental issue of fairness
      • Employers only liable for disability caused by workplace injury
      • Will open up new litigation on apportionment
  • AB 1155 will be heard on 6/29/2011 in Senate Labor & Industrial Relations
      • No fiscal committee


what can i do
What Can I Do?
  • Learn About the Issues
      • Join a membership organization
  • Be Heard
    • Write, call or meet with your legislature
    • User-friendly online advocacy tool
      • Visit and click Take Action!
thank you
Thank You