Study shows workers’ compensation system in California improving

A new state report highlights a 10 percent decrease in employer costs since 2013 workers compensation reforms went into effect.

State officials have been promoting the results of workers' comp reforms in California enacted in 2013. The reforms included using evidence-based medicine when making decisions regarding treatment and using independent medical examinations (IMEs) to settle treatment disputes.

Under SB 863, passed in 2013, the Independent Medical Review program has physicians use preexisting medical research regarding the necessity of treatments. This includes not allowing opioids to be used as a first treatment option for chronic pain and limiting bed rest to one or two days for back pain. Options have been shown to delay recovery times and bed rest has been shown to worsen lower back symptoms.

Results are promising for employers

The California Department of Industrial Relations issued a report on July 23 claiming that the workers' compensation system has shown decreased costs for employers and increased payments to injured workers in the wake of reforms. In May, 2015 the Department of Insurance dropped suggested premiums by 10.2 percent. The lowered premiums have not resulted in less care for workers. In fact, California workers have had their weekly maximum benefit payment increase by $20. Permanently disabled workers have seen a 30 percent increase in their benefit amount. Injured workers are also eligible for a $5,000 supplement under the Return-to-Work-Supplement Program. Finally, workers have also had increased access to network doctors through reforms.

Partially accounting for the saving is a decrease in medical costs and less waste involved in the system.

Certainly, the system is not perfect. Workers' compensation fraud continues to be a tough problem to solve. The workers' compensation process can provide delays. Legal issues can complicate workers compensation claims and increase costs for employers if not handled efficiently.

Still, "The progress made since the passage of SB 863 . . . is encouraging" wrote DIR Dircetor Christine Baker in a press release after the study was released. Hopefully improvements will continue to be made in workers' compensation to further lower the high burden often placed on employers facing workers' comp claims.

Help with workers' compensation defense

While changes in the law are encouraging, employers still may find themselves facing high costs associated with workers compensation. For help with workers compensation defense in California, including for uninsured and self-insured employers, contact Sacks & Zolons, LLP, to discuss your legal options.