The goal of the reform is to return fairness to the system while providing high quality medical care to injured workers, and reducing medical and other costs. The reform is very complex and various components will be rolled out in time. We would encourage you to access the Republic Indemnity Website at www.republicindemnity.com to review three particular documents produced by the California Workers' Compensation Institute (Summary/Effective Dates/Agency Duties) regarding SB 899. After reviewing the same, one can appreciate that the effects will be realized over a long period of time. Not only will the regulatory process be crucial, especially in the development of medical networks and a new Permanent Disability Rating Schedule (not to be implemented until next year), but the courts will play a critical role in interpreting the new Statutes and Regulations.
Nationally recognized ACOEM (American College of Occupational and Environmental Medicine) Guidelines are presumptively correct standards for medical care based on objective evidence, regardless of date of injury. The Administrative Director of the Division of Workers' Compensation may adopt other Guidelines.
Effective January 1, 2005, insurers/employers may direct injured workers into specific medical networks established by the insurer that have been pre-approved by the Administrative Director. Insurers/employers must arrange initial medical evaluation. Employee permitted to select new physician from network after the first visit.
Until a claim is accepted or denied, the insurer/employer is liable for up to $10,000 of medical care. Employers must always promptly notify Republic of every claim, but it is now especially important that employers immediately advise of any disputed claim. Please immediately notify us by either calling, faxing or reporting on-line any disputed injury, in order to allow our claims professionals to quickly evaluate the allegations for prompt decision making.
If insurer or employer does not establish a medical provider network for occupational injuries, employer retains control over medical care for 30 days post injury.
Until April 30, 2007, when this provision automatically sunsets (unless reinstated), up to 7% of employees, on a statewide basis, with employer-provided group health insurance may predesignate personal physicians as their workers' compensation doctors, but only if the doctor agrees to be predesignated. Previous predesignations are no longer valid.
State law requires all employers to provide new hires, at either the time of hire or by the end of the first pay period, with a pamphlet entitled, "Facts About Workers' Compensation." The law, as outlined in Labor Code Sections 3550 and 3551, requires that the pamphlet include mandatory language explaining the role of the Personal Treating Physician, and a form that the employee may use to notify the employer of the name of a predesignated personal physician. Failure to provide new hires with the Pamphlet may result in a tolling of the Statute of Limitations for employees to file a workers' compensation claim. We have included in the Claims Kits five English pamphlets, and five Spanish pamphlets. Additional copies may be obtained by faxing your request to our Mail/Supply Department at 818-382-1297.
The Primary Treating Physician presumption is repealed retroactively, no matter the date of injury.
For all dates of injury after January 1, 2004, physical therapy, occupational therapy and chiropractic visits are limited to 24 each during the lifetime of a claim, unless otherwise authorized by the insurer.
If a treatment dispute exists with any injured worker who is in our approved medical network, the worker can request up to two additional opinions from doctors within the network. If dispute remains, an Independent Medical Review ( IMR ) may be sought from the Administrative Director. Only if the IMR agrees with the injured worker may the specific treatment be obtained outside the network, but the injured worker will remain in network for all non-disputed industrial treatment.
Temporary Disability Benefits:
For all dates of injury after April 19, 2004, most injured workers will receive temporary disability benefits for a maximum of two years from the date a temporary disability benefit is first paid. (Prior law allowed for virtually unlimited temporary disability payments.)
Permanent Disability Benefits:
The reform is intended to compensate similarly injured workers the same, not arbitrarily as under the previous Permanent Disability Rating Schedule.
No later than January 1, 2005 the Administrative Director must promulgate a new Permanent Disability Rating Schedule based on the American Medical Association Guidelines. Also, a new modifier, Diminished Earning Capacity, will be added to the Rating Schedule. Severely injured workers will receive increased benefits, while less severely injured workers will receive a decrease in benefits.
Disputes should be resolved more quickly, by limiting admissibility of multiple medical reports.
An employer is only liable for the percentage of permanent disability caused directly by the occupational injury.
Creates a two-tier permanent disability schedule: Permanent disability awards will be adjusted to reflect the ability of an employee to return to work and return-to-work offers by their employers.
Excessive penalties regarding disputes over benefits will be limited to up to 25% of the benefit delayed (old law required a penalty be paid on the entire category of benefit.
The new maximum penalty is up to $10,000 (previously, there was no cap.)
New law institutes a Statute of Limitations of two years from the date that the delayed benefit was due in which to make a claim for the alleged penalties.
The delayed payment penalty is reduced from 25% to 10% if the insurer voluntarily pays a delayed benefit within 90 days of the date of discovering that a payment is overdue.
Settlement agreements or Stipulated Awards presumptively settle all penalties not specifically excluded.
These new provisions take effect June 1, 2004 for all dates of injury.
It was clarified that workers' compensation is specifically excluded from SB 796 (which became law last year) permitting private attorney general actions (including Awards of attorneys fees) for any Labor Code violation. The California Chamber of Commerce is actively working to overturn SB 796.
Insurance Rate Study:
A record number of insurers have become insolvent or stopped writing workers' compensation insurance in California. Critics of reform charge insurers will not promptly pass on anticipated savings to employers. The Administrative Director will commission a study of reform's impact on rates and make a preliminary report to the Governor, the Legislature and the Insurance Commissioner by January 1, 2005, and a final report by January 1, 2006.