California DIR Backs Comp Reform Plan

The director of Cal/OSHA's parent agency said the plan will solve several problems "before projected rate increases push California to a crisis situation."

The director of the California Department of Industrial Relations, Christine Baker, recently announced her agency’s support for a comprehensive plan to reform the California workers' compensation system. "Representatives of labor and employers have been working vigorously to reform California's workers' compensation system before projected rate increases push California to a crisis situation," Baker said in a news release posted by DIR. "The result of this work is a comprehensive reform proposal that protects workers and employers by improving benefits and ending wasteful litigation."

The release says labor and employer groups have been meeting for several months with departmental representative to develop the plan, and stakeholders offered their suggestions and comments at nine statewide public forums. Those meeting identified these systemic problems with the current system, according to DIR:

  • Low permanent disability benefits
  • Unnecessary delays and disputes in medical delivery
  • Lack of standard fee schedules
  • Poor oversight of medical provider networks
  • Liens overwhelming the courts

Even as California employers paid $16.2 billion for comp coverage in 2011, costs are rising and the Workers' Compensation Bureau has just approved a 12.6 percent rate increase on California businesses. "The goal of the reform plan is to prevent these fee increases while also fixing the systemic problems identified by stakeholders. The new plan accomplishes this goal by redirecting benefits to increase payments to disabled workers, while standardizing the process to reduce unnecessary disputes and litigation," according to the agency, which says the plan would save as much as $1.3 billion and would paid injured workers about $750 million in additional compensation.

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