Slew of Bills Aim to Fix Ailing Workers' Comp System

By HOWARD FINE
Staff Reporter

The crisis in workers' compensation is finally getting the attention of state legislators.

More than 50 bills aimed at reining in workers' comp costs have been introduced in the current session, and for the first time in a decade, bipartisan support is coalescing around a couple of measures targeting workers' compensation medical providers.

Sen. Jackie Speier, D-San Mateo, is carrying one of the two key bills, SB 354, which would cap for the first time the number of visits injured workers could make to chiropractors and prohibit doctors at outpatient clinics from referring injured workers to affiliated facilities. She estimates such a measure would save employers $500 million in premium costs a year.

Sen. Richard Alarcon, D-Van Nuys, is carrying the other key reform bill, SB 228. Alarcon's legislation would cap the fees that doctors at outpatient clinics could charge and tie the medical fees in the workers' compensation system to Medicare or Medi-Cal reimbursement levels.

Alarcon, who chairs the Senate Labor and Industrial Relations Committee, said this could lop $1.2 billion off of employer premiums, though some employer advocates say the savings could be even greater.

Both bills, still in committee, have broad support and, at this stage, appear likely to pass the Legislature. When they hit the Senate floor will depend on efforts to deal with the state budget, but it is expected they will come up for a vote this session. Gov. Gray Davis has not taken positions on either of these bills.

That Speier and Alarcon, who have often targeted big business, are now leading the charge to help employers save hundreds of millions of dollars in workers' compensation premiums speaks volumes about how serious the workers' compensation crisis has become.

In the last four years, employer-paid workers' compensation premiums have, on average, more than doubled. Last year, the average premium topped $5 per $100 in payroll for the first time ever.

"The costs have soared so much for employers that the pressure they are putting on legislators to do something about it is greater than at any time in the last 10 years," said Lori Kammerer, president of the California Coalition on Workers' Compensation, an employer advocacy group.

As a result, the coalition coming together to back these two bills is among the broadest ever assembled on workers' compensation in Sacramento, including conservative Republicans, liberal Democrats, employer and labor groups and insurers.

Alarcon, a liberal Democrat, said his bill has the backing of the California Manufacturers & Technology Association, as well as the California Labor Federation. He also expected backing from the California Chamber of Commerce.

Opposition from Doctors

The only significant opposition is coming from the doctors whose incomes would be threatened by the caps on fees and visits.

The California Society of Industrial Medicine and Surgery, which represents the bulk of these doctors, released a study earlier this year that said efforts to cap medical fees in other states led to reduced access to care for injured workers. The study pointed to Massachusetts, where it said that after reimbursement rates were lowered, the number of managed care plans for workers' comp shrank to 14 from 46.

"California presently has the fifth lowest fee schedule for medical services in the nation," said society lobbyist Carl Brakensiek. "No state has been able to adopt a Medicare-based fee schedule at California's levels without creating massive access problems for injured workers."

Furthermore, Brakensiek added, adopting Medicare and Medi-Cal-based fee schedules would shift about $350 million away from medical specialists to primary care gatekeepers.

Nonetheless, the doctors are fighting an overwhelming tide.

"Despite all their lobbying this year, the doctors are going to take it on the chin," said Nils Wright, editor of the Workers' Comp Executive, a Sacramento trade publication following the workers' comp insurance industry. "The appetite to take them on is there among both Democrats and Republicans because everybody realizes the system is so out of whack that it needs to be cut."

At a hearing last week, Speier brought out a copy of an ad appearing in a chiropractor trade magazine about a seminar being held next month at the Los Angeles Airport Hilton:

"While so many doctors are suffering losses from changes in the health insurance market, believe it or not there are many (chiropractors) enjoying the greatest profits and collecting tons of money by understanding and implementing simple procedures to gear your practice up for workers' comp," the ad reads. "If you would like to take advantage of the only goose that is really still laying the golden eggs, then this is one seminar you won't want to miss!"

Speier said she was appalled at the ad.

"It is horrifying to me that chiropractors would be this blatant about extracting as much money as they can from workers' comp, all on the backs of the very same employers who are complaining to me," she said. "It was one of the things that convinced me that this simply had to stop."

The consensus to go after doctors' fees does not extend to other areas of the workers' comp system. Employer groups are still pushing hard for legislation that would roll back or at least freeze the benefit hikes enacted last year. They also want tighter controls on diagnosing workplace injuries so that fewer people qualify for the maximum benefit levels. Assemblyman Keith Richman, R-Northridge, is carrying one such bill.

But even employer advocates realize those bills are long shots this year as they face stiff opposition from labor groups, attorneys for injured workers and Democrats.

"Realistically, the chances are way less than 50 percent that these other measures are going to get to the Governor's desk," one employer lobbyist said.

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