Legislators Race to Beat Deadline for Reform
By LAURENCE DARMIENTO
Staff Reporter
The struggle to reform the state’s costly workers’ compensation system will likely go down to the wire this week in the Legislature.
With medical care providers fighting efforts to limit their compensation a key element in the reform package and other disagreements among members of the Assembly-Senate Workers’ Compensation Conference Committee, a vote on the package was repeatedly put off last week.
While there was general consensus about using the government’s Medicare fee schedule as a basis for establishing rates for reimbursing medical care providers, questions remained at what level to set them for outpatient surgical centers, considered one of the costliest drivers in the system.
Other issues that remained on the table as of late Thursday included reform of vocational rehabilitation, limits on chiropractor care and physical therapy and whether or not the insurance commissioner should be given the authority to once again set minimum rates. (That authority was stripped when the system was deregulated in 1995, leading to fierce price competition that ultimately backfired when several major carriers went bankrupt.)
The lack of consensus threw into question just how much money the package might save and whether there would be enough time to accurately calculate those savings.
“We are trying to make sure that whatever is in the package will save dollars and lower revenue, but it’s difficult for anyone to give cost savings,” said Charles Bacchi, a lobbyist for the California Chamber of Commerce.
Cost savings are key because premiums are rising so quickly. The California Workers’ Compensation Rating Bureau recommended carriers raise premiums another 12 percent on Jan. 1.
In order to head off the increase, legislators would have to find about $3 billion in savings of future costs. Several want to go further and see reductions that roll back rates.
Sen. Charles Poochigian, R-Fresno, the ranking Republican on the conference committee, was aiming for $11 billion in cuts, but that would have had to involve reforming the disability portion of the system, which pays injured workers when they cannot work. However, the committee has largely tackled only the medical cost components.
“We have a crisis that is historic yet large segments of the workers compensation system are not being reformed,” Poochigian said.
With the legislative session set to end on Friday (12th), a vote by the conference committee on the package must come by about Tuesday (9th) in order for both houses of the Legislature to have time to consider it.
Once it leaves the conference committee, the reform package cannot be amended and must pass both houses in an up or down vote. It also would need the governor’s signature.
