Workers' Comp officials reprimanded

MAY 13, 2010


Mention workers’ compensation reform in a crowd, and eyes immediately glaze over. It can be a droll subject – unless you have skin in the game.

The Senate Labor and Industrial Relations Committee held a hearing Wednesday in order to decide if the Division of Workers’ Compensation (DWC) is “appropriately serving California’s injured workers.”

And everyone with skin in the game testified before the committee… except for most of the employers who write the big checks to workers compensation insurance companies.

Representing labor, applicants’ attorneys, the California Commission on Health and Safety and Workers’ Compensation (CHSWC), the Division of Workers Compensation (DWC), the Department of Industrial Relations (DIR), and the Legislative Analysts Office (LAO), three panels presented information about the effects of workers’ compensation reform changes to the committee. Grimway Farms was the employer present.

Judge Lach Taylor (CHSWC) and CHSWC Executive Officer Christine Baker gave the update of the current status of the permanent disability ratings schedule stating that “raising benefits to injured workers actually saves money.” The LAO recommended to the committee that the Legislature clarify the statute because the system for measuring a permanent disability can be rebutted, triggering additional litigation and higher awards. The LAO recommendation suggested that tightening up the language would provide more uniformity and objectivity in the workers’ compensation system.

After explaining that the best they can do is to define the injured workers in workers’ compensation claims, DIR Director John Duncan, DWC Chief Counsel Destie Overpeck, and Administrative Director Carrie Nevans received a stern reprimand from Sen. Mark DeSaulnier, D-Concord, the committee chairman, for ignoring the required status update of the 2005 Permanent Disability Ratings. DeSaulnier asked several times whether they ignored the law requiring the status update. Duncan dodged the question but DeSaulnier finally asked, “Did you obey the law?” Duncan said that they had. DeSaulnier, appearing unhappy with their answers, stated that he is frustrated with a couple of state agencies ignoring the Legislature. He asked that if the law needs to be changed, why they didn’t bring it to the attention of legislators. Overpeck answered, “It was the choice we took.”

DeSaulnier then asked the panel if its members were concerned with creating the potential for greater litigation, or even getting the state sued. Nevans insisted to DeSaulnier that they had spoken with legislators and staff and “made clear we were going to miss the deadline.”  When DeSaulnier pressed for whom specifically in the Legislature Nevans had spoken with, she said she had spoken with legislative staff. When Nevans could not answer to whom she had spoken, DeSaulnier explained that while he wasn’t interested in “playing gotcha,” he said that he reserved the right to go to the Rules Committee and have the panel come back before him under oath. Duncan finally admitted that they were responsible for not taking action in updating the permanent disability ratings, and felt that the hearing was “a good start.”

Duncan ended the panel presentation saying that his department has made it “a top priority looking for uninsured employers to keep the playing field level.”

DeSaulnier explained to Duncan, Nevans and Overpeck that he understood that the hearing had been uncomfortable, but respect was owed to the people of the state and it is the responsibility of the DWC and DIR, concluding, that it was “troubling at best when you ignore the larger responsibility.”

The final panel consisted of applicants’ attorneys, labor, and one employer representing farming.

Linda Atcherley and Brad Chalk with the Applicants Attorneys Association said that they want flexibility in the workers compensation ratings and stated that the LAO report is inaccurate. The need to litigate some workplace injuries is necessary in order to “measure the ability to exist as a human being,” according to Chalk. Chalk explained that the lack of uniformity in medical care and costs was due to the American Medical Association (AMA) doctors who write the guide books on which all workplace injury care and compensation is based.  “The AMA makes a lot of money traveling around the country selling books. The guides are highly political,” said Chalk, as “there is a business intent selling books.”

Sean McNally, vice president of Grimway Farms, said the 2004 workers compensation reform resulted in lower costs to business as well as a much higher level of satisfaction by the injured worker of the medical care they received. McNally said there was far too much litigation over everything in the workers compensation system, and there is a need for changes without increasing costs to employers.

Angie Wei of the California Labor Federation identified some problems with “insurance companies enjoying higher bottom line,” after the 2004 reforms. Wei said that her goal was to “restore dignity” to the injured worker.

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