AIA Responds to Calif. WC Reform Committee Announcement

July 14, 2003

In response to the recent decision to move all pending California workers’ compensation legislation to a Legislative Conference Committee that will consider broad reforms to the system, the American Insurance Association released the following statement:

“We are pleased that the legislature has recognized the need to overhaul California’s system, but a conference committee is not a panacea,” said Jeanne Cain, AIA vice president, western region. “We must hold policymakers’ feet to the fire and ensure that the conference committee approves meaningful reform. A band-aid approach to resolving California’s workers’ compensation crisis will not help anyone.”

The conference committee will be comprised of six members, three from the Assembly and three from the Senate. Democrats will select four members and Republicans will appoint two members; however, no appointments have been announced yet.

“Addressing the system’s medical cost drivers will continue to be a priority,” says Mark Sektnan, AIA assistant vice president, western region. “But if the goal is to truly fix this broken system, legislators must consider broader reforms including changes to the way permanent disability ratings are determined, modifications to the penalty system, and more medical training for workers’ compensation medical providers.”

“California will have a long, hot summer to consider ways to fix the system,” said Sektnan. “Unless a comprehensive approach to this problem is taken, cost drivers will continue to escalate and employers will continue to face higher and higher expenses for this mandatory line of insurance.”

Some of the 20 measures sent to the new Conference Committee include the following:

SB 228 (Alarcon) – Creates a medical fee schedule for all workers’ compensation services.

SB 354 (Speier) – Curbs over-utilization of chiropractic services and creates an independent medical review system.

SB 191 (Alarcon) – Allows the Department of Insurance to disapprove rates below the pure premium rate.

AB 1579 (Cogdill) – Contains a package of reforms supported by the Republican Caucus.

AB 227 (Vargas) – Creates a medical fee schedule.

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