AIA Says CAAA Lawsuit Will Undermine Calif. Workers’ Comp Reforms

November 11, 2004

The American Insurance Association (AIA) on Wednesday issued the statement below in response to the lawsuit filed by the California Applicant Attorneys Association (CAAA) challenging the regulations regarding Medical Provider Networks (MPNs) recently adopted by the Division of Workers’ Compensation (DWC), which were mandated by the 2004 workers’ compensation reform package – SB 899, authored by Sen. Chuck Poochigian (R).

The following statement may be attributed to Ken Gibson, AIA vice president, western region:

“Here we go again. As employers and insurers expected and predicted, the applicant attorneys are right on schedule in their attempts to sabotage the workers’ compensation reforms enacted by the legislature and signed by the governor earlier this year. Employers and insurers warned that these kind of lawsuits can and will thwart the implementation of California’s important 2004 reforms.

“Lawsuits, like the one announced today, are exactly what will cause the 2004 effort to fail just as previous reform efforts have come up short in the translation process from enactment to implementation. The legislature and Gov. Schwarzenegger (R) took a close look at California’s flawed workers’ compensation system and decided major changes were needed. Now, just as the state’s system is attracting new carriers into the marketplace, and right before the permanent partial disability regulations are about to be issued by the DWC, CAAA is using the courts in an attempt to protect those elements of the system that line their pocket books.

“Litigation like this that threatens the reforms will give insurance carriers considering entering the California workers’ comp marketplace and committing capacity a reason to rethink their decision. Sadly, the applicant attorneys are using injured workers in their selfish litigation scheme. The attorneys are attacking the Medical Provider Networks because they will reduce the costly and abusive practice of ‘doctor shopping.’

“Unfortunately, the attorneys are fighting to maintain a system which subjects injured workers to excessive and unnecessary medical care that actually keeps them off the job longer. In the end, if this lawsuit is successful, it is the injured workers and employers who will lose because California’s system will remain costly and subject to endless litigation.”

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