First Scientific Study of Calif. Gov. Schwarzenegger’s Workers’ Comp Reform Released

December 7, 2004

The first scientific study of the impacts of California Gov. Schwarzenegger’s workers compensation reforms on injured workers was released Tuesday.

The study reportedly shows that the Governor’s proposal to cut permanent disability ratings will drastically reduce the already-meager compensation injured workers receive. Conducted by University of California at Davis Professor Dr. J. Paul Leigh, the study of 218 back, shoulder, wrist and knee injuries found that under the governor’s proposed disability schedule, on average injured workers would receive a disability rating that is 28% lower than before the governor’s changes. just one-third of the compensation they currently receive.

Injured workers’ advocates and California Applicants’ Attorneys Association President David Schwartz said that the Schwarzenegger Administration’s proposed new permanent partial disability compensation schedule “severely reduces permanent disability benefits to injured workers.” Schwartz told a Sacramento news conference that the Administration has “refused to follow the statute and the Legislature’s intent,” and vowed to challenge the proposed cuts in permanent partial disability ratings proposed by the Division of Workers Compensation. Schwartz said that the new cuts set permanent disability levels “lower than they were in 1983. Injured workers will lose up to two-thirds of the meager compensation they get now.”

Here are some examples of injured workers who would reportedly be harmed by the governor’s proposal:

A carpenter with an injury to both shoulders who cannot lift his arms, or work, above the shoulder, would be rated 46% disabled and receive $51,550 presently. That same injured carpenter would be rated just 18% disabled and receive only $16,050 under the Administration’s plan. In 1983, this same injured worker would have received $28,000 (equal to $52,532 in 2004 dollars), significantly more than under the Administration’s proposal.

A warehouseman with a leg injury that requires amputation just below the knee, and gets an artificial leg, would receive $62,000 under the present schedule. Under the governor’s proposal, he would receive just $36,000. (In 1983, this same injured worker would have received $34,000, which is worth $64,150 in 2004 dollars. [Consumer Price Index Conversion Factor])

“The proposed new rating schedule will result in a two-thirds reduction, on average, in permanent disability benefits for injured workers,” said Schwartz. “These new ratings will not provide fair or adequate benefits for injured workers.”

Leigh is a professor of Health Economics, Center for Health Services research in Primary Care at the UC Davis School of Medicine. His study examined 218 cases of specific injured workers from across the state with a range of the most frequent and costly work injuries.

A doctor who had been agreed upon by the insurance carrier had rated each case under the present disability schedule. The cases were analyzed by independent physicians with expertise applying the American Medical Association Guides. Their findings were then rated by one of California’s most expert disability raters. The average difference between the ratings under the current system and the governor’s proposed schedule was 28 percentage points.

According to Schwartz, the horrendous impact the governor’s proposed cuts would have on injured workers was made clear in the testimony of Domenicio Argentino, 55, who worked for 28 years at NASSCO’s San Diego shipyard worker, building scaffolding for ship repairs.

Over his many years of work at the shipyard, Argentino sustained injuries to his left lower leg, both knees, and back. He suffers from constant low back pain, and cannot bend without pain. Under the present disability rating schedule, Argentino is rated as 30% disabled. Argentino is unable to return to his job, which involved lifting, carrying, climbing, hanging, squatting, twisting and pivoting. Under the governor’s proposed schedule, Argentino would reportedly be rated just 4% disabled.

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