Study: Calif. Workers’ Comp Reforms Working

California experienced the largest decrease in average workers’ compensation costs per claim among 14 states, after years of double-digit cost growth and in the wake of reforms that took effect 2003 through 2006, according to a new study by the Workers’ Compensation Research Institute.

According to the study, “Early Evidence of the Impact of the Multiyear Reforms in California: CompScope Benchmark, 7th Edition,” workers’ comp costs per claim in California dropped by 15 percent in 2004-2005, after a 4 percent increase in 2003-2004, and double-digit growth in previous years.

Legilsation in California from 2003 to 2006 revised the state medical fee schedule, increased the maximum weekly benefits, limited chiropractic and physical therapist services, replaced vocational rehabilitation benefits with the Supplemental Job Displacement Benefit, revised the permanent disability schdule and permanent partial disability benefits, and placed a 104-week cap on temporary disability benefits.

The report indicates that payments for lost wages, otherwise known as indemnity benefits, per claim with more than seven days of lost time changed little in 2004-2005, after growth of 7 percent in 2003-2004 and increases of 4 percent to 7 percent in the previous years. However, that result masked two opposing trends, the report indicated. Duration of temporary disability fell by 1.5 weeks after increasing by almost one week per year since 1996, except for 2003-2004 when there was little change. Also, there was a 6.5 percent increase in the average weekly temporary disability benefit, the result of a 21 percent increase in the statutory minimum weekly temporary disability benefit under 2002 legislation.

The study noted that defense attorney involvement changed little over the study period. Payments to defense attorneys increased 8 percent in 2004-2005, about double the growth rate in each of the previous two years.

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Source: WCRI