Has anything really changed?

The reality of workers' compensation might best be explained by reviewing the following true account of a business situation addressed by our organization: Has anything really changed? The reality of workers' compensation might best be explained by reviewing the following true account of a business situation addressed by our organization: A man in Fresno owns a body shop and has worked at it for over 17 years. His son worked there also, and was to take over the business. They have four employees. This is a typical small business that, along with so many other small businesses in California, provides employment by creating and maintaining over 80% of the jobs in this state. Our Fresno body shop owner had one accident, an employee who claimed to have a sprained ankle. When we met him and he asked for our help, the sprained ankle case was almost two years old, and the cost was over $250,000, headed for $275,000. Yes, for a sprained ankle. The body shop's premium was headed toward four times the amount it was prior to this accident. That premium increase would be significant enough to close the business, put four people out of work and crush a son who could not continue his father's business. When the owner spoke to his carrier about the inefficient handling of his claim and what it was doing to his business, he was told, as so many other business owners are told by the claims department, the issue of you going out of business is not our concern. The injured employee? Well, he was busy collecting disability payments, going to therapy and—oh yes, doing body shop work out of his garage while claiming that he could not do anything anymore due to his injury. Does this mean that all claims are fraud? Of course not. Does this mean that injured workers obtain a major windfall when they file legitimate claims? Of course not. What is true about the system, even after SB 899, is that workers' compensation in California is still about funneling the billions in premium dollars to inefficient claims departments and the core of vendor groups consisting of doctors, lawyers and related entities that feed off this system. Right now we are talking about a soft market. But there are no soft dollars being spent in claims; they are hard dollars still being spent by the same mind-set that existed prior to SB 899, and though the premiums may be less, they are still part of an inefficient, costly claims process, which we all know will soon begin to impact the system even after SB 899. And too soon, the premiums will once again begin to climb. Andrew Gomez Employers Self-Defense Association Inc. Editor's Note: The Employers Self-Defense Association Inc. is a company offering investigative services to employers in the interests of preventing fraudulent claims. According to the California Department of Insurance, workers' compensation fraud, whether perpetrated by employees or other stakeholders in the system, costs more than $1 billion a year.