Predictability has been the hallmark of California’s workers’ compensation system for an unusually long time. So, it would seem predictable that this status quo is increasingly susceptible to disruption.
Over the past several years, we have seen an assortment of bills targeting the administration of medical benefits and the qualified medical evaluator process. These bills did not get chaptered, but they are clearly evidence of dissatisfaction in various parts of the medical community. Assembly Bill 1465 (Reyes D-San Bernardino) was a very loud wake-up call to the payer community when the prospects of a state-run medical provider network (MPN) made its way into print in Sacramento. It, too, did not get to Governor Newsom. It languishes in the Senate Labor, Public Employment and Retirement Committee as a ubiquitous study bill.
Then there are presumptions. Predictably, the COVID-19 presumptions are up for renewal in Assembly Bill 1751 (Daly), a bill that recently moved out of the Assembly Insurance Committee. At this point the bill simply extends the current presumptions until January 1, 2025. Coincidently, that is the same date the post-traumatic stress presumptions in Senate Bill 542 (Stern) will sunset. Senate Bill 213 (Cortese D-San Jose) creates a wide range of presumptions for hospital employees who provide direct patient care in an acute care hospital. This too has an air of predictability to it. SB 213 is a 2021 bill that passed the Senate early this year by the narrowest of margins. The text has been updated to bring COVID presumptions into its provisions, but the basic premise of the bill has been around since 2019.
Presumptions also figure prominently in Senate Bill 1127 (Atkins D-San Diego), a do-over from last year’s Senate Bill 335 (Cortese) but with the Senate President Pro Tem Toni Atkins as the author and additional language regarding temporary disability benefits for firefighters diagnosed with occupational cancer and subject to a presumption of compensability. It, too, is out of its policy committee and likely will move out of the Appropriations Committee at its scheduled April 4 hearing.
So, is this another wash-rinse-repeat for the California Legislature? Maybe, but then again maybe not. The recent assessment for the Subsequent Injury Benefits Trust Fund (SIBTF) for fiscal year 2021-22, $372,069,914.00 to be exact, has got the attention of a lot of large employers. So, too, does the apparently out of control costs for medical-legal exams caused by recent changes to the Medical-Legal Fee Schedule (MLFS). And then there is the ongoing angst over cumulative trauma claims (CT), particularly post-employment ones. Add this to the mix of presumptions and associated issues in SB 1127 and there might well be a table at which this can all be sorted out.
And this is only one side of the ledger. If there is a table and if there is a discussion, how much of the medical management agenda will be embraced by labor in their negotiations with management? This involves more than a pump-up of permanent disability benefits. The resolution of issues outlined by employers will automatically result in higher permanent disability benefits having to be paid by the employer at injury. This will occur at a time when COVID-19 claims will start being included in pure premium rates and experience modifications. It will also occur at a time when the economy is arguably transitioning to an “endemic” COVID environment and losses from sectors devastated by the pandemic will start coming in.
So, enjoy predictability while you can. Those who will sacrifice it can afford to. Those who cannot are not at the table.
Note: The opinions expressed herein may or may not be those of Workers’ Comp Executive. Mark Webb is a former Arizona insurance regulator, insurance company chief compliance officer, and is an expert in corporate governance, risk and compliance. He is the owner of Prop 23 Advisors.