Recall Déjà Vu’

By: Mark Webb
Mark Webb
Mark Webb

In 2003, proponents of the recall of Governor Gray Davis stated, as part of their justification for the recall:


“Over 296,000 good paying jobs have left California…and more are leaving every day. Over one million Californians can’t find work, while neighboring states are happily providing jobs for people leaving California. You can’t have employees without employers, yet Gray Davis is doing nothing to address the Workers’ Compensation Crisis he created that threatens all jobs in California.”


California’s workers’ compensation system is not in crisis in 2021. But you might not believe that will remain the case when you look at bills recently introduced in the California Legislature.


Specifically, Assembly Bill 1465 (Reyes), a bill that would create a state-run medical provider network (MPN), is causing quite a stir. The details of this plan are at best murky, and the glaring omissions – like how to pay for the California Medical Provider Network (CAMPN) it creates – indicate the proposal is a work in progress. The question is progressing to what?


There is no scenario in which allowing employees the option of picking a physician from a list of medical providers generated and updated by the Division of Workers’ Compensation (DWC) will not cost employers money. It is only an issue of how much and from which pocket.


The bill is also silent as to how appointments are to be made with CAMPN physicians. If the DWC is supposed to be hiring medical access assistants, then the cost through DWC assessments will be even higher. If non-contracted providers are supposed to have appointments set by employer medical access assistants, then the costs will be reflected in expenses paid by the employer, whether in premium, fees, or reimbursements under deductible policies.


The bill further states CAMPN physicians will not be added to or taken off the provider list because of economic profiling. In other words, while employers will be paying to review the requests for authorization of CAMPN physicians and bearing the costs of independent medical review (IMR), repeated efforts to provide unnecessary and costly treatment will not affect the provider’s status in the CAMPN. And these physicians get to bill at fee schedule. Since there is no contract between a CAMPN physician and a provider, this would also suggest the employer will have to pay at fee schedule as well.


Recall Bill of Particulars

It now appears likely there will be a recall election in 2021. According to the sponsors of the recall, one of their grievances was the chaptering of Assembly Bill 5 (Gonzalez) relating to independent contractors in 2019. The Dynamex case and its codification continue to cast a long shadow not only in California but across the country. It would seem the Labor Code slot for justifying a recall has already been filled.


Per California’s Constitution, an election to determine whether to recall an officer and, if appropriate, to elect a successor must be called by the Governor and held not less than 60 days nor more than 80 days from the date of certification of sufficient signatures. Whether workers’ compensation will be added to the bill of particulars against Governor Newsom should he be recalled remains to be seen. But unlike his predecessor, it will not be a crisis unless the Legislature gives him something to create one.


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.