Home page — 2005-11-18

> posted by Charles Wear > 8/4/05; 4:22:23 AM      

No political will to change SB 899 in any way...

There is no political will to alter the SB 899 reform legislation in any way by any of the stakeholders, the legislators, the governor, or in the appeals courts. This is the story that drives this lack of political will: 1) Workers' Compensation Insurance premiums were way too high, driving good employers out of the State [medical costs were out of control]; 2) The law was unfair, rewarding uninjured people with huge awards obtained by unscrupulous attorneys and approved by equally unscrupulous judges; 3) Honest insurance carriers could no longer compete and were driven into bankruptcy by the rampant fraud; and 4) If something was not done about this state of affairs, then politicians would be VOTED OUT OF OFFICE. As far as the legislature is concerned there was a huge increase in benefit rates in 2003. The fact that awards have now been cut from 50-70% is not yet accepted as a fact. Old cases may keep applicant attorneys going for a while until the defense bar and carriers, emboldened by the actions of the administrative director, refuse to settle any more cases under the old schedule. This will grind cash flow to a halt. And if the carriers are successful in making this tactic stick, they will receive the largest windfall in insurance history. The pre-1/1/05 cases were reserved under the old schedule. If they settle under the new schedule the profits will be astronomical. > posted by Charles Wear > 7/16/05; 6:01:59 AM      

Supreme Court dashes hope for early relief

Lawyers for injured workers and injured workers are bound to be disappointed by the California Supreme Court's rejection of their lawsuit against the new permanent disability schedule. At the crux of the suit was the argument that Administrative Director, Andrea Hoch, exceeded her statutory powers and did not follow the law as it was clearly deliniated in SB 899. VotersInjuredAtWork and the California Applicant's Attorney Association had hoped that the Supreme Court lawsuit would shortcut the litigation process that must be followed to overturn the schedule. Essentially that process will require a trial at the district office level, an appeal to the Workers' Compensation Appeals Board, then an appeal to the Court of Appeals. This is a process that, if it started today, would probably take at least 18 months.
> posted by Charles Wear > 7/15/05; 5:58:28 AM      

Rate regulation bill dead...

The assembly insurance committee voted 4-0 to table Alarcon's rate regulation bill. Another example of the complete lack of political will to do anything to correct problems associated with workers' compensation reform legislation. In this case, insurance carriers are reaping profits by collecting premiums that far exceed the benefits provided. The employers have yet to see much relief for all of the cuts while injured workers continue to feel the pain.
> posted by Charles Wear > 6/30/05; 5:58:10 AM      

For wishful thinkers appeals court decisions are painful

Wishful thinkers are relying on the good graces of the courts of appeal and the supreme court to overturn the draconian effects of SB 899. In particular, the new rules on apportionment and the new permanent disability schedule. They took heart in the WCAB decision in Scheftner which said that SB 899 did not apply to cases in which discovery was closed pending trial. In the recent decision, Marsh v. WCAB, the Fifth Disctrict Court of Appeals puts another nail in the lid of the coffin burying pre-existing benefits for injured workers. In Marsh, the injured worker's case had been tried and a decision issued. The employer's petition for reconsideration opened the case to SB 899 and the new apportionment rules. The clear ruling of Marsh says that SB 899 apportionment applies to all cases that have not had their writ of review denied by the Court of Appeals. The effect of this decision will be to grind all pre-SB 899 cases to a halt pending further medical reports. It also confirms the facts of the situation for the wishful thinkers. SB 899 represents, depending on your perspective, a political solution to cut workers compensation benefits in every area, medical treatment, temporary  and permanent disability benefits, and by any means. The Court of Appeals has recognized this legislative intent and has determined to carry it out. Those practioners hoping that the courts will overturn the new permanent disability schedule had better hold off on making down payments on new California real estate. Their cash flow is definitely going to suffer along with the injured workers.
> posted by Charles Wear > 6/29/05; 6:05:06 AM      

Applicant's attorneys hear legislator's "mea culpa"

Friday at the California Applicant's Attorney Association summer convention, the "congregation" heard several democratic legislators utter their apologies for their votes on SB 899. "It was a mistake" said Assembly Speaker Pro Tem, Dr. Leland Yee of San Francisco.

Of course, here's the problem: the mistake cannot be corrected. There is no political will to do so. There are lawsuits pending to declare the new permanent disability schedule "illegal." Are these the only hope for injured workers? That appears to be the situation. > posted by Charles Wear > 6/26/05; 6:46:13 AM      

Premiums dropping...

Zenith, State Fund, Employers Direct and Republic are just a few of the carriers who have made double digit cuts in their premiums for workers' compensation. Here's a question, however. Where are the savings coming from? Are they coming from denied or delayed medical treatment? Savings from retroactive application of apportionment to pre-existing pathology? The cuts in the new permanent disability rating schedule? Here's the second question. Are the premium savings benefitting the employers who pay the premiums, or are experience ratings and reclassifications keeping the premium dollar fairly constant?
> posted by Charles Wear > 6/13/05; 7:10:38 AM      

The definition of is...

Here's a link to my recent article It Depends on What the Definition of Is, Is. It was published on WorkCompCentral.
> posted by Charles Wear > 6/8/05; 4:44:23 AM (link unavailable)      

Bulworth Beatty taking on Schwarzenegger?

Has Clyde stepped up to gun down the terminator? Or is he merely going to do his hair? That's the question after Warren Beatty spends his weekend commencement address taking on the governor's "musclebound conservatism." Is is Warren for governor? He fits the profile: Rich, a celebrity, willing to stand up to the governor. the LA Times report says (link unavailable): 'Still, as it's been for decades, whenever Beatty talks, the media wonder if he's planning to run for public office. During his speech, Beatty said that Schwarzenegger "knows I'm a private citizen just as he was a year ago, I'm an opponent of his muscle-bound conservatism with a longer experience in politics than he has and, although I don't want to run for governor, I'd do one helluva lot better job than he's done." A couple of days later, Beatty demurs and seems keen on simply being a "truth teller," although he does say, "One never knows at what point one becomes sufficiently inflamed to take a step that one does not basically want to take."' Maybe there is hope for California's little guy, like the injured worker. Maybe CAAA should approach Beatty about being a spokesman for a series of injured worker ads designed to raise public awareness about the plight of those who have harmed by SB 899?
> posted by Charles Wear > 5/25/05; 5:42:53 AM      

Governor Arnold makes mess with WC reform

Here's a terrific quote from Larry White's  recent SF Chronicle article (archived): Crafted in secrecy and layered with ambiguity, SB899 has led to major litigation, slowdowns in an already broken delivery system and bitter acrimony between organized labor and business groups. The 2003 reforms solved the major workers' compensation problems. Schwarzenegger's measure created a whole new set of them. That's Schwarzenegger's workers' comp accomplishment -- snatching legislative failure from the jaws of solid accomplishment." > posted by Charles Wear > 5/24/05; 5:53:21 AM      

Study shows what we all know...

The LA Times' Mark Lifsher reports on the Brigham study which shows that permanent disability awards will be cut more than 50% under the new permanent disability rating schedule. "[Brigham's findings] give new ammunition to Senate Democrats who want to reopen the debate over the best way to fix the $22-billion-a-year system. Last year's overhaul was largely orchestrated by Republican Gov. Arnold Schwarzenegger, who vowed that workers would not be harmed by efforts to rein in premiums."

Please. Deliver us from Democrats who want to fix the system. Their most recent  fixes include: Utilization Review, Elimination of Vocational Rehabilitation, Employer control of medical treatment, Apportionment to Causation, and a new Permanent Disability Rating Schedule that cuts benefits by over 50%. If the Democrats help the injured worker anymore, there won't be a system left.
> posted by Charles Wear > 5/20/05; 11:07:31 PM      

Garamendi says premium reductions not fast enough...

A recent report in the Sacramento Bee states (link unavailable): "Not too many small businesses have received reductions," Garamendi told a packed hearing room Thursday at the Insurance Department's offices on Fremont Street. "The insurance industry wants to fatten its profit margin. We are in the process of careful monitoring where the insurance companies are going with their premiums and their costs." So what else is new?
> posted by Charles Wear > 5/20/05; 2:14:18 PM      

The difference in the rating schedules

Just received a defense doctor's report which rated approximately 9% under the new schedule and 16% under the old schedule. This may not seem like much difference, after all it is only 7 percentage points. But it is nearly 50% less in the raw rating . The dollar value is $7200 for the 9% and $14,050 for the 16%. Now this is a 2004 injury that should be under the old schedule, however the defense attorney is pushing to settle the case under the new schedule. Of course, it is easy to see why, the insurance carrier will save about $7,000, and this is the DEFENSE report. By the way, the carrier originally denied the case, did not pay benefits for nearly 6 months until the defense doctor said the injury was industrial and that the applicant was entitled to benefits. Does this seem right?
> posted by Charles Wear > 5/17/05; 9:55:18 PM      

Sick of warning labels...

Does anyone think that having an FBI warning on DVDs stops pirates from ripping off DVDs and people from buying the "stolen" material? Doesn't this seem like a huge waste of time and energy? And what about the workers' compensation fraud warnings? "Making a false claim for worker's compensation, etc., etc." Does this cut down on fraud? Does anything cut down on fraud? This is one of those stupid rules that should be changed...immediately.
> posted by Charles Wear > 5/8/05; 9:21:12 AM      

Labor group sues over new permanent disability schedule

The California Labor Federation has brought suit to overturn the new permanent disability schedule put forth by Administrative Director, Andrea Hoch. The suit claims that Hoch ignored the law when she did not utilize empirical data prepared by a Southern California think tank. The data was supposed to compensate injured workers for the loss of earnings capacity caused by their injury. Read the entire article here >>> (link unavailable).
> posted by Charles Wear > 5/5/05; 9:13:58 PM      

California making economic comeback? That's what Arnold says...

In a recent radio address the Governor claimed that job figures show that California is making an economic comeback. He credits the workers' compensation reforms for reducing the cost of doing business in California. Only one problem, the premium reductions have not yet hit the employer's pocketbooks...You can read the Governor's propaganda here >>> (link unavailable).
> posted by Charles Wear > 5/2/05; 6:36:57 PM      

And so the AD is confirmed....

Andrea Hoch is approved by the State Senate as the Administrative Director of the Division of Workers' Compensation. This is the person who has instituted the draconian permanent disability schedule which fabricates out of thin air the "loss of future earnings" for injured workers as a factor of disability. The result: 50-70% cuts in permanent diability awards. Injured workers are being shafted on the political and legislative front. The rulings being handed down by the Workers' Compensation Appeals Board are not favorable. This leaves the Court of Appeals and the Supreme Court to restore some sanity to an unconscionable situation. Will relief come in time?
> posted by Charles Wear > 4/29/05; 6:12:37 AM      

Hoch voted out of committee

The embattled administrative director of the California Division of Workers' Compensation, Andrea Hoch, was approved by the Senate Rules Committee and will go before the entire State Senate for a vote. Ms. Hoch has been serving as the acting director and unless ratified, here 1 year term will expire on May 3. There are rumors of a back-room deal between the Governor and committee chairman, State Sen. Don Perata. Read the entire article here >>> (archived).
> posted by Charles Wear > 4/28/05; 6:00:28 AM      

Defense attorney denounces PD schedule

Clifford D. Sweet III, former president of a defense attorneys groups, calls the new permanent disability schedule "socially unacceptable." He calls for the legislature to move quickly to fix the problem. Read the entire article here >>> (archived).
> posted by Charles Wear > 4/28/05; 5:53:33 AM      

Schwarzenegger in retreat?

This USA Today article claims that the Governor is in retreat (archived). Now if the Democrats in the legislature could just get the guts to stand up to him and make the necessary changes to restore balance to the workers comp system, all would be right in the cosmos! One wonders if this article is just wishful thinking, or if the Governor has decided that he put a little too much bratwurst on his plate with his massive reform agenda? The only way to truly find out would be to tinker with SB 899, don't you think?
> posted by Charles Wear > 4/27/05; 5:32:49 AM      

Insurance commissioner states the obvious

Garamendi has stated the obvious, costs have fallen in the light of workers' compensation reforms, but premiums have stayed high while insurers reap windfall profits. Read the entire LA Times article here >>> (link unavailable). Regulations have cut permanent disability benefits in half, a crisis is looming in the future for those injured after January 1, 2005.
> posted by Charles Wear > 4/26/05; 5:48:53 AM      

Governor weaker than he looks?

Michael Hiltzik writes in the Los Angeles Times: "In recent weeks the signs have mounted that we are witnessing the twilight of the Schwarzenegger administration.

One by one, the governor's grand initiatives have come apart. The box-exploding state reorganization? Abandoned. The balanced state budget? A non-starter. Government without special interests? A joke. Bipartisanship in Sacramento? Never happened."

Read the rest of the article here >>>. This sounds like wishful thinking to me.
> posted by Charles Wear > 4/25/05; 5:16:13 AM      

Reforms make insurance market more competitive...

According to this article on businesswire (link unavailable), the workers comp insurance market is more competitive since the reforms. So the insurance carriers can recognize a tremendous opportunity for profit. One wonders how long it will be before savings are passed on to employers?
> posted by Charles Wear > 4/21/05; 6:48:46 AM      

Nunez ready to fight over workers' comp rating schedule

This article in the Sacramento Bee (archived) quotes Assembly Speaker Fabian Nunez as follows: "We need to put an end to what the new law on workers' comp is doing to injured workers, or else we are not going to move forward on a budget." The new permanent disability schedule which has been put forward by Administrative Director, Andrea Hoch, cuts permanent disability awards by 50-70% according to estimates. Let's watch and see if Mr. Nunez keeps his promises come budget time.
> posted by Charles Wear > 4/20/05; 7:12:51 AM      

Burton "haunting" Capital...

From Gilbert Chan's Sacramento Bee (link unavailable) article:

"Workers' comp has seen the last of John L. Burton," the then-Senate president pro tem said after hammering out a sweeping compromise package with the governor.

Over the next eight days, workers' compensation will take center stage again in a flurry of protests and regulatory and legislative hearings. At stake are summer insurance rates paid by employers and the job of a key Schwarzenegger appointee charged with carrying out the workers' compensation overhaul that the governor considers a cornerstone of his economic recovery strategy.

"The unions and the disability groups have learned that demonstrations work with this governor. They are saying, 'It's not over; you haven't fixed it,' " said Barbara O'Connor, director of the Institute for the Study of Politics and Media at California State University, Sacramento.

On tap:

* Around California today, hundreds of demonstrators - many of whom are injured workers - are boarding more than a dozen buses for rallies outside the Capitol in Sacramento and the Ronald Reagan state building in downtown Los Angeles. The demonstrations are spearheaded by the California Labor Federation and Voters Injured at Work, a political action group backed by the California Applicants' Attorneys Association. Another coalition of injured workers plans to protest outside an insurance company office in Rancho Cordova.

* On Monday in San Francisco, Insurance Commissioner John Garamendi will consider an industry group's recommendation for a 10.4 percent rate cut in July - one of the largest proposed by the Workers' Compensation Insurance Rating Bureau of California.

Since January 2004 - when the first of a series of workers' compensation laws took effect - Garamendi has urged insurers to reduce rates about 24 percent. Carriers, though, have been slower to follow suit, reducing rates 13.9 percent to 16.6 percent.

* In a political showdown on April 27, the Senate Rules Committee will hold a confirmation hearing for Andrea Hoch, administrative director of the Division of Workers' Compensation. Appointed by Schwarzenegger in April 2004, Hoch can serve one year without Senate confirmation.

Labor leaders and groups for injured workers are trying to oust Hoch, a former state prosecutor, over the new rules that dictate how medical treatment and disability benefits are determined.

In a pre-emptive move Monday, Hoch released a progress report on SB 899 and predicted that by late 2005, employers will see insurance rates fall by more than 26 percent from their 2003 peak if carriers pass along all the recommended rate cuts.

"Drafting these regulations is a vital part of implementing the reforms," Hoch said in a statement.

But two weeks ago, Burton assailed Hoch for her proposed regulations to decide permanent disability benefits. He said he felt "betrayed" because the legislation wasn't meant to cut benefits or deny treatment for severely injured workers."