On Sept. 18, 2012, Governor Jerry Brown signed into law significant changes to the California workers’ compensation system, which will take effect on Jan. 1, 2013.

The legislation was supported by both Democrats and Republicans and is intended to benefit employers and employees in California by reducing costs, increasing benefits and improving the system overall. In the past two years, the costs of workers’ compensation insurance have risen from $14.8 billion to $19 billion, with an estimated 12.6 percent increase projected in the near future. According to a statement from Governor Brown, the workers’ compensation changes will reduce systemic inefficiencies and unnecessary expenses and are projected to save businesses $1 billion in 2013, increase payments to disabled workers by 30 percent and improve the delivery of medical treatment, retraining, and other benefits.

Increased Benefits
The amended statutes enable injured employees who are permanently disabled to receive higher benefits by increasing impairment ratings by 40 percent and raising the number of weekly benefits over a two-year period.

Delayed Payment
Under the amended statutes, an employer is not obligated to provide wage replacement benefits for a worker with a permanent disability in some circumstances.

Process Prior to 2013
Under the system in place prior to 2013, injured workers are required to receive an initial evaluation of their injury from a physician that belongs to the Medical Provider Network. Insurance carriers and employers use the utilization review process to evaluate whether treatments plans follow authorized medical standards. In theory, employers that disagree with a treatment plan can contest it through an IMR system.

Process for 2013 and Beyond
The amended statutes force disputing parties to resolve their disputes through the IMR process. This change is intended to help employers, injured workers and physicians avoid litigation costs and provide a faster determination on treatment for injured workers.

Appealing an IMR Decision
Appealing an IMR decision is difficult under the amended statutes. Only under circumstances will an appeal be eligible for revision.

Author: Corbin Wade, cwade@petersonmilaney.com