Workers Comp Overhaul Bill Narrowly OKd by Assembly

The Assembly on Monday narrowly approved legislation that would double benefits for injured workers and overhaul the state’s $8-billion worker compensation program.

The bill was approved despite the unified opposition of Assembly Republicans, who complained that the proposed increase in benefits would not be matched by reforms to lower costs for employers.

On a 41-32 vote--the bare majority needed for passage--the bill was sent to the Senate, where it is expected to be the subject of intense negotiations when lawmakers return from their summer recess in late August.

If the bill emerges intact and is signed into law by the governor, it would represent a landmark transformation of a system that is one of the most expensive in the country for employers but still provides some of the lowest benefits for workers who are injured on the job.

The measure is the product of more than 40 hours of public hearings at which legislators reshaped a compromise first proposed by a coalition of interests with a stake in the workers compensation system.

Although the original deal had the blessing of Gov. George Deukmejian, it has been subjected to more than 70 amendments and now is in a form that the governor would veto, a spokesman for Deukmejian said.

Despite the legislation’s status as a “work in progress,” the bill’s author, Democratic Assemblyman Burt Margolin of Los Angeles, pleaded with his colleagues to move the measure to the Senate lest efforts to reshape the program be stalled for another year and probably longer.

If the Legislature does not pass the bill this year, Margolin said, the various interests that benefit from the current system--including doctors and lawyers--will have time to bring pressure on individual lawmakers and prevent any changes until at least 1991.

“The only chance for workers compensation reform within a structure that will produce savings for employers and also new benefits for employees is in this bill,” Margolin said.

Before winning passage of the bill, Margolin fought off amendments from Republicans who wanted to return the measure to nearly the form it was negotiated by a coalition representing insurance companies, major business organizations, and about 15% of organized labor.

GOP lawmakers complained that the business representatives on the coalition gave up many of the reforms that were originally proposed to pay for the increase in benefits. They said the resulting agreement would be especially hard on owners of small businesses, who would be unable to absorb the costs or pass them along to customers.

“If we take the most expensive system in the nation and make it even more expensive, we’re going to regret what we’ve done,” said Assemblyman Charles Bader (R-Pomona). “A year from now or two years from now, the bill is going to come due.”

All participants in the workers compensation system apparently agree that the program is in need of repair, but no two people seem to agree on what would be the best way to fix it.

One point not in contention is that temporary benefits are so low under current law that workers are encouraged to seek higher, permanent disability benefits even if they are not permanently disabled. This causes costly delays while workers try to prove they are disabled and insurance companies seek to prove that they are not.

To address this problem, Margolin’s bill would more than double the maximum weekly benefit from the current $224 to an amount equal to the state’s average weekly wage, which is expected to be $511 by 1992. The maximum benefit would then increase automatically as much as 5% each year to keep pace with wage increases.

To pay for the benefit increase, the bill would enact several major changes in the way the system works.

The most fundamental revision would be aimed at ending the “doctor shopping” that occurs when both workers and insurance companies select physicians who they believe will give their side the most favorable medical evaluation. The reports cost an estimated $1,033 each, and workers may obtain as many as are necessary to prove their case. The average claim involves three medical evaluations.

Under the bill, if the worker and the employer could not agree on a doctor, the worker would be forced to choose from a panel of four selected at random by the state from a list of hundreds of eligible physicians participating in the program. The employer could pay for one rebuttal evaluation but would also be required to fund another report by a doctor of the worker’s choice.

Another change would involve vocational rehabilitation, which is used when injured workers are unable to return to their former jobs. Under the current system, the average injured worker does not enter retraining until 550 days after the injury. The bill would require a worker to decide whether he wants rehabilitation within 90 days after his physician determines that the worker is medically able to participate.