Negotiators Reach Common Ground on Workers’ Comp

Abandoning attempts at a top-to-bottom reform of California’s $8-billion workers’ compensation system, negotiators on Tuesday reached tentative agreement on a more modest proposal to boost benefits for injured workers by about 50% over two years.

In exchange for the benefit increase, which would be the first since 1983, the proposal limits the freedom of employees to choose the doctors who evaluate their work-related injuries. This and other proposed changes are designed to pay for the benefit increase.

“This is a very significant reform that ends a seven-year legislative logjam,” said Assemblyman Burt Margolin (D-Los Angeles), who has led months of negotiations on the issue. “This will put the system on the road to recovery.”

Jose Hermocillo, legal counsel for Californians for Compensation Reform, a coalition of insurance companies and employers, described the deal as a “modest approach” that should win the signature of Gov. George Deukmejian, who earlier this year endorsed a more dramatic proposal negotiated by the industry coalition with representatives of organized labor.

“If this becomes law, it will provide an opportunity for the system to try out reforms, but it does not commit us to much more far-reaching reforms that may or may not work,” Hermocillo said. “Some people have likened this to a laboratory experiment. I think it’s better than that.”

Kevin Brett, a Deukmejian spokesman, said the governor has supported the efforts of Californians for Compensation Reform and would look favorably on any bill that had that group’s endorsement.

“If the coalition indicates that they feel they have a satisfactory bill in hand, certainly their recommendation would carry considerable weight,” Brett said.

The agreement is expected to go before both legislative houses on Friday, the final day of their 1989 session.

The proposal is still opposed by lawyers for injured workers as well as many public employee groups and doctors, according to Donald Green, lobbyist for the California Trial Lawyers Assn. and the California Applicant Attorneys Assn. Although the trial lawyers have traditionally had the ear of Assembly Speaker Willie Brown (D-San Francisco), Brown earlier this year told The Times that he would support any bill to which Margolin agreed.

“Our argument is that the bill is far too lean on benefits and far too rich in take-aways and reductions from injured workers,” Green said.

Margolin and Hermocillo both conceded that the package falls short of being a long-term, structural transformation of the troubled system, which is among the most expensive in the nation for employers but provides benefits for injured workers that are among the lowest. A broader proposal was abandoned last week after negotiators concluded that they could not resolve their differences before the Legislature adjourns.

“The other proposal was designed to be a reform that in one fell swoop created a system that would be the standard for years to come, for the decade of the 1990s,” Margolin said. “This is more like a three-year reform.”

The package includes:

* A 50% increase in maximum temporary disability benefits, which have been frozen at $224 a week since 1983. The proposal also provides smaller increases in permanent disability payments and death benefits.

* Limits for the first time on so-called “doctor shopping.” The bill would require injured workers who are not represented by lawyers to choose a doctor to evaluate their injuries from a panel of three physicians selected at random by the state from a list of thousands of doctors qualified to do the work. Workers with lawyers would be free to choose their own doctors but would be limited to one employer-paid evaluation from each medical specialty.

* Limits on claims for disability caused by stress or psychiatric injuries. The bill would require that workers prove their injuries were caused by actual on-the-job conditions and were not simply the perception of the employee.

* A requirement that injured workers decide whether to enter vocational rehabilitation within 90 days after they are declared eligible to do so. The requirement would be coupled with more intense counseling to enable workers to reach a quick decision.

* Rollbacks of 10% in fees charged by doctors who evaluate on-the-job injuries and vocational rehabilitation therapists who work with injured employees.

* Reforms to speed up the process, including arbitration, more state information officers to guide employees through the system, and a greater number of judges and clerks to handle appeals.