Care Needed in Workers’ Comp Reform

Sleazy entrepreneurs and some doctors and lawyers are said to be responsible for recent alarming increases in deceptive advertising in the multibillion-dollar workers’ compensation system.

Assemblyman Burt Margolin (D-L.A.), who spearheaded the legislative fight to reform the system in 1989, opens hearings today in Sacramento to see if what he calls a disgraceful new trend can be stopped.

Margolin predicts legislative action this year to block deceptive ads, which are being denounced by unions, insurance companies, health-care providers and lawyers for workers and management.

However, it will be a disgrace if the furor over deceptive ads is used as an excuse to postpone urgently needed increases in workers’ benefits for legitimate on-the-job injury or illness claims.

The hearings will focus on the advertising, on new reform proposals and on the impact the 1989 reforms have had so far.

New reforms will come only after something is done about deceptive ads used by so-called claim mills. These mills plaster leaflets on cars in parking lots urging workers to phone for help to file claims, especially for mental stress on the job. They solicit workers in unemployment insurance lines and make offers of “free help” and promises of financial benefits in TV, radio and newspaper ads.

Proposals to stop such abuse include one to let the state’s Industrial Medical Council screen out clearly deceptive ads that cannot possibly fulfill their grandiose promises.

Honest solicitation by lawyers is legal and can reach workers who truly need help getting benefits, such as non-union workers in minority communities.

Unfortunately, other workers without real injuries or illnesses are tempted by the solicitors, who carefully select doctors willing to write misleading reports supporting dubious claims.

Too little time has passed to fully evaluate the 1989 changes, but new battles are already starting over reforms that go beyond the fraud issue.

Workers’ comp benefits were not raised from 1983 to 1989, leaving them woefully inadequate. Because of objections from the insurance industry and employers, former Gov. George Deukmejian vetoed every bill the Legislature passed to boost benefits and curb abuses.

The bill he finally signed was a weak compromise that boosted benefits somewhat but also made them more difficult to get.

Backers of the 1989 bill say it was designed to reduce fraud--not legitimate claims. But critics say it is harder than before for workers to get benefits they are entitled to--and the bill’s key sponsors admit it.

So pressure is building to raise benefits again. Despite agreement by all unions and most employers that increases are needed, employers are again demanding that workers pay for most additional raises by further cutting the number of claims.

They are aiming at claims based on job stress, even though the 1989 changes were meant to reduce them.

Before the changes, a worker could get at least some help from the system if a job contributed in any way to an illness or injury.

That was also true in stress cases.

But now, job stress must be at least 10% responsible for a mental or emotional illness before the worker can get any benefits. The California Labor Federation and its supporters decided that that limitation had to be accepted to get Deukmejian to sign the bill.

Now many employers want to eliminate all stress claims, as if no amount of job stress can cause illness.

The 1989 compromise boosted benefits, such as those for temporary disability that went to a weekly maximum of $336 from $224.

However, that is far below the $511 accepted even by employer associations before it was cut back as part of the compromise.

It would be tragic for workers if it takes another seven years to agree on a meaningful hike in benefits as more changes in the rules are debated. To avoid that in the future, benefits must be indexed to automatically keep them in line with cost of living increases.

The Legislature and the governor should finally realize that the compensation system was designed to help workers--not lawyers, companies, the insurance industry, hospitals or doctors.