Workers’ Comp Plan Unveiled : Wilson: Governor attacks Democrats’ proposal as ‘almost meaningless’ in announcing his overhaul. They call on him to stop talking and start bargaining.

Gov. Pete Wilson on Tuesday unveiled his proposal to overhaul the state’s troubled workers’ compensation system, deriding a Democratic alternative as an “almost meaningless” attempt to retain “the same fraud-ridden shop with a different display in the window.”

But a leading Democratic assemblyman brushed off Wilson’s criticism, noting that the centerpiece of the Republican governor’s plan also is part of the Democrats’ proposal. The lawmaker--Assemblyman Burt Margolin of Los Angeles--called on the Republican governor to suspend his partisan rhetoric and come to the bargaining table for serious negotiations.

Wilson’s proposals strike at the heart of California’s $11-billion system for compensating workers who have been hurt on the job, which has come under harsh criticism because it is among the most costly in the nation but delivers below-average benefits to injured workers.

Wilson said the system’s high costs are driving away businesses when the state needs to create hundreds of thousands of jobs a year to keep pace with population growth and counter the effects of the recession.

“The current system is a disgrace, and everyone knows it,” Wilson told reporters at a truck repair shop in West Sacramento, an industrial city across the river from the capital. Wilson noted that the company’s workers’ compensation premiums have more than doubled in three years--an experience common to businesses across the state.

Wilson, like the Assembly Democrats before him, called for repeal of a state law that sets minimum rates for workers’ compensation insurance. The minimum rates currently include a built-in, 32.8% allowance for expenses and profit.

“Insurance companies should simply compete to set the lowest possible rates for California employers,” Wilson said.

Wilson also called for changes that would limit the right of workers to choose their own doctors for treatment and evaluation of their injuries, sharply limit benefits for on-the-job stress and remove vocational rehabilitation benefits from the workers’ compensation system.

His plan would:

* Allow companies to require workers who have no personal physician to seek treatment for their injuries from state-sanctioned managed care groups, known as preferred provider organizations and health maintenance organizations.

* Allow benefits for on-the-job stress only when a worker can show that a “sudden and extraordinary” job event, rather than the cumulative effect of years of stress, caused the disability. Police, firefighters and others in life-threatening jobs, including prison guards, would be exempt from this provision.

* Remove vocational rehabilitation benefits from the current workers’ compensation system and have the state provide the services at one-third the cost. Workers no longer would automatically receive extra compensation for lost wages while undergoing therapy.

* Allow just one medical evaluation of a worker’s injury when an employer disputes a claim. The evaluation would be done by a doctor agreed upon by the employer and the employee. When they cannot agree, the doctor would be chosen from a panel approved by the state. Current law does not limit the number of evaluations that can be ordered by the worker or the employer.

Together, Wilson said, these changes could shave as much as $2 billion from the system’s $11-billion price tag. He said half the savings would go to reduce employer premiums and the other half eventually would go back to workers in higher disability benefits.

The Democrats’ proposal addresses many of the same elements as Wilson’s plan but in different ways. Like Wilson’s plan, the Democrats’ proposal would repeal the minimum-rate law. They would limit stress benefits but still allow compensation for work-related stress accumulated over time. They would roll back vocational rehabilitation rates and fees paid to doctors who evaluate injuries in disputed cases. And they would limit fees paid to doctors who treat work-related injuries.

But Wilson blasted the plan, using rhetoric reminiscent of a year ago, when he blocked enactment of the state budget for two weeks while he sought major changes in the workers’ compensation system.

“So far, the Democrats have drafted an almost meaningless workers’ compensation plan that is merely the same fraud-ridden shop with a different display in the window,” he said. “The Democrats’ plan isn’t some reform; it’s no reform.”

Assemblyman Margolin disputed Wilson’s portrayal of his legislation, contending that the proposal would save about $1.3 billion, with about half of that coming from repeal of the minimum rate law. The plan would increase benefits to workers at a cost of $250 million.

Margolin praised parts of Wilson’s plan, including the minimum-rate proposal, the effort to curb “doctor shopping” in disputed cases and the goal of trimming vocational rehabilitation costs.

“We aren’t nearly as far apart as the partisan rhetoric would suggest,” Margolin said in an interview. “We have a growing, bipartisan consensus that the system is badly broken. All we (Democrats) want to do is make sure we fix it in a way that respects the rights of legitimately injured workers.”