Bill OKd to Cut Cost of Workers’ Comp Tests

While lawmakers study ways of making major changes in the $11-billion-a-year workers’ compensation system, the Legislature on Monday approved a modest change that could cut the system’s cost by $100 million a year.

By unanimous votes, the Senate and Assembly approved and sent to Gov. Pete Wilson’s desk a bill that seeks to reduce the cost of the diagnostic reports written when workers are injured on the job.

Sen. Patrick Johnston (D-Stockton), who authored the bill, said doctors have made “an industry” out of writing the diagnostic reports, often charging more than the attending physicians who treat injured workers.

Doctors charge $500 an hour or more to write the reports, and several reports may be written documenting or disputing the same injury. In all, the reports cost up to $900 million a year. Employers, who face ever-escalating costs for workers’ compensation insurance, must pay the tab.

“I would be disappointed if the savings is anything less than $100 million a year,” said Johnston, who is carrying other legislation this year to make broader changes to the troubled system.

Under the current system, fees for diagnostic reports are based on inflated charges levied in previous years. If Wilson signs the bill into law, the fees would be set by the director of the division of workers’ compensation, an appointee of the governor.