Injured Employees Challenge Provision of Revised State Workers’ Compensation Law

Lawyers representing injured workers filed the first legal challenge to the recent overhaul of the state workers’ compensation system on Wednesday, contending that new rules could force injured employees to change doctors in the middle of treatment.

Giving employers the power to control medical care for victims of on-the-job accidents was a key provision of the workers’ comp bill passed by the Legislature and signed into law by Gov. Arnold Schwarzenegger in April.

Currently, an injured worker is allowed to choose any doctor after the first month of treatment is completed. After Jan. 1, a worker will have to pick from a pool of doctors who belong to tightly controlled physician networks organized by companies or insurers.

The suit maintains that the new rule should be applied only to people hurt on the job after Jan. 1. The suit filed in Sacramento by the California Applicants’ Attorneys Assn. names as defendants the state Division of Workers’ Compensation and Director Andrea Hoch.

“It’s one thing for workers injured next year to be forced to see a company doctor. But it’s absolutely ridiculous for the state to rip a patient away from his or her doctor in the midst of treatment,” association President J. David Schwartz of Torrance said at a news conference in Sacramento.

Forcing employees with old injuries to change doctors could make it harder for people to return to work, Schwartz said. He added that the rule, which could affect tens of thousands of injured workers, could increase employers’ costs as existing cases are reevaluated.

In addition to Schwartz and the attorneys association, the plaintiffs in the case are DeMarco Foster, a San Francisco police officer, who according to the suit is suffering from post-traumatic stress after being shot in March; and Joanne D’Amato of Encinitas, a former office manager and part-time waitress who was hurt in a 1996 fall.

Foster, who is being treated once a week by a psychiatrist, said he worried that he might not be able to “recover as well with another doctor.”

Representatives of the Schwarzenegger administration, insurance companies and business organizations said the lawsuit was a ploy by the applicants’ attorneys to derail new workers’ compensation laws even before they were fully implemented. The overhaul, a top Schwarzenegger priority during his first year in office, was aimed at cutting workers’ compensation insurance premiums that had increased by as much as 300% over the last five years.

“We’re going to fight this vigorously,” said Rick Rice, assistant secretary of the California Labor and Workforce Development Agency. The new regulations, which have just been approved by the state Office of Administrative Law, provide plenty of exemptions for workers such as Foster and D’Amato, who may need surgery or have chronic ailments, Rice said.

He conceded, however, that disputes arising from such cases would have to be decided by workers’ compensation judges, potentially causing an increase in litigation and crowded court calendars.

Getting all injured workers into employer-controlled physician networks is essential for lowering treatment costs, said Jeanne Cain, a senior vice president of the California Chamber of Commerce. The networks are designed to function much like current health maintenance organizations by providing workers with a variety of physicians who specialize in occupational injuries and rehabilitation.

The networks “are a critical component of bringing quality treatment and stability to the workers’ compensation system by requiring that medical decisions are made by qualified medical professionals, not lawyers,” Cain said. The new regulations, she said, provide “unprecedented safeguards” to ensure that injured workers get the correct care.

Business interests also worry that lawsuits and other challenges from the applicants’ attorneys could wind up derailing this year’s changes in the workers’ comp laws. Hopes were high that the overhaul would draw workers’ comp insurers back to the California market, creating competition and bringing down rates, said Nicole Mahrt, a spokeswoman for the American Insurance Assn. in Sacramento.

The applicants’ attorneys are “using the courts to protect the parts of the system that line their pocketbooks,” Mahrt said.