Panel OKs Appointee to Workers’ Comp Post

The state’s top workers’ compensation official got a key legislative endorsement Wednesday, but only after the Senate’s Democratic leader said he had a commitment from Gov. Arnold Schwarzenegger to consider changes in controversial new regulations that allegedly slash benefits to injured workers.

The appointment of Andrea Hoch as administrative director of the state Division of Workers’ Compensation appears more likely to be approved by the full Senate after being confirmed by the Senate Rules Committee on a 3-2 vote. The appointment is being closely watched because Hoch, who was named to the post a year ago by the governor, has been overseeing a landmark overhaul of the state’s troubled workers’ compensation system.

The deciding vote was cast by committee Chairman and Senate President Pro Tem Don Perata (D-Oakland), who broke with two fellow Democrats after 4 1/2 hours of emotional testimony from employers, nonprofit organization executives and injured workers.

Labor officials, who lobbied Perata heavily in the weeks leading up to the confirmation hearing, accused the Senate president of selling out.

“Today, Don Perata joined Gov. Schwarzenegger in abandoning workers who are plainly disabled,” said Art Pulaski, executive secretary of the California Labor Federation.

Pulaski and attorneys who represent employees in workers’ compensation courts had hoped to send a protest message to Schwarzenegger by blocking Hoch’s confirmation. In testimony before the committee, they contended that new regulations approved by Hoch violated a deal struck last year between the governor and Democratic legislative leaders that was crucial in getting the workers’ comp overhaul passed.

In particular, they criticized rules issued by Hoch’s office Jan. 1 that change the formula for calculating permanent disability benefits for injured workers, saying the new rules would cut benefits by as much as 70%.

“My vote was not premised on injured workers being harmed,” said rules committee member Sen. Debra Bowen (D-Marina del Rey), who voted in favor of the overhaul legislation. Bowen voted against Hoch’s confirmation.

Even Perata acknowledged that he was troubled by anecdotal evidence of benefit cuts.

“This wasn’t what anybody signed up to do,” he said, noting that Schwarzenegger has repeatedly said that any new workers’ comp law should both cut costs for employers and improve medical care for on-the-job accident victims.

Before casting his vote, Perata said that he and Assembly Speaker Fabian Nunez (D-Los Angeles) had extracted a promise from the governor last week that he would be open to looking at data showing that workers were being shortchanged by the new regulations.

Schwarzenegger spokesman Vince Sollitto confirmed that the governor was “committed to talking about the regulations ... if there is statistical evidence” that shows that injured workers are not getting the care and treatment they need.

Hoch, a former lead attorney at the state Department of Justice, testified that her goal in running the state’s $23-billion-a-year workers’ comp program was to ensure that injured employees received medical care quickly.

“We need to redirect our focus on the ability of workers to return to work,” she said. Her newly implemented regulations, she said, are designed to replace old “subjective” standards with criteria that award disability benefits consistently from case to case.

Business groups, which lined up to testify for Hoch, praised her administrative skills and ability to meet tight deadlines for issuing the complex regulations required to make the workers’ comp bill function. Willie Washington, a lobbyist for the California Manufacturers and Technology Assn., called her the “most effective” of six administrative directors he had dealt with at the Division of Workers’ Compensation.

Washington, whose group represents high-tech and major industrial companies, said his members were pleased that workers’ comp insurance premiums, which had risen as much as 300% at the start of the decade, have come down about 16% since the governor signed the overhaul legislation April 19, 2004.

“We believe we’re going to see additional rate decreases,” he said.

Ousting Hoch from her job just as the workers’ compensation overhaul is starting to work “would be a step back” and could get in the way of progress in reducing numbers and costs of claims, said Martin Brady of the Schools Insurance Authority, a self-insurance pool for 35 Northern California school districts.

For Hoch to keep her job, she said, she must be confirmed by the full Senate before Tuesday, the anniversary of her appointment.