Details Left up to Courts, Bureaucrats

When the Legislature passed its landmark makeover of the workers’ comp system in April, several hot-button issues were addressed only in the vaguest terms, leaving it to court rulings and bureaucratic regulations to fill in the details.

Perhaps the thorniest question involves the law’s mandate that existing medical problems must be taken into account when assessing a workers’ comp claim. Under the old law, an employer was responsible for all medical and disability expenses resulting from a workplace injury, even if the costs included treating an existing condition that was aggravated by the accident.

But under the new law, workers are compensated only for injuries directly linked to a job, which could dramatically reduce the amount an employer -- or its insurer -- must pay. That has set the stage for a protracted legal battle over the rules for determining how much of a back injury is due, for example, to a fall at the office and how much to the worsening of a preexisting condition such as arthritis.

A second tricky question focuses on new medical guidelines that make it easier for insurers to veto certain treatments. To date, the Schwarzenegger administration hasn’t issued complete rules on which procedures are allowed. Until it does, insurers, workers and doctors are hesitant about ordering certain treatments and procedures, such as hip replacements or post- surgical physical therapy.

There are other areas of uncertainty. For example, it has been left up to the courts to decide whether employers can force workers, currently being treated by their own doctors under the old law, to join the medical provider networks created by the new law. The HMO-like networks began opening for business Jan. 1, and it could be months or even years before a definitive court ruling is issued.

And looming just over the horizon is an even bigger dispute over the regulations used to calculate how permanent disability benefits are calculated. Labor unions and employee attorneys contend that the new rules could cut payments for many injuries by as much as 50%. The attorneys have sued the state, charging that the regulations are illegal, even before they have been applied in a single new case.