Schwarzenegger Calls Special Session on Workers’ Compensation

By Loretta Macktal, Executive Assistant to the Vice President, Government Relations

Capitol Update, Nov. 21, 2003 Share this on FacebookTweet thisEmail this to a friend

One of the first acts by Governor Arnold Schwarzenegger after being sworn in on November 17th was to call legislators back to the Capitol for a special session to fix California's broken workers’ compensation system. The governor agrees that curbing runaway workers’ compensation costs and making the system work more efficiently is one way to help turn the sluggish economy around and get Californians working again.

The administration has sponsored ABx4 1 (Abel Maldonado, R-Santa Maria), a comprehensive workers' compensation reform bill that would reduce employers costs by as much as $11.4 billion. The bill includes several of the heretofore workers’ compensation "untouchables" such as objective medical findings in permanent disability, use of American Medical Association guidelines in determining disability, and more employer control of medical treatment.

In addition, the bill contains some relatively new ideas such as the use of independent medical evaluators to resolve disputed medical services; clarifying language of the "cure and relieve" standard of medical care; and allowing employers that choose to provide employee health coverage to contract with Health Care Organizations under specified rules and protocols to treat injured workers. The bill also expands some of the existing and pending cost savings changes in recent legislation.

The Assembly Insurance Committee met November 19th to discuss ABx4 1's 193 pages. Significant discussion occurred between all of the parties about what could be done to fix the system without unduly penalizing injured workers. According to Senate Insurance Committee Chair Juan Vargas (D-San Diego), the committee may hold one more informational hearing before the bill is voted on.

Several bills have been introduced in the Senate including an identical bill to ABx4 1 that is also sponsored by the administration – SBx4 3 (Charles Poochigian, R-Fresno). According to a senior staffer, the Senate Labor and Industrial Relations Committee, will hold a pre-hearing November 21st on the status of cost savings attributed to SB 228 and AB 227 (reforms passed last session) and get an update on the RAND study on Permanent Disability. Interestingly , and certainly out of the ordinary, the committee is going to require witnesses to testify under oath. No one has given a reason for this significant policy change or shared what effect it will have. Hearings are scheduled on November 24th, 25th and 26th beginning at 9:00 a.m. in room 2040 of the Capitol.
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