Workers’ compensation permanent disability hearing

By CMTA Staff

Capitol Update, March 17, 2006 Share this on FacebookTweet thisEmail this to a friend

The Senate Labor and Industrial Relations Committee, chaired by Senator Richard Alarcon (D-Los Angeles), will hold an informational hearing in Sacramento on the permanent disability rating schedule on March 22, 2006.  The hearing, which is titled "New Evidence of Declining PD Rates under SB 899 – Implications for Injured Workers", will focus on the effects of the rating schedule on injured workers.

The informational hearing stems from a report that was recently issued by the California Commission on Health and Safety and Workers’ Compensation (CHSWC).  CHSWC, at the request of the Democratic leadership in the legislature, prepared an analysis of the permanent disability rating schedule that was adopted after SB 899 (Chapter 34, Statutes of 2004, Charles Poochigian, R-Fresno).  The report indicates that there has been a 51 percent reduction in PD benefits paid to injured workers since SB 899.

CMTA has a number of concerns regarding the adequacy of the study:
  • The study relies only on summary ratings and ignores the more costly consultative ratings.  This leaves out of consideration all of the complicated, high dollar, litigated claims under the workers compensation system.
  • The number of ratings used by CHSWC in their analysis is too small to be statistically valid, even when an appropriate dataset is used.
  • The data used to evaluate the loss of future earnings capacity is derived from a questionable and outdated RAND study that was completed prior to the reforms. Because the reforms have improved outcomes for injured workers, the data is an inappropriate tool by which to measure the adequacy of current benefits.
  • Because there are severe flaws in the data used to conduct the study, the results and conclusions are questionable.
  • The timeline for development of a new schedule that is recommended by the report is not realistic.  This is a very important issue to all stakeholders and it deserves thorough consideration prior to any action being taken.
This study is being used as a tool to make public policy.  Because there are questions with regards to the legitimacy of the study, CMTA does not believe that it should be used in such a way.  CMTA believes that the legislature should wait until an appropriate analysis of the permanent disability rating schedule has been completed.  

The hearing will consist of testimony from injured workers, the Division of Workers’ Compensation, labor and employer representatives.  CMTA will participate in an employer panel.  

This hearing could shape the debate about the adequacy of permanent disability benefits.
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