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Governor Schwarzenegger fulfilled one of his most
ambitious campaign promises on April 19, 2004 by
signing Senate Bill 899 (Poochigian), a
comprehensive workers' compensation bill that
addresses many of the major cost drivers and
problems that have plagued the system and driven
employers out of the state, according to the
California Workers' Compensation Institute (CWCI).
Capping several weeks of negotiations,
including a final session that ran into the
late-night hours of last Thursday morning, state
lawmakers passed Senate Bill 889 by Senator
Charles Poochigian on Friday afternoon. The vote
was 77-3 in the State Assembly, and 33-3 in the
State Senate. Schwarzenegger, who had made
overhauling the state's troubled workers'
compensation program a centerpiece of his recall
election campaign and a top priority of his
administration, signed the bill at a ceremony at a
Boeing plant in Long Beach.
The law which overhauls the state’s troubled
worker’s compensation system with the intent of
lowering worker’s compensation premiums for
employers and providing greater benefits for
workers with the most severe work-related
injuries, is set to dramatically change both
medical treatment and disability benefits.
Included in the law, which will become
effective immediately upon signing, are
provisions that will do the following:
- Allow companies to create a pool of doctors
from which an injured worker can choose for
initial treatment of a work-related injury.
- Require an injured worker to see three
doctors from the company-designated pool of
doctors before they can seek an independent
medical review.
- Establish uniform medical guidelines that
doctors must follow in the assessment of a
work-related injury and treatment of
disability claims.
- Cap temporary disability payments at two
years and use a medical review in the instance
of a dispute.
- Provide greater benefits for
severely-disabled workers while cutting the
benefits awarded in some other situations.
- Allow all workers to seek immediate
treatment rather than waiting for employer
approval (currently workers with non-emergency
injuries, including work-related back pain,
may have to wait for approval from their
employer before seeking treatment).
- Require treating doctors to evaluate what
percentage of the injury resulted from a
present work-related situation and what
portion of the injury is attributable to other
factors.
- Hold the employer liable only for the
percentage of the injury deemed to be
attributable to the current work situation.
- Permit state reimbursement for small
businesses who make changes in the workplace
to help an injured worker return to work.
- Prohibit the state from regulating insurance
companies’ worker’s compensation premium
rates.
- Require a review of the impact of the law on
the state’s worker’s compensation rates.
In an article in the Sacramento Bee,
Frank Neuhauser, a worker’s compensation
expert from the University of California, said
that the new worker’s compensation law should
cut a little more than $4 billion in costs. The
governor had initially demanded that the law cut
over $11 billion in costs.
Sources: Sacramento Bee; San Jose Mercury
News; Associated Press
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