SACRAMENTO, California – With a few strokes of his pen, Gov. Jerry Brown has made clear decisions about the need to save costs in California’s workers’ compensation system and avoid new mandates or requirements that will increase costs and make the system less predictable and stable, says the Association of California Insurance Companies (ACIC).
“Gov. Brown said yes to an important bill that will curb abuses in the workers’ compensation system and he said no to several bills that would have increased costs or made California’s system more litigious,” said Mark Sektnan, ACIC president. “We commend him for his leadership and his common sense approach. Given the state of California’s economy, Gov. Brown made the right decisions for employers who pay for the system and employees that want jobs and safe working environments.”
Gov. Brown signed AB 378, authored by Assembly Insurance Chair Jose Solorio. This measure brings compound drugs under the pharmacy fee schedule.
“ACIC applauds Gov. Brown’s signature of this important measure that was supported by a broad coalition including insurers, employers and labor unions representing injured workers,” said Sektnan. “This new law will take away financial incentives for unnecessary dispensing of these medications that are created for the sole purpose of avoiding the pharmacy fee schedule. Injured workers must get the medicines they need to get better and get back to work. Medical providers should not have incentives to prescribe costly, yet questionable drugs.”
Studies by the California Workers’ Compensation Institute (CWCI) in 2010, and a report to the Commission on Health and Safety and Workers’ Compensation (CHSWC) by the RAND Institute have pointed out the costly abuses involving physician-dispensed compound drugs. Compound medications are often paired with topical and transdermal creams that have not been approved by the FDA. Since compound medications are a combination of other medications, these medications present unique billing issues and many insurers have seen instances where the bill for a compounded drugs is several times more expensive than the comparable FDA-approved, commercially available oral dosage. Some of these compound prescriptions are not vetted and could pose safety risks to injured workers.
“Gov. Brown vetoed four measures that would have raised workers’ compensation system costs or fostered litigation,” said Sektnan. “The Governor’s veto messages state he is willing to make changes to the system but he wants changes to be made in a balanced way where cost increases are offset by cost savings. Governor Brown wisely recognized in his veto message that costs in the system must remain sustainable.”
The Governor vetoed the following workers’ compensation bills:
- AB 211 by Assemblymember Gil Cedillo (D-Los Angeles)
Workers’ compensation: permanent disability benefits.
- AB 584 by Assemblymember Paul Fong (D-Mountain View)
Workers’ compensation: utilization review.
- AB 947 by Assemblymember Jose Solorio (D-Santa Ana)
Workers’ compensation: temporary disability payments.
- AB 1155 by Assemblymember Luis Alejo (D-Salinas)