Sacramento, CA – The following statement is in response to the passage of SB 863 during the final hours of the 2012 California session. SB 863 will increase disability benefits for injured workers and make streamlining reforms to the workers’ compensation system. This statement can be attributed to Mark Sektnan, president of the Association of California Insurance Companies.
“California has enacted major changes to its workers’ compensation system several times including the early 1990s and 2003 – 2004. Each of these reform efforts passed with great expectations and resulted in unexpected repercussions. It is important that expectations for SB 863 remain reasonable. The true impact of these changes is unknown and it will take time before they become apparent.
The bill contains a long sought after benefit increase with much needed changes to improve the predictability of the system. These changes include tighter controls on out of network care plus provisions which allow doctors, not judges, to settle medical disputes. The bill also contains much needed reforms to medical liens.
The bill, however, will result in increases in administrative costs to implement many of the new provisions. SB 863 will increase administrative costs in the short run with the introduction of independent bill review and the appointment assistance program. Lien filings will spike before the imposition of the lien filing fee because third party billers and other bulk lien filers will scavenger through their sofa cushions for old liens to file before the start date.
Realization of long term savings will depend on how quickly the Administration can develop and implement the new fee schedules called for in the bill. The three golden rules of workers’ compensation will also influence the successful development of savings. These rules are 1. Things never work out the way they were originally designed or intended. 2. The Courts will interpret the language in unexpected ways and 3. The entrepreneurial element in the workers’ compensation system will find their way around the law in many areas we cannot anticipate or imagine.
We look forward to working with the Division of Workers’ Compensation to implement this bill and tackle the rising cost pressures in the system.”