The Legacy of Arnold Schwarzenegger's Workers' Compensation "Reform" The Five Year Anniversary of Senate Bill 899
The following is the second in a two part series detailing how the law has evolved since the California state legislature enacted Senate Bill 899 at then newly elected Governor Arnold Schwarzenegger's urging.
April 19, 2009 marked the fifth anniversary of Governor Arnold Schwarzenegger's assault on Workers' Compensation benefits to injured workers. Upon signing the 100 plus page Senate Bill 899 into law, the Governor changed almost every part of the workers' compensation system. During the last five years, it has been a struggle for injured workers. The "reform" has meant fewer benefits, less treatment and longer delays. The law firm of Gordon, Edelstein, Krepack, Grant, Felton & Goldstein, LLP has helped lead the fight for a fair interpretation of the law and fair benefits for injured workers.
Part one of this series detailed the changes in the law related to temporary disability and permanent disability benefits. The following is a recap of how Senate Bill 899 affected other related Workers' Comp benefits and how subsequent interpretations and changes of the law continue to affect injured workers five years later.
Apportionment: Apportionment is a permanent disability concept that deals with the assigning of the percentage of industrial versus nonindustrial permanent disability, or the percentage of permanent disability as between multiple industrial injuries. This issue is initially described by a medical doctor. The new law changed the law of apportionment, relaxing the standard allowing for greater apportionment to nonindustrial factors, thus lowering permanent disability payments to injured workers.
The most important case interpreting the new law, Escobedo, determined that the new apportionment law applied to all pending injury cases, regardless of the date of injury. The Escobedo case did list a very strict standard for doctors to follow when addressing apportionment. Skilled advocates for injured workers holding the doctors to this strict standard have tried hard to limit the negative impact of this new apportionment law.
The Benson case, which is pending an appeal to the Supreme Court of California, changed the law on apportionment between industrial injuries. Again, this case used the new law to conclude that more than one industrial injury may not be combined to produce one larger permanent disability award, but instead the permanent disability must be split up into smaller separate awards if due to separate injuries. An exception to this harsh rule remains, and skilled advocates for injured workers have succeeded in obtaining a combined, larger permanent disability award in some cases.
Return to Work Benefits In 2003, during the recall campaign of Governor Davis, a bill that abolished vocational retraining benefits to injured workers' was signed into law, leaving a rarely used benefit called a "supplemental job displacement voucher." This is a monetary sum that ranges between $4000 and $10,000 that an injured worker can apply towards an educational school in an effort to assist in returning to the workforce. Unfortunately, Governor Schwarzenegger's administration has not been able to successfully implement rules that would allow for better access for injured workers to the supplemental job displacement voucher. There have been legislative attempts to create rules that would allow for better access to this rarely used benefit. There are two bills pending the legislature in 2009 that seek to improve access to obtaining the voucher or alternative return to work assistance.
Medical Treatment: Prior to the enactment of Senate Bill 899, there had already been some changes in how injured workers were provided medical care. The Legislature put caps on the amount of physical therapy, chiropractic care, and occupational therapy that an injured worker could receive subsequent to an injury. Also, a program called "utilization review" was created to review and authorize medical treatment requests submitted by a physician. Senate Bill 899 did nothing to amend these new rules. Over the last five years, there have been no legal cases or change in the law that has "softened" the hard cap on physical therapy, chiropractic, and occupational therapy. However, a 2008 California Supreme Court case entitled Sandhagan concluded that a workers' compensation insurer had to request utilization review of treatment requests, but this process must be completed in most cases, no less than fourteen days from receipt of the medical treatment request. The Supreme Court recognized that a strict timeline as required by law was necessary to insure that injured workers receive prompt and efficient medical treatment. Despite the Sandhagan case, advocates for injured workers continue to observe significant delays in authorizing medical treatment. In the near future, as the courts enforce the timelines mandated by the Sandhagan case, injured workers hope to get relief from the delays and unreasonable denials in medical treatment.
The new law also allowed employers to create a Medical Provider Network (MPN), which is a list of approved treating doctors. If an MPN is established with proper notice, the employee must seek medical treatment from a doctor on the list. There are strict notice requirements for an employer to require treatment with a doctor in the MPN. Case law (Knight) supports the right to receive treatment outside the MPN if these requirements not met.
Third Party Civil Lawsuits: One potential source of recovery that was not affected to date by Senate Bill 899 was an injured worker's right to sue a third party defendant for negligence that contributed to or directly caused the worker's injury. In a case where a third party civil lawsuit is successful, an injured worker will in most cases obtain a greater recovery for his or her injury.
The law firm of Gordon, Edelstein, Krepack, Grant, Felton & Goldstein, LLP continues to handle both workers' compensation claims and third party lawsuits on behalf of injured workers. The firm continues to be active at the statewide level through active participation in the California Applicant's Attorney's Association, a statewide advocacy group for injured workers, and continues to be active in educating the Legislature in Sacramento about the existing inadequacies in the workers' compensation laws subsequent to enactment of Senate Bill 899. Even though five years have passed since the enactment of Senate Bill 899, there remain many questions regarding interpretation of the law. It is anticipated that over the next five years there will be further development of the law through the local and appellate court processes.
