Senate Bill 863 – Governor Brown and the Legislature Reform Workers' Compensation… Again
October 2026 update: is SB 863 still the law?
Yes. More than a decade after Governor Brown signed it, SB 863 still shapes nearly every California workers’ compensation claim. The article below describes the law as it was passed in 2012. These are the parts that matter most today:
- Independent medical review (IMR). When an insurer’s utilization review denies or modifies the treatment your doctor requests, the dispute goes to IMR, not to a workers’ compensation judge. A California Court of Appeal upheld the IMR system in Stevens v. WCAB (2015). How IMR works.
- Utilization review (UR). Every treatment request is screened by the insurer under strict deadlines, and a late or defective UR decision can be challenged. What you need to know about UR.
- Permanent disability ratings. For injuries on or after January 1, 2013, ratings use a fixed 1.4 adjustment in place of the old “diminished future earning capacity” factor. Add-on ratings for sleep disorders, sexual dysfunction and psychiatric injury that result from a physical injury are limited. Permanent disability ratings explained.
- Supplemental Job Displacement Benefit. Workers injured on or after January 1, 2013 who are not offered regular, modified or alternative work can receive a $6,000 voucher for retraining and skill enhancement.
- Return-to-Work Supplement Program. Workers who qualify for that voucher may also be eligible for a separate $5,000 payment from the state’s Return-to-Work fund.
- Spinal surgery disputes now go through IMR, and the rules for medical provider networks and pre-designating your own doctor still follow the framework SB 863 created.
Details have shifted since 2013 through regulations and court decisions, so check the date on any older article. For a current overview, see SB 863: what injured workers need to know, or browse all of our medical care, UR and IMR coverage.
On April 19, 2004, former Governor Arnold Schwarzenegger signed a sweeping “reform” bill that forever changed the landscape of Workers’ Compensation benefits for California’s injured workers. Since then, many people have criticized the serious, unintended consequences of that law, including unreasonable delays and denials in medical treatment and substantial decrease in the payment of permanent disability benefits—the settlement portion of a Workers’ Compensation case.
Fast forward to August 9, 2012, when a draft of a 160-plus-page bill, Senate Bill (SB) 863, became public. The bill’s authors—some of the State’s largest employers and unions—set out to try to reduce delays in providing medical treatment and increase disability benefits payable to injured workers. Multiple drafts of the bill were circulated throughout Sacramento in the weeks leading up to the final day of the Legislative session, August 31st. The result is a bill that passed almost unanimously out of both houses of the Legislature. Governor Brown signed SB 863 into law on September 18, 2012.
All of the Workers’ Compensation attorneys at Gordon, Edelstein, Krepack, Grant, Felton & Goldstein, LLP (GEK) worked diligently to communicate their concerns to their legislators about the proposed new law, and worked to educate many in and outside of the Workers’ Compensation community about the proposed law during the month of August. Partner Adam Dombchik, a past President of the California Applicants’ Attorneys Association, concluded, “The new law has some positives for injured workers if it is implemented properly. We will actively participate in the implementation to ensure that injured workers get just and fair compensation for their injuries and timely medical treatment.”
Some of the provisions of the new law become effective on January 1, 2013 for all dates of injury, with a few exceptions. Some provisions of the new law apply only to dates of injury after January 1, 2013 and some to dates of injury after January 1, 2014. Here is a brief list of the changes.
- A change in how permanent disability benefits are calculated for injuries after January 1, 2013.
- A return-to-work fund to compensate injured workers who are unable to return to work within specific guidelines.
- A change in the review process for medical treatment requests that are denied.
- A change in the process for resolving disputed spine surgery recommendations.
- An expedited process to provide a $6,000 supplemental job displacement voucher for injured workers who do not return to work for their employer after an injury.
- Changes in the rules governing medical provider networks, the list of physicians from which injured workers can choose to receive medical treatment for their injuries.
- An expansion of the right to pre-designate a treating physician prior to an injury.
- A change limiting the ability of some injured workers to pursue claims for injury to the psyche, a sleep disorder, and/or sexual dysfunction.
- A change in the rules regarding reimbursement for home healthcare services necessary because of an industrial injury.
The final bill is still being analyzed for its impact on injured workers’ benefits. GEK will be issuing a series of detailed articles over the coming months, updating the community on the new law.
With these substantial changes in the law, now more than ever it is imperative to consult with a skilled Workers’ Compensation attorney to protect your rights if you are injured on the job.
