Governer Signs New Work Comp Legislation

California -- Gov. Signs Bills on TD and 24-Visit Cap; Vetoes Others: Top [10/15/07]

Gov. Arnold Schwarzenegger over the weekend signed bills that extend the two-year cap on temporary disability benefits, lift the hard 24-visit cap on chiropractic treatment and physical therapy and make other mid-course corrections to a workers' compensation system that was sharply redirected by reforms in 2003 and 2004.



Schwarzenegger vetoed measures that would have required hospitals to use power devices to lift patients, increased penalties for misclassifying employees and allowed audiologists to become qualified medical evaluators (QMEs).



The governor's signature on AB 338 by Assemblyman Joe Coto, D-San Jose, puts into law a hard-fought compromise between business and labor. The bill, while still limiting collection of temporary disability benefits to 104 weeks in total, allows injured workers within five years after injury to return to work and cease benefits but take time off later and resume benefits.



Employers and labor also compromised on AB 1073 by Pedro Nava, D-Santa Barbara. As originally introduced, the bill would have lifted the 24-visit cap on chiropractic and physical therapy treatment for patients recovering from surgery.



Schwarzenegger signed an amended version that lifts the cap for post-surgical patients, but gives the Division of Workers' Compensation authority to impose limits through its medical treatment guidelines.



The governor also signed:



* SB 869 by Senator Mark Ridley-Thomas, D-Los Angeles. The bill requires the labor commissioner to establish a data-matching program to identify uninsured employers and target those employers for enforcement.



* AB 812 by Ed Hernandez, D-West Covina. The measure, sought by the insurance industry, allows carriers to increase rates of employers who refuse to turn over records necessary for thorough payroll audits.



* AB 1269 by Ed Hernandez, D-West Covina. The bill directs the Division of Workers' Compensation to increase in-patient fee schedule amounts for Diagnosis Related Groups (DRGs) 504 to 511, regarding hospital treatment of burn victims, after consulting with the Commission on Health and Safety and Workers' Compensation.



Schwarzenegger vetoed:



* SB 557 by Senator Pat Wiggins, D-Santa Rosa, which would have allowed audiologists to become QMEs.



In his veto message, Schwarzenegger said although Wiggins' bill would allow audiologists to issue AME reports, a final diagnosis would still have to be made by a physician.



"This could result in unnecessary delays for injured workers and increased costs to the system by delaying prompt resolution of claims. In addition, the proponents of this measure have not demonstrated an unmet need for evaluating hearing loss in the workers' comp system," the governor said.



* SB 171 by Senate President Don Perata, D-Oakland. The measure would have required hospitals to impose "musculoskeletal injury prevention plans" that must include a "zero lift/safe patient handling policy" that substitutes manual lifting and transferring of patients with powered patient transfer devices, lifting devices, or lift teams.



Schwarzenegger said he had vetoed similar measures in the past that do not give hospitals the flexibility they need to protect worker safety.



* SB 622 by Senator Alex Padilla, D-Pacoima. The bill would have imposed penalties of up to $25,000 on businesses that misclassify employees as independent contractors and exposed employers to civil suits by misclassified employees.



Schwarzenegger adopted language by the California Chamber of Commerce, saying the bill was a "job killer" in his veto message.



"In creating new and redundant exposure to litigation and sanctions, this bill may cause businesses to avoid use of the independent contractor model even where it may be appropriately utilized," the governor said. "This will ultimately contribute to a negative perception of California as an inhospitable business climate."



* SB 906 by George Runner, R-Lancaster. The bill clarifies processing and submission of pharmacy claims and other medical service claims in the workers' compensation system.



"I am concerned that some provisions of this bill may inadvertently undermine existing law," Schwarzengger said in his veto message. "For instance, this bill appears to force health plans that cover medical services later determined to be workers' compensation injuries to accept a loss on their outstanding health plan liens against workers' compensation insurers. In addition, by providing that the changes it makes are declaratory of existing law, this bill would unfairly impact existing liens in the system."