Workers’ Comp Reform, at Last : The Primedex case underscores the urgent need for legislative action

Finally, Sacramento appears serious about reforming the state’s disastrous workers’ compensation system. Last Thursday the Senate overwhelming approved its version of a workers’ compensation reform bill designed to reduce at least $800 million in employers’ insurance premiums next year. Also last week, the Assembly, in a rare unanimous vote on a major issue, approved its version of a reform measure, which as currently written would save substantially more than the Senate version.

Now comes real challenge: Fast-tracking the Senate and Assembly bills in and out of conference committee for a compromise measure before state budget negotiations begin. The Assembly has already started on the Senate’s workers’ compensation bill. The Senate must get cracking on the Assembly’s too.

The bills--AB 110, by Assemblyman Steve Peace (D-Chula Vista) and SB 30, by Sen. Patrick Johnston (D-Stockton)--each take a comprehensive approach to overhauling the current system. As is, the workers’ comp system provides economic incentives for abuse and fraud--all at the expense of truly injured California workers, whose benefits are among the lowest in the nation. The Assembly and Senate bills vary, but each would limit the number of medical and legal evaluations; narrow the basis for stress claims; cap medical fees, revamp vocational rehabilitation and change the method that determines how much companies pay for workers’ comp insurance.

The bills are aimed at squeezing out profit incentives in the current system, which is too easily exploited. Times Staff Writer Stuart Silverstein’s reporting on questionable practices by Primedex Corp., one of the biggest and most controversial workers’ compensation medical enterprises in Southern California, illustrates the point. The company is being investigated by the Los Angeles County District Attorney’s office and the FBI, concerning whether it committed insurance fraud by providing unnecessary treatment or paid for patient referrals.

The skyrocketing costs of providing for injured workers puts California employers at a competitive disadvantage. Reform is long overdue.