Workers' compensation reform - frequently asked questions - employers
Q. What is the effective date of Senate Bill 899?
A: Most sections of SB 899 became effective on April 19, 2004, the date it was signed into law by Governor Schwarzenneger. Some sections will become effective later on dates specified in the bill, and some sections are retroactive. Many provisions require that the Division of Workers' Compensation adopt implementing regulations.
Q. How do we find out about the status of new regulations as they are developed?
A: Information on new or revised regulations will be posted on the DWC web site at http://www.dir.ca.gov/dwc throughout the rulemaking process That page has a link to an online discussion forum on proposed new rules (the "DWC/WCAB Forum") as well as a link to a "proposed rulemaking" page, which provides the latest information about the status of proposed regulations needed to implement this bill. Also check the "announcements" page, where developments will be announced as they occur. DWC will continue to update these FAQs as more questions arise and more information is available.
Q: What does this bill mean to me?
A: This bill makes major changes to the state's workers' compensation system. It affects injured workers with an ongoing workers' compensation claim or case before the Workers' Compensation Appeals Board (WCAB), as well as all employees in general. It also affects employers, insurance carriers and medical providers. Some of the more common questions we have received to date from these groups are addressed below.
Q: What are these new "medical provider networks," and when do they go into effect?
A: Labor Code section 4600 provides that medical provider networks may be established by employers or insurers on or after Jan. 1, 2005. The network must meet certain standards. These include accessibility of care for common occupational injuries and illness, types of providers, continuity of care, medical decision making, and following treatment guidelines. The standards must also include a process for allowing employees a choice of provider in the network (after the first visit) and for getting second and third opinions. If an employer or insurer uses an approved medical provider network, covered employees would receive their medical care in this network, unless a predesignated physician is chosen prior to an injury. Medical provider networks must be approved by DWC before they can be used.
Q: We paid $5,211 in medical expenses on a claim that was subsequently denied. Can we seek reimbursement from the employee's health insurance carrier to recover our costs?
A: Section 5402 of the new statute requires the employer to authorize medical care within one day of receipt of a claim form and to reimburse for all medical treatment in accordance with the American College of Occupational and Environmental Medicine's (ACOEM) guidelines or utilization schedules adopted by the DWC administrative director. Until the claim is accepted or denied, liability for medical treatment is limited to $10,000. The legislation does not address an employer's recovery rights on denied claims.
Q: When can I expect my premiums to drop as the result of SB 899?
A: Insurance rates are set by the individual insurance carriers, although the State Insurance Commissioner recommends advisory rates. The Insurance Commissioner's future rate recommendations are expected to reflect cost savings contained in this bill, and in fact, on May 28, 2004 the commissioner announced his decision to lower the advisory rates by 20.9 percent for policies that begin on July 1, 2004, based on the impact of the 2003 reform bills as well as SB 899. In addition, SB 899 requires the DWC administrative director, in consultation with the Insurance Commissioner, to study the cost savings from the 2003 and 2004 reforms and issue a final report to report to the Governor, and others, by Jan. 1, 2006.
Q: How do I request reimbursement for my out-of-pocket expenses in returning an employee back to work under the new return-to work-program?
A: For employers with 50 or more employees, the DWC administrative director is required to adopt regulations to establish a return-to-work program to promote the early and sustained return to work of employees following a work related injury. These regulations will include procedures for requesting reimbursement for workplace modifications. To the extent funds are available, employers with 50 or fewer full-time employees may be eligible for the reimbursements for workplace modifications to help an employee return to work if that employee is injured on or after July 1, 2004. Announcements regarding this new program will be posted to the DWC web site when further information is available.
Q: I am an insured employer. What do I need to do if I want to use a medical provider network for my employees?
A: As an insured employer, you should talk to your workers' compensation carrier about a Medical Provider Network. It is voluntary for insurers and self-insured employers to set up such a network. If your insurer is approved by the Division of Workers' Compensation for a Medical Provider Network, your injured employees would receive medical care through the insurer's network. Insured employers do not set up their own network.