News Release

July 18, 1997 Christine Baker
(415) 557-1304

Commission Releases Second Report on

Workers' Compensation Medical-Legal Process

SAN FRANCISCO -- The California Commission on Health and Safety and Workers' Compensation has released the second report from its three year study of the impact of the Medical/Legal reform on California's workers' compensation program.

The study was conducted by the Survey Research Center at the University of California at Berkeley under contract with the Commission. The first report, issued in 1996, evaluated the reforms to the medical-legal process and found dramatic improvements since 1989 in the cost and frequency of medical-legal reports. Much of that analysis required projections for the 1993 and 1994 accident years. The current report, using more recent data, confirms those savings and the accuracy of the projections.

These more recent data also suggest that the substantial savings, especially for the 1993 and 1994 accident years, continue into the 1995 accident year. The 1996 report found that substantial savings resulted from changes in the Medical-Legal Fee Schedule and the decline in psychiatric exams and claims. These trends continue to be demonstrated in the 1997 reportís findings. The costs of medical-legal exams have declined from a high of $394 million in the 1991 accident year to an estimated $59 million for the 1995 accident year.

In addition, data for the 1994 and 1995 accident years suggests an additional source of major cost savings, the reintroduction of the role of the treating physician. This legislative change is likely responsible for a substantial portion of the decline in the average cost and frequency of medical-legal reports on claims occurring after January 1, 1994. However, these data for 1994 and 1995 injuries come from special panels that are smaller than the full panels drawn for 1989-1993. The survey conducted during the current year, with a full panel of 3500 claims for 1994 injuries, will be important in analyzing this trend.

Finally, analysis of the time required to resolve PD claims continues to demonstrate the resistance of the system to more rapid claim resolution. The full 1994 panel, available late in 1997, will be critical to determining if the 1993 reforms have finally been able to achieve the goal of speeding up the claim resolution process.

A copy of this report can be obtained by writing to Christine Baker, Executive Officer, Commission on Health and Safety and Workers' Compensation, 30 Van Ness Avenue, Suite 2122, San Francisco, CA 94102, by calling (415) 557-1304, or by faxing a request to (415) 557-1385. This report is also available through the Department of Industrial Relations' Internet servers' Commission on Health and Safety and Workers' Compensation home page. The address is

The Commission, created by the workers' compensation reform legislation of 1993, is charged with overseeing the health and safety and workers' compensation systems in California and recommending administrative or legislative modifications to improve their operation. The Commission was established to conduct a continuing examination of the workers' compensation system and of the state's activities to prevent industrial injuries and occupational diseases and to examine those programs in other states.