IR #07-57
November 29, 2007

Susan Gard
Dean Fryer
(415) 703-5050

DIR Announces First Workers' Comp Carve-Out with Integrated Medical Care

Monrovia — The California Department of Industrial Relations (DIR) today announced the establishment of the first workers’ compensation carve-out with an integrated medical care component.  This innovative approach helps expedite medical care from the same provider for both work related and non-work related injuries and illnesses through Kaiser Permanente.

“The goal of the carve-out is to achieve lower costs and provide better medical care for injured workers and expedite resolution of disputed workers' compensation claims,” said DIR Director John Duncan. “This innovative approach is consistent with Governor Schwarzenegger’s reforms that streamlined the workers’ compensation system and produced savings that have improved the state’s business climate.

This novel carve-out approach was made possible through Senate Bill SB 899 and signed by Governor Schwarzenegger in 2004. SB 899 gave employers and unions the authority to negotiate any aspect of the delivery of medical benefits and disability compensation for occupational injuries to employees who are eligible for non-occupational group health and disability benefits provided by the employer, allowing the same provider to treat both work related and non-work related injuries and illnesses.

This revolutionary approach to the carve-out is being applied in a new agreement today signed by DMS Facility Services, a company that provides facility management, maintenance and janitorial services, and Service Employees International Union (SEIU) Local 1877 representing building services workers.  This agreement will cover over 2,000 workers in locations throughout California.

"We are pleased to create the environment where we can reduce costs and improve return to work opportunities for our employees," said Carole Thorsell of DMS Facility Services. 

Mike Garcia president of SEIU Local 1877 agrees. "This program is promising for injured workers as we can improve medical delivery and ultimately access to quality medical care."

This integrated medical care approach was completed with the collaboration of DMS Facility Services, SEIU Local 1877, the Commission on Health and Safety and Workers Compensation, UC Berkeley, and Kaiser Permanente.  Partial support was provided by a grant from the California HealthCare Foundation.