The Commission 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 has the following observations about the performance
of state agencies regarding the operation of the specific programs
for which they are responsible and in the fulfillment of tasks
mandated by the reform legislation.
In its evaluation of agency operations, the Commission is more
concerned with the approach and status of efforts to meet those
requirements than with the completion of those tasks by the mandated
Division of Workers' Compensation
The Commission has been somewhat hampered in its evaluation of
DWC's operations due to the lack of availability of consistent
workload data and performance measures. The Commission supports
DWC's long-range efforts to design and implement an information
system for the future and it also urges DWC to modify the current
system to provide basic data needed for ongoing program administration.
One of the most persistent administrative problems facing the
DWC in recent years has been the development of a backlog of lien
claims at some appeals board offices. This problem continues in
the Van Nuys, Santa Ana and Los Angeles areas, but DWC reports
that the other district offices are able to handle their ongoing
In response to the backlog, the DWC established special Lien Units
in the Santa Ana and Van Nuys district offices to focus on the
backlogged liens. DWC now reports that these Lien Units have been
It is reported that there are approximately $300 million in unrecovered
liens filed by the Employment Development Department against workers'
compensation cases. The Commission attempted to verify this reported
amount but EDD advised that there is disagreement within EDD as
to the exact extent of the unrecovered monies.
EDD's Disability Insurance (DI) pays benefits when there is medical
certification that a claimant cannot work. If there is an industrial
component, DI will investigate. They notify the employer and the
insurer of the liability to pay benefits when a determination
is made. EDD advised that they must pay within 14 days or deny
benefits while insurers have up to 90 days to accept liability.
DI provides a safety net for the injured worker, paying benefits
on an interim basis and expecting to be reimbursed through the
lien process when the injury is determined to be industrial and
thus covered by workers' compensation. EDD continues to pay benefits
under a lien, and when an application is filed with the WCAB to
resolve the issue, the EDD is joined as a party to the WCAB case.
When a WCAB case is resolved with a Findings and Award or Compromise
and Release, the parties agree and the lien is settled. There
are approximately 60,000 EDD lien filings per year.
Ordinarily, if the workers' compensation claim is accepted, then
EDD is not involved because there is no dispute. However, the
majority of claims are disputed.
Several problems have been noted with this procedure:
The Commission recommends that a work group be convened to develop
solutions to this problem. Potential solutions that have already
been identified include:
The reform legislation directs the Division of Workers' Compensation
to develop a workers' compensation information system compatible
with the International Association of Industrial Accident Boards
and Commissions Electronic Data Interchange (EDI) system. The
legislation requires the system to help the Department of Industrial
Relations to manage the workers' compensation system more effectively,
to help evaluate the efficiency of the benefit delivery system,
to help measure how adequately injured workers are indemnified
and to provide statistical data for research.
At several Commission meetings, the DWC administrative director
has reported on the development of an information system pursuant
to Labor Code Section 138.6. He pointed out that this is a broad
charge and therefore open to interpretation. While there is not
a specific requirement that the DWC coordinate with the Commission
on this project, the administrative director stated at the first
Commission meeting that he wanted to inform the Commission of
his actions in light of the Commission's responsibilities to oversee
the workers' compensation system.
The Commission expressed its concern about several aspects of
the proposed information system, including the need of maintaining
the proper confidentiality of certain records. A determination
needs to be done regarding how confidentiality will be handled;
it is a balance between the Public Records Act and the Privacy
Act to get the information to those with a legitimate use for
it while screening out those who do not.
The Commission also voiced its concern about the cost of such
a system. The administrative director explained that the proposed
system will go through a full cost analysis in the feasibility
study report process. A Feasibility Study Report (FSR) must be
completed for any major proposed data processing project, detailing
the system's purpose, goals and objectives, how it is to be developed,
what it will do, an analysis of its estimated costs and projected
benefits, and the timetable for development and implementation.
The FSR is then submitted to the Office of Information Technology
in the Department of Finance for review and approval before the
project may be undertaken. Once approval is granted, DWC may then
submit a budget change proposal to fund the project. Mr. Young
declared that DWC is not going to propose anything that's going
to be terribly costly, especially in this environment and that
this project has got to be developed in a very cost efficient
The Division reports that a considerable amount of work has gone
into the development of this information system. An August 1995
report from UC DATA/Survey Research Center entitled "A Workers'
Compensation Information System Proposed For The Division Of Workers'
Compensation" outlines the framework of a workers' compensation
information system, and makes recommendations for completing the
development work. The report recommends a layered approach, obtaining
a small amount of data on all claims, more data on a ten percent
sample, medical detail on a one percent sample, and the most detailed
information through surveys. It recommends appointing an Advisory
Committee made up of the various workers' compensation stakeholders
to help oversee the completion of the development of the information
DWC reports that a Workers' Compensation Information System Advisory
Committee has been appointed and has been meeting in order to
promote a process to obtain consensus from the workers' compensation
stakeholders on the framework of the information system. Subcommittees
were formed to produce discussion and recommendations in the areas
of confidentiality, system performance, and agency performance.
The Division recommends and the Commission concurs that legislation
be enacted which will protect the confidentiality of information
submitted to the department as part of the information system.
The Permanent Disability Rating Schedule
The 1993 reform legislation directs the administrative director
of the DWC to revise the schedule for the determination of permanent
disabilities. This revision must update the standard disability
ratings and occupations to reflect the current labor market. When
complete, the revision must be approved by the Commission on Health
and Safety and Workers' Compensation before the DWC may officially
adopt it. The reform legislation requires the administrative director
to submit the proposed revision to the Commission by July 1, 1994
and to complete the revision by January 1, 1995.
This requirement has not been met. The DWC administrative director
has yet to submit a final proposal for a revised permanent disability
rating schedule to the Commission.
At the time the Commission issued its first annual report in July
1995, it was anticipated that the administrative director would
submit a revised schedule to the Commission later that year.
In September 1995 the Commission was advised that DWC was in the
process of testing a proposed schedule by rating a sample of claims.
The Division randomly selected about 2200 cases containing ratings
performed in 1993. After two training sessions on how to use the
proposed schedule, DEU shut down and re-rated the files, recording
both the original rating in total, and the new rating using the
proposed schedule. DWC Research Unit was beginning their analysis
to determine the overall effect of the proposed rating schedule
as well as the individual impact on categories of injuries such
as upper extremities, lower extremities and backs.
The Commission requested that DWC Administrative Director Casey
L. Young report on the status of the PDRS at the Commission's
November 1995 meeting. Mr. Young reported that the DWC survey
of the summary ratings sample indicated that the proposed PDRS
schedule would increase permanent disability ratings by about
2%. Most of the increase came from the occupation changes; the
other modifications seem to be fairly insignificant.
However, Mr. Young said he was uncomfortable with those findings
for a couple of reasons. Because only summary ratings were reviewed,
just the simple ratings were evaluated in the survey -- the more
complicated ratings that are often disputed were not included.
The other difficulty was to rerate doctor's reports where the
doctor had used the existing schedule and try to figure out what
the rating would be under the new schedule -- for example, if
the evaluators should use the work capacity guidelines in the
proposed schedule instead of the objectives and subjectives.
The administrative director stated that DWC received other indications
about the proposed PDRS revisions. When DWC gets appeals from
summary ratings on current cases and the doctor inappropriately
used the proposed work capacity guidelines, the contention is
that the PD ratings are too high. Mr. Young thus believed that
the increase in the permanent disability ratings under the revised
PDRS is probably more than what DWC's particular sample and methodology
The administrative director said he wasn't comfortable putting
the proposed PDRS out to public hearing until he had some sense
of what the economic impact would be. He stated that he did not
have confidence that the sample of summary cases reflected the
real impact of the new PDRS since litigated cases were not included.
To get information on the impact of the PDRS on litigated cases
would take several months, well beyond the scheduled date in January
1996 for the Commission's permanent disability fact-finding hearing..
Mr. Young said that he was very reticent to put forward a change
in the permanent disability rating schedule with an uncertain
impact if something else will be done in the next year or two.
That would create basically two more tracks that the claims administrators
and attorneys would have to follow. He said that his inclination
was to wait until the Commission's January hearing and see if
the Commission and DWC can do the whole thing together. Then at
least when a change is made there will be just one new track and
he would have some more confidence than he had right now.
In May 1996, DWC reported that it has formed a Permanent Disability
Rating Maintenance Committee to try to encourage agreement and
strategies for rulemaking for changes in the PD schedule. For
example, this group is working on consensus building around ways
to include previously unscheduled categories into the schedule.
DWC said that it expected to propose regulations in the summer
of 1996 to change the occupational grouping, age groupings, and
add new language on work restrictions.
Inappropriate Use of Proposed PDRS Revision
While the revision of the Permanent Disability Rating Schedule
was in process last year, draft copies were made available to
interested members of the workers' compensation community for
their review and comment. However, DWC discovered that some physicians
were improperly using the draft PDRS instead of the current version.
In June of 1995, the Division of Workers' Compensation advised
doctors who perform medical evaluations that a proposed revision
of the California Permanent Disability Rating Schedule has not
yet been adopted and should not be used. In a letter distributed
to all Qualified Medical Evaluators (QMEs), physicians were told
that the use of these proposed guidelines is clearly inappropriate
until such time, if ever, they are adopted through the regulatory
process, and that their reports will likely be returned as unratable
if the work guidelines in the proposed schedule are used.
The community has advised the Commission that the draft PDRS is
still being used improperly by some physicians. The Commission
recommends that DWC renew its efforts to direct physicians not
to use a proposed PDRS revision unless and until it has been officially
Backlogs of Disability Ratings
In its first annual report, the Commission noted that DWC was
dealing with a large backlog of requests for permanent disability
ratings. As of late 1994, the DWC had a backlog of 20,000 requests
for summary ratings and a 2,000-case backlog of rating reconsideration
The backlog resulted from a provision of the Workers' Compensation
Reform Act of 1989 that required all claims in which the injured
worker was represented and unrepresented to obtain a permanent
disability rating from the DEU in the DWC. The 1993 reform legislation
eliminated the requirement that new represented cases be rated,
but the DEU still had to rate all of the backlogged cases and
all new cases where the injured worker was unrepresented.
DWC reports that the backlogs have now been eliminated. The administrative
director explained that DWC employed three major strategies to
remove the backlog:
Judicial Ethics Regulations
In response to legislation enacted in 1993 (AB 1252, Mountjoy),
the DWC administrative director developed regulations requiring
workers' compensation referees to comply with the Code of Judicial
Conduct adopted by the Conference of California Judges, effective
December 1, 1995.
The regulations were developed by the Josephson Institute of Ethics
after interviews with and surveys of participants in the workers'
compensation system. They cover such subjects as the duty to report
misconduct, integrity of court records and ex parte communications,
socializing with practitioners, financial interest in educational
programs, diligence, honesty and decorum. The new regulations
specify that written approval of the Administrative Director must
be obtained before anything of value is transferred from practitioners,
attorneys, interest groups, or others to a Workers' Compensation
Judge. The Judges now have a duty to report misconduct that they
see in the courtroom or around whether it be by another Judge,
a witness, an attorney or others. The regulations also specifically
prohibit Judges from putting on educational programs for the workers'
compensation community for profit.
The DWC administrative director advised that a significant aspect
of the regulations is the creation of an ethics advisory committee,
made up of individuals representing labor, employers, insurers,
and attorneys. The ethics advisory committee will review the complaints,
forward them with a recommendation to the Administrative Director
and then monitor to make sure the appropriate action(s) are taken.
The advisory committee will also be responsible for doing a report
to the Legislature, the Governor, and the Administrative Director
on the ethical state of the judicatory system in workers' compensation
and other kinds of issues.
A record number of workers' compensation claims audits were
conducted last year resulting in $1,099,610 in penalty assessments
according to the Division of Workers' Compensation 1995
audit report to the Legislature.
In 1995, the Audit Unit conducted 64 audits and audited 16,261
claims, an increase from the 56 audits and 13,196 audited claim
files in 1994. The audits resulted in 25% more citations than
in 1994 and the average amount of a penalty assessment in 1995
was $130, up slightly from $127 in 1994.
Of the 64 audits, 57 were selected at random, while seven were
selected based on results of a prior audit or following investigation
of claims handling practices resulting from complaints. In addition
to the scheduled audits, 40 investigations were conducted in which
116 claims files were reviewed based on complaints regarding claims
handling practices. Nine non-random audits have been selected
for 1996 as a result.
A total of 8,481 administrative penalty assessments were issued
against the 31 insurance companies, 11 self insured employers,
and 22 third party administrators (TPAs) audited in 1995. The
average number of penalty citations per audit subject was 133
and the average amount in penalty assessments per audit was $17,181,
Most assessments were found in the indemnity, complaint, and denied
The following are the six most common types of violations and
the number of times they have been cited in 1995 audits
3,997 penalty citations totaling $310,120
(47% of penalties and 28.2% of dollar amount)
$1613 penalty citations totaling $119,605
(19% of total penalties and 10.9% of the total dollar amount)
$1,613 penalty citations totaling $119,605
(19% of total penalties and 10.9% of the total dollar amount)
686 penalty citations totaling $263,080
(8.1% of the total penalties and 23.9% of the total dollar amount)
552 penalty citations totaling $34,440
(6.5% of the total penalties and 3.1% of the total dollar amount
55 penalty citations totaling $112,200
(0.6% of the total penalties and 11% of the total dollar amount.
In addition to the 8,481 administrative penalty assessments totaling
$1,099610 which were assessed as a result of audits, an additional
68 penalties totaling $13,900 were assessed not as the result
of individual audits, but for the failure of claims administrators
to timely file an Annual Report of Inventory of Claims with the
Audit Unit as required by Title 8, California Code of Regulations,
The Division of Workers' Compensation has adopted a new management
DWC Administrative Director described the reorganization at the
Commission's November 1995 meeting:
Mr. Young said that the opportunity came after the 1993 reforms
passed and DWC convinced the Governor and the Legislature that
they needed a different structure to ensure that the changes that
were made are carried out in a consistent and uniform basis around
DWC proposed a new personnel classification and a new organization
chart and obtained approval by the Department of Industrial Relations,
the Department of Personnel Administration and then finally, the
State Personnel Board, effective June 1995.
Mr. Young said two major changes were made.
One is a new position at the top of DWC's organization entitled
the Chief Deputy Administrative Director who acts as a Chief Operating
Officer and is responsible for the day-to-day operations within
the Division. This is a Career Executive Appointment (CEA) position.
The other organizational change is the creation of a middle management
structure for Claims Adjudication. Previously, the Claims Adjudication
function, the largest in the Division, had 27 Presiding Judges
from Eureka to San Diego reporting to the DWC Assistant Chief
resulting in a span of control that was too broad. To enforce
policies and procedures in the district offices, the DWC proposed
a smaller span of control and some management in between. A new
classification entitled DWC Regional Manager was created and three
new positions were established.
The Commission notes that this revised organizational structure
has just been implemented and thus believes that it is too early
to gauge its effectiveness.
The workers' compensation community has expressed concern that
the DWC has negatively impacted injured workers by closing offices,
shifting workload and making other significant changes in its
service to the public without sufficient notice nor advanced planning.
At the March 1996 meeting of the Commission, John Sikora of the
Association of California State Attorneys and Administrative Law
Judges (ACSA) asked the Commission to take a look their concerns
about the Division of Workers' Compensation specified in
a March 12, 1996 letter to Ms. Baker from Stephen D. Beck.
ACSA requested that the Commission conduct an investigation of
DWC's claims adjudication function. ACSA, the exclusive
representative of the workers' compensation judges, is concerned
with the manner in which DWC closed the Norwalk office and relocated
staff, and has filed an Unfair Labor Practice Charge with the
Public Employment Relations Board.
The Association also believes that DWC is spending monies on studies
inappropriately. Mr. Sikora said last year DWC spent $160,000
on an ethics study that was criticized by another study for being
too limited. Now DWC is spending hundreds of thousands of dollars
to contract with Peat Marwick for a study to address issues that
he believes the DWC administration itself should determine. When
asked if ACSA intended to bring their concerns before the Assembly
and Senate Insurance Committees, Mr. Sikora responded that ACSA
was in process of so doing.
Industrial Medical Council
The reform legislation charged the Industrial Medical Council
(IMC) with several new responsibilities:
Medical treatment guidelines
The IMC contracted with the University of California - San Francisco
Division of Occupational and Environmental Medicine and the University
of California - San Diego to develop guidelines for medical treatment
of common industrial injuries (occupational asthma, occupational
dermatitis, and various injuries to the hand, wrist, arm, back,
neck, knee and shoulder). The guidelines for occupational asthma
and contact dermatitis have been adopted. The other proposed guidelines
are currently going through the public hearing process.
|Occupational Asthma||Effective July 1995|
|Contact Dermatitis||Effective July 1995|
|Post Traumatic Stress Disorder||Public Hearings May 1996|
|Low Back Injuries||Public Hearings June 1996|
|Neck Injuries||Public Hearings July 1996|
|Shoulder Injuries||Public Hearings July 1996|
|Elbow Injuries||Public Hearings July 1996|
|Knee Injuries||Public Hearings July 1996|
|Wrist Injuries||Public Hearings July 1996|
Soft tissue injuries
The reform legislation (LC _139.05) required the IMC to study
the feasibility of requiring objective medical findings for soft
tissue injuries. The IMC contracted for the study with the University
of California - San Diego, which completed its report in December
As a result of the mandated study, the IMC in their December 29,
1994 report to the Legislature, stated "We propose that there
is no accepted medical test to evaluate all soft tissue injuries
which can lead to a medical diagnosis." In their May 3, 1995
progress report to the Legislature, the IMC concluded that "...
evaluation of the patient by an informed and motivated physician
remains the appropriate approach to each individual case, and
other, perhaps simpler (and perhaps more costly) measures or modalities,
have not been identified." In conclusion, the IMC noted that
in light of its medical, economic and social importance, the IMC
would like to continue to pursue the issue.
The IMC has adopted protocols pursuant to Labor Code Section 139(e)(8)
governing the evaluation of pulmonary, immunologic, cardiac, psychiatric
and neuromusculoskeletal disabilities.
|Cardiac Disability||Effective March 1994|
|Pulmonary||Effective March 1994|
|Immunologic||Effective March 1994|
|Psychiatric||Effective July 1992, rev. 3/93 & 10/93|
|Neuromusculoskeletal||Office of Administrative Law, July 1996|
The University of California - Los Angeles School of Medicine
recently developed and submitted to the IMC guidelines for physicians
to use in evaluating and determining causation of occupational
injuries and illnesses.
Treating physician form
The IMC has developed a form for treating physicians to use when
reporting on medical issues necessary to determine compensability.
This form was approved and distributed to 122,000 treating physicians
throughout the state in 1995.
The reform legislation required the IMC to develop and administer
an examination that health care providers must pass in order to
be certified as a qualified medical evaluator (QME).
In June 1994 the first QME examination was administered to 4,456
physicians, of whom 93 percent passed. A second general QME exam
was taken by 1,208 physicians in September 1994, of whom 81 percent
passed. Another 392 physicians took the third general exam in
April 1995, with 68 percent passing. In September 1995, 274 physicians
took the general QME exam, and 61 percent passed. In March 1995,
271 physicians took the exam with 86 percent passing. Special
QME examinations for acupuncturists were also given in October
and November 1994 and April 1995. IMC reports that the general
QME exams will be given twice each year.
Division of Occupational Safety and Health
High-Hazard Employer Program
The reform legislation directed the Division of Occupational Safety
and Health to begin a program targeting especially hazardous employers
for consultations and inspections, to be funded by assessments
upon employers with higher than average workers' compensation
Assessment for High-Hazard Program
The reform legislation specifies that the targeted inspection
assessment is to be levied on insured employers with experience
modifications of 1.25 or more and private self-insured employers
with an equivalent experience rating of 1.25 or more.
In August 1994, DIR required insurers to advance assessment funds
to the department on behalf of affected policyholders and then
to collect this assessment at the time of policy renewal. The
Association of California Insurance Companies and eight insurers
subsequently sued the state to block DIR from requiring them to
collect the assessment. A Sacramento Superior Court judge initially
granted a fifteen-day temporary injunction preventing DIR from
collecting the funds from these insurers, but upon expiration
refused to extend the order into a preliminary injunction. The
department and the workers' compensation community then began
negotiating a new approach to collecting the assessment.
Problems were also identified by the self-insured employers. Because
of the proposed assessment methodology, individual employers felt
that they would receive both excessive and disproportionate individual
Senate Bill 996 was passed to resolve the problem until a better
methodology can be developed. Among other provisions, SB 996 requires
that the department submit a report to the legislature by January
1, 1998, addressing one or more alternative methods of funding
the Cal-OSHA targeted inspection and consultation programs. The
report shall also propose and evaluate one or more alternatives
to the use of workers' compensation insurance experience modification
ratings for the identification of employers subject assessment,
and alternative methods for determining assessment amounts and
collecting the assessments.
In 1996, due to difficulties initially encountered when insurers
billed employers, DIR revised its method and sent invoices for
the High Hazard program assessment directly to the insured employers
and notified the insurers which of their insured employers were
Loss Control Certification Unit
The Loss Control Certification Unit (LCCU) in the Division of
Occupational Safety and Health (DOSH) certifies the loss control
capabilities of insurers.
The loss control certification program is new in California and
exists no where else in the United States. The Loss Control Certification
Unit staff have worked with the insurance carriers to optimize
LCCU reports that the great majority of the industry has cooperated.
The Loss Control Advisory Group has worked with LCCU to develop
the certification process and there has been a lot of dialog between
the LCCU staff and insurers.
The few insurers who are not cooperating are ones that are deficient
or are reluctant to do the paperwork. For example, some east coast
insurers say that their computer systems do not generate the information
required by the LCCU.
Loss Control Certification
The Loss Control Certification Unit is currently certifying the
Loss Control Consultation Service Plans for 106 insurer groups
writing workers' compensation insurance in California.
LCCU reports that more and more insurers are offering "unbundled"
workers' compensation policies. "Unbundling" is a marketing
device whereupon the insurer, insured employer, and broker/agent/producer
have agreed to sell the policy at reduced price and without some
of the services traditionally associated with a workers' compensation
policy. These "unbundled" services then become the responsibility
of the employer who may elect to have them provided by the broker/agent,
or by a private consultant, or the employer may elect to provide
them himself. The "unbundled" services may be any one
or more of several services, but usually are confined to loss
control and/or claims handling. Thus the insurer is providing
insurance coverage only -- leaving the insured to do what
they wish with these critical services. LCCU has determined that
there is no general agreement among the insurers as to the exact
definition or meaning of the concept of "unbundling".
The specific problem LCCU faces is that current legislation does
not speak to "unbundling" in any way. Therefore LCCU
is still required to certify the insurers to provide loss control
services as a condition to writing workers' compensation insurance
in the state, in spite of the fact that a growing number are issuing
more and more 'unbundled' policies . Since the practice of 'unbundling'
is not regulated in any way, LCCU has not been able to make an
accurate determination as to the size or volume of 'unbundled'
business, but most insiders agree that it is a growing element
and just one of many innovations the insurers are using to cope
with the continuing open rating price wars. In their ongoing evaluations,
LCCU will attempt to draw some conclusions as to the magnitude
of the problem which may ultimately have to be addressed by the
LCCU Evaluations (Audits)
The Loss Control Certification Unit has begun the process of auditing
insurers to determine how effectively they are providing loss
control services to high hazard employers. LCCU reported that
the evaluation process is evolving from a review of documents
in the office to obtaining information from the site. LCCU began
with test audits, implementing some changes and getting good feedback
that it is on the right track.
The evaluation is both quantitative and qualitative. Currently
there is no standard format in which to report the loss control
budget but LCCU reports that there are plans to include that in
the regulations. The LCCU is aware of several carriers who have
laid off the great majority of their internal loss control staff
as a cost-cutting measure, opting to provide service through contractors
and/or consultants. While this is permissible under current regulations,
LCCU expresses serious concerns as to the ability of the contractor/consultant
industry to handle this workload shift without a serious loss
in the quality of service. The ability of these consultants to
operate in this environment without conflicts of interest is another
concern. These concerns will be a major influence in LCCU's posture
regarding the Evaluations, as LCCU must hold the insurers accountable,
not the contractors/consultants.
Since the LCCU has only three Evaluator (auditor) positions, audits
will normally be performed on insurers whose performance indicate
an audit need, e.g., complaints from insureds or how they responded
during the certification process. Out-of-state insurers will be
difficult to audit since there is no law which requires insurers
to maintain offices or keep records in California. When auditing
an out-of-state insurer, the LCCU reports that it will have to
request that files be sent to California, or send auditors out-of-state.
At the March 1996 Commission meeting, the LCCU manager reported
that the Unit has received offers from several insurers to allow
the LCCU to perform "test" audits of their program for
LCCU training purposes.
Several "test" evaluations were completed in April and May
1996 and the first two "for record" evaluations were
completed in June 1996. A minimum of two evaluations per month
are scheduled for fiscal year 1996-97 and three will be scheduled
in selected months if training of the incoming staff allows.
The Loss Control Certification Unit reports that it has made considerable
progress in the past year. Current staffing is as follows:
|1||Sr. Industrial Hygienist||Plan Reviewer|
|1||Sr. Safety Engineer||Plan Reviewer|
|1||Associate Govt. Prgm. Analyst|
|2||Asso. Industrial Hygienists||Temp assignment as "plan evaluator"|
|1||Asso. Safety Engineer||Temp assignment as "plan evaluator"|
|1||Office Assistant||Vacant (hire anticipated shortly)|
Approval is expected from the State Personnel Board for the announcement
of an open spot examination to fill the three authorized Plan
Evaluator positions. In the interim, the unit will continue to
utilize the three safety professionals on temporary assignment
from DOSH. These three people have undergone extensive training
in workers' compensation to enable them to perform evaluations
(audits) of insurer operations in the field.
The Loss Control Certification Unit further reports:
When asked by the Commission in March 1996 if there were legislative
modifications or changes needed in order to increase the efficiency
of its program, DOSH replied that it believes that Legislative
changes are not needed at this time.
DOSH is asking the Loss Control Advisory Committee to consider the following regulatory changes:
At the Commission's March 1996 meeting, Willie Washington of the
California Manufacturers Association expressed concerns about
DOSH's Loss Control and High Hazard programs. Mr. Washington
believes that there are loss control models and that it should
be a goal for DOSH to come up with a model program. He pointed
out that it is the insurers that receive a Loss Control certification,
but there is a need to make sure that outsourced loss control
providers are doing a good job. Mr. Washington encouraged DOSH
to continue to hold insurers responsible. He noted that when insurers
are not providing the information that LCCU needs for certification,
LCCU has the "ultimate hammer" -- the certification itself.
Mr. Washington stated that he does not believe that the High Hazard
Program is going well. In the handout provided by DOSH, Mr. Washington
said some sources were not relevant since they were over three
years old. He also expressed the opinion that the ExMOD is useful
on an interim basis until a better measurement is devised.
Commission on Health and Safety and Workers' Compensation
The following is a description of the steps that the Commission
on Health and Safety and Workers' Compensation has taken to fulfill
The workers' compensation reform legislation established the Commission
on Health and Safety and Workers' Compensation. Pursuant to California
Labor Code Sections 75 through 78, the Commission is authorized
to perform the following duties:
The first annual report was issued in July 1995.
The second annual report (this document) was issued in September
The Commission awarded grants to nine applicants in 1994. A description
of the Commission's grant program is contained in Section I -
The Commission. In subsequent years, the Commission has elected
to contract with independent research organizations for studies
in particular areas of interest and concern.
The Commission has not yet received such a proposal from the DWC
administrative director. A discussion of this project is contained
in "Agency Operations - Division of Workers' Compensation".
The Commission has also held a public fact-finding hearing and
subsequently contracted with RAND for a comprehensive study of
workers' compensation permanent disability. A description of this
activity is contained in Section III - Workers' Compensation Issues.
As reported in the Commission's first Annual Report, the DWC Administrative
Director has announced that he will not go forward with such regulations
without clarification of the legislative intent.
The Commission is fulfilling this mandate in several ways. Its
ongoing studies of various issues include the determination and
analysis of comparable programs in other states. The Commission's
educational program "Challenges in California's Workers'
Compensation: A Symposium" brought together the workers'
compensation community in California with program managers and
public officials from other states which had specific programs
designed to address concerns that California shares.
The Commission on Health and Safety and Workers' Compensation
derives its funding by appropriations from a special fund entitled
the "Workplace Health and Safety Revolving Fund".
Monies are deposited into the Workplace Health and Safety Revolving
Fund from collections made by the Division of Workers' Compensation
from administrative and civil penalties assessed by the Audit
Unit pursuant to Labor Code Section 129.5 and from civil penalties
assessed against physicians pursuant to Labor Code Section 4628.
The amounts collected vary from year to year.
The Commission has experienced some uncertainties relating to
this source of funding. The Commission is in a position of evaluating
the actions of the Division of Workers' Compensation, whose penalty
collections are its only funding source. The Commission is totally
dependent on the activities of the DWC -- if the Division does
not collect penalty monies, the Commission is in jeopardy.
Since the penalty collections are unpredictable, so are the amount
of monies deposited into the Workplace Health and Safety Revolving
Fund, the source of the Commission's funding. The Department of
Finance has informed the Commission that it has been reluctant
to establish additional permanent staffing primarily because the
CommissionÃs funding source has been so unpredictable.
GO TO SECTION SIX