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.
Timeliness of Actions
It has been difficult to determine the time required for a case
to be resolved in the Division of Workers' Compensation.
Statistics in DWC's July 1, 1996 report to the Legislature, Governor
and the Commission indicate that as of March 31, 1996, the average
time from request to conference is 88 days, while the average
time from request to trial is 208 days.
For the period October through December 1996, DWC reports that
the average time from request to conference is 94 days, while
the average time from request to trial is 214 days.
The following chart shows the numbers and percentages of conferences
held within and beyond 30 days and of trials held within and beyond
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 DWC district offices. CHSWC reported on this lien
situation in its 1995-96 Annual Report and the recent visits to
the Los Angeles, Santa Ana and Van Nuys offices have confirmed
that the problem continues.
Commission staff found that in many instances, liens for payments
made over 10 years ago were being filed on workers' compensation
cases. In other instances, liens on the same case are not being
heard at the same time, leading to costly notification and scheduling,
churning of cases and delays in resolution.
It is reported that in newer cases, many of the lien claimants
are not receiving proper notice of upcoming hearings, primarily
due to the delegation by DWC of the responsibility for issuing
the hearing notice to the parties.
In addition, the Employment Development Department (EDD) files
approximately 60,000 liens with the DWC each year. It has been
reported, but not confirmed, that there are approximately $300
million in unrecovered liens filed by EDD against workers'
CHSWC staff visited the Los Angeles office and determined there
was a backlog of over 6,000 Declarations of Readiness on WCAB
lien cases which had yet to be scheduled for hearing. We understand
that a special DWC task force was formed to deal with that backlog.
When CHSWC members and staff participated in a walk-through of
the Los Angeles office on June 18, 1997, we noted that the lien
backlog had been cleaned up. The WCAB lien cases with Declarations
of Readiness had been set on calendar in Los Angeles and other
DWC district offices. In the meantime, DWC staff said that other
liens had been filed, resulting in a new backlog of about 3,000
new WCAB lien cases.
CHSWC Lien Resolution Roundtable
CHSWC has established a "Lien Resolution Roundtable"
comprised of interested members from the workers' compensation
community. The Roundtable is discussing staff a proposal developed
by CHSWC staff with legislative and administrative recommendations
to address lien issues.
The reform legislation directs the Division of Workers' Compensation
to develop a workers' compensation information system (WCIS) 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.
To develop and implement the part of WCIS involving data collection
from claims administrators, medical bills, and non-EDI surveys,
DWC estimates its annual start-up and ongoing annual costs of
approximately $1 million, exclusive of EDI transmission charges
which will be borne by data providers. The WCIS budget includes
a startup staffing level of 15.5 positions for EDI and non-EDI
surveys, and 17.5 positions thereafter; equipment; travel; facilities;
supplies; communication; consulting, and other operating expenses
to carry out the program. A separate cost estimate is currently
being developed (in conjunction with KPMG/Peat Marwick) for the
integration of internal DWC data systems which will address agency
In August 1997, the DWC administrative director reported a "WCIS
funding setback" and stated that it now appears that this
project will not go forward until a least July 1998, assuming
that the funding is approved.
The Permanent Disability Rating Schedule
California employs a permanent disability rating schedule (PDRS)
which prescribes the monetary amount an injured worker is to be
compensated for specified percentages of permanent impairment
incurred due to industrial injury or occupational disease.
The 1993 reform legislation directs the administrative director
of the DWC to revise the PDRS and provides that CHSWC must approve
changes to the standard disability ratings before they are adopted.
This requirement was not met. The DWC administrative director
did not submit a final proposal for a revised permanent disability
rating schedule to the Commission.
In December 1996, the DWC administrative director adopted a revision
to the Permanent Disability Rating Schedule (PDRS) effective April
1, 1997. The DWC administrative director contends that the revision
did not require the review and approval of the Commission under
the provisions of Labor Code Section 4660(d).
However, several members of the workers' compensation community
had other interpretations of Labor Code Section 4660(d) such that
the December 1996 PDRS revision was subject to CHSWC review and
The Commission has entered into negotiations with the Department
of Industrial Relations and the Division of Workers' Compensation
for a Memorandum of Understanding (MOU) specifying the process
by which future revisions to the PDRS will be proposed, reviewed,
California Labor Code Section 4660(d)
California Labor Code Section 4660(d) specifies:
"On or before January 1, 1995, the administrative director
shall review and revise the schedule for the determination of
the percentage of permanent disabilities. The revision shall
include, but not be limited to, an updating of the standard disability
ratings and occupations to reflect the current labor market.
However, no change in standard disability ratings shall be adopted
without the approval of the Commission of Health and Safety and
Workers' Compensation. A proposed revision shall be submitted
to the commission on or before July 1, 1994."
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.
A significant aspect of the regulations is the creation of an
ethics advisory committee appointed by the DWC administrative
director. The committee includes three members of the public,
one of whom represents organized labor, one of whom represents
insurers, and one of whom represents self-insured employers; two
attorneys who formerly practiced before the Workers' Compensation
Appeals Board, one of whom usually represented insurers or employers
and one of whom usually represented applicants (injured workers);
a presiding referee and a referee or retired referee; and two
members of the public outside the workers' compensation community.
The committee, which meets approximately four times a year to
review complaints, is currently chaired by a Superior Court judge.
A total of 26 complaints about the ethical conduct of workers'
compensation referees were received by the Workers' Compensation
Ethics Advisory Committee (EAC) during 1996. Of the 23 complaints
reviewed during 1996, the committee determined that there was
an insufficient showing of misconduct to warrant further investigation
in 17. It recommended investigation by the DWC administrative
director in the other six cases, three of which remain under active
investigation as of the 1996 report publication.
The DWC administrative director received over 100 requests for
written approval to receive teaching fees, meals, honoraria, and
other gifts, as well as to participate in various educational
events. Advance written approval to receive any such item that
exceeds five dollars in value is required under new DWC ethics
The Division of Workers' Compensation's Audit Unit issued 9,030
penalty assessments totaling $1,164,120 to workers' compensation
claims administrators during 1996, according to DWC's 1996 Annual
Report to the Legislature on its audit activities.
Unpaid compensation due to injured workers that was found in the
55 audits conducted during the year added up to $473,961. The
largest amount, $261,733, was for unpaid permanent disability
Unpaid compensation due was found in one out of eight of the indemnity
and complaint files audited, averaging $819 per case. Statistics
in the report also show that over one fifth of all temporary disability
cases and over 30 percent of permanent disability cases had late
Comparing 1995 and 1996 statistics for late-paid and unpaid indemnity
in undisputed cases, DWC noted that the number of indemnity and
complaint files audited dropped somewhat, from 6,045 in 1995 to
4,577 in 1996. However the number of penalties assessed for late
and unpaid indemnity remained substantially the same, 2,732 in
1995 and 2,739 in 1996, and the amount of penalties rose to $365,645
in 1996 compared to $312,470 in 1995.
Failure to notify injured workers regarding payment or delay of
payment of indemnity benefits was found in one out of five files
where such a notice was required. The notice was sent late in
another 22 percent of the cases.
Other statistics in the report show that, in over 45 percent of
vocational rehabilitation cases involving post-1994 injuries,
there was either a failure to issue a notice of vocational rehabilitation
rights after 90 days of total temporary disability, or the notice
was sent late. In nearly one half of all vocational rehabilitation
cases, the injured worker was not provided a timely notice of
potential eligibility for vocational rehabilitation after medical
eligibility was established.
DWC Task Forces on Simplification: Audit
DWC reports that the Audit Simplification subcommittee sought
to develop means of better focusing limited staff resources on
poorly performing claims administrators. The committee discussed
various recommendations for reducing the initial sample size for
an audit, and the standards by which expanded audits would follow
unsatisfactory audit results.
The committee also discussed recommendations to reduce the frequency
of audit, or the mitigation of penalties among subjects with good
results. The subcommittee currently expects to propose regulations
to implement their recommendations later in 1997, to be effective
in January 1998.
Rehabilitation Unit Workload
Rehabilitation plan approvals are showing a sharp decline after
peaking in 1993. This is likely the result of the decline in
all reported injuries after 1991.
Also, vocational rehabilitation plans on claims that have dates
of injury after January 1, 1994 and are represented by an attorney
do not require approval by the DWC Rehabilitation Unit.
Rehabilitation plan disapprovals have shown a sharp decline since 1991. The San Francisco region seems to be running counter to this trend.
Plan disapprovals are likely to represent greater workloads than
approvals. Approvals can be the result of no action taken by
the DWC Rehabilitation Unit within 30 days. Disapprovals require
active review of the plan documents and notification of the parties.
Decisions and Orders
Decisions and Orders (D&O) following conferences are an important indicator of workloads in the Rehabilitation Unit. Since these represent a conference held and a decision issued, a D&O will represent two work intensive activities undertaken by the consultants.
The sharp rise in D&Os could indicate that, despite the decline
in nearly all other measures of workload (e.g., openings, closures,
approvals and disapprovals), the Rehabilitation Unit may not be
experiencing an overall decline in manpower requirements.
The percent of workers successfully returning to work at rehabilitation plan completion has been declining since 1991 from over 57% to 46%. The portion of plans terminated prior to completion has declined. Unfortunately, the percentage of workers not working at plan completion has increased from 28% of those receiving services in 1991 to 46% of those receiving services in 1996.
Rehabilitation Unit Guidelines
The Division of Workers' Compensation reports that it has adopted
a revised set of administrative guidelines for the DWC Rehabilitation
Unit. The guidelines, covering 48 subjects, provide policy and
procedure direction for the day-to-day activities of the division's
rehabilitation consultants. The new policy document is intended
to ensure that state vocational rehabilitation laws and regulations
are interpreted and implemented consistently across the state.
These revisions come in reaction to major changes to State Labor
Code and Title 8 California Code of Regulations sections that
pertain to the provision of vocational rehabilitation services
in workers' compensation cases in recent years, particularly as
a result of the 1993 reforms.
Included in the revised guidelines are eight new subjects, including
return to modified/alternate work, waiver of qualified rehabilitation
representative, uninsured employer fund cases, vocational rehabilitation
maintenance allowance, interpreters' fees, dispute resolution,
fee disputes, and considerations for audit referral.
Another seven subjects were significantly changed, including those
dealing with the independent vocational evaluator, vocational
rehabilitation maintenance allowance vocational rehabilitation
and/or temporary disability during on-the-job training, maintenance
benefits due to public safety employees, self-employment/capital
investment, maintenance and transfer of case files, proceedings
before the WCAB, and public access to Rehabilitation Unit records.
DWC District Office Operations
Concern has been expressed regarding the operations of the DWC
district offices throughout the state.
The community has cited the closing of some DWC offices, sometimes
without sufficient notice to DWC staff, the workers' compensation
community, or to the public.
Complaints have also been received regarding the level of service
provided to injured workers, employers, their representatives,
and the public at certain DWC district offices. Specifically
mentioned were the following:
CHSWC Profile of DWC District Office Operations
The Commission decided to implement a project entitled "CHSWC
Profile of DWC District Office Operations. " As part of
the Commission's responsibility to oversee state operations
which administer the workers' compensation program, this
project is designed to provide insights and knowledge in areas
which have been identified as problematic.
Commission staff requested that DWC suggest the offices that should
be observed. Commission staff selected the San Francisco, Oakland,
Van Nuys, Los Angeles, Santa Ana and Anaheim offices for walk-throughs.
When possible, CHSWC staff were given an overview by the DWC Regional
Manager, and were guided through district office operations by
the Presiding WC Judge and other staff in specific areas such
as mail handling, filing, and calendaring.
CHSWC requested that its members have the opportunity for a "walk-through"
of the Los Angeles DWC district office to view its clerical and
calendaring operations. DWC staff graciously conducted the walkthrough
for CHSWC members and staff on June 18, 1997. CHSWC staff appreciate
the spirit of cooperation and willingness to share information
demonstrated by the DWC staff.
The Commission will continue to monitor the operations of the
DWC district offices.
In June 1997, the Commission forwarded findings and recommendations
to the DWC administrative director and requested his comments
and a description of actions that he has taken or plans to take
to address these issues. Included were the following preliminary
recommendations based on CHSWC observations of selected DWC district
office operations and discussions with some DWC staff associated
with those offices.
Industrial Medical Council
The Industrial Medical Council is the medical unit within the
Department of Industrial Relations. It acts in coordination with
other state agencies and the Administrative Director of the Division
of Workers' Compensation to set medical policy and establish
guidelines on treatment and evaluation for injured workers in
California. The Council also regulates standards for physicians,
such as the Qualified Medical Evaluation program, and advises
the Administrative Director with the respect to issues impacting
the Workers' Compensation systems. The IMC's goal
is quality care for the injured worker at reasonable cost.
Medical Treatment and Evaluation Guidelines
Discussions of the medical treatment guidelines and evaluation
guidelines developed by the Industrial Medical Council are under
the "Medical Issues" subsection of the "Workers'
Compensation Issues" section of this report.
The IMC is required by the Labor Code to recommend to the Administrative
Director reasonable levels of fees for physicians who treat and
evaluate industrial injury in the California workers compensation
system. A discussion of those efforts is contained under the
"Medical Issues" subsection of the "Workers'
Compensation Issues" section of this report.
The IMC reports that one of its subcommittees, the Fee Schedule
and Utilization committee, met to review the data generated by
a treatment reimbursement benchmarking study initiated by the
IMC in early 1996. Conversion factors in the California OMFS
have not changed since 1985 for all categories, except Medicine
which was last increased in 1987. The data showed in general
that for the top 100 cost drivers identified by the contractor
(Medicode) in workers' compensation, reimbursement under
the California OMFS is approximately 34% higher, overall, than
average Medicare allowable reimbursement (population-weighted)
in California but is lower than the 25th percentile of Medicode's
California group health reimbursement for all types of service
except Physical Medicine and Lab/pathology.
The IMC committee also explored proposals on converting the California
Official Medical Fee Schedule to an RBRVS-based schedule. Ultimately,
the committee determined that more time was needed to study the
impact of such a conversion in the California fee schedule.
QME Report Quality Project
The IMC is charged with continuously reviewing the quality and
timeliness of QME (Qualified Medical Evaluator) and AME (Agreed
Medical Evaluator) forensic reports. In early 1996, after consultation
with the Disability Evaluation Unit (DEU) of the Division of Workers
Compensation (DWC), the Workers Compensation Appeals Board, and
Information and Assistance Unit of DWC, the IMC devised a three
tier system for analyzing the quality of medical/legal reports.
A study by the IMC found about 10% of reports contain no errors.
In approximately 52% of the reports, the evaluator failed to
state the time spent face-to-face with the injured worker. In
17% of the reports, the evaluator omitted one or more of the required
declarations at the end of the report. At the Tier II level of
review, in approximately 20% of the cases, the discussion of work
restrictions was inadequate. Copies of the results of the full
study are available upon request from the IMC.
Investigations and QME Discipline
The Investigations Unit of the IMC investigates complaints about
physicians in the workers' compensation system. Investigations
which reveal misconduct by QMEs are referred to the IMC Discipline
Committee. Investigations which find misconduct by non-QME physicians
are referred to a licensing agency, the Department of Insurance,
a prosecutor or other state or federal agency, as appropriate.
A qualitative transition was made by the IMC Investigations Unit
during 1996 - 1997. With the skill and experience of a Senior
Special Investigator, the Investigations Unit began in-field investigations,
which led to more case referrals to prosecutors as well as closer
working relationships with a variety of anti-fraud investigative
The Investigations Unit staff also currently includes a supervising
attorney, an Associate Medical Director, who assists with field
investigations and with medical issues, and a Workers'
Compensation Assistant who manages the complaint tracking system.
During this time, the Investigations Unit enhanced and refined the complaint tracking system by expanding to 39 complaint type codes. Between July 1996 and June 1997:
By recommendation of the IMC Discipline Committee and vote of the full IMC, the following disciplinary actions were taken during the 1996-97 fiscal year:
A complaint hotline with an '800' number was established
(1-800-999-1041). Tips from the hotline have led to investigation
of more complex cases involving alleged unlawful referral and
kickback schemes, double billing and other fraudulent activity.
The Investigations Unit staff met with the executive directors
and chiefs of enforcement of various medical licensing boards,
including the Medical Board, the Osteopathic Medical Board, the
Board of Chiropractic Examiners and the Psychology Board, to coordinate
better interagency communication and investigative assistance.
In June 1997, the IMC Investigations Unit presented a half day
training session for the statewide complaint intake personnel
of the Medical Board.
One impediment in the IMC's investigation work has been
the lack of "peace officer" status for the IMC investigator.
The IMC is the only medical licensing board whose investigators
are not "peace officers" under Penal Code § 830.3.
The IMC is hopeful that the legislative change needed to make
the IMC investigator a peace officer will be made during 1997
The IMC reports that it firmly believes that physician education
will help improve the quality of care for injured workers in California.
During the past year, the IMC reviewed and revised the Physician's
Guide to Medical Practice in the California Workers' Compensation
System. The revised version will be distributed by the Fall of
In addition to approving course providers of continuing medical
education courses for QMEs, the IMC began auditing courses. The
audit program will be expanded during late 1997.
The IMC also began planning a one day educational seminar directed
primarily to treating physicians in the California workers'
compensation system. The seminar will be given in November 1997,
in conjunction with release of the CHSWC study on the permanent
disability system in California.
QME Appointments, Reappointments and Panels
The 1996/1997 fiscal year marked the 'second generation'
era for the majority of Qualified Medical Examiners (QMEs).
In this period, the IMC approved 3,321 QMEs for re-appointment.
A total of 465 QME applicants sat for the QME competency exams,
with 343 passing.
A total of 321 new QMEs were appointed.
The IMC also issues 'panel' letters to unrepresented
injured workers. From 1996 - 1997, the IMC processed approximately
39,500 panel requests.
Division of Occupational Safety and Health
High-Hazard Employer Program
The 1993 reform legislation directed the Division of Occupational
Safety and Health (DOSH) to create a program targeting especially
hazardous employers for consultation and inspections. The program
- High Hazard Employer Program (HHEP) - was designed
to reduce preventable occupational injuries and illnesses and
workers' compensation losses.
The statute requires HHEP to:
Assessment for High-Hazard Program
The HHEP program is paid for by employers who experience higher
than average workers' compensation losses. The statute
permits the Director of the Department of Industrial Relations
to levy an assessment on all employers with an experience modification
(ex-mod) or its equivalent for a self-insured employer of 125
percent or more.
The program is of limited duration as the statutory provision
for the Targeted Inspection and Consultation Fund "sunsets"
on January 1, 1999, unless a later enacted statute deletes or
extends the date.
DOSH reports that in their January 1, 1997 report to the legislature
less than 10 percent of the employers identified by the ex-mod
as "high hazard" are in an industry that has higher
than average rates of workplace injuries and illnesses. DOSH
also states that many of the employers identified in the program
- employers that have been assessed due to their ex-mod
- have few Title 8 correctable hazards after an on-site
DOSH reports in its January 1, 1997 report to the legislature
that it is applying "on-site" selection of High Hazard
Employers in the High Hazard Industries. First, high hazard industries
are identified after review of injury and illness data. Then
employer members of the high hazard industry are determined using
SIC codes, or other sources. Employers or "establishments"
are then selected as "high hazard" but only after
an on-site review of the injury, illness and loss data and other
required programs. The on-site selection of high hazard employers
is a method used to focus resources on the employers who need
it the most.
The HHEP is applying an "on-site" methodology to
a subset of 34,000 employers with 520,000 employees in the following
high hazard industries based on data from Division of Labor Statistics
|421||Trucking & Courier Services except air|
|2086||Bottled & canned soft drinks|
|373||Ship & boat building|
|176||Roofing, siding & sheet metal work|
|2421||Sawmills & planing mills, general|
|449||Water transportation services|
|2033||Canned fruits & vegetables|
|243||Millwork, plywood & structural members|
|805||Nursing & personal care services|
|2015||Poultry slaughtering & processing|
|371||Motor Vehicles & Equipment|
|2034||Dehydrated Fruit & Vegetables|
|2984||Wines, brandy & brandy spirits|
DOSH reports that in 1994, 1995 and 1996 calendar years, it completed
1,449 on-site consultation inspections.
Report to Legislature
No later than January 1, 1998, DOSH is to prepare its final report
to the legislature describing its Targeted Inspection and Consultation
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
was created in January, 1994, and began its fourth Annual Plan
review year in April 1997.
LCCU reports that the great majority of the industry has cooperated.
The few insurers who have not cooperated are ones that are deficient
or are reluctant to do the paperwork. For example, some east
coast insurers reported that their computer systems do not generate
the types of information required by the LCCU.
The LCCU recently reported that the impact from the elimination
of the minimum rate law on the workers' compensation industry
continues to have a dramatic effect on the Loss Control departments
of most insurers. LCCU reports that while most insurers'
loss control departments seem to be trying to meet their legal
obligations, severe economic pressures are being brought to bear
on insurers to reduce operating costs and loss control departments
are being eliminated (at some companies) or scaled back (at other
companies) or are having their travel and training budgets restricted.
Although understanding of these marketing pressures, the LCCU
reports that it has taken the position of holding a carrier 100%
responsible with an expectation of 100% control over services
provided to policyholders.
LCCU Working Group
Since inception the Loss Control Certification Unit staff have
worked closely with workers' compensation insurance carriers
in order to optimize the effectiveness and success of the program.
The Loss Control Work Group has worked with the unit staff to
help develop the Certification and Evaluation processes. Created
in 1994, the Work Group was formed to serve in an advisory capacity
to the Unit, and consists of representatives from workers'
compensation carriers, employer and employee advocates, and a
variety of other legislative interests.
Loss Control Certification
The Loss Control Certification Unit is currently certifying the
Loss Control Consultation Service Plans for 101 insurer groups
consisting of 273 carriers writing workers' compensation insurance
LCCU Evaluations (Audits)
In fiscal year 1996-97 the unit completed twenty three (23) evaluations
of carriers to determine their compliance with their own certified
service plans and compliance with the regulations. The unit concentrated
on evaluating only the annual plan years of 1994 and 1995 so that
complete plan years could be evaluated. From these evaluations
the division issued seventy-five (75) mandatory corrective actions.
These are required actions the carrier must take to bring service
into compliance with the regulations. In addition, the division
made forty-four (44) non-binding recommendations to assist the
carriers in improving the quality of loss control service or to
improve their next annual plan submissions.
LCCU reports that most carriers showed improvement in meeting
their plans and the regulations during the 1995 plan year. Carriers
are becoming more knowledgeable of the regulations and are adjusting
their service capabilities to meet their requirements. Since
only twenty-five per cent (25%) of the carrier groups have been
evaluated thus far, it is too early to draw too many conclusions
from these early evaluations. The carriers who have been evaluated
have been very responsive both to the process and to the corrective
actions and recommendations made. Evaluations have been made
of carriers of all market sizes from small niche carriers to large
multi-line national companies.
Additional LCCU Information
The Loss Control Certification Unit further reports:
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 was issued in September 1996
The third annual report (this document) was issued in September 1997
2. Review and approve applications for grants to assist in establishing
effective occupational injury and illness prevention programs.
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.
3. Review for approval a proposal by the Administrative Director
of the Division of Workers' Compensation as required by California
Labor Code Section 4660 to change the standard disability ratings.
The Commission did not 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.
4. Consult with the Administrative Director of the Division of
Workers' Compensation, as required by Section 139.2(o) of the
California Labor Code, on the adoption of regulations prohibiting
a Qualified Medical Evaluator (QME) from requesting or accepting
any compensation or other thing of value from any source that
does or could create a conflict with the QME's duties as a medical
As reported in the Commission's first Annual Report, published
in July 1995, the DWC Administrative Director announced that he
will not go forward with such regulations without clarification
of the legislative intent.
5. Conduct continuing examinations of the California Workers'
Compensation System and of California's activities to prevent
industrial injuries and occupational diseases and examine these
programs in other states.
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 programs and forums, including the upcoming Permanent Disability Summit, brings together the workers' compensation community in California with program managers and public officials from other states 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 Department of Finance has informed the Commission that it
has been reluctant to establish additional permanent staffing.
A Budget Change Proposal was submitted for fiscal year 1997-98
that would provide the Commission with one additional clerical
position, one additional analyst position, and a permanent annual
appropriation of an additional $200,000 for contracted studies.
The Governor's Budget for 1997-98 included the monies
for contracts, but deleted the request for additional positions.
The Commission's budget for fiscal year 1997-98 is $921,000.
Executive Summary: Findings and Recommendations
Section I The Commission on Health and Safety and Workers' Compensation
Section II Reform Legislation Impact on the Workers' Compensation
Section III Workers' Compensation Issues
Section IV Health and Safety Issues
Section V Program and Agency Operations
Section VI Commission's Future Activities