California Commission on Health and Safety and Workers' Compensation

Information Bulletin

FOR IMMEDIATE RELEASE					CONTACT:
July 19, 1996						Christine Baker
			         			(415) 557-1304
Internet:  Http://www.dir.ca.gov

Commission Releases First Report on Workers' Compensation Medical-Legal Process

SAN FRANCISCO -- The California Commission on Health and Safety and Workers' Compensation has released the first report from its 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 study, based upon data provided by the Workers' Compensation Insurance Rating Bureau, found that recent reforms to the medical-legal process in the California workers' compensation system have had a dramatic impact on the costs and frequency of medical-legal examinations.

The cost of medical-legal exams on PPD claims has shown a steep decline since its peak during the 1991 accident year. For the insured community, the costs of medical-legal exams performed on PPD claims (measured at 40 months after the beginning of the accident year) has declined over 80 percent from a high of $394.5 million for the 1991 accident year to an estimated $64.5 million for the 1994 accident year.

The average cost per exam has declined nearly 40 percent from $987 for 1991 accident year claims to an estimated $606 for 1994 accident year claims.

The 1989 and 1993 reforms attempted to reduce the number of medical-legal reports by forensic doctors. The survey data indicate that these efforts to deal with the "dueling docs" syndrome have been successful. The average number of exams per claim has declined by half from 2.2 for the 1991 accident year to an estimated 1.1 for the 1994 accident year. This decline is being driven by the improvement in the represented claims -- the frequency of exams on unrepresented claims has been consistently lower than represented claims and has changed little.

The study also found significant reductions in the number and cost of psychiatric medical-legal examinations. The costs of psychiatric related medical-legal exams dropped from $93.8 million in the 1991 accident year to an estimated $5.9 million in the 1993 accident year.

The study also looked at the effect of the introduction of arbitration and mandatory settlement conferences intended to reduce the need for hearings and decisions and to speed the resolution of cases. Data from the WCIRB survey suggest that the new resolution mechanisms have not accomplished these goals.

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 www.dir.ca.gov.

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.

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