California Commission on
Health and Safety
and Workers’ Compensation

State of California Seal

 

CHSWC Strategic Plan

Commission Members
Tom Rankin, Chair
Allen L. Davenport
Jill A. Dulich
Leonard C. McLeod
Kristen Schwenkmeyer
Robert B. Steinberg
Darrel "Shorty" Thacker
John C. Wilson


Executive Officer
Christine Baker

November 2002


TABLE OF CONTENTS

2002 STRATEGIC PLAN
    Strategic Planning Process
    CHSWC Mission
    Goals and Objectives
    Priority Areas

APPENDIX A    BACKGROUND ISSUES DOCUMENT
    Introduction
    Summary

APPENDIX B   CONSTITUTION OF THE STATE OF CALIFORNIA
    Article 14 – Labor Relations

APPENDIX C   CHSWC PLAN FOR CONTINUOUS IMPROVEMENT IN SYSTEM PERFORMANCE
    Monitoring
        A.  Current Monitoring
        B.  Major New Initiative
            1.  Administrative Efficiency - Organizing Audit Unit data for ongoing monitoring
            2.  Return-to-Work
            3.  Prevention - Monitoring California's performance on prevention of occupational injury and illness
            4.  Dispute reduction and judicial performance
            5.  Health workers
            6.  Monitoring the Targeting of Benefits

APPENDIX D   DESCRIPTION AND TIMETABLE FOR CHSWC STUDIES PER AB 749
    Evaluation of AB 749
    New CHSWC Studies per AB 749


2002 Strategic Plan

Strategic Planning Process

A "Background Issues" document was distributed to the CHSWC members as a starting point to outline the areas that tie to the Commission’s mandates in the California Constitution and the Labor Code. See Appendix A for the background issues document.

The workers’ compensation community -- labor organizations, employer organizations, insurers, and attorneys as well as medical and rehabilitation providers, administrators, educators, government agencies and members of the public -- provided input to the CHSWC staff and, based on these meetings, the background paper was developed.

A 2-day CHSWC meeting in July 2002 was devoted to prioritizing identified areas and developing a preliminary research agenda.

CHSWC staff presented accomplishments to date, which included research that led to policy change in California. Active projects in process were also presented. At the conclusion of the meeting, CHSWC members requested that staff develop a draft strategic plan, action items, and a communications plan based on priorities discussed at this meeting.

CHSWC Mission

CHSWC’s mission is specified in Section 77(a) of the California Labor Code:

77. (a) The commission shall conduct a continuing examination of the workers' compensation system, as defined in Section 4 of Article XIV of the California Constitution, and of the state's activities to prevent industrial injuries and occupational diseases. The commission may conduct or contract for studies it deems necessary to carry out its responsibilities. In carrying out its duties, the commission shall examine other states' workers' compensation programs and activities to prevent industrial injuries and occupational diseases. All state departments and agencies, and any rating organization licensed by the Insurance Commissioner pursuant to Article 3 (commencing with Section 11750) of Chapter 3 of Part 3 of Division 2 of the Insurance Code, shall cooperate with the commission and upon reasonable request provide information and data in their possession that the commission deems necessary for the purpose of carrying out its responsibilities. The commission shall issue an annual report on the state of the workers' compensation system, including recommendations for administrative or legislative modifications which would improve the operation of the system. The report shall be made available to the Governor, the Legislature, and the public on request. (Emphases added)

Section 4 of Article XIV of the California Constitution is included as Appendix B.

CHSWC Goals and Objectives

The strategic goal is to improve California workplace health and safety and worker’s compensation through labor-management consensus. The following objectives support CHSWC’s mission and the fulfillment of its mandates.

Please note that the following areas developed by the Commission help identify new areas for emphasis. CHSWC’s core functions of monitoring the impact of the reforms and the specific mandates required by the reforms remain a top priority. A description and timetable for CHSWC’s AB 749 studies are included as Appendix D.

The research topics developed by CHSWC focus in on certain concerns but do not limit the development of additional issues for future study as approved by the Commission.

Priority Areas

1. Efficiency of administration

The efficient administration of workers’ compensation can lead to prompt resolution of disputes and provision of services. It can also lower costs to employers without reducing benefits to injured workers. Encouraging efficiency in the administration of workers’ compensation mutually benefits injured workers and employers.

Action items

2. Return to Work

If injury occurs, return to sustained employment avoids much of the costs borne by injured workers and their employers and therefore both benefit. Return to work programs should be carefully designed to avoid return too early, which may lead to subsequent health problems which could lead to the worker quitting, being laid off, or retiring. Thus increasing sustained employment is the key, which is essentially equivalent to reducing wage loss.

Action items

3. Prevention and Worker Protection

No area of research should facilitate consensus more than preventing injury. Workers can avoid the potentially devastating consequences of injury, disability and lost work, while employers can avoid the cost of compensation and medical care as well as lost productivity. Policies that encourage prevention must be carefully designed to ensure that they reduce injury and not simply discourage the reporting of injuries.

Action items

  • Best media and languages
  • Focus on unions and outreach to small employers

4. Dispute Reduction

Both workers and employers benefit from avoiding disputes before they occur. This must be done to insure that disputes if they arise are properly adjudicated and that the worker has access to representation, if needed. But if the dispute is avoided or resolved prior to litigation, workers and employers mutually benefit.

Action items

5. Healthy Workers

With recent increases in the cost of medical care for workers’ compensation, reducing medical costs is often advocated. But if reducing medical costs lowers the quality of care to workers or denies access to care, the worker’s recovery could be compromised. This can lead to continued medical costs, or the loss of a valuable employee. For this reason, we recommend a focus on healthy, productive workers, which might imply less expensive medical care, but only if the full employer cost (including future health costs and future lost work time) is lower when medical costs are lowered.

Questions to be answered include:

Action items

6. Targeting of Benefits

While the overall level of benefits can be characterized as a "zero-sum game", the targeting of benefits to workers with greater need improves outcomes for injured workers without increasing costs to employers. This can therefore be a point of mutual consensus.

Questions to be answered include:

Action items

7. Communications Plan

Specific goals

  • From the state?
  • From other funders?

Action items

o After each meeting?

  • Research highlights: Two-pager summaries of research results

APPENDIX A

Background Issues Document

Introduction

Workers’ compensation in California was created in 1913 as a bargain between employers and labor. Workers received the assurance that if they were injured on the job, they would receive prompt medical care and compensation without having to prove in court that the employer is at fault. Employers received protection from potentially high tort damages awarded by juries so that they could have predictable, manageable injury compensation and treatment costs. This bargain between employers and labor was historic, maintaining the incentives for employers to create a safe workplace, and allowing workers to remain productive and healthy.

Today, the workers’ compensation system continues to function well, delivering over $15 billion in benefits and caring for almost a million new claimants every year. For employers, it is a significant part of the package of compensation provided to employees – considerably larger than other programs that are arguably higher profile, such as unemployment insurance (which in 1999 cost $2.6 billion in California).

Workers’ compensation is critically important to injured workers. As research funded by CHSWC has shown, workers with permanent disabilities from injuries at work on average have earnings losses of approximately $50,000 over the ten years after injury – far higher losses than the benefits they receive from workers’ compensation. RAND research estimates that 33% of working age adults with disabilities (a population at high risk for poverty) became disabled as a result of an occupational injury or illness. Thus, workers’ compensation benefits are a critically important part of the social safety net.

While some aspects of the workers’ compensation system are undeniably controversial, few would advocate for its elimination. Indeed, it is noteworthy that no state has ever repealed workers’ compensation. After almost 90 years, the workers’ compensation bargain remains as a testament to the value of cooperation and bargaining between employers and labor.

At the same time, the world in which the workers’ compensation system exists today is very different than the one in which it was created. Social expectations for an adequate standard of living for workers have changed. Medical technology and expectations with regard to health have changed. The American economy and the work performed by its workers have changed. Firms and workers are mobile across state and international borders. To remain useful, the workers’ compensation system needs to change as well, and the example of the original bargain can serve as a model for how enduring policies can be devised that will continue to serve both workers and employers during the 21st century. In particular, the success of workers’ compensation in the long run depends upon the maintenance of the bargain: value to both workers and employers.

CHSWC is a policy innovation that was created 80 years after workers’ compensation in California, but the employer-labor composition was intended to keep the parties to the original bargain at the table. This document argues that by sponsoring research on policies that encourage consensus between employers and labor, CHSWC can facilitate the success of the workers’ compensation program for the next 80 years.


Can There Be Workers’ Compensation Reforms that Benefit Both Workers and Employers?

The recent workers’ compensation legislation, AB749, contained a number of actions that improved the adequacy and distribution of benefits.

Similar benefit increases were vetoed in two previous years. The legislation has been criticized by many employers. And yet the size of the increase by 2006, after inflation is factored in, essentially restores the benefit level approximately to where it was in 1993.

Part of the problem is that benefit increases are sometimes viewed as a "zero-sum game," to use the language of economics, whereby the worker’s ‘gain’ is the employer’s ‘loss’, dollar for dollar. This leaves little room for consensus, and usually requires identifying some employer savings to offset the benefit increase.

The research described in this document focuses on a different set of policies, those for which employer-labor mutual benefit is recognized. With the passage of AB 749 and the benefit level returned to its past value after inflation, fundamental improvements in the workers’ compensation system can be facilitated by CHSWC by identifying policies that will lead to mutual benefit for employers and labor.

Those mutually beneficial policies are illustrated in Figure 1. This figure, drawn from the forthcoming RAND report which compares the adequacy of compensation for permanent disability across five states, shows ten-year earnings losses for California, New Mexico, Washington, Wisconsin and Oregon on the left, and the total workers’ compensation benefits paid to compensate these losses on the right. In California, the earnings losses are the highest of the five states. This is driven by the fact that the post-injury employment (return-to-work) in California is the worst of the five states. At the same time, the benefits paid are also the highest in California of the five states.

The combination of high earnings losses and high benefits leads to an outcome where both workers and employers lose: workers end up with benefits that do not completely cover their losses, and employers end up with the highest workers’ compensation costs. In a context such as this, it is critical to identify policies that improve outcomes for injured workers while also lowering employer costs.

Multi state comparision: Ten year wage loss and benefits, Permanent Disability Clams graph

 

Employers, Labor and the Workers’ Compensation Service Providers

The difficulty in identifying and passing reforms that benefit both workers and employers is in part driven by the political power of other stakeholders in the workers’ compensation system, such as medical professionals, attorneys, insurance companies, and government employees involved in the administration of workers’ compensation. The services provided by the other stakeholders are critical to the functioning of the system, and in order to attract high quality services, the system must be an attractive place for these professionals to conduct their business. At the same time, the purpose of the system is to compensate workers, and the compensation is paid for by employers. The parties represented on CHSWC are the primary stakeholders of the system.

Many groups have an interest in the way the workers’ compensation system is structured. While the interests of employers and labor form the cornerstone of the system, the political agenda of both groups is large and somewhat diffuse. The costs and benefits of the system are diffused across many employers and workers. However, many of the other interest groups are highly focused on this system because they depend upon it for all or a significant portion of their livelihood, with benefits and costs concentrated among a small number of important constituents. Consequently, interest groups outside the two key parties, management and labor, often dominate the political debate and the flow of information surrounding reforms.

Objective, empirically-driven research on the value of policies that mutually benefit employers and labor can create the foundation for consensus among the primary system stakeholders and the parties to the original workers’ compensation bargain. In general, outside of CHSWC, the research is funded by the government or by the service providers, the data are largely provided by the services providers, the most intense lobbying is by the service providers, and therefore much of the information to legislators is arguably shaped by parties outside the original bargain. With a properly conceived research and legislative agenda, CHSWC is in a position to fundamentally reform the system to benefit workers and employers.


Strategic planning issues: Summary

While of course, CHSWC’s research will need to be flexible and designed to react to the relevant issues of the moment, we propose the following litmus test for the long-range and larger agenda items: Can the research lead to policies that mutually benefit workers and employers?

In this document, we will describe research in six areas that can mutually benefit employers and labor. Comprehensive reforms in these six areas could fundamentally reshape workers’ compensation in California, improving outcomes for injured workers and lowering workers’ compensation costs to employers:

1. Efficiency of Administration.Efficient administration of workers’ compensation can lead to prompt resolution of disputes and provision of services. It can also lower costs to employers without reducing benefits to injured workers. Encouraging efficiency in the administration of workers’ compensation mutually benefits injured workers and employers.

2. Return to Work.If injury occurs, return to sustained employment avoids much of the costs borne by injured workers and their employers and therefore both benefit. Return to work programs should be carefully designed to avoid return too early, which may lead to subsequent health problems which could lead to the worker quitting, being laid off, or retiring. Thus increasing sustained employment is the key, which is essentially equivalent to reducing wage loss.

3. Prevention. No area of research should facilitate consensus more than preventing injury. Workers can avoid the potentially devastating consequences of injury, disability and lost work, while employers can avoid the cost of compensation and medical care as well as lost productivity. Policies that encourage prevention must be carefully designed to ensure that they reduce injury and not simply discourage the reporting of injuries.

4. Dispute Reduction.Both workers and employers benefit from avoiding disputes before they occur. This must be done to insure that disputes if they arise are properly adjudicated and that the worker has access to representation, if needed. But if the dispute is avoided or resolved prior to litigation, workers and employers mutually benefit.

5. Healthy Workers. With recent increases in the cost of medical care for workers’ compensation, reducing medical costs is often advocated. But if reducing medical costs lowers the quality of care to workers or denies access to care, the worker’s recovery could be compromised. This can lead to continued medical costs, or the loss of a valuable employee. For this reason, we recommend a focus on healthy, productive workers, which might imply less expensive medical care, but only if the full employer cost (including future health costs and future lost work time) is lower when medical costs are lowered.

6. The Targeting of Benefits. While the overall level of benefits can be characterized as a "zero-sum game" as discussed above, the targeting of benefits to workers with greater need improves outcomes for injured workers without increasing costs to employers. This can therefore be a point of mutual consensus.

In the following sections, we expand upon these themes, suggesting particular research projects as illustrations of the themes that CHSWC can consider.

1. Efficiency of System Administration

The efficient administration of workers’ compensation can lead to prompt resolution of disputes and provision of services. It can also lower costs to employers without reducing benefits to injured workers. Encouraging efficiency in the administration of workers’ compensation mutually benefits injured workers and employers.

Administration of the workers’ compensation system is an important component of the cost of compensation faced by employers and also an important determinant of the speed, fairness, and cost with which benefits are delivered to workers. System administration involves several key components. 1) Well functioning insurance markets are key to employers being able to acquire fairly priced insurance with quality service. Well functioning markets can involve a range from strongly competitive markets with limited regulation to a state run and regulated monopoly insurer. 2) Markets where employer compliance with the coverage requirement is effectively enforced. 3) Dispute resolution needs to be efficient and just. 4) Even the best judicial systems are typically costly for participants, consequently, a well administered system would also try to reduce the frequency of disputes without compromising equity. Each of these areas has been or will be an important component of the CHSWC research agenda.

Insurance Markets/Insurer Performance
State-of-the-State 1992-2002:

One of the most striking changes in the workers’ compensation system over the past decade has been the composition and financial health of the insurance market. In the early 1990s, premiums were high and increasing while claims and claim costs were declining. Rates were regulated and competition among insurers was generally on the quality and breadth of service provided rather than price. There were a large number of insurers, many of whom were specifically focused on the California Market. Profits were high and the largest insurer (SCIF) had less than 20% of the market.

In 1995, insurance rates were deregulated and competition among insurers became based on price rather than quality of service. At the same time, the tools available to regulators to monitor this change in markets were not sufficiently strengthened, or at least the application of regulatory oversight was not sufficiently adjusted. The insurance market rapidly consolidated, leaving few domestic California companies, and a few relatively large carriers dominated the market. When cost per claim began to increase rapidly, but premiums remained low, a series of large insolvencies resulted. During this period there was ample evidence that the quality of claims administration, a key to the satisfaction of employers and insures, declined substantially. The DWC Audit Unit annual reports chronicled what appeared to be poor and declining compliance with benefit delivery regulations and increasing violations for unpaid compensation to workers.

Current State-of-the-State:

A number of insurers handling a substantial fraction of California’s market are insolvent or under regulatory monitoring. The second largest claim handling function in the state is supplied by the California Insurance Guarantee Association (CIGA) handling the claims of insolvent insurers. The State Compensation Insurance Fund (SCIF) has come to dominate the market with between 40% and 45% of written premium. Instead of a highly competitive market, the observation has been made that we have evolved into a near de facto monopoly state fund, but with pricing and regulatory controls that were designed for a very different environment. Some conclude that this has led the Insurance Commissioner to pressure SCIF to maintain higher rates for employers to avoid further consolidation through insolvencies or price competition.

Key Issues:

1. The quality of claims handlings affects both employers costs and the adequacy and timeliness of benefit delivery to workers. Quality may be low and deteriorating in the face of insolvencies and rapid fluctuations in market share.
2. Further insolvencies or consolidation may affect the ability of employers to obtain fairly priced insurance and quality service.
3. The current regulatory tools were created for an environment of competitive markets with no dominant player and, to some extent, for a market with highly regulated pricing. Today’s market is dominated by a single large insurer and highly competitive pricing.
4. There is reason to be concerned that the claims handling performance, for insurers and third party administrators acting for self-insured employers, has been deteriorating.
5. Compliance with insurance coverage is likely to deteriorate in the face of steep increases in premium rates, leaving workers without benefits and compliant employers at a competitive disadvantage.

2. Return-to-Work

If injury occurs, return to sustained employment avoids much of the costs borne by injured workers and their employers and therefore both benefit. Return to work programs should be carefully designed to avoid return too early, which may lead to subsequent health problems which could lead to the worker quitting, being laid off, or retiring. Thus increasing sustained employment is the key, which is essentially equivalent to reducing wage loss.

There are several specific areas that are related to the return-to-work issue that deserve special attention.

1) Measuring and tracking return-to-work success,
2) Vocational rehabilitation,
3) Planning for the implementation and evaluation of the return-to-work provisions of AB-749.

We will take each of these issues in turn.

Return-to-work indicators and wage loss

State-of-the-State: 1992-2002

The multi-state comparisons conducted by RAND, Boston University, and Michigan State University found that the while compensation levels in California were competitive relative to other states, California did poorly when measured on the basis of replacement rates.

Percent of Injured Workers at At-Injury Employer 5 Years After Injury graph

 

The important factor in this dichotomy is that California’s workers experience much greater difficulty in maintaining post-injury employment.

Over the past decade, employment and wage loss outcomes have improved for the less impaired workers, however, despite a dramatic economic recovery that drove wages up and unemployment rates to 20-year lows, outcomes for the most seriously disabled experienced little or no improvement.

Proportional wage loss over time by rating range graph

 

 

 

 

 

 

 

 

Because permanent disability benefits in California, unlike a number of states, are not indexed, the economic condition of the state’s injured workers can be expected to deteriorate after AB-749 is fully implemented in 2006.

Key issues:

1) By many measures, replacement rates have been deemed inadequate. However, compensation levels have proved difficult to increase and a divisive issue in political debates. Improvements in workers outcomes over the next decade will most likely come from efforts to reduce wage loss through improved return-to-work.

2) Our current state of knowledge on why California is less successful than other states in keeping injured workers employed is not adequate to confidently identify initiatives in this area.

3) To understand what is effective in return-to-work, on-going assessment is needed to gauge the success of return-to-work efforts.

4) Methods have been developed to accurately measure, and compare over time the State-of-the-State with regards to return-to-work.

Vocational Rehabilitation

For over two decades, California’s workers’ compensation system has relied on the vocational rehabilitation benefit to help return-to-work the most seriously disabled workers, those with impairments that preclude them from returning to their usual occupation. This benefit has been often criticized as expensive, difficult to administer, costly to implement and monitor, and unsuccessful at improving workers’ outcomes. AB 749 made major changes to the benefit, allowing represented workers to compromise the benefit for up to $10,000.

State-of-the-State: 1992-2002

In 1992, vocational rehabilitation expenditures exceeded $1.4 billion system-wide, over 20% of indemnity benefits paid to injured workers. Average rehabilitation costs per VR claim were over $13,000, with a quarter of claims exceeding $25,000. The 1993 reforms introduced a $16,000 cap on the VR benefit and a separate cap for the services of rehabilitation professionals. The legislation also introduced incentives to encourage employers to offer work modification and alternative job opportunities to enhance the return-to-work of VR eligible workers.

According to CHSWC research, the effect was a dramatic decline in the average cost per claim for VR benefits of 45%.

Average Cost per Vocational Rehabilitation Claim graph

 

 

 

 

 


 

There was a significant increase in workers returning to the at injury employer

Percentage of VR Eligible Workers rReceiving Modified / Alternate Work Offers graph

 

 

 

 

 

 

Despite the dramatic decrease in VR costs, workers outcomes improved. Approximately 70% were working when interviewed, both before and after reform, but a high percentage were able to return to the at-injury employer in modified jobs.

System-wide, total VR cost have declined to $700 million, approximately 13% of indemnity payments to workers. This still represents an important component of benefit costs and is accompanied by high administrative costs. Only 45% of the benefit cost is actually paid directly to workers.

AB-749 introduced a sweeping change. The legislation allows compromises of the benefit for the first time.

Key issues:

1) Compromising the VR benefit represents a new challenge for both workers and employers. Each party deserves fair valuation. However there is no current knowledge about how to evaluate individual settlements.

2) Data from the DWC Rehabilitation Unit has been somewhat incomplete over the past decade. In response to additional oversight requirements and to develop useful data for monitoring the changes introduced by AB-749 a comprehensive evaluation and revision of the data process will be necessary.

3) Workers eligible for VR are on average substantially more impaired (average rating 28% v. 15%. In addition, these workers suffer the additional disability of being excluded from their occupation. These workers will be faced with new choices about reemployment services. It is imperative that the outcomes of these workers be monitored to ensure that the changes introduced by AB-749 are positive for worker and employer alike.

4) AB-749 shifted the focus of return-to-work from the end of recovery to the beginning of recovery.

AB-749 Return-to-Work Program

AB-749 adds Section 139.48 to the Labor Code requiring the administrative director to establish the Return-to-Work Program in order to promote the early and sustained return-to-work of the employee following a work-related injury or illness. This will be funded out of the General Fund if money is appropriated by the Legislature.

Key Issues:

AB-749 requires several actions in order to implement the Return-to-work program.

1. The Administrative Director must adopt regulations concerning

a. Conditions for payment to employers for workers’ wages when returned to modified work
b. Reimbursement to employers for work place modifications necessary to return an injured employee to work
c. Refunding of workers’ compensation premiums for workers returned to modified duty.

2. The administrative director must contract with an independent research organization to evaluate the Return-to-work program.

3. Prevention

No area of research should facilitate consensus more than preventing injury. Workers can avoid the potentially devastating consequences of injury, disability and lost work, while employers can avoid the cost of compensation and medical care as well as lost productivity. Policies that encourage prevention must be carefully designed to ensure that they reduce injury and not simply discourage the reporting of injuries.

State-of-the-state 1992-2002:

The last decade has seen an unprecedented decline in the number of reported occupational injuries and illnesses. In fact, the number of claims per 100 workers has declined every year since 1991.

Year-toYear Changes in Indemnity Claim Frequency graph

 

 

 

 

 

 

 

There are potentially many causes for this trend.

1. More attention paid to the cost of injuries due to very high comp rates in the early 90s
2. Other safety efforts including increased OSHA enforcement
3. Restrictions on compensability of claims (e.g., psychiatric and post-termination)
4. Anti-fraud efforts (as well as the related stigma attached to comp claims)
5. Changing industrial mix and workplace demographics
6. Declines in the real value of indemnity benefits after the last increase in 1996

The WCIRB anticipates that the indemnity claim rate will continue to decline at least through 2004.

Current state-state-of-the-state:

Occupational injury and illness rates in California are at the lowest levels ever recorded. This can be seen as one of the workers’ compensation success stories of the 1990s. At the same time there are concerns on the horizon. AB-749 eliminated regulation of loss control services through Cal-OSHA. At the same time, insolvencies and potential insolvencies may cause insurers to reduce short-term expenditures, such as safety efforts, where the benefits are derived in the long-term. However, with premium increases in the range of 50-60% over the past couple policy years, employers can be expected to focus even more efforts on safety.

Key issues:

1. How should the system deal fairly with the rise of "new injury/illnesses"? (e.g., fibromyalgia, Hepatitis-C, illness from environmental factors, or changes in the understanding of causation for psychiatric/stress disorders)

2. Ergonomic related injuries and illnesses remain an area of a significant number of claims, but without standards for workplace safety intervention.

3. Is part of the decline in incidence the result of under-reporting either purposeful or because of stigma attached to claiming? Is the under-reporting concentrated in special populations (e.g., immigrant, ESL, temporary/contract workers).

4. If labor-management cooperation is a key to reduction in injury rates, how does California strengthen it’s current efforts to support labor-management safety committees?

4. Dispute Reduction

Both workers and employers benefit from avoiding disputes before they occur. This must be done to insure that disputes if they arise are properly adjudicated and that the worker has access to representation. But if the dispute is avoided or resolved prior to litigation, workers and employers mutually benefit.

State-of-the-State

California appears to be a very litigious system compared to other states in a forthcoming RAND report for CHSWC, as shown in the figure. Over 30% of lost-time claims in California involve attorneys, which is two to three times the rate of representation experienced by other states.

Consequently, litigation costs are high in California. Defense litigation cost in 2000 was $294 million applicant cost was $199 million, for a total of $493 million. Since indemnity benefits were $3.5 billion, this suggests that litigation costs were equal to 14% of indemnity benefits.

Fraction of Lost-Time Claimd with Attorney Representation graph

Key Issues:

1. Access to representation is an important protection for workers. The challenge of any reform is to reduce litigation and disputes without limiting workers’ access to representation.

2. Reducing litigation and related costs depends upon reducing disputes. Some lessons may be learned from the California experience with carve-outs that have achieved very low dispute rates without reducing benefits paid.

3. Carve-outs may offer an opportunity for union workplaces to reduce dispute related costs in workers’ compensation. They may also offer a model from which the wider system can adopt new approaches to early intervention in disputes that mirrors the actions of the ombudsperson in carve-outs.

5. Healthy Workers

With recent increases in the cost of medical care for workers’ compensation, reducing medical costs is often advocated. But if reducing medical costs lowers the quality of care to workers or denies access to care, the worker’s recovery could be compromised. This can lead to continued medical costs, or the loss of a valuable employee. For this reason, we recommend a focus on healthy, productive workers, which might imply less expensive medical care, but only if the full employer cost (including future health costs and future lost work time) is lower when medical costs are lowered.

Medical Treatment:

Medical treatment is arguably the most important component of the workers compensation system. It is the key benefit for returning workers to the workforce and healthy lives. Hundreds of thousands of workers that never receive a dollar of compensation for disability time receive medical treatment through their employers’ participation in the compensation system. From the employers’ perspective, medical treatment represents the majority of the benefits that they finance.

State-of-the-State 1992-2002:

During the early and mid-1990s, the average medical cost per indemnity claim showed low rates of growth. The rapid decline in medical-legal cost was an important contributor to dampening cost increases. At the same time, the growth rate of medical costs on the health benefit side also was moderate. A major revision of the Official Medical Fee Schedule including provisions for a pharmacy fee schedule was introduced in 1994.

During the later half of the 1990s, medical cost became the fastest rising component of workers’ compensation benefits. The WCIRB reported 15% annual year-to-year growth rates in the average medical benefits paid per indemnity claim. These increases occurred despite the introduction of a new hospital fee schedule in 1999.

Estimated Ultimate Medical per Indemnity Claim graph

 

 

 

 

 

 

Recent CHSWC research has identified presumption as an important component of the higher medical costs after the Minniear decision in 1996. Presumption appears to drive increases in the number and intensity of medical service visits as well as leading workers to change to a physician of their choice more often and earlier in the claim. However, the majority of the growth in medical costs is not explained by presumption and the cost drivers are poorly understood.

Some research has suggested that provisions for future medical benefits within compromise and release agreements may be a likely contributor to the increase in medical costs and overall benefit costs.

Current State-of-the-State

Medical costs are expected to represent 55% of total benefit costs on 2003 calendar year claims, up from 45% in the mid 1990s. These cost are rising at 15% per year. However, there is little consensus about what is driving cost, how to control costs, and the quality of the health care workers receive. While these issues might have been intractable several years ago, there are two new databases of medical treatment data available for research, one from CWCI and another from WCRI. These offer the Commission important opportunities for research about improving medical treatment while controlling costs.

Key issues:

1. AB-749 repealed presumption in all but a minority of cases. This will likely result in stricter application of utilization review, more restrictions on medical treatment, and more disputes about what is medically necessary.

2. Fee schedules cover medical treatment by providers, medical-legal costs, pharmacy reimbursements, and hospital facility fees. The only area outside the fee schedule is outpatient surgery facility fees. These are an area of great concern to insurers and employers.

3. There is limited understanding of what is driving the rapid increase in medical costs. If medical costs continue to rise at current rates, they will impact employers bottom line as well as threatening the level of benefits workers receive and the breadth of compensable injuries that is unique to the California system.

4. Quality of care remains poorly understood within occupational medicine. In addition, there is no research on how quality has changed in relation to the increase in cost.

5. Future medical appears to be a rapidly growing component of the medical benefit. This could reflect underlying medical inflation or it could signify changes in the underlying settlement process. There is insufficient reliable, well researched, independent data to guide judges, workers, and insurers on what constitutes a reasonable settlement of future medical across the range of injuries and illnesses.

6. New technology is constantly introduced in the medical arena. These technological advances are often rapidly adopted by workers’ compensation providers. However, the cost effectiveness and appropriate pricing are often not well established and consequently are an area of both frequent disputes and potential access problems.

Medical-Legal Issues:

Medical-legal costs are incurred when an opinion, other than the treating physician’s permanent and stationary report is required to solve one or more disputed issues. Consequently, the frequency and cost are driven by:

1. The number of disputes, which in turn depends upon the complexity of the system particularly the extent to which we include difficult to determine issues within the compensation system (e.g., psychiatric injuries).

2. The willingness or need for parties to seek medical legal opinions. For example, the impact of presumption on the value of obtaining an opinion other than the treating physicians.

State-of-the-State: 1992—2002

Medical-legal costs on  PPD claims, insured employers, 40 months after beginning of accident  year graph

 

 

 

 

 

 


   Source: CHSWC 2001 Annual Report


In 1992, medical-legal costs were in the process of declining from historic highs reached in 1990 and 1991. In 1990-91, medical-legal costs represented approximately 20% of all medical expenditures. 25% of permanent disability claims had at least one psychiatric evaluation. And the average cost of a medical legal evaluation was nearly $1000.

The latest information available indicates that medical-legal costs in 2002 are less than 4% of medical expenditures, fewer than 4% of claims have a psychiatric evaluation, and the average cost of a medical-legal exam is approximately $750.

According to studies by the Commission, the decline in medical legal cost was due to a decline in the frequency of claims, changes in the fee schedule that reduced reimbursements, and declines in the number of exams per claim. Another important savings driver was the restriction placed on the compensability of psychiatric claims that eliminated compensation when less than 51% of the cause arose from work.

Current state-of-the-state:

Medical legal costs over the past 8 years have been steady at less than 2% of total system costs. CHSWC has consistently monitored both the cost and quality of reports over that period, making a number of recommendations to the legislature, IMC, WCIRB and DIR. These recommendations have generally been followed and the medical-legal process appears stable and well monitored as a result. The only area that appears of immediate concern is that the average price of medical-legal reports has risen about 25%, from $600 to $750 over the past several years.

Key issues:

1) AB 749 has virtually eliminated the presumption of the correctness of the primary treating physician (PTP) reports. There is considerable concern that this will return California to the ‘dueling docs’ environment of the early 1990s. However, previous CHSWC research did not find that presumption was an important contributor to the decline in medical-legal reporting frequency and cost.

2) CHSWC efforts to redefine the permanent disability rating schedule by establishing an empirical basis for the rating of different impairments might lead to substantial revision of the schedule. These efforts might lead to problems with medical-legal evaluations as doctors and raters learn to apply any new schedule.

3) The average cost of medical-legal reports has been rising and is now about 25% higher than it was in the middle to late 1990s.

6. Benefits: Distribution

While the overall level of benefits can be characterized as a "zero-sum game" as discussed above, the targeting of benefits to workers with greater need improves outcomes for injured workers without increasing costs to employers. This can therefore be a point of mutual consensus.

State-of-the-State--2002

There are a number of important characteristics of benefit levels. Most often, in legislative and planning, the debate focuses on aggregated levels of benefits or the portion of wages replaced across all workers or groups of workers, this is basically the adequacy of benefits. However, how accurately we target benefits at those who need them most, for example workers who are not able to return to their at injury job is just as important an issue. Even if we achieve a consensus about an adequate overall replacement rate, the benefits might be inequitably distributed because we overcompensated some less serious disabilities and under compensated others. Improving benefit targeting, especially in the face of limited resources is one way to make cost neutral but very effective improvements to the compensation system.

State-of-the-state 1992-2002:

Through out the last decade, the California compensation structure has exhibited three main characteristics.

1. Because the system had relatively low maximum benefit levels, lower wage workers received higher wage replacement rates than higher wage workers.
2. Because compensation rates increased very rapidly with increasing severity, more seriously injured workers received higher wage replacement rates relative to low wage workers.
3. Because California has a very broad definition of permanent disability, a much larger percentage of workers receive compensation than in most other states.

California is very similar to other states on the first two characteristics. In the several states compared in the CHSWC study, low wage workers are better compensated than high wage workers and more serious injuries are better compensated than less severe injuries. However, California differs from other states on the third measure. While California pays generous benefits in the aggregate, it pays somewhat lower benefits for a given injury, but pays for a wider range of injuries. During the decade, while some minor restrictions were placed on the breadth of injuries compensated (e.g., psychiatric, post-termination), benefit increases tended to maintain the much higher replacement rates for low wage, more severely injured workers.

Percent of Lost Time Claims with PPD graph

 

 

 

 

 

 

Two very important policy making opportunities in this area emerged as a result of CHSWC research during the past decade.

1. For the first time, the system has accurate measures of wage replacement across different groups of workers. These data allow policymakers to make explicit decisions about issues of equity and distribution.
2. A unique combination of administrative datasets has for the first time given policymakers, researchers, and other stakeholders an opportunity to establish an empirical basis for permanent disability rating schedules.

However, benefits may still seem to be inadequate for many workers suffering permanent disabilities, since only about 40% of lost wages are replaced over the 10 years after injury.

Key Issues:

1. Monitoring benefit levels and values. Recently legislated increases are not fully phased in until 2006 and current overall compensation levels are similar or higher than many states.
2. Future benefit increases should take advantage, in an explicit way, of the knowledge about the distribution of benefits implicit in the current structure.
3. Replacement rates for permanently disabled workers that return to their at-injury employer are at or above 100% after tax. However, replacement rates for workers who do not sustain return to the at-injury employer are significantly lower. Focusing compensation on workers who are not offered the opportunity for appropriate return to the at-injury employer has the double advantage of offering incentives to employers to improve retention while focusing benefits on the workers suffering the greatest loss.
4. CHSWC research over the past several years has focused attention on the unreliability of the rating process. More recent research suggests that much of the inconsistency is a result of a poorly constructed schedule that targets benefits incorrectly across different impairments.


APPENDIX B

CONSTITUTION OF THE STATE OF CALIFORNIA

ARTICLE 14 -- LABOR RELATIONS

SEC. 4. The Legislature is hereby expressly vested with plenary power, unlimited by any provision of this Constitution, to create, and enforce a complete system of workers' compensation, by appropriate legislation, and in that behalf to create and enforce a liability on the part of any or all persons to compensate any or all of their workers for injury or disability, and their dependents for death incurred or sustained by the said workers in the course of their employment, irrespective of the fault of any party. A complete system of workers' compensation includes adequate provisions for the comfort, health and safety and general welfare of any and all workers and those dependent upon them for support to the extent of relieving from the consequences of any injury or death incurred or sustained by workers in the course of their employment, irrespective of the fault of any party; also full provision for securing safety in places of employment; full provision for such medical, surgical, hospital and other remedial treatment as is requisite to cure and relieve from the effects of such injury; full provision for adequate insurance coverage against liability to pay or furnish compensation; full provision for regulating such insurance coverage in all its aspects, including the establishment and management of a state compensation insurance fund; full provision for otherwise securing the payment of compensation; and full provision for vesting power, authority and jurisdiction in an administrative body with all the requisite governmental functions to determine any dispute or matter arising under such legislation, to the end that the administration of such legislation shall accomplish substantial justice in all cases expeditiously, inexpensively, and without incumbrance of any character; all of which matters are expressly declared to be the social public policy of this State, binding upon all departments of the state government.

The Legislature is vested with plenary powers, to provide for the settlement of any disputes arising under such legislation by arbitration, or by an industrial accident commission, by the courts, or by either, any, or all of these agencies, either separately or in combination, and may fix and control the method and manner of trial of any such dispute, the rules of evidence and the manner of review of decisions rendered by the tribunal or tribunals designated by it; provided, that all decisions of any such tribunal shall be subject to review by the appellate courts of this State. The Legislature may combine in one statute all the provisions for a complete system of workers' compensation, as herein defined.

The Legislature shall have power to provide for the payment of an award to the State in the case of the death, arising out of and in the course of the employment, of an employee without dependents, and such awards may be used for the payment of extra compensation for subsequent injuries beyond the liability of a single employer for awards to employees of the employer.

Nothing contained herein shall be taken or construed to impair or render ineffectual in any measure the creation and existence of the industrial accident commission of this State or the state compensation insurance fund, the creation and existence of which, with all the functions vested in them, are hereby ratified and confirmed. (Emphases added)


APPENDIX C

CHSWC Monitoring Plan for Continuous Improvement in System Performance

Monitoring

Future research efforts depend on defining specific areas to focus limited resources. In addition some of these efforts depend on developing or maintaining continuous monitoring processes that can form the basis for research and evaluation. There are several important components of the value of continuous monitoring:

A.    Current monitoring of system performance and the impact of reforms:

CHSWC has put in place two successful and ongoing monitoring processes that the Commission should consider continuing. They offer valuable insight into the health of the system and are inexpensive to maintain and analyzing the results is straightforward.

a. Uninsured employers—tracking uninsured employers through linked EDD and WCRIB data
The pilot effort was developed and analyzed by the Commission. Current and future tracking will be done by the DWC/DIR. The Commission should consider regular analysis and review of the result of the tracking.

b. Medical-legal—monitoring the cost and frequency of medical legal reports using WCIRB PD Survey
The Commission has used this valuable survey for several years to monitor the health of the medical-legal system. The survey was improved substantially through the suggestions of CHSWC studies. Continuing this effort should be considered.

B. Major new initiative--Linked WCIS/EDD data

A number of proposed research and monitoring efforts would require consistent and accurate estimates of wage loss and return-to-work measures. Past CHSWC research has established state-of-the-art methodologies for this type of research that should be considered as the basis for all future CHSWC efforts in these areas. The methods require linking several administrative datasets across two agencies and one non-profit. Specifically, linking the DWC’s Workers’ Compensation Information System (WCIS) with the Employment Development Department’s Base Wage File and Unemployment and Disability files and possibly the WCIRB Unit Statistical Report files would create a necessary dataset for future research in the areas of:

i. Wage loss and benefit adequacy
ii. Vocational Rehabilitation reforms
iii. Return-to-work

1. Impact on benefit adequacy
2. Success of AB-749 Return-to-Work Program

Currently, this process requires a series of one-time negotiated arrangements that are time consuming and cause substantial delays in access and the timeliness of the analysis. Setting up a regular, ongoing monitoring process with automatic updates would greatly simplify CHSWC research, reduce the substantial repeated contracting costs and allow results to be more current.

Monitoring related to AB-749 and the strategic Plan:

1. Administrative Efficiency--Organizing Audit Unit data for ongoing monitoring

The quality of claims administration has been an important concern of both employers and labor. It is often claimed that the quality of claims administration has declined over time and is particularly threatened by the rapid changes in the make-up of the insurance markets. The DWC Audit Unit has collected and will continue to collect data on claims administration that, if made available in the correct format, would allow inexpensive evaluation of past, present, and future system performance in the areas of:

i. Claims handling performance
ii. Claim frequency
iii. Denial of benefits
iv. Failure to pay compensation
v. Amount of compensation underpaid
vi. Timeliness of benefit delivery
vii. Reporting to WCIS

While these data have been available, the current reporting by the Audit Unit does not allow consistent estimates of trends in system performance or measures of any of the above outcomes. A short, one-time research and planning effort would set up appropriate reporting that could be recreated historically and continued on an annual basis in the future.

2. Return-to-work

A. On-going monitoring of California’s performance in returning workers to sustained employment.

CHSWC research has developed methods and established base-line measures of return-to-work. The Commission should consider monitoring on a regular, on-going basis wage-loss and return-to-work. Linking WCIS and EDD data, for annual analysis would be valuable. This will be simplified if a Labor Agency that includes both EDD and DIR is established. At a minimum, DIR or CHSWC should create a series of longitudinal cohorts of injured workers by linking samples of WCIS and EDD.

Return-to-work efforts undertaken by the State or the Commission should always include an evaluation component to determine what actually works. Evaluation methodologies should, to the extent possible, use the methods developed from previous CHSWC efforts.

B. Vocational Rehabilitation

Monitoring and evaluating the changes introduced by AB-749 require high quality, consistent data, collected in a timely manner. An immediate priority for the DWC is the introduction of effective data collection by the Rehabilitation Unit. CHSWC is already working with the Division to identify effective strategies. Past data collection at the Rehabilitation Unit has been inconsistent, often reduced as a simple solution to budget and staffing problems. CHSWC should consider monitor the data collection process and periodically evaluate the data. This could be done as part of a VR evaluation.

Similar to the return-to-work initiatives discussed above, the Commission should consider conducting an evaluation of outcomes for workers eligible for VR, on an ongoing basis, using methodologies already developed as part of CHSWC research into wage loss and return-to-work.

Monitoring could also be conducted through the WCIRB Annual PD Survey. The survey already includes questions concerning VR. To these the Commission would request that the WCIRB add questions about whether a worker is QIW and whether there was a settlement, and if so, what was the dollar amount of the settlement.

C. Monitoring the AB-749 Return to Work Program

The evaluation of the program is required. It would be appropriate for this evaluation to be done in a manner consistent with the evaluation methods developed for previous CSHWC research. This evaluation will likely require data on return-to-work for industrially injured workers from the period prior to the implementation of the legislation. This may require CHSWC and DWC to implement a data collection process even before implementation of the actual Return-to-work Program.

3. Prevention--Monitoring California’s performance on prevention of occupational injuries and illnesses

A very informative and very high profile monitoring series would involve creating an annual comparison of California’s injury and illness rate as compared to the rates in the other 50 states. The basis of a comparison would be the annual BLS employer survey with weighting to adjust the relative rates for industry mix and other factors. The comparison could include in addition to the injury/illness rates, rates of lost time and restricted work cases and average lost work day rates. These later comparisons would also help monitor California’s return to work performance.

4. Dispute reduction and judicial performance

A. The current CHSWC evaluation of the judicial process could be used to develop recommendations for implementation of measures of judicial performance that could be the basis of ongoing monitoring. This process could include a review of current reporting (including quality of statistics), recommendations for future reporting (including monitoring of quality), and annual analysis of the results. The planning of the monitoring process may require considerable thought and analysis input by CHSWC and associated researchers, but the data collection would be conducted by the DWC and consequently be relatively inexpensive for CHSWC. Annual review and analysis of these data would likely entail only moderate cost.

B. Monitoring Medical-Legal:
CHSWC’s current ongoing monitoring of the medical-legal process through use of the WCIRB Permanent Disability Survey seems sufficient. This monitoring is simple and inexpensive. For the near future, this monitoring should focus on examining the cause for the current rate of increase in the average cost of reports when the fee schedule has remained fixed of over a decade.

5. Healthy Workers

WINS survey will be the basis for monitoring a number of quality and access issues.

6. Monitoring the Targeting of Benefits:

The distribution of benefits relative to losses, the replacement rate, differs substantially across different groups of workers, by wage, by severity of injury, and by whether they return to sustained employment with the at injury employer. The differences in replacement rates across these groups represents implicit decisions by policymakers about equity. These relative rates can be easily monitored using the linking of WCIS and EDD data that is also suggested for monitoring over time changes in return to work, vocational rehabilitation and several other areas. An example of reports on performance related to targeting could be developed. These are likely to include


APPENDIX D

Description and Timetable for CHSWC Studies per AB 749

It is extremely important that CHSWC receive sufficient funding resources to carry out all its mandates, including the consultations. In the past, CHSWC, in a consultation role with the Division of Workers’ Compensation, has shared data from its studies and surveys and tested informational prototypes in various focus groups including workers and employers. This has ensured that workers’ compensation program information is clear, concise, non-legalistic, and easily accessible to workers, employers, and California’s diverse population.

Evaluation of AB 749

Description

Pursuant to Labor Code Section 77(a), CHSWC is mandated to "conduct a continuing examination of the workers' compensation system … and of the state's activities to prevent industrial injuries and occupational diseases. The commission may conduct or contract for studies is deems necessary to carry out its responsibilities."

With the passage of AB 749, CHSWC plans to conduct studies to carry out its responsibility to evaluate the impact of new reform legislation on the workers’ compensation system, particularly with respect to

Costs, benefits, and outcomes of the reforms
Medical cost controls

o Elimination of the presumption of correctness of primary treating physician reports,
o Pharmaceuticals,
o Qualified Medical Examiners [QME],
o Health Care Organizations [HCOs])

Vocational rehabilitation and return to work,
Fraud, and
Court procedures.

It is important to lay the foundation to analyze the before and after effects of the legislation. These efforts will need to begin immediately to be able to determine the changes from the reforms.

Timetable of Activities
July 2002 – December 2002

CHSWC will begin by designing a comprehensive evaluation plan for the recently enacted (AB-749) workers compensation reform legislation, incorporating the following activities:

January 2003- June 2003

Beginning July 2003

New CHSWC Studies per AB 749

The provisions of AB 749 specifically mandate that CHSWC carry out new projects and consult with the Division of Workers’ Compensation and other entities on specified studies. The following descriptions of the CHSWC studies cite the AB 749 authorizing section and the revisions to the Labor Code.

Report on Medical Treatment Provided to Industrially-Injured Workers

Description

Section 32 of AB 749 amends Labor Code Section 127.6 which requires CHSWC to consult on a study of medical treatment provided to industrially-injured workers:

" (a) The administrative director shall, in consultation with the Commission on Health and Safety and Workers' Compensation, the Industrial Medical Council, other state agencies, and researchers and research institutions with expertise in health care delivery and occupational health care service, conduct a study of medical treatment provided to workers who have sustained industrial injuries and illnesses."

Timetable of Activities
July 2002 – December 2002

January 2003- June 2003

Benefit Notice Study

Description

Section 20 of AB 749 amends Labor Code Section 77 which requires CHSWC to issue a report regarding improvements and simplification of the workers’ compensation benefit notices:

" (b) On or before July 1, 2003, and periodically thereafter as it deems necessary, the commission shall issue a report and recommendations on the improvement and simplification of the notices required to be provided by insurers and self-insured employers."

Timetable of Activities
July 2002 – December 2002

January 2003- June 2003

Ongoing

Information Notice in Workplace

Description

Section 44 of AB 749 amends Labor Code Section 3550(d) which requires CHSWC to consult regarding development of a workers’ compensation information notice to be posted in the workplace:

" (d) The form and content of the notice required by this section shall be prescribed by the administrative director, after consultation with the Commission on Health and Safety and Workers' Compensation, and shall advise employees that all injuries should be reported to their employer. The notice shall be easily understandable. It shall be posted in both English and Spanish where there are Spanish-speaking employees. …"

Timetable of Activities
January 2003- June 2003

Work with DWC to

Workers’ Compensation Information for New Employees

Description

Section 45 of AB 749 amends Labor Code Section 3551(a) which requires CHSWC to consult on the development of a notice provided to new employees by their employers:

"3551. (a) Every employer subject to the compensation provisions of this code, except employers of employees defined in subdivision (d) of Section 3351, shall give every new employee, either at the time the employee is hired or by the end of the first pay period, written notice of the information contained in Section 3550. The content of the notice required by this section shall be prescribed by the administrative director after consultation with the Commission on Health and Safety and Workers' Compensation."

Timetable of Activities
January 2003- June 2003

Work with DWC to

Notice and Claim Form for Workers’ Compensation Benefits

Description

Section 77 of AB 749 amends Labor Code Section 5401(b) which requires CHSWC to consult on the development of a notice of potential eligibility and claim form for workers’ compensation benefits:

"b) Insofar as practicable, the notice of potential eligibility for benefits required by this section and the claim form shall be a single document and shall instruct the injured employee to fully read the notice of potential eligibility. The form and content of the notice and claim form shall be prescribed by the administrative director after consultation with the Commission on Health and Safety and Workers' Compensation. The notice shall be easily understandable and available in both English and Spanish. …"

Timetable of Activities
January 2003- June 2003

Work with DWC to

Establish parameters and scope of the study
Evaluate and select among competing alternatives
Initiate project

Report on Access to Funds Paid to Injured Workers

Description

Section 65 of AB 749 amends Labor Code Section 4651(c) which requires CHSWC to provide oversight and consultation to DWC for preparing a report on how to provide better access to funds paid to injured workers:

"(c) On or before July 1, 2004, the administrative director shall present to the Governor recommendations on how to provide better access to funds paid to injured workers in light of the requirements of federal and state laws and regulations governing the negotiability of disability indemnity payments. The administrative director shall make specific recommendations regarding payments to migratory and seasonal farmworkers. The Commission on Health and Safety and Workers' Compensation and the Employment Development Department shall assist the administrative director in the completion of this report."

Timetable of Activities
January 2003- June 2003

Work with DWC to