Workers' Compensation Reforms

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California's workers' compensation system has been the center of intense debate and legislative activity over the past several years. The most dramatic reforms in the history of California workers' compensation began in 2003 with the adoption of evidence-based medicine guidelines, the application of those guidelines though a mandatory utilization review process, and the repeal of vocational rehabilitation. These were rapidly followed by the adoption of employer-selected medical provider networks and a new approach to permanent disability evaluation. Then in 2012 another round of comprehensive reforms were passed. This section describes the large-scale changes enacted in recent years.

Reforms of 2012


Senate Bill 863 was passed on Aug. 31, 2012 and was signed into law by Governor Brown on Sept. 18, 2012. The bill makes wide-ranging changes to California's workers' compensation system, including increased benefits to injured workers and cost-saving efficiencies. Major areas addressed include a Independent Bill Review (IBR) process, a new Independent Medical Review (IMR) process, new lien filing fees, a revised Qualified Medical Examiner (QME) process, new or updated fee schedules, changes to factors allowed in calculating Permanent Disability benefits, and the creation of a disproportionate earnings loss adjustment return-to-work fund. The bill took effect on Jan. 1, 2013, although not all of its provisions were effective immediately. In order to remain current with the implementation of this large bill, a link to the DWC is provided.

Summary of System Changes as of 2008

Reforms of 2004

Reforms of 2003

Assembly Bill 749

Workers' compensation and the California economy

Evaluation of workers' compensation cost and benefit changes since the beginning of the reforms
(special study at the request of the Legislature)

Baseball Arbitration - provisions of labor code section 4065

Evaluation of labor code section 5814 penalty provisions

Evaluation of the Division of Workers' Compensation (DWC) Audit Function
(Special Study at the Request of the Legislature)

Medical-Legal Study

Vocational Rehabilitation Study

Evaluation of Treating Physician Reports and Presumption

October 2018