10/17/2004
WORKERS' COMP CHANGES RUB SOME RECIPIENTS THE WRONG WAY
By Eve Mitchell, BUSINESS WRITER
THE WAY Faye Taylor sees it, the physical therapy she used to get when her work-related disabilities acted up made it easier to do her job as a production worker for a glass container factory.
"It's not like I'm sitting at home," said the 58-year-old employee of Owens-Brockway Glass Containers in Oakland, who still works her regular shift despite pain from her injuries. "I haven't been able to get any therapy" since changes in workers' compensation laws took effect earlier this year, she said.
"I can't take (pain pills) because I work rotation. I just work in pain," said Taylor, who has sustained injuries to her hands, knees, shoulders, back and pelvis area over the years.
Taylor is among thousands of Californians hurt on the job who are now grappling with a workers' compensation system that is vastly different from the way it was only a year ago.
Legislative reforms aimed at fixing California's costly workers' compensation system are leaving some ailing workers without the medical treatment they once received routinely and are forcing them to meet tougher standards for obtaining disability benefits.
That was the intent of the changes designed to stem the spiraling cost of workers' compensation insurance. But the harsh reality of those changes is beginning to be felt by workers.
The changes were made possible by two landmark workers' comp laws. Among other things, Senate Bill 899, signed into law by Gov. Arnold Schwarzenegger on April 19, requires permanent disability benefits to take into account how much of the injury is work-related.
Legislation signed into law by then-Gov. Gray Davis a year ago permits the use of objective treatment guidelines established by the American College of Environment and Occupational Medicine among its many provisions.
The new treatment guidelines, which went into effect in April, are meant to replace previous ones that were largely subjective. The new guidelines apply to all injuries regardless of when they happened. The law also puts a 24-visit cap on physical therapy and chiropractic visits for injuries after Jan. 1, 2004.
The reforms were pushed by the insurance and business community to deal with skyrocketing premiums and soaring medical and claims costs that have some employers paying double and triple the premiums they paid in 2000.
Fueled by rising medical and claims costs, premiums paid by employers began to climb four years ago, going from an average of $2.68 per $100 of payroll to a record-setting $6.37 in the last six months of 2003. In the wake of workers' comp reform legislation, premiums have begun to decline slightly this year, dropping down to $5.89 per $100 of payroll.
But injured workers, the medical specialists who treat them and the attorneys who represent them argue that many of the reforms are unfair and insurers are failing to pass on the savings to employers.
While premiums paid by private employers have started to come down -- standing at an average of $5.89 per $100 of payroll in March 2004 compared to $6.37 in December 2003 -- they haven't come down fast enough, critics say.
"We're starting to hear stories of workers denied medical care. The big winner in the new workers' comp laws are the insurers. They are not passing on the savings from the reforms to the employers," said Angie Wei, legislative director for the Sacramento-based California Labor Federation, whose members include about 1,600 unions representing more than 2 million workers.
Insurers say the reforms were needed to fix a broken system and that progress is being made.
"Rates are going down. California was going through double-digit increases. There has been a stop to that," said Nicole Mahrt, spokeswoman for the American Insurance Association, whose members write workers' comp policies in California.
Restaurant owner Alberto Palacio estimates his premiums have come down about 10 percent since the reforms went into effect.
"It went down, nothing dramatic, it leveled off," said Palacio, who owns Alberto's Cantina in Pleasanton.
"We are also beginning to see carriers come back to the market that weren't there before," said Scott Hauge, president of Cal Insurance & Associates, a San Francisco-based insurance agency that has been active in small business and workers' comp issues.
In response to criticism that premiums are not falling fast enough, Mahrt said that not all of the pieces of reform are in place yet. For example, a key part of SB 899 won't go into effect until January. The provision switches to tougher American Medical Association guidelines to help set permanent disability benefits in pending cases, regardless of the injury date.
In California last year, there were nearly three times the number of permanent partial disability claims compared to the national average, according to data from the National Council of Compensation Insurance.
In the meantime, some medical providers and workers already are feeling the impact of the existing changes.
Since the new treatment guidelines went into effect in April, Veda Lyles, whose Oakland-based Professional Touch Therapies specializes in orthopedic massage therapy, has seen a steep decrease in her business. Treatments that used to be approved are no longer getting the go-ahead, she said.
"It's a big mess. I used to have five to seven patients a day with workers' comp, which has now dropped down to two to three a day," said Lyles. "Some days it's none. Some (patients) in pain have come on their own because they need the treatment."
In late September, the Medical Express Family Practice in Hayward had to move from its Hesperian Boulevard offices to a smaller location in the city due to a drop in workers' comp cases, said Kelly Klug, former office manager at the facility. The move led to the layoff of 12 employees, including Klug.
Klug said the new medical treatment guidelines are "very confusing" and that different insurers act differently in approving treatment for similar injuries.
"It's like reading the Bible, that's how I compare it. They have different interpretations," said Klug, who estimates that about half of treatment requests are being denied under the new guidelines.
The new guidelines "hurt the injured workers," said Carl Brakensiek, vice president of the California Society for Industrial Medicine and Surgery. "Many physicians are choosing to cut back on the number of injured workers they are treating or are deciding to stop treating injured workers altogether."
Mahrt, the insurance industry spokeswoman, said the new guidelines are necessary to rein in over-use of medical treatments that existed under the old system.
"The goal of these reforms is to create a balance, a fair and predictable system," she said. "If we don't do things like reduce unnecessary medical treatment, we're not going to reduce costs and we're not going to give relief to businesses. That's the cold hard reality."
Palacio, the restaurant owner, said he would like to see a little more of that relief in the form of lower premiums.
But Palacio, who plans to open a second restaurant in Danville's Blackhawk area in January, said he doesn't think that would have been possible if premiums had continued to skyrocket.
"Of course, if we went back to where rates were (before they began soaring), I would be the happiest man alive," he said.
Eve Mitchell can be reached at (510) 208-6474 or emitchell@angnewspapers.com .
