Gov. Signs Mostly Benign Workers' Comp Legislation

Thursday, October 13, 2011 | 0

No man's life, liberty, or property are safe while the legislature is in session.”  Hon. Gideon J. Tucker

It is the end of another legislative year ending in with the governor’s review, signing or vetoing the work of the California Legislature.  This year there was more smoke than fire in the final analysis with the governor showing concern over the potential expenses bills might carry and also encouraging a broader negotiated result to modifications of the system rather than piecemeal changes.

Gov. Jerry Brown warned about the” veto blues” after the legislature’s passage of more than 600 bills. “You've given me 600 bills, and there's not 600 problems that we need those solutions for," the governor was quoted as saying.  His comments proved to be especially prophetic in the workers' compensation arena as he signed a number of mostly non-controversial bills and vetoed most of the significant legislation with various veto messages indicating he was concerned about increasing costs and piecemeal reforms.

Thanks go to the California Workers’ Compensation Institute for its prompt dissemination of the below list of bills signed and vetoed.  The brief summaries are my own and the veto messages are edited portions lifted from the governor's messages with the vetoed bills:

Bills Signed by Governor Brown:

• AB 335 by Assemblymember Jose Solorio (D-Santa Ana) – Workers' compensation: notices.

Requires the Division of Workers' Compensation administrative director with the Commission on Health and Safety and Workers' Compensation to revise some DWC forms. Removes reference to vocational rehabilitation and substitutes supplemental job displacement voucher references. Eliminates need to send supplemental job displacement voucher NOPE by certified mail at end of temporary disability.

• AB 378 by Assemblymember Jose Solorio (D-Santa Ana) – Workers' compensation: pharmacy products.

Provides imposition caps on compound drugs at 83% of generic for lowest price generic equivalent until the administrative director adopts a fee schedule.

• AB 397 by Assemblymember William W. Monning (D-Santa Cruz) – Workers' compensation insurance: contractors.

Requires contractors to prove they are either exempt from coverage or have workers’ compensation coverage when renewing contractors’ licenses.

• AB 585 by Assemblymember Paul Fong (D-Mountain View) – Workers' compensation: cancer presumption.

Extends existing cancer presumption in Labor Code § 3212.1 to Firefighters working at government installation.

• AB 1168 by Assemblymember Richard Pan (D-Sacramento) – Workers' compensation: vocational expert fee schedule.
Requires the administrative director to adopt a fee schedule for vocational rehabilitation expert testimony by Jan. 1, 2013

• AB 1426 by Solorio – Workers' compensation: court administrator.

Eliminates position of court administrator. This position is currently empty and the statutory provisions conflicted with the authority of the administrative director. The functions of the court administrator will be handled primarily through the administrative director's office.

• SB 457 by Sen. Ronald Calderon (D-Montebello) –Workers' compensation: liens.

Provides where an employee obtains medical treatment pursuant a medical plan provided by a self-insured employee welfare benefit plan reimbursement shall be determined notwithstanding the official Medical Fee Schedule adopted pursuant to Section 5307.1. Such liens shall be paid pursuant to the terms of the self-insured benefit plan not according to fee schedule.

• SB 684 by Senator Ellen Corbett (D-San Leandro) – Workers' compensation insurance: dispute resolution: arbitration clauses.

Would allow California employers to arbitrate disputes under insurance policies that arise in California using California law even where the policy may have been written in a different state and provides for arbitration of disputes using another states law.

• SB 826 by Senator Mark Leno (D-San Francisco) –Workers' compensation: data reporting requirement: administrative penalties.

Provides for imposition of administrative penalties where a claims administrator violates reporting requirements regulations.

Bills vetoed by Gov. Brown:

• AB 211 by Assemblymember Gil Cedillo (D-Los Angeles) – Workers' compensation: permanent disability benefits. A veto message can be found here:

"This bill would have modified the provisions for providing the Supplemental Job Displacement Voucher from after the PD award till the end of TD. It would also have change the voucher amount to a flat $6000 rather than a structured amount based on the level of PD."

• AB 584 by Assemblymember Paul Fong (D-Mountain View) – Workers' compensation: utilization review. A veto message can be found here:

"This bill would have required physicians performing UR services be licensed to practice medicine in CA. The bill would have created different standards for WC UR than the same services in Group health.  The Governor was aware of the effort to impose this unique requirement in WC and did not consider a need to have different approaches in WC than from the rest of the health care industry."

• AB 947 by Solorio – Workers' compensation: temporary disability payments. A veto message can be found here:

"This bill would have extended the time for payment of TTD beyond the 104 limit in Labor Code § 4656 where the employee underwent surgery and the period of TD extended beyond the 104 weeks. This bill was amended near the end of the session to limit it to post-surgical cases in an effort to limit the potential expense attached to the changes to Labor Code § 4656.  As originally drafted it would have effectively eliminated the 104-week limitation on TTD.  The recent amendments provided significant limitation on the extension of TTD but the governor appeared concerned the amendments such as this should be part of an overall effort to modify the system and rather than piecemeal changes."

• AB 1155 by Assemblymember Luis Alejo (D-Salinas) – Workers' compensation. A veto message can be found here.

"This bill would have interposed additional language in Labor Code § 4663 ostensibly to prevent discrimination on the basis of “immutable characteristics” such as race, gender, sexual orientation etc.  The Governor’s message indicated the law already recognized similar protections and this provision would have potentially generated additional unnecessary litigation increasing employer costs with little corresponding additional protection to employees."

The tenor of the governor’s messages suggest he is willing to extend additional benefits only if there are some offsetting savings. This was the same message offered by the new administrative director, Rosa Moran, at a presentation she made a few weeks ago at the well-attended California Workers’ Compensation & Risk Conference at Dana Point.

Remember, an optimist is merely one who believes we have the best of all possible workers’ compensation systems; a pessimist is merely one who fears that is true (Paraphrased from James Branch Cabell, The Silver Stallion, 1926)

<i>Richard M. "Jake" Jacobsmeyer is a founding partner of the Shaw, Jacobsmeyer, Crain & Claffey workers' compensation defense firm in Oakland.</i>