Open to Making a Deal?

Friday, September 11, 2009 | 0

By Julius Young

Recently I did a post on reports that surfaced of back-room talks between Commission on Health and Safety and Workers' Compensation (CHSWC) members on a "grand bargain" comp reform. Those talks were leaked on WorkCompCentral.com and in an e-blast from the California Society of Industrial Medicine and Surgery and perhaps other places.

CHSWC executive director Christine Baker was quoted as denying awareness of the talks, which apparently resulted in a draft that looked a lot like an internal CHSWC document. Permanent disability benefit increases were under consideration, with proposed cost savings in the utilization review/qualified medical examiner (UR/QME) process and lien procedures, among others.

Some of those proposals were intriguing, such as a COLA-type factor for permanent disability (PD) benefits. Some were meanspirited, such as prohibiting PD advances. And some, such as abolishing the ability to rebut the PD schedule, were just not wise from the disabled worker standpoint. There was an upfront hostility to lawyers in the draft.

The prospect of an emerging back-room deal caused concern on the part of many observers. It brought back memories of 2004. Attorneys and other stakeholders were shut out of the 2004 negotiations which resulted in SB 899, with disastrous results for many working folks.

Last week, both California Labor Federation's Angie Wei and employer spokespersons were quoted as saying that talks had stalled after release of the document.

On Thursday, WorkCompCentral's Jim Sams reports on an interview with John Duncan, director of the Department of Industrial Relations. Duncan apparently believes that the DWC will meet the Jan. 1, 2010, deadline for updating the 2005 PD rating schedule. But he is quoted as saying "I'm not going to preclude a grand legislative understanding that preempts our regulatory obligation in some action".

So is it "Let's Make a Deal" time?

This could happen in various ways. Until the last legislative gavel falls, a bill could be gutted and serve as a vehicle for a grand bargain. But the legislature has huge remaining issues on its plate, prison reform and water policy reform. And many legislators may be reluctant to rubber stamp a late back-room deal, particularly if it isn't well vetted to a range of system stakeholders.

Many of those stakeholders are political allies and campaign contributors of key legislators, so it would appear unlikely that the process could or would move in the same way as the 2004 reform. Unlike 2004, where legislators were acting in the shadow of threats of a workers' comp initiative, there is not a current sense of a comp crisis.

Another option could be a special legislative session, but Duncan apparently declined to say that was an option in the WorkCompCentral interview. It's hard for this observer to see the governor calling a special session to deal with comp. It's been his signature issue. Revisiting it would be an admission that the system was not fixed, or not fixed properly. And with the governor's juice fading, that's risky.

But what is apparent is that the employer community recognizes that there will be a revision of the Permanent Disability Rating Schedule (PDRS) somehow. It's required by statute. There's already a template, the 2009 PDRS revise that was never adopted. Whether employers are on the verge of a deal or whether they mistimed their strategy remains to be seen.

I'm on my way to a week on the azure waters of Croatia's Dalmatian Coast, but what would I like to see while I'm gone?

I'd like to see Senator DeSaulnier's Senate Industrial Relations Committee take the lead in holding some hearings on the PDRS revision and the various proposals being circulated for counterbalancing cuts. Let's shine a bit of light on what some of the proposals would cost.

What savings could be achieved, and how would these affect the system?

Care should be taken to inquire as to how any proposals would affect an individual's right to seek justice and redress for the effect of the injury on their wage earning capacity. Proposals that will lead to more "cookie cutter justice" need to be explored carefully.

Applicant attorneys and doctors should be ready to price out system savings they would propose. Nobody wants to negotiate in public, but there should be a way to put some numbers on systemic change proposals.

There may in fact be ways to improve delivery of medical treatment, ways to streamline the UR/QME process, and ideas to improve the lien process. I would not reflexively reject innovative ideas on those things.

Labor representatives should drop the canard that they are the only negotiating voice for injured and disabled workers. That's not credible and, frankly, offensive. Many of us who represent disabled workers - union members or not - are in this together for the long haul. Many of us have relationships with labor locals that go back decades.

Such hearings could also clarify the proper role of CHSWC in all of this. There has been some concern about CHSWC members or its staff preparing proposals that are not vetted to its own members and officials.

Any hearings should be done in a deliberative fashion, not rushed.

If health care reform in Washington appears to be gathering steam, hearings could examine how those changes may affect workers' comp in California.

We've seen what happens when the votes are taken before the print on the bill is dry. It's not pretty.

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Julius Young is an applicants' attorney with Boxer & Gerson LLP in Oakland. This column was reprinted with his permission from his blog, www.workerscompzone.com
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