Christine Baker Addresses the Employers

Tuesday, July 26, 2011 | 0

By Julius Young
Boxer & Gerson

As yesterday's post noted, Workerscompzone is at Disneyland, site of the premier employer-side conference on California workers' comp.

Many readers may be interested in the keynote address given by Christine Baker, director of the California Department of Industrial Relations, at Thursday's luncheon.

Newly appointed DWC head Rosa Moran will be reporting to Baker, the DIR head. Baker noted that Moran will be finishing up her work as a Workers' Compensation Appeals Board judge within the next three weeks and then assuming her duties.

To my knowledge it is the first address given by Baker since she assumed this role. Baker's input is likely to be pivotal in what happens on the legislative and regulatory front with the system.

As a disclosure, I should note that I've consulted with Ms. Baker and her staff on several projects and studies while she was at the Commission on Health and Safety and Workers' Compensation. With years of experience in many roles in the workers' comp system, she has a firm grasp on the system's issues and the metrics behind the issues.

The conference is being covered by some excellent journalists who cover the workers' comp beat, Greg Jones of Workcompcentral (http://www.workcompcentral.com) and Brad Cain of the Workers' Comp Executive (http://www.wcexec.com). Readers can may wish to check those publications for their perspective as well.

The address was short on specifics about policy changes, but did reveal what the emphasis of the Brown administration is likely to be in workers' comp matters.

Without my editorializing, here are summaries of some of the key points made by Ms. Baker today:

• The DIR is looking to "consolidate" and "streamline"; with money being tight they will "have to do more with less". In some instances that may mean "breaking down silos", "prioritizing" and determining "core functions". This approach will also apply to other DIR agencies including Cal-OSHA, Labor Standards Enforcement, etc.
• Permanent disability benefits can be raised by reducing excessive costs elsewhere in the system.
• Labor enforcement is important; they will be sampling employers with five or more employees and doing targeted enforcement.
• There should be focus on reducing unnecessary liens and the disputes that cause them; most of the liens involve medical issues.
• With the Electronic Adjudication and Management System (EAMS), although there is "more right than wrong", there are many problems and the plan is to implement conclusions of a recent EAMS study "where possible"; there's a need to streamline EAMS and the Workers' Compensation Information system (WCIS).
• The DIR acknowledges that the 2004 reforms resulted in a 50% to 65% reduction in permanent disability.
• The administration is concerned that premium increases could damage the economy and therefore there is a need to reduce underlying cost drivers and "look for solid savings."
• Medical benefits are the fastest growing component of California workers' comp and closing some loopholes "could save tens of millions."
• A goal should be to simplify the system where possible and the administration will weigh costs and benefits of changes. Overall, the administration seeks adequate benefits for workers and employer costs consistent with a recovering economy.
• On the WCIS, there are many gaps in WCIS data and this needs to be addressed. The DWC needs the data, the information.
• Fee schedules will be a focus.
• The DIR's goal is to have the worker get appropriate treatment, to get the worker back to work where medically appropriate; the DIR seeks a balance, where there are adequate benefits for workers and where the costs to employers are fair. The goal is to restore the balance while restoring the California economy.
• In an answer to several questions about who would be at the table in meetings with stakeholders, Baker assured the group that employers would be included.
• In response to concerns that many feel the agreed medical evaluator/qualified medical evaluator process is broken, Baker noted that the DIR would take a look at the process and requested ideas on how to fix it.
• In response to a question of whether medical dispute resolution could be taken out of the WCAB and resolved in some other way, Baker mused as to whether savings could be achieved and whether labor would want to bargain with that.
• Noted that she had met with Governor Brown for a three-hour strategic meeting on the California economy and that the governor is concerned with increasing costs to employers in this economy.
• In response to a question on whether the General Fund was tapping into DIR money that is "user funded", Baker said that is not the case.
• In answer to a question about whether applicants' attorneys have a place at the table in system negotiations, Baker noted that the two key voices are labor and management but that applicants' attorneys represent workers and have a role just as insurance companies have a role.
• Responding to a question on a revision of the 2005 Permanent Disability Rating Schedule that did not occur in 2010 as mandated by statute, Baker noted that if the DIR can't find things to offset increased costs, it might have to be done legislatively but that they don't want a "tidal wave of costs."
• Asked a general question about whether the Brown administration had decided about some of the bills making their way through the legislature, Baker did not indicate Brown's position on specific bills.