Grinberg: Sacramento Moves to Shorten WC Investigation Period

Tuesday, May 18, 2021 | 1

Happy Monday, dear readers!  We are just powering through 2021, aren’t we?

Gregory Grinberg

So, pop quiz for you, dear readers. How many days does an employer have from receipt of the DWC-1 claim form to deny a claim? Well, if you were to look at Labor Code 5402, you’d see that an employer has 90 days to issue a denial.  But if you were to look into the future, the answer might be different… very different.

Senate Bill 335 would amend Labor Code section 5402 to reduce the 90-day investigation period to 45 days. The bill would also reduce COVID related investigation periods to 30 days (down from 45 for some cases). Finally, employers would be liable for the first $17,000 (up from $10,000) in medical treatment prior to the denial of the claim.

Let’s just do some basic arithmetic (come on, dear readers, it will be fun!)

An employee who has a history of back problems that pre-date the start of employment files a workers’ compensation claim for an injury to the back. The employer is skeptical as to causation and plans to request a panel. A delay notice issues about 10 days after receipt of the claim form, and the pro per employee requests a panel by mail. About 20 days later, the panel arrives and the first available appointment is in 45 days. The report will not issue for another 30 days after that.

In order to get a QME opinion about causation, the likely wait is going to be 105 days from when the claim form is provided to the employer. Mind you, dear readers, this is all very optimistic about the timeline. The typical time from claim form to QME opinion is a lot longer, often requiring replacement panels because the available QMEs cannot set timely.

It is tough enough to do a thorough investigation with 90 days, what is the employer supposed to investigate in 45 days? Most of the time, even a deposition is not available within 45 days, which means that more and more employers will have to issue a denial because an investigation cannot be completed in time.

Hopefully, SB335 goes the way all the other bad legislative ideas and becomes a footnote rather than law. But this is another example of the worrying trend coming from Sacramento which seems determined to make workers’ compensation an unbearable burden on California’s remaining employers. Certainly, as other states court California businesses by offering lower taxes and less regulation, the cost of workers’ compensation insurance per $100 of payroll will be an added incentive to move out.

Gregory Grinberg is managing partner of Gale, Sutow & Associates’ S.F. Bay South office and a certified specialist in workers’ compensation law. This post is reprinted with permission from Grinberg’s WCDefenseCA blog.