Schwarzenegger Strikes Down Bill to Increase Disabled Workers' Compensation

The bill struck down by Governor Arnold Schwarzenegger would have doubled the benefits available to workers with job-related permanent disabilities over three years. One of the elements in the legislation was toadopt American Medical Association guidelines for making objective determinations of injuries and rates of disability and, accordingly, for determining proper treatment and payments.

The veto came at about the same time a recent state report showed that changes in the state’s workers’ compensation system resulted in a $14.5-billion cost reduction.

The report by the state said physician fees and inpatient facility fees were reduced by approximately 4% each with the changes; pharmaceutical fees were cut by about 13% and outpatient facility fees by approximately 39%. It found that chiropractic utilization was cut by about 82% and physical therapy by 66%.

According to the news account. some argue that such a high level of cost savings – $4.5 billion more than what was predicted – could mean that disabled workers were getting neglected. However, Sam Sorich, president of California Insurance Companies said of the changes that led to the cost savings that “to have administrative agencies adjust the schedules rather than the legislature imposing across-the-board increases in benefits,” was a good move, he told BestWire.