Thursday, August 23, 2012

CA Reform: Disassociate PD with RTW

The proposed California reform is getting a lot of attention, particularly from those who oppose it.

Some may believe that I oppose it too. Let me be clear: I am not particularly opposed to the proposed reform bill. In my opinion there are some parts that are good for the system and some parts that have not been well though out.

I AM opposed to secret negotiations, and the failure of drafters and proponents to release the real data upon which they make savings and benefit increase claims.

Be that as it may, most of the objection that I have been reading about seems to be concerning the shift in permanent disability benefits to the lower and middle tier ratings, the independent medical review process and the change in physician fee schedules.

But there are other subtle items that I think would have a profound effect on claims.

One of these is a declination of PD if the injured worker returns to work.

The operative language in the draft bill reported by WorkCompCentral is:

SEC. 52. Section 4650 of the Labor Code is amended to read:

(2) Prior to an award of permanent disability indemnity, a permanent disability indemnity payment shall not be required if the employer has offered the employee a position that pays at least 85 percent of the wages and compensation paid to the employee at the time of injury or if the employee is employed in a position that pays at least 100 percent of the wages and compensation paid to the employee at the time of injury.

Allow me to put some experienced perspective to this provision.

I live in a blue collar town. Most of my friends and acquaintances at home are thus blue collar workers and many of them are union card holders too. I have quite a bit of experience (I have lived in the same house in this blue collar town since 1987) with their thoughts, mentality and motivations, particularly when it comes to matters of work injury since most everyone in my town knows that I am in the work comp industry.

I can say with authority (albeit anecdotally, but nevertheless with sufficient frequency to be credible): telling a blue collar worker that if they don't get any money if they go back to work is tantamount to telling them it is better to stay off of work.

That's right, amending Labor Code 4650 to eliminate that payment of permanent disability indemnity when the injured worker goes back to work means the injured worker will NOT return to work until and after his or her workers' compensation case has been resolved, which means more temporary disability indemnity and/or state disability.

The motivation of this amendment is completely backwards. If employers truly wanted to motivate an injured worker to return to work then there would be a REWARD for doing so, not a penalty.

The 2004 reforms introduced a complex, one sided, "reward" to employers for offering return to work. This provision just muddied up the permanent disability indemnity process, created more complex work for the claims adjuster to a) follow up on return to work offers, b) adjust indemnity payments, c) get challenged in court with evidence of return to work offers or not.

The proposed bill does away with this, frankly, stupid provision. That's good.

But creating a disincentive to return to work is bad.

We have seen time and time again that disability has nothing to do with whether someone can work.

Disability is a legal status. It is how society defines whether someone gets money and other benefits for being on the wrong side of an injury, illness or other circumstance that affects one's ability to take care of one's self.

There are plenty of examples of folks who overcome their impairments to do remarkable things: flying airplanes with no arms, competing as an Olympic sprinter with no legs, etc.

While an injured worker may not be able to return to the pre-injury occupation, there is always something socially productive someone with a physical or mental impairment can do.

The allocation of permanent disability indemnity should be disassociated with return to work status. They have nothing to do with one another and denying indemnity when there is return to work means that people won't return to work ... at least not until they get their fair share of money.

Ivory tower thinkers may not like that, but that's reality.

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