In recent months, there has been a lot of activity in the California legislature related to the Workers' Compensation system. The legislators passed several reforms that may affect your business. These reforms will likely change again in the up-coming months.

As a Workers' Compensation specialist, we at Zenith want to assist you in understanding how these laws could affect your policy, future claims and your workers' benefits. Below you will find a summary of the current impact of the reform. If you have any questions at all regarding these changes or your policy, feel free to contact us at 800-440-5020.

1. Benefit changes are effective 1/1/04. While the minimum temporary disability rate remains at $126, the maximum temporary disability rate increases from $602 to $728 per week. There are also moderate changes in the permanent partial disability weekly rate.
2. Cost of living adjustments apply to all injuries with a date of injury 1/1/03 for permanent total disability and life pension cases. The amount of adjustment is based on the increase of the state average weekly wage for the year. Note that the adjustment for life pension cases will not actually take place until all of the permanent partial disability has been paid out.
3. Formal vocational rehabilitation has been repealed effective 1/1/04. For injuries on or after 1/1/04 rather than the employee participating in a formal rehabilitation plan, a voucher will be given for use in this area with the amount based on the level of permanent disability if the employee is not afforded an opportunity to either return to his/her regular employment, including alternative or modified employment if indicated.
   
   • The voucher levels are:
   • 1. 1% - 15% - $,4000 voucher
   • 2. 16% - 25% - $6,000 voucher
   • 3. 26% - 49% - $8,000 voucher
   • 4. 50% - 99% - $10,000 voucher
4. Treating physicians no longer carry the presumption of correctness at the Workers' Compensation Appeals Board unless they have been predesignated prior to the date of injury by the selection of a physician who previously directed the medical treatment of the employee, and also maintains the employees medical records and medical history.
5. Medical Treatment Changes:
   • The State has adopted treatment guidelines that as published by the American College of Occupational & Environmental Medicine that outlines specific treatment plans based on the specific diagnosis provided by the treating physician. These guidelines, effective 3/22/04 shall be presumptively correct on the issue of extent & scope of medical treatment.
   • The State has mandated a second opinion for any second spine surgery, prior to authorization.
     *The impact of both of these items is yet to be determined.
6. Outpatient hospital fees have been regulated to 120% of Medicare rates for payment.
7. For injuries occurring on and after 1/1/04 an employee shall be entitled to no more than 24 chiropractic and 24 physical therapy visits per industrial injury, unless more are authorized in writing by the insurance carrier.