Re: “’Grand Bargain’ In Workers’ Comp Unravels, Harming Injured Workers Further,”
(March 4, 2015)
The reporting of Joel Ramirez’s case in the NPR/ProPublica article of March 4, 2015,
incorrectly implies that California’s negotiated workers’ compensation reforms of 2012
allowed Travelers Insurance to unilaterally cut off his home health care and renege on a
previously approved treatment plan. This is not accurate. Further, omitted in its entirety
in your report and misrepresented in the interactive graphics included, was any mention
of a nearly $1 billion increase in benefits for injured workers in California under the 2012
reforms.
On the question of cutting off home health care, agreed-upon medical treatment must be
honored, and California’s 2012 reform law, SB 863, did not change this. The insurance
company was responsible for Mr. Ramirez’s tragic situation, not the new law. When Mr.
Ramirez took his insurance company to court for having denied the health care services
he relied on, the court found no evidence that could justify ending those services and they
were restored. Under the 2012 reforms, unless a treating physician provides medical
evidence of a change in the injured worker’s condition that justifies modification of
agreed-upon treatment, the treatment cannot be modified.
Two important components of California’s reforms are utilization review and the newly
created independent medical review procedure. Utilization review ensures that treatment
requests by a physician are, in fact, medically necessary. This process prevents harmful
over-treatment and over-medication. The independent medical review program uses
neutral medical experts to make evidence-based determinations to more quickly resolve
disputes regarding the medical necessity of recommended treatment. This replaces the
prior system that delayed treatment because it required a costly and time-consuming
medical-legal process.
Regrettably, Travelers Insurance did not follow the mandated utilization review process,
which would have allowed Mr. Ramirez to then use the independent medical review
procedures to appeal. Instead, the insurance company unilaterally terminated Mr.
Ramirez’s round-the-clock home health care services outside of any approved procedure,
and he was left with no recourse but to take his insurance company to court.
As to the question of benefit cuts, California’s reforms in SB 863 united labor and
employers to improve the system for workers by increasing permanent disability benefits
and eliminating frictional costs of providing medically unnecessary
treatment. Permanent disability benefits were increased 30 percent – increasing
payments to injured workers by more than $800 million per year. Included in this major
benefit increase is up to $120 million annually in special funds for injured workers whose
employers do not offer them continued employment after the injury at approximately the
same pre-injury income levels.
I appreciate the opportunity to set the record straight on California’s progress to increase
benefits for injured workers and improve the medical treatment process.
David Lanier
Secretary
California Labor and Workforce Development Agency