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September 05, 2012
DIR expresses support for workers’ comp reform plan

The California Department of Industrial Relations (DIR) has announced support for a comprehensive plan to reform the state’s workers’ compensation system. The changes aim to protect employees while preventing sharp increases in the cost of doing business in the state. Cal/OSHA is a DIR agency.

Over the last several months, labor and employer groups have met with the department to develop substantial reforms to the comp system. The DIR has also sought input from hundreds of stakeholder at nine public forums.

Among problems identified are:

  • Low permanent disability benefits
  • Unnecessary delays and disputes in medical delivery
  • Lack of standard fee schedules
  • Poor oversight of medical provider networks
  • Liens overwhelming the courts

According to DIR, California employers paid $16.2 billion for workers’ compensation in 2011, and the cost continues to rise. The reform plan seeks to prevent such fee increases while fixing problems identified by stakeholders.

Under the plan, up to $1.3 billion could be saved by reducing expenses for liens, out-of-network treatment disputes, and other expenses. DIR says the improvements would yield about $750 million in additional compensation benefits, and California employers would save up to $670 million.

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