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Archive | January, 2005

Workers’comp injured hold protest

Posted on 20 January 2005 by admin

They say system’s recent overhaul denies them care they need

Tom Abate, Chronicle Staff Writer
Thursday, January 20, 2005

Workers hurt on the job rallied in Oakland on Wednesday to argue that recent overhauls to the workers’ compensation system have gone too far, making it harder for people hurt on the job to get benefits.

“Until now, voters injured at work have had no political voice,” said Steve Duncan, a founder of the newly formed political action group VotersInjuredatWork.org.

The group was formed to protest changes in the workers’ compensation system put in place in the last few years that have curtailed employers’ fast- rising costs. The workers group says the savings are being achieved in part by depriving those hurt on the job of benefits they deserve.

Duncan, 53, survived a 1999 oil refinery accident near Martinez by jumping off a 57-foot catwalk and landing in flames. He said that while most of his claims were handled under the old rules, the changes are making it harder for him and other injured workers to get treatment.

“They delay everything. You have to prove this and prove that,” said Duncan, who has a history of political action over workers’ compensation. He was one of several activists who persuaded former Gov. Gray Davis to sign legislation increasing benefits in 2002.

Sen. Charles Poochigian, R-Fresno, who wrote the most recent in a series of bills designed to curb the rising cost of workers’ compensation costs, noted that the new group is backed by the California Applicants’ Attorneys Association, composed of lawyers who represent injured workers. He said the attorneys instigated the protest out of fear that the changes would cut their income.

“Nothing that was done was intended, nor has the effect of harming truly injured workers,” Poochigian said.

Oakland resident Peggy Sugarman, who is the executive director of the workers group, which is based in Sacramento, said the attorneys association had provided less than $100,000 to start Voters Injured at Work. She said the group plans to recruit enough $25-a-year members to become self-sustaining.

“We hope to have 10,000 members by next January,” said Sugarman, a former deputy director of the state Division of Workers’ Compensation.

About 100 people attended Wednesday’s rally in Oakland outside the state office building where the Workers’ Compensation Appeals Board settles benefit disputes between injured workers and their bosses or insurers. Sugarman said rallies were scheduled at more than a dozen similar locations statewide.

Frances Quintana, 44, of Union City attended the Oakland rally at the suggestion of her lawyer to protest recent changes that have ended her access to acupuncture. Quintana said the treatments helped relieve the pain of carpal tunnel injuries sustained during 23 years as a court clerk.

“I am not faking,” said Quintana, in response to a question about the oft-repeated charge that workers’ comp rolls are swelled with abusers. “I’ve worked very hard,” she said. “That’s the only job I’ve ever had since I was 20 years old.”

Three bills — two passed before and one after the 2003 gubernatorial recall election — have sought to curb the costs of providing medical treatments and disability payments to injured workers. The legislation was passed after employers were stung by a series of double-digit increases in workers’ compensation insurance premiums that began in 2000.

In legislative hearings, critics argued that injured workers in California used more medical services and spent more time out of work than employees in other states, suggesting a lax system in need of reform.

Organized labor argued that the premium crisis was partly precipitated by the deregulation of insurance rates beginning in 1993.

Rates dropped for several years, but competition became so cutthroat that, by 2000, more than 20 insurance firms were either leaving the California market or on their way to bankruptcy.

Against this backdrop, the Democratic-controlled Legislature — first under Democrat Davis and then Republican Gov. Arnold Schwarzenegger — overhauled the system twice.

Lawmakers created guidelines for medical treatments, set standards for disability pay for certain injuries and let employers form preapproved pools of doctors to treat the injured instead of letting workers choose doctors for themselves.

The Workers’ Compensation Insurance Rating Bureau, a San Francisco group that is the system’s official fact-gatherer, released data last week showing that cost containment is working.

The average cost per indemnity claim, after rising steadily from about $19,000 in 1992, began to level off at roughly $50,000 in 2002. Insurance premiums have retreated about 16 percent from their July 2003 peak, it said.

But injured workers say the premiums are still too high.

In 1999, insurers incurred $1.82 in costs and liabilities for every dollar they collected in premiums, the Bureau said. In 2003, the comparable figure was 85 cents per dollar.

“We are calling for insurers to roll back their prices at least 30 percent,” Duncan said at the injured workers’ rally in Oakland on Wednesday.

Nicole Mahrt, Sacramento spokeswoman for the American Insurance Association, said that without the recent changes, premiums would have continued to escalate, meaning that the 16 percent cuts understate the savings.

Economist David Neumark, who will summarize the reforms at a Public Policy Institute of California forum in San Francisco today, framed the latest turn in the debate this way:

“Are we creating a system that reins in costs and is humane to workers or that is going to aggressively cut costs but not meet their needs? It’s too early to say.”

E-mail Tom Abate at tabate@sfchronicle.com.

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State Is Sued Over Workers’ Comp Rules

Posted on 20 January 2005 by admin

New regulations would cut benefit payments to permanently disabled employees. A complaint by workers and lawyers asks a Sacramento judge to halt enforcement.

By Marc Lifsher
Times Staff Writer

January 20, 2005

SACRAMENTO — Injured workers and the lawyers who represent them sued the state of California on Wednesday in an effort to overturn recent state regulations that would cut benefit payments to permanently disabled workers.

The lawsuit, filed by VotersInjuredatWork.org and the Applicant Attorneys Assn., contends that the regulations reduce permanent-disability benefits by a much greater amount than lawmakers intended when they approved a sweeping overhaul of the state’s workers’ compensation system last spring.

The complaint asks a Sacramento Superior Court judge to issue an injunction, restraining the state from enforcing the new regulations.

“These are devastating reductions, and we do not believe they are permitted by the California Constitution,” said Steve Hopcraft, a spokesman for the applicants’ attorneys, who represent injured workers in special Workers’ Compensation Appeals Board courts.

The attorneys’ and injured workers’ groups claim that benefits could be slashed by more than 50% under the new rules, which were drafted by Andrea Hoch, the administrative director of the state Division of Workers’ Compensation. Hoch and her agency are the defendants in the lawsuit.

The regulations, which took effect Jan. 1, are a key part of the complex revision of the legal and medical criteria used to prescribe treatment for on-the-job injuries and to award permanent disability benefits to compensate employees for lost wages.

Fixing the workers’ comp system was a major legislative goal for Gov. Arnold Schwarzenegger last year. Rick Rice, assistant secretary of the California Workplace and Development Agency, dismissed the lawsuit as “a desperate act” to slow implementation of the overhaul, just as it’s beginning to bring down sky-high workers’ comp insurance premiums.

Sen. Charles Poochigian (R-Fresno), the author of the 2004 workers’ compensation bill, said he wasn’t surprised that the applicants’ attorneys are involved in the suit. “These are the people who profit from the broken system, so it’s in their interest to undermine it,” he said.

Poochigian’s district office in Fresno was one of 19 government offices targeted by the new injured workers’ organization for protests Wednesday.

However, the biggest demonstration occurred in downtown Los Angeles. About 400 people rallied for about an hour in front of an office at a courthouse where administrative law judges hear workers’ compensation appeals cases.

At a simultaneous protest at the appeals board in Santa Ana, the president of VotersInjuredatWork.org, Mark Hayes, vowed that his organization “will fight to win back the right to choose our doctor, restore our benefits and punish fraud by insurance companies.”

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Injured Workers, Attorneys Challenge Governor Schwarzenegger’s Proposal Cutting Injured Workers’ Disability Compensation by Two-Thirds

Posted on 19 January 2005 by admin

FOR IMMEDIATE RELEASE:
Wednesday, January 19, 2005 Contact: Steve Hopcraft 916/457-5546;
steve@hopcraft.com

INJURED WORKERS, ATTORNEYS CHALLENGE GOVERNOR SCHWARZENEGGER’S
PROPOSAL CUTTING INJURED WORKERS’ DISABILITY COMPENSATION BY TWO-THIRDS

SACRAMENTO – VotersInjuredatWork.org and attorneys for injured workers filed a lawsuit today challenging the governor’s authority to chop injured workers’ permanent disability compensation by up to two-thirds. A complaint seeking to block drastic reductions in the already-meager compensation injured workers receive was filed in Sacramento Superior Court. The Complaint charges that the Schwarzenegger Administration’s Permanent Disability Ratings Schedule (PDRS) “fails in every critical respect” to comply with the law (SB 899), and will have “dire consequences” for Californians injured on the job. The lawsuit charges that the Administration failed to consider whether the new schedule would provide adequate benefit levels, as guaranteed in the California Constitution. The suit seeks to have the schedule set aside or declared ineffective.

A UC Davis professor’s scientific study of the impacts on injured workers of Governor Schwarzenegger’s permanent disability compensation schedule was released in December. Conducted by University of California at Davis Professor Dr. J. Paul Leigh, the study of 218 back, shoulder, wrist and knee injuries found that under the governor’s disability schedule permanent disability ratings would reduce injured workers’ disability ratings by 28%. Workers injured on the job would receive just one-third of the compensation they currently receive.

Mark Hayes, president of VotersInjuredatWork.org, an injured workers’ advocacy group, said, “The consequences for injured workers are dire. The ratings fail to replace workers’ pre-injury earnings. If these drastic reductions take effect, more Californians will lose their cars, their homes and their good credit. Injured workers will end up on welfare, because there’s no way to live if present disability compensation – already too low – is reduced.”

Injured workers’ advocates and California Applicants’ Attorneys Association President David Schwartz said that the Schwarzenegger Administration’s “permanent disability ratings schedule is not based on empirical data or studies, and fails to measure diminished future earnings capacity, as required by the law.” Schwartz said that Schwarzenegger’s Administrative Director, Andrea Hoch, “is the most anti-worker bureaucrat to come along in the past 30 years. Her proposed regulations fly in the face of the Legislature’s intent. There is no legal basis for what she has done, which she calls a ‘policy decision.’ Her own Commission on Health, Safety and Workers Compensation has said her regulations reduce permanent disability compensation by 50%. Nowhere does the law give her authority to make a ‘policy decision’ that severely reduces permanent disability benefits to injured workers. The Administration has refused to follow the statute and the Legislature’s intent.”

Director Hoch testified before the State Senate Committee on Industrial Relations in December that she did not even know how the new PDRS would change overall benefit levels.

Schwartz said that the new cuts set permanent disability levels “lower than they were in 1983. Injured workers will lose up to two-thirds of the meager compensation they get now.” A study by the RAND Institute for Civil Justice (RAND) found that “adequacy” requires replacement of two-thirds of a worker’s pre-injury earnings.

“According to a RAND, California workers received inadequate permanent disability benefits under the pre-SB 899 PDRS because the benefits replaced so little of workers’ lost pre-injury earnings. Director Hoch’s new regulations take these already-inadequate benefits and slash them deeply, by as much as 50-70 percent below pre-SB 899 levels. These devastating reductions are neither permitted by California’s constitutional guarantee of ‘adequate’ benefits, nor were they intended by the Legislature,” said attorney James Harrison, who drafted the Complaint. “California’s employers pay among the highest workers’ compensation insurance rates in the nation, yet injured workers in California receive benefits that are well below other states when measured as a proportion of lost earnings.”

Here are some examples of injured workers who would be harmed by the governor’s proposal:

A carpenter with an injury to both shoulders who cannot lift his arms, or work, above the shoulder, would be rated 46% disabled and receive $51,550 presently. That same injured carpenter would be rated just 18% disabled and receive only $16,050 under the Administration’s plan. In 1983, this same injured worker would have received $28,000 (equal to $52,532 in 2004 dollars), significantly more than under the Administration’s proposal.

A warehouseman with a leg injury that requires amputation just below the knee, and gets an artificial leg, would receive $62,000 under the present schedule. Under the governor’s proposal, he would receive just $36,000. (In 1983, this same injured worker would have received $34,000, which is worth $64,150 in 2004 dollars. [Consumer Price Index Conversion Factor])

“The proposed new rating schedule will result in a two-thirds reduction, on average, in permanent disability benefits for injured workers,” said Schwartz. “These new ratings will not provide fair or adequate benefits for injured workers.”

Dr. J. Paul Leigh, a Professor of Health Economics, Center for Health Services research in Primary Care at the UC Davis School of Medicine,. His study examined 218 cases of specific injured workers from across the state with a range of the most frequent and costly work injuries. A doctor who had been agreed upon by the insurance carrier had rated each case under the present disability schedule. The cases were analyzed by independent physicians with expertise applying the American Medical Association Guides. Their findings were then rated by one of California’s most expert disability raters. The average difference between the ratings under the current system and the governor’s proposed schedule was 28 percentage points.

The horrendous impact the governor’s proposed cuts would have on injured workers was made clear by the case of Domenico Argentino, 55, who worked for 28 years at NASSCO’s San Diego shipyard worker, building scaffolding for ship repairs. Over his many years of work at the shipyard, Mr. Argentino sustained injuries to his left lower leg, both knees, and back. He suffers from constant low back pain, and cannot bend without pain. Under the present disability rating schedule, Mr. Argentino is rated as 30% disabled. Mr. Argentino is unable to return to his job, which involved lifting, carrying, climbing, hanging, squatting, twisting and pivoting. Under the governor’s proposed schedule, Mr. Argentino would be rated just 4% disabled.

PLEASE CLICK ON ICON TO VIEW LAWSUIT.

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Injured Workers Launch Political Group

Posted on 19 January 2005 by admin

FOR RELEASE – 12:01 am:
WEDNESDAY, JANUARY 19, 2005
Contacts: Mark Hayes 562/630-1235, cell 714/396-5260,
Peggy Sugarman 510/465-3974, cell 510/520-6052
Steve Hopcraft 916/457-5546, cell 916/956-4592

INJURED WORKERS LAUNCH POLITICAL GROUP:
19 Protests Kick Off Campaign to Protect Injured Workers;
Injured Workers Revolt to Stop Attacks on Rights, Care & Compensation,
Propose Twelve California Workers Compensation Solutions

SACRAMENTO, CA – Injured workers across California today formed a new political group to fight for the rights of voters injured on the job. VotersInjuredatWork.org kicked off a new campaign to stop attacks by insurance companies, the governor and other politicians on injured
workers’ rights, medical care and disability compensation with a series of statewide protest news
conferences.

“Republican Arnold Schwarzenegger and the Democrats in the Legislature cut worker
Compensation benefits by as much as 50% and took away our right to choose our doctor,” said Mark Hayes, president of the new non-profit political organization of injured workers and their
families. Hayes, an Orange County court reporter spent over 31 years working in the Orange
County Superior Court. Unfortunately, after years of dedicated hard work, Mark now suffers from work-related injuries (including hypertension, hypertensive heart disease, post surgical neck, post surgical right shoulder, left shoulder tendonitis, tendonitis in both elbows, left shoulder tendonitis, low back injury, wrist and hands). “They forget,” said Hayes at the Santa Ana protest, “we are Voters! The Republicans and Democrats ganged up on us to help the insurance companies that fund their campaigns. Now, workers’ compensation insurance companies are making more money. But we’re the ones who got injured. Worker compensation isn’t welfare that comes from taxpayers. The California Constitution guarantees Workers Compensation. Politicians, shouldn’t cut our benefits because special interests tell them to. We
earned them, sacrificing our health at work. The only thing the politicians understand is power.

VIAW.org will fight to win back the right to choose our doctor, restore our benefits, and punish
fraud by insurance companies.”
VotersInjuredatWork.org launched its organizing drive with statewide protests at 18 Regional
Workers’ Compensation Appeals Boards and the Fresno office of Sen. Charles Poochigian.

Poochigian authored the governor’s SB 899 that took away basic rights, medical care and
disability compensation. Groups of angry voters who’ve been injured at work and their families
and supporters protested in Anaheim, Long Beach, Los Angeles, Oakland, Pomona, Redding,
Riverside, Sacramento, Salinas, San Bernardino, San Diego, San Francisco, San Jose, Santa Ana,
Santa Monica, Santa Rosa, Stockton, and Van Nuys.

“Hundreds of thousands of voters are injured on the job in California each year, yet have no
political voice,” said “We were injured in the service of our employers and California as a whole.

We demand the medical care and compensation guaranteed us in the Constitution. The governor and Legislature harmed us worse than our on-the-job injuries by taking away our rights. We are going to fight back, and we will go after those politicians who scapegoat injured workers. Today is the beginning of an effort to organize tens of thousands of voters injured on the job to elect our friends, and punish our enemies.”

“Voters Injured at Work.org will provide a strong voice in Sacramento to help enact legislation that will rebalance the California workers’ compensation system that has been ‘fixed’ at the
expense of injured workers,” said Steve Duncan, a VotersInjuredatWork board member and Tosco Oil Refinery worker who was caught in an explosion that killed four workers and left him
permanently injured when he leapt from a height of 47 feet – an act that ultimately saved his life
– to try to escape the explosion. “VIAW will work to prevent others from having to go through the severe physical and financial hardships that I have experienced. What the governor and the politicians have done to injured workers is often worse than our work injuries.” Victor Villa, of Lomita, a Southern California Gas Company employee, fell, while carrying 65-
85 pounds of equipment, and injured his shoulder when a gas meter broke loose in a crawlspace.
The series of injuries, which were originally diagnosed as minor, culminated in the need for
shoulder surgery for a torn rotator cuff. He had surgery for the second time to his shoulder in
May of 2004, only to be told that he will have to have it replaced in the near future with a metal
ball and socket. Victor experienced cynicism, financial hardship and harassment by his employer since his injuries on the job. Mr. Villa was originally sent to a company doctor who concluded that Victor was not a qualified injured worker. Despite Victor’s need for shoulder surgery, he was called back to work and suspended by the company. “I voted for our new Governor because he said he would work to resolve the problems of the workers compensation system and get our state going in the right direction and grow jobs. He apparently wants to make changes in the workers comp system at the expense of the injured workers. We will no longer remain silent. It is time that the injured had a voice.”

The VotersInjuredatWork.org agenda includes:
• Access to appropriate medical care with a physician of our choice.
• Improved benefit levels.
• Assistance in returning to gainful employment.
• Increasing enforcement of existing laws that protect workers.
• Improving benefit delivery and system performance.

The Executive Director of VotersInjuredatWork.org, Peggy Sugarman, is a former Chief Deputy
Administrative Director for the Division of Workers’ Compensation under governors Pete Wilson and Gray Davis. Peggy took on the task of helping organize VotersInjuredatWork.org
because, “California workers are hurt in the line of duty and have no choice but apply for
workers’ compensation benefits – it’s their only remedy in California. Yet, they and their
families are treated like second-class citizens, having to deal with long delays in getting
necessary medical treatment, denials of care, and late payment of their meager benefits. The
California Constitution requires the system to provide necessary medical care and to relieve
workers from the consequences of the injury. It’s failing and we have to do something about it.
Getting hurt in the service of your employer is not supposed to be an immediate ticket to pain
and poverty.”

Ms. Sugarman announced the launch of the group’s website, VotersInjuredatWork.org, and
urged injured workers and their families to visit the site, join the group and help fight for the
rights of California voters who are injured on the job. “Today is historic. Hundreds of thousands
of Californians are injured at work each year. They are angry, and well they should be. We
intend to focus that anger on changing the politicians, laws and practices that don’t heal injured workers, but just hurt them more. The days of scapegoating injured workers are over as of today.

By the end of 2005, we intend to have tens of thousands of members who will work to elect
leaders who’ll fight for injured workers, and to get rid of those who won’t.”

Other members of the VotersInjuredatWork.org board of governors are:
Dolores Gallegos, a former computer science high school teacher and current member of the
Hanford City Council, developed carpal tunnel syndrome. Her employer sent Dolores to a
company doctor who initially denied her injury was caused by her work. Dolores was fired from
her job two weeks after filing her workers compensation claim, “I lost my car, my home, and almost two years of my life. The insurance company tried to make it look as if I was not injured. They denied and delayed and ran me around, hoping that I would drop my case. I’m sure that
with many injured workers these tactics are successful.”

Larry Anderson spent 30 years as a Firefighter for the City of Orange. He was diagnosed with
Non Hodgkins lymphoma in March, 2000, and with asthma in June, 2000. After being taken off
the job, Larry’s benefits were discontinued by the fire department. After benefits were reinstated with the help of his attorney, the County of Orange fell into bankruptcy. Larry was left without any disability pay for months. Since then, three different adjusting agencies have handled Larry’s claim. He has been subjected to four depositions and has appeared in court seven times with no
end in sight. “Injured workers are subjected to emotional and financial losses on top of our work injuries. I’ve gone to 40 doctors, 9 workers compensation courts and came within a week of
losing my home. All our savings are gone, and so is our good credit. I’m now retired, though
with very little money. I look forward to fighting for the dignity of the injured workers of
California.”

Scott Hayes of Sacramento brings a unique perspective to VotersInjuredatWork.org, having been a Workers’ Compensation claims examiner for five years before developing back and neck
problems as a result of his job. His employer fired him for filing a claim. “I became involved in
the fight to protect injured workers as a result of my experiences dealing with my injury claim,” said Scott. “If I, with my knowledge of workers’ compensation rules and regulations, have had such a difficult time in getting treatment and benefits, how can we expect the average person
with no experience to get what they need and deserve?”

Connie Cardinalli, of Manteca, is the widow of John Cardinalli, Jr., an injured electrician who
committed suicide in despair after fighting unsuccessfully to get the care needed to recover from his work injuries. “The workers’ comp system treats injured workers worse than convicts in prison.”

Ms. Cardinalli blamed her husband’s suicide on “a never-ending battle with a system
that was never on his side.” Ms. Cardinalli charged that “company doctors want to overmedicate
and not treat the injuries. My husband did not take his own life, he was murdered by a system
that ignores, delays and avoids the needs of the injured worker.”

John Cardinalli was 43 years old when his life ended. The Manteca resident had worked as a
production worker and electrician for many years, and developed back injuries while on the job.
John had a failed back with intractable pain. After years of dealing with disabling pain, and after a request for psychiatric care was not approved, Mr. Cardinalli killed himself on August 15th by overdosing on pain medications.

VotersInjuredatWork.org will work to elect political candidates who care about the plight of
California’s injured workers and their families.
Twelve California Workers Compensation Solutions
VotersInjuredatWork.org has identified a dozen of the most pressing problems in workers’’
compensation today, along with our proposed solutions.

Problem No. 1: Injured workers are not getting proper medical care.

Solution: Medical Treatment Appropriate for the Individual’s Injury.

Problem No. 2: Medical Treatment is being Delayed or Unfairly Denied

Solution: Tighten Timeframes and Increase Accountability

Problem No. 3: Choice of Doctor has been Restricted

Solution: Workers must be allowed to Choose Their Own Physician

Problem No. 4: Temporary Disability Benefits were Capped at 104-Weeks

Solution: Temporary Disability Benefits Should Not be Capped
The arbitrary limit on the payment of temporary disability benefits of 104 weeks within a two-year period is just plain ridiculous.

Problem No. 5: Vocational Rehabilitation Benefits Were Eliminated

Solution: Injured Workers Need Help Returning to Work

Problem No. 6: Permanent Disability Benefits Were Cut; Pain Ignored

Solution: A permanent disability schedule that fairly compensates workers disabled due to an injury or illness that arises out of their employment and that does
not ignore the pain that accompanies a disability.

Problem No. 7: 15% is Unfairly Subtracted from Permanent Disability if worker returns to
work

Solution: Stop punishing workers who have a permanent disability yet still return to work.
We need a fair system of compensating workers for lifetime disabling injuries.

Problem No. 8: Disability benefits have been reduced (or “apportioned”) to “causation.”
(Labor Code 4663).

Solution: The laws governing “apportionment to causation” must be eliminated or
clarified to mean that a prior condition had to have been work disabling in
order to be subject to apportionment. The introduction of “fault” only against workers when employers still can’t be sued for negligence in workers’ compensation is both unfair and, we believe, unconstitutional.

Problem No. 9: There is no longer any meaningful penalty for insurance companies or employers who unreasonably delay or deny benefits.

Solution: Increase Penalties for Unreasonable Claims Handling

Problem No. 10: State Audits Show Poor Claims Practices

Solution: Raise the Standards for Proper Claims Handling and Increase state audits

Problem No. 11: The price of Workers’ Compensation Insurance is unregulated.

Solution: Adopt authority for the Insurance Commissioner to regulate rates so that
documented cost savings will be passed on to employers in the form of lower and reasonable rates.

Problem No. 12: Fraud in the system hurts legitimately injured workers.

Solution: Support fraud prosecution that is fair and balanced.

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viaw.org and attorneys for injured workers filed a lawsuit today challenging the governor’s authority to chop injured workers’ permanent disability compensation by up to two-thirds.

Posted on 19 January 2005 by admin

SACRAMENTO – VotersInjuredatWork.org and attorneys for injured workers filed a lawsuit today challenging the governor’s authority to chop injured workers’ permanent disability compensation by up to two-thirds. A complaint seeking to block drastic reductions in the already-meager compensation injured workers receive was filed in Sacramento Superior Court. The Complaint charges that the Schwarzenegger Administration’s Permanent Disability Ratings Schedule (PDRS) “fails in every critical respect” to comply with the law (SB 899), and will have “dire consequences” for Californians injured on the job. The lawsuit charges that the Administration failed to consider whether the new schedule would provide adequate benefit levels, as guaranteed in the California Constitution. The suit seeks to have the schedule set aside or declared ineffective.

A UC Davis professor’s scientific study of the impacts on injured workers of Governor Schwarzenegger’s permanent disability compensation schedule was released in December. Conducted by University of California at Davis Professor Dr. J. Paul Leigh, the study of 218 back, shoulder, wrist and knee injuries found that under the governor’s disability schedule permanent disability ratings would reduce injured workers’ disability ratings by 28%. Workers injured on the job would receive just one-third of the compensation they currently receive.

Mark Hayes, president of VotersInjuredatWork.org, an injured workers’ advocacy group, said, “The consequences for injured workers are dire. The ratings fail to replace workers’ pre-injury earnings. If these drastic reductions take effect, more Californians will lose their cars, their homes and their good credit. Injured workers will end up on welfare, because there’s no way to live if present disability compensation – already too low – is reduced.”

Injured workers’ advocates and California Applicants’ Attorneys Association President David Schwartz said that the Schwarzenegger Administration’s “permanent disability ratings schedule is not based on empirical data or studies, and fails to measure diminished future earnings capacity, as required by the law.” Schwartz said that Schwarzenegger’s Administrative Director, Andrea Hoch, “is the most anti-worker bureaucrat to come along in the past 30 years. Her proposed regulations fly in the face of the Legislature’s intent. There is no legal basis for what she has done, which she calls a ‘policy decision.’ Her own Commission on Health, Safety and Workers Compensation has said her regulations reduce permanent disability compensation by 50%. Nowhere does the law give her authority to make a ‘policy decision’ that severely reduces permanent disability benefits to injured workers. The Administration has refused to follow the statute and the Legislature’s intent.”

Director Hoch testified before the State Senate Committee on Industrial Relations in December that she did not even know how the new PDRS would change overall benefit levels.

Schwartz said that the new cuts set permanent disability levels “lower than they were in 1983. Injured workers will lose up to two-thirds of the meager compensation they get now.” A study by the RAND Institute for Civil Justice (RAND) found that “adequacy” requires replacement of two-thirds of a worker’s pre-injury earnings.

“According to a RAND, California workers received inadequate permanent disability benefits under the pre-SB 899 PDRS because the benefits replaced so little of workers’ lost pre-injury earnings. Director Hoch’s new regulations take these already-inadequate benefits and slash them deeply, by as much as 50-70 percent below pre-SB 899 levels. These devastating reductions are neither permitted by California’s constitutional guarantee of ‘adequate’ benefits, nor were they intended by the Legislature,” said attorney James Harrison, who drafted the Complaint. “California’s employers pay among the highest workers’ compensation insurance rates in the nation, yet injured workers in California receive benefits that are well below other states when measured as a proportion of lost earnings.”

Here are some examples of injured workers who would be harmed by the governor’s proposal:

A carpenter with an injury to both shoulders who cannot lift his arms, or work, above the shoulder, would be rated 46% disabled and receive $51,550 presently. That same injured carpenter would be rated just 18% disabled and receive only $16,050 under the Administration’s plan. In 1983, this same injured worker would have received $28,000 (equal to $52,532 in 2004 dollars), significantly more than under the Administration’s proposal.

A warehouseman with a leg injury that requires amputation just below the knee, and gets an artificial leg, would receive $62,000 under the present schedule. Under the governor’s proposal, he would receive just $36,000. (In 1983, this same injured worker would have received $34,000, which is worth $64,150 in 2004 dollars. [Consumer Price Index Conversion Factor])

“The proposed new rating schedule will result in a two-thirds reduction, on average, in permanent disability benefits for injured workers,” said Schwartz. “These new ratings will not provide fair or adequate benefits for injured workers.”

Dr. J. Paul Leigh, a Professor of Health Economics, Center for Health Services research in Primary Care at the UC Davis School of Medicine,. His study examined 218 cases of specific injured workers from across the state with a range of the most frequent and costly work injuries. A doctor who had been agreed upon by the insurance carrier had rated each case under the present disability schedule. The cases were analyzed by independent physicians with expertise applying the American Medical Association Guides. Their findings were then rated by one of California’s most expert disability raters. The average difference between the ratings under the current system and the governor’s proposed schedule was 28 percentage points.

The horrendous impact the governor’s proposed cuts would have on injured workers was made clear by the case of Domenico Argentino, 55, who worked for 28 years at NASSCO’s San Diego shipyard worker, building scaffolding for ship repairs. Over his many years of work at the shipyard, Mr. Argentino sustained injuries to his left lower leg, both knees, and back. He suffers from constant low back pain, and cannot bend without pain. Under the present disability rating schedule, Mr. Argentino is rated as 30% disabled. Mr. Argentino is unable to return to his job, which involved lifting, carrying, climbing, hanging, squatting, twisting and pivoting. Under the governor’s proposed schedule, Mr. Argentino would be rated just 4% disabled.

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