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Archive | May, 2005

INJURED WORKERS, ADVOCATES FILE LAWSUIT TO STOP GOVERNOR’S PERMANENT DISABILITY COMPENSATION CUTS

Posted on 27 May 2005 by admin

FOR IMMEDIATE RELEASE:
Friday, May 27, 2005 Contact: Steve Hopcraft 916/457-5546

INJURED WORKERS, ADVOCATES FILE LAWSUIT TO STOP GOVERNOR’S PERMANENT DISABILITY COMPENSATION CUTS IN CALIFIORNIA SUPREME COURT:
Permanently Disabled Workers’ Compensation Cuts “Unconstitutional”

SAN FRANCISCO – VotersInjuredatWork.org and attorneys for injured workers filed a lawsuit today in the California Supreme Court challenging the governor’s deep cuts in injured workers’ permanent disability compensation. The lawsuit seeks to block the governor’s drastic reductions in the already-meager compensation injured workers receive. The lawsuit charges that the Schwarzenegger Administration’s Permanent Disability Ratings Schedule (PDRS) “is inconsistent with SB 899, undermines the Legislature’s balanced approach to reform, and threatens to relegate thousands of workers to subsist on constitutionally inadequate benefits.”

The lawsuit charges that the Administration failed to “link the new permanent disability ratings to wage loss by using empirical data and findings” on whether the new schedule would provide adequate benefit levels, as guaranteed in the California Constitution. Instead, the Schwarzenegger Administration “substituted policy judgments for empirical data and assumptions for empirical studies.” The suit asks the Supreme Court to “invalidate” the schedule and order the Administration to replace it with a schedule that “complies with the law.”

Mark Hayes, president of VotersInjuredatWork.org, an injured workers’
advocacy group, said, “The consequences for injured workers are horrible. Californians injured at work will lose their cars, their homes and their good credit under these ratings. 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 unconstitutional because benefits to injured workers are inadequate.”
Schwartz said that Schwarzenegger’s Administrative Director, Andrea Hoch, “Refused to consider whether benefits would be adequate for injured workers. 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.”

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.

Four studies, including one by the insurance industry’s own ratings bureau, have found the Schwarzenegger ratings reduce compensation to permanently disabled workers by more than half. One was conducted by a UC Davis Medical School professor; another by the State’s own Commission on Health, Safety and Welfare Compensation (CHSWC); yet another by an insurance defense expert; and the fourth from the insurance carriers’
own ratings bureau. In April, thousands of injured workers protested the takeaways from permanently disabled workers in the biggest-ever demonstration by injured workers. Originally adopted on January 1, 2005 under the governor’s emergency powers, the schedule recently became permanent. The Studies have consistently shown Schwarzenegger’s schedule will reduce permanent disability compensation by an average of 50% to 70%.

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])

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INJURED WORKERS & THEIR ADVOCATES CALL ON INSURANCE COMMISSIONER TO

Posted on 19 May 2005 by admin

FOR IMMEDIATE RELEASE:
Thursday, May 19, 2005 Contact: Steve Hopcraft
916/457-5546
steve@hopcraft.com; Jon Akana, cell 916/ 712-4213

INJURED WORKERS & THEIR ADVOCATES CALL ON INSURANCE COMMISSIONER TO
“PUBLICLY ADMONISH” INSURANCE INDUSTRY FOR QUASHING ITS OWN STUDY:
Governor Takes All Permanent Disability Compensation From 37% Of Injured
Workers;
Governor’s Cuts Average “In Excess of 50%”

SAN FRANCISCO – VotersInjuredatWork.org and the California Applicants’
Attorneys Association today called upon Insurance Commissioner John
Garamendi to “publicly admonish the WCIRB for its outrageous conduct
relating to its just released ‘Dual Rating Study’ conducted by Brigham
and Associates. According to the study, benefits for permanently
disabled workers will be slashed by an average of 76%! The industry’s
own expert also found that a full 40% of legitimately injured workers
who would have been entitled to benefits under the prior rating schedule
will be denied any benefits at all under the new schedule! These
findings confirm three prior comparisons of ratings between the prior
and new rating schedules.

“Rather than accepting its own and other independent findings, the
WCIRB is trying to obscure and disavow them,” said Peggy Sugarman,
executive director of VotersInjuredatWork.org, a non-profit political
organization of injured workers and their families. “We call on the
governor to change this fatally-flawed permanent disability compensation
schedule now, before it costs thousands of injured California workers
and their families their homes, their cars and their hope.”

Findings from the new study conducted by the insurance industry’s own
ratings bureau’s expert confirm three earlier independent studies
showing Governor Schwarzenegger’s new permanent disability compensation
schedule eliminates or sharply reduces compensation for permanently
injured workers. The new review of 250 cases by a nationally-recognized
expert shows 37% of injured workers would lose ALL permanent disability
compensation, and reductions overall would average in excess of 50%.

The findings of the study, funded by the Workers Compensation Insurance
Rating Bureau (WCIRB), a group with 400 insurance carrier members, are
the fourth showing Governor Schwarzenegger’s new rating schedule
dramatically reduces compensation for injured workers who suffer
permanent disabilities. The industry-financed study was conducted by Dr.
Christopher R. Brigham, an expert in the use of the AMA Guides (5th
Edition) and California’s permanent disability ratings schedule.

“The new permanent disability rating schedule does not comply with the
statutory mandate. We anticipate its invalidation by the courts. The
ratings under this schedule do not provide fair or adequate compensation
for injured workers,” California Applicants’ Attorneys Association
President-elect David Rockwell told the Insurance Commissioner at a
public hearing. Rockwell said the WCIRB has taken steps to obscure the
expert’s findings of deep cuts. “The Brigham study is larded with
unfounded speculation that the actual ratings will be higher than the
findings indicate. It asserts that physicians who will do the ratings
have various limitations and biases and that applicants’ attorneys will
find ways to artificially increase impairment. The WCIRB commissioned a
second, results-oriented product by the same UC Berkeley researcher who
conducted the CHSWC study that found benefits will be cut between 30% –
100%.”

“That second product is a contrived, fanciful, and absurd ‘economic
model’ – whose shortcomings the researcher acknowledges. Yet, the WCIRB
offers it to refute the Brigham findings. One expects an insurance
industry dominated entity to reflect the industry’s biases. But such
transparently disingenuous conduct is both reprehensible and outrageous.
It cries out for public admonition at a minimum,” said Rockwell.

A UC Davis Medical School professor conducted one earlier study; a
second by the State’s own Commission on Health, Safety and Welfare
Compensation (CHSWC); a third by an insurance defense expert; and now,
the insurance carriers’ own. Last month, thousands of injured workers
protested the takeaways from permanently disabled workers in the
biggest-ever demonstration by injured workers. Originally adopted on
January 1, 2005 under the governor’s emergency powers, the schedule
recently became permanent. The Studies have consistently
shown Schwarzenegger’s schedule will reduce permanent disability
compensation by an average of 50% to 70%.

Injured workers have no right to sue their employer for the damages
caused by their work-related injuries. Their only compensation comes
under the state’s workers’ compensation system. Permanent disability
compensation compensates workers for the lifetime consequences of their
injuries, including their reduced ability to compete equally with other
similarly skilled workers. Several studies of workers injured on the job
show that these workers lose a substantial portion of what they would
have earned over their working lifetimes. Despite the fact that the
permanent disability compensation provided to these workers does not
replace even half of that earnings loss, the new rating schedule being
adopted by Gov. Schwarzenegger will further reduce the compensation
provided to these permanently disabled workers.

The reductions in compensation were similar to those documented in a
scientific study conducted by University of California at Davis
Professor Dr. J. Paul Leigh. That study of 218 back, shoulder, wrist and
knee injuries found that under the governor’s proposed disability
schedule, on average injured workers would receive a disability rating
that is just one-third as high as the rating that would have been
assigned before the governor’s changes.

Injured workers have protested that the reductions result in
“inadequate” compensation that wreaks economic havoc on their families.

According to a RAND Institute for Civil Justice study, permanent
disability benefits under California’s prior rating schedule replaced
less than 40 percent of the earnings losses experienced by injured
workers. Now, Gov. Schwarzenegger is reducing the low compensation even
further.

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