Senate Bill 899: Positive Impact on Workers’ Compensation System, Injured Workers, Employers, and Insurance Companies or Not?

October 26, 2023

In the deep sea of labor law, Senate Bill (SB) 899 stands as a crucial and pivotal piece of legislation that has the potential to bring substantial changes to the California workers’ compensation system as we know it today.

However, if you were to ask any reputable workers comp attorney in Los Angeles about this bill, the uniform answer would be that this change to personal injury law is controversial, at best. Indeed, this legislation has ignited debates and discussions regarding its implications for injured workers, employers, and insurance companies.

In this analysis, we will take a deep dive into the key changes introduced by Senate Bill 899, analyze its impact on stakeholders, and answer a key question: How will the implementation of SB 899 shift the balance of power in the California workers’ compensation system?

Understanding Senate Bill 899

Senate Bill 899 represents a comprehensive overhaul of the workers’ compensation system, introducing a range of changes aimed at improving efficiency, reducing costs, and ensuring fairness in the California Worker’s Compensation system for all parties. Some of the prominent changes include:

Medical Provider Networks (MPNs)

The bill introduces the concept of Medical Provider Networks, allowing employers to establish a network of pre-approved medical providers for injured workers to receive treatment. This change aims to expedite medical care and simplify the process of obtaining treatment.

Injured workers and applicant lawyers have stated that they believe this is going to allow the insurance companies to “stack the deck” against injured workers and only allow them to go to select doctors with allegiance towards the insurance company, therefore not giving injured workers honest and reliable care that is in the best interest of their health.

Utilization Review (UR) Process

Senate Bill 899 strengthens the utilization review process, which involves assessing the medical necessity of treatments. This change is intended to prevent unnecessary medical procedures, thus reducing costs for employers and insurance companies. Injured workers and applicant lawyers fear this will give the insurance companies, the mechanism to deny all medical treatment all drugs all procedures. 

According to one applicant attorney’s statement, the utilization review allows the insurance company to deny anything and everything. He also stated that the individuals doing the utilization review did not have to be licensed doctors, which was troublesome. As the lawyer went on, he explained you could be having nurses make decisions on neurosurgeries something that’s totally outside their purview. 

Independent Medical Review (IMR)

The bill establishes an Independent Medical Review process for cases where disputes arise between injured workers, employers, and insurance companies regarding the necessity of medical treatments. IMR provides an unbiased evaluation of treatment necessity, offering a resolution for disagreements.

The most troublesome thing about IMR is that doctors, physicians, assistants, and nurse practitioners are making decisions on complex medical procedures just by reviewing medical records with no examination. What’s worse,  whatever the decision of the independent medical reviewer is, it stands for one year and cannot be appealed during that period. 

From speaking with other applicant attorneys, the one thing that was feared most is that IMR would be like a mill for the insurance companies, allowing them to feed doctors that are beholden to them and deny necessary treatment at will. As such, Independent Medical Review has been labeled as unconstitutional and in violation of an individual’s right to due process. 

Apportionment of Permanent Disability

One significant change introduced by the bill is the apportionment of permanent disability benefits based on the percentage of pre-existing conditions. This alteration aims to ensure that workers are compensated only for injuries directly related to the workplace and not for pre-existing conditions. 

Again, applicant attorneys and injured workers are upset about this particular portion of the bill. The main concern is that a permanent disability is entirely subjective, as well as that the majority of doctors work inside of insurance companies and medical provider networks.

In the face of these facts, applicant lawyers fear they’re going to be getting smaller settlements for their clients since doctors beholden to the insurance companies could attribute disability to activities that did not have to do with work when they actually did.

Return-to-Work Programs

Senate Bill 899 promotes return-to-work programs, encouraging injured workers to reenter the workforce in a modified capacity if they are unable to perform their previous job duties. This change helps reduce compensation costs for employers and insurance companies. 

Injured workers and applicant lawyers have serious concerns about the “return to work program” because modified duty is not always possible. Therefore, this bill doesn’t actually protect people from losing their jobs. Instead, it allows room for injured workers to be fired because their injuries are so severe, they can’t accommodate modified duty.

Benefits for Injured Workers

Senate Bill 899 presents several potential benefits for injured workers:

Streamlined Medical Care

The establishment of Medical Provider Networks could lead to quicker and more efficient medical care for injured workers, reducing waiting times and ensuring prompt treatment. As stated above, the medical provider networks turn out to be nothing but a collection of doctors who make decisions that benefit the insurance companies. Therefore, if they’re not on an MPN, they cannot accept patients from them, which compromises the quality of medical care for injured workers.

Unbiased Dispute Resolution

The introduction of Independent Medical Review offers injured workers an impartial mechanism to resolve disputes over medical treatment, ensuring their well-being isn’t compromised due to disagreements. What was sold as an impartial medical review, has essentially turned into the insurance companies taking the doctors that make the most beneficial decisions for them, and steering the IMRs to them. The result is that doctors are denying essential medical care for injured workers, and thousands, if not hundreds of thousands of individuals have suffered since this bill was passed.

Fair Compensation

Apportionment of permanent disability benefits can contribute to fair compensation by linking benefits more directly to workplace-related injuries. This change prevents overcompensation for pre-existing conditions. What was sold as “fair” ended up being anything but. Again, the problem with apportionment is subjectivity. When you’re dealing with a group of doctors who have shown allegiance to the insurance companies, they make decisions that look out for their own income, leading to a huge conflict of interest. Many applicant attorneys have stated that, when it comes to apportionment, there should be three independent doctors outside of the Work Comp system to make an assessment based on the individual’s injury and, again, their past health history.

Benefits for Employers

Senate Bill 899 introduces potential benefits for employers:

Cost Reduction

The utilization review process, reinforced by IMR, ensures that medical treatments are necessary and appropriate, preventing unnecessary expenses associated with treatments that might not directly contribute to recovery. At least, that was the idea, in theory.

Unfortunately, utilization review became a mechanism for insurance companies to post record profits by denying necessary medical equipment, medication, and medical care to people who need it.

Return-to-Work Programs

Encouraging injured workers to return to modified duties can reduce the financial burden on employers, as they can retain experienced employees in a capacity that accommodates their current capabilities. Again, this is troublesome because many people have jobs where there is no possibility for modified duty.

Benefits for Insurance Companies

Senate Bill 899 may provide several advantages for insurance companies:

Reduced Claims Costs

The emphasis on efficient medical treatment and the apportionment of benefits can result in decreased overall claims costs, as insurance companies only need to compensate for injuries directly related to the workplace. The insurance companies absolutely will honor this Senate bill, as it allows them to pay a massive reduction in claims and hit record profits. In fact, the California state-formed insurance company, referred to as state fund, at one point had over $4 billion that was supposed to be refunded to the employers but never was.

Controlled Medical Expenses

By establishing Medical Provider Networks and reinforcing utilization reviews, insurance companies can exercise better control over medical expenses, ensuring that treatments are necessary and reasonably priced. This is very true. The insurance company is controlling all medical expenses – and they’re doing it in a way where they don’t have to pay a fraction of the costs they did prior to this senate legislation.

Balancing the Scales: Injured Workers vs. Employers vs. Insurance Companies

Determining whether injured workers, employers, or insurance companies benefit more from Senate Bill 899 requires careful consideration of the changes’ implications:

• Injured Workers: While the bill introduces streamlined medical care, unbiased dispute resolution, and fair compensation mechanisms, some argue that the apportionment of permanent disability benefits might reduce compensation for some workers with pre-existing conditions, potentially affecting their overall benefits.
• Employers: Employers stand to benefit from cost reduction through efficient medical care and return-to-work programs. However, concerns arise over the potential for cost-shifting to employees as they return to work with modified duties, potentially leading to lower wages.
• Insurance Companies: Insurance companies can enjoy reduced claims costs and controlled medical expenses due to utilization review and IMR. Yet, the introduction of new processes like IMR might lead to increased administrative burdens.

Concerns regarding the SB 899

Senate Bill 899 marks a significant step in reforming the workers’ compensation system, with the intent of achieving efficiency, cost reduction, and fairness. While the bill brings benefits to injured workers, employers, and insurance companies, its impact is multifaceted.

• Injured workers gain streamlined care and dispute resolution, but potential reductions in compensation for pre-existing conditions warrant attention.
• Employers enjoy cost reduction and return-to-work incentives, though the potential for cost-shifting demands careful monitoring. 
• Insurance companies benefit from controlled costs, yet the implementation of new processes requires adaptation.

Ultimately, the balance of benefits hinges on the effective implementation of Senate Bill 899 and the ongoing collaboration of all stakeholders to address challenges and optimize the outcomes for injured workers, employers, and insurance companies alike.

SB 899: A Blessing or a Curse?

Since its passage several years ago, Senate Bill 899 has done incredible damage to the Worker’s Compensation system. It gave employers and insurance companies the ability to create medical provider networks and put strict limitations on doctors by forcing them to participate and be part of those networks. Those restrictions essentially were unsaid rules and regulations that they must follow or they will be kicked off. When a doctor is kicked off a medical provider network, they cannot receive injured workers from the insurance company any longer.

Independent medical review, again, spells a total disaster for injured workers and applicant attorneys, yet it is still being followed with terrible success. Applicant attorneys are urging the legislature to overturn this mechanism due to the aforementioned facts. Essentially it gives the insurance company 100% power to make decisions on serious injuries and their treatment (e.g. knee replacements, hip replacements, neck fusions, back fusions, etc.). Additionally, if the independent medical review does go through the file and decides treatment isn’t necessary, the applicant lawyer and his client have to wait 365 days to appeal and request an independent medical review. 

There has been recent talk about Governor Newsom making it mandatory for all doctors conducting IMRs to be an MD. Applicant lawyers and injured workers would like to see a system set up where the actual medical doctor does a thorough examination of the injured worker, instead of making a decision solely by looking at medical records. The reasoning here is that, in the applicant attorneys’ minds, this type of decision-making is skewed against giving injured workers the necessary treatment, and geared more toward saving billions of dollars for the insurance companies yearly.

Where can I find a reputable workers comp attorney near me in Los Angeles?

Never has California’s Workers’ Compensation system been more unfavorable to injured workers than it is at this point in time. That’s why it is so important to hire an ethical, experienced, and aggressive legal representation to advocate for your rights.

In Los Angeles, there’s no one better to entrust that task to than the California Workers’ Compensation Lawyers, APC. With 25+ years of experience and unwavering commitment to our client’s well-being, our attorneys stand as true protectors of injured workers’ rights in LA County and beyond.

All cases are taken on a contingency, which means if we don’t get paid you pay no fees ever. We offer free initial consultations in English and Spanish via telephone, all video and teleconferencing platforms, as well as in person by appointment only.