Effectiveness of Workers’ Compensation Reform Law

In August 2012, the California Senate passed Senate Bill 863. The governor signed it into law in September 2012. The law made important changes to the California workers’ compensation system in a variety of different areas. These changes included such issues as the amount of weekly benefits for permanent disability, changes to supplemental job displacement, and creation of a “return to work” fund. The bill also introduces the idea of independent medical review to resolve medical treatment disputes, improved medical provider networks, and changed regulations regarding liens.

In the summer of 2015, the Department of Industrial Relations and its Division of Workers’ Compensation released a report concerning the progress and effectiveness of the new reforms. The report showed that the cost of workers’ compensation had dropped. The Department of Insurance adopted advisory premium rates in May 2015 which were five percent lower than previously. The report also showed that workers who had received work-related injuries were also receiving increased benefits. The report recited that before the legislation was reformed, the weekly benefits for permanent disabilities was between $130 and $270. After the legislation, the range was increased to be between $160 and $290. The report also determined that as of June 2015, the DIR had issued 370 checks under the return-to-work supplement program, totaling almost two million dollars.

The report went on to discuss other areas of the legislation. The Independent Medical review program was created to allow physicians to individually review the necessity of disputed medical treatments provided to the injured employee, in an attempt to reduce fraud. The report found that the IMR was functioning well and was issuing its decisions within the statutory timeframe. The study also determined that the law was helping with the commitment to evidence-based medicine, through the use of and adjustments to the Medical Treatment Utilization Schedule, which creates a set of parameters for appropriate medical care.


California continues its commitment to adjusting the workers’ compensation system by passing new legislation. In addition to the changes in 2013, many new laws also came into effect at the beginning of 2017. Call me today at (714) 516-8188 for an appointment to discuss your business and the changing workers’ compensation system.

Ratings and Reviews