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California comp reforms generated $1.3B in savings

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California

BOSTON — Workers compensation reforms in California have been an ongoing process, but the efforts have created some positive changes in the state’s comp system, said Alex Swedlow, president of the California Workers' Compensation Institute.

Mr. Swedlow spoke during a presentation Thursday at the Workers Compensation Research Institute's Annual Issues & Research Conference in Boston.

California Senate Bill 863, a comprehensive workers comp reform bill, was passed in 2012 and began being implemented in 2013. Reforms in S.B. 863 included an independent review process for medical treatment and billing disputes, fee schedules for home health care, language interpretation and other comp-related services and fees for lien filings.

Research from the Oakland, California-based CWCI shows that S.B. 863 reforms have led to stabilization in California workers comp medical cost trends, Mr. Swedlow said. He credited the improvement partially to the implementation of a resource-based relative value scale medical fee schedule, as well the removal of duplicate payments for the surgical hardware used in the spine surgeries.

The California Workers’ Compensation Insurance Rating Bureau estimates that S.B. 863 has generated $1.3 billion in systemwide savings for California’s workers comp system, said Mr. Swedlow, who called the developments “good news.”

“We are a big state and play an important role in the national workers comp economy,” he said.