As California lawmakers for the second year consider reducing the amount of time allowed for workers compensation claims administrators to investigate the compensability of occupational injury or illness claims, an analysis by the California Workers’ Compensation Institute shows how the changes could affect acceptance of more complex claims.

S.B. 1127, introduced in February and still in committee, would reduce the investigation period for presumption claims to 75 days. CWCI, in a paper released Wednesday, examined underlying issues associated with proposed reductions in the claim investigation time frames and analyzed data from a large sample of non-COVID-19 and COVID-19 claims to evaluate the potential impact of the proposed changes. It found that “(e)fforts to reduce the investigation timelines… would create compensability determination thresholds that are unnecessary for accepted claims and unrealistic for litigated and denied claims.”

Investigation periods are longer for litigated and denied claims and require significantly more time to gather reports and documentation from outside sources. For example, at 75 days, only 49.2% of litigated claims that are eventually denied have a compensability decision, “strongly suggesting that under the current rules, 75 days is an insufficient amount of time for claims administrators to obtain the medical and factual evidence required to make a compensability determination,” CWCI said.

CWCI found that determining compensability is “particularly challenging and time-consuming for COVID-19 claims, especially when those claims are litigated.” At the 45-day mark, 91.4% of accepted, non-litigated COVID-19 claims have a compensability decision, compared with 68.9% of the accepted COVID-19 claims with litigation, a 22.5 percentage point difference. At 30 days, determinations have been reached on 85.5% of accepted, non-litigated COVID-19 claims, compared with 61.1% of the litigated COVID-19 claims that are accepted, a 24.4 percentage point differential.