Bill could increase employer liability during claim investigations

A bill proposed in the California Senate could cut the time that workers compensation claims administrators have to investigate on-the-job injury claims and lead to increased employer liability, according to a report released Thursday by the California Workers Compensation Institute.

S.B. 335, introduced in February, would decrease the investigation time for injury claims to 45 days from 90 and increase employers’ liability for medical benefits during the investigation by 70% to $17,000, CWCI said.

CWIC researchers compiled a dataset of claims between 2015 and 2019 to examine the percentage with a decision made within 30, 45 and 90 days, and the percentage of claims that met or exceeded the current treatment limit of $10,000 and the proposed limit of $17,000.

The study found that on average, more than 97% of claims had a compensability decision at 90 days, but only 85% did so at 45 days. However, the study noted that of claims that were ultimately denied, only 37% were decided within 45 days and 63% remained under investigation, though almost 94% were decided in 90 days.

The researchers also found that 1.4% of claims exceeded the $10,000 limit, and 0.8% met or exceeded the proposed $17,000 limit.

The CWCI analysis concluded that “it is unlikely that claims adjusters would be able to unilaterally expedite much of the investigation process” and that “reducing the investigation period by half and increasing employers’ liability for medical treatment benefits during the investigation period” would likely “generate unintended consequences.”