Legislature Passes SB 863 after Endorsement from Brown

SACRAMENTO, Calif. - A workers' compensation reform bill backed by employers, labor and the governor sailed through the California Legislature on Friday with strong bipartisan support in both the Assembly and the Senate.

The bill sent to Gov. Jerry Brown will:

  • Increase permanent disability benefits by $700 million over two years by adjusting the formula used to calculate maximum awards.
  • Create a $120 million program designed to increase benefits for injured workers who suffer a disproportionate loss of earnings as the result of an industrial injury. De Leon and Solorio added that sweetener to their bill to compensate for the elimination of the future-earning-capacity modifier when calculating permanent disability awards.
  • Eliminate the 15% bump-up/bump-down that increases or decreases a permanent disability award based on whether an employer makes an offer of work within 60 days of the injured worker becoming permanent and stationary.
  • Authorize a $6,000 supplemental job displacement benefit that can be used for vocational rehabilitation and is made available when the injured worker is declared permanent and stationary and the treating physician determines there will be some degree of permanent disability.
  • Prohibit add-ons for psychological conditions, sexual disorder and sleep dysfunction in permanent disability awards. An injured worker who is a victim or witness to a violent act or who suffers a catastrophic injury could still increase his award if he suffered a psychological condition as a result of the injury.
  • Require disputes over utilization review denials be resolved through an independent medical review (IMR) process. IMR would take the place of the existing requirement that an injured worker obtain a second opinion for spinal surgery.
  • Says a report by a doctor outside of a medical provider network (MPN) can't be the sole basis of an award for compensation.
  • Prohibit professional employer organizations and temporary staffing agencies from becoming self-insured.
  • Eliminate from the Labor Code a provision allowing a chiropractor to become a qualified medical evaluator (QME) by completing a postgraduate specialty program of at least 300 hours taught by an approved school or college. A chiropractor can still become a QME by becoming certified in workers' compensation evaluation by a provider recognized by the administrative director.
  • Limit to 10 the number of office locations that a QME can register.
  • Prohibit a chiropractor from serving as the primary treating physician after 24 visits.
  • Eliminate the requirement that non-occupational providers make up at least 25% of a medical provider network (MPN).
  • Require periodic audits of MPNs and authorize discretionary MPN audits.
  • Provide that failure to post notice of an MPN is not a sufficient reason for an injured worker to treat outside of the network.
  • Establish a $150 lien filing fee and a $100 activation fee for liens that have already been filed.
  • Require the Official Medical Fee Schedule transition to Medicare's Resource-Based Relative Value Scale (RBRVS).
  • Reduce reimbursement for outpatient surgery centers to 80% of the hospital rate.


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