Press Release

FOR IMMEDIATE RELEASE
October 22, 2004

Gov. Schwarzenegger Applauded for Meeting First Major Regulatory Deadline to Implement Workers' Comp Reform Package

Medical networks will help manage costs, ensure quality care

SACRAMENTO, Calif. - The Workers' Compensation Action Network (WCAN) expressed support for the administrative regulations issued today to allow the use of medical provider networks (MPNs), beginning January 2005, to treat employees injured on the job in California.

A key milestone in California's ongoing efforts to reform its workers' compensation system, these regulations spell out the rules and procedures governing how MPNs will be established and operate to ensure injured workers receive quality medical treatment. Regulations implementing MPNs were required to be adopted on or before November 1, 2004. The regulations were issued today by Andrea Hoch, administrative director of the state's Division of Workers' Compensation.

"These regulations represent yet one more important step in the arduous process of bringing workers' compensation costs under control for employers," said Allan Zaremberg, president of the California Chamber of Commerce, and co-chair of WCAN. "With these regulations in place, employers and insurers can begin the process of setting up networks of doctors qualified to diagnose and treat workplace injuries."

Under the regulations, employers and insurers may apply to the Division of Workers' Compensation to establish an MPN, which will include physicians that specialize in both occupational and non-occupational medicine. The regulations establish standards for ensuring access to care and procedural requirements for workers and MPNs regarding 2nd and 3rd opinions for disputed diagnosis or treatment, as well as other requirements for employers and insurers who establish MPNs.

"Working with an established network of qualified doctors will offer several advantages," said Tim East, chairman of the California Coalition on Workers' Compensation, and co-chair of WCAN.

"Doctors can be better informed about the types of injuries that may occur in specific workplace conditions and industries, as well as the workers' compensation system itself, helping to ensure that the treatment will be appropriate. In the end, our interest coincides with that of our workers: to improve their medical condition so they can return to work sooner."

MPNs help bring widely accepted principles of managed care - similar to HMOs and PPOs - to the workers' compensation system. In states, such as Washington, Oregon and Florida, where medical provider networks have been used, they have been shown to be an effective tool for reducing medical costs, while ensuring access to and quality of care.

"Many more administrative regulations need to be adopted before January 1, 2005," said Jack Stewart, president of the California Manufacturers & Technology Association, and co-chair of WCAN. "As important as this milestone is, we still have a long way to go to make sure the reforms enacted this year and in 2003 can be implemented. These laws cannot be implemented without administrative regulations. Suffice it to say, we're in it for the long haul."

WCAN is a statewide, broad-based grassroots coalition of employer and insurer trade groups, businesses , non-profit organizations and public entities working together to ensure the full and successful implementation of reforms to restore predictability and stability to the workers' compensation system, reduce costs for employers and improve services to injured workers. WCAN works to ensure that California employers and the media are informed about the implementation process so the legislative gains are protected and realized to ensure injured employees are given necessary medical care promptly and receive benefits timely, fraud is eliminated, legitimate disputes are resolved fairly and quickly, and system costs are reduced where inefficiencies and inequities exist.