Three years after California’s SB 863 was enacted, which reformed the state’s workers’ compensation system, the Department of Industrial Relations (DIR) and the Division of Workers’ Compensation (DWC) released their third annual report on the results of all those changes and suggestions on how they can make improvements in the system to benefit workers and employers even more.

The most significant reforms in the original bill were to introduce evidence-based medical guidelines to make smarter and sounder treatment decisions, to have treatment disputes settled by independent medical reviews (IMR), and to make it easier to connect workers with in-network physicians.

Building off of last year’s report it looks like the state is still on their intended path of initial projected savings, and may even be saving more than they anticipated. They estimate that they have saved $600 million more than originally estimated and the state’s premium rates were once again reduced this past July 1^st. Projected medical costs have decreased by eight percent since 2011 and workers saw a 30 percent increase in permanent disability benefits.

The evidence-based medical guidelines have not only reduced unnecessary treatments (and therefore costs), but have made the independent medical review process more efficient. Treatment recommendations are backed by years’ worth of case data and it is easy to understand the best options for the particular patient and their injury. The state hopes to have an evidence-based workers’ compensation drug formulary in place by July 1^st of next year to not only combat excessive opioid use, but to try and reduce other potentially unnecessary or excessive prescriptions as well.

They are also hoping to extend the deadline for RTW supplement payments, improve the utilization review process, and to establish guidelines for home care and interpreters. They expect to see even more reductions in costs when there are fee schedules for services like home healthcare and interpreters, and when there is a work comp drug formulary.

The DWC is going to launch an initiative to teach providers how to use evidence-based medical guidelines and the state’s Medical Treatment Utilization Schedule (MTUS) in the fall at no cost to providers. The DIR is also focusing on fraud and trying to improve how they identify and prevent fraud in comp.

For the full report click here and for the DIR’s press release on the report click here.