California proposal would burden claims organizations: Report

A proposal to alter the law on temporary disability benefits in California would “would create costly new requirements for oversight and compliance for claims administrators,” according to details of a study by the California Workers’ Compensation Institute released Wednesday.

A.B. 1213, introduced in February and now in committee, would change California’s 104-week cap on temporary disability benefits by excluding benefits paid or due during the resolution of medical disputes if a utilization review treatment denial is overturned by independent medical review or the Appeals Board.

CWCI used claims data to model how the proposal could affect the current system and found that the changes “would drive up IT and administrative expenses for claims administrators but provide only a nominal increase in total (temporary disability) to less than 0.3% of all claims,” according to the study that explored the potential impact of the measure.

“Chief among the new costs… would be the automation and programming costs required to update claims systems and the ongoing administrative costs for manual processes to identify and track claims” with disability payments and medical reviews, CWCI said.

“These requirements would apply to every workers compensation claims administrator in the state, further increasing California’s average loss adjustment expense,” CWCI said.