1993_05 Insight May 1993

              March 12,1993
Page 13
Special interests hinder
workers comp reforms
By Ruth Kehler	
Staff Writer
A Fresno manufacturing plant hired
the next worker on the list at the
Employment Development Department The man worked 15 minutes,
went to the restroom and fainted. He
claimed heat exhaustion and received
a settlement from workers compensation. The company's insurance rates
rose S250.000 that year. The company, which has headquarters in
Texas, is trying to sell its Frcsnc facility.
Workers' compensation reform has
drawn increasing attention with the
mass exodus of industry from California.
Employers' groups and insurers have
claimed that the workers compensation system is the single most oppressive factor in the state's dismal business climate.
The Independent Business Coalition Against Workers Compensation
Fraud (IBCAWCF), a grassroots organization representing thousands of
employers, was formed to lobby for
reform.
According to Tom Hagcrman,
IBCAWCF manufacturing president,
someof what passes for workers compensation reform is actually efforts to
enlarge the S12 billion industry. He
called the reform efforts a joke.
"If allowed to play out, history will
probably memorialize it as one of the
greatest economic disasters of California history," he said.
The workers compensation system
was not designed for litigation. It was
originally intended as a no-fault solution to thecoslof industrial accidents.
Workers traded their right to lawsuits
for guaranteed remuneration.
Workers compensation has its own
court system. Injured workers are not
required to prove they were injured
on the job, and employers are required tocarry insurance to pay medical costs and rehabilitation for injured
Hagcrman said that Califomians
work in the safest conditions in the
nation, because Cal-OS HA. an agency
to which he referred as "Nazi," has
very stringent safety regulations. But
many people who profit from the
workers compensation system have
an interest in the system's growth, he
said.
"How can you make it grow?" he
said. "You need more injuries defined
as medical. They want to get more
people into the system. One of the
Insight
Tk   T INSIGHT
News
most powerful interest groups is the
Trial Lawyers Association."
The issue has caused a partisan lineup, with Democrats accusing Republicans of favoring insurers, doctors
and employers, while Republicans
blame Democrats for allegedly catering to the Trial Lawyers Association.
Workers compensation is vulnerable
to abuse and it has given rise to a new
industry called "insurance mills."
The idea originated in southern California, where lawyers began advertising for clients lo submit workers
compensation claims, overtly implying that the claims need not be legitimate. Recruiters, called "cappers"
would appear at employment offices,
attempting to persuade disgruntled
workers to file stress claims against
former employers.
Legislation passed in 1992 makes
these practices illegal, bul the industry
is so lucrative it may take years to
unravel.
One Fresno-area farmer gained
knowledge ofthe workers compensation system the hard way. An employee claimed a back injury, requiring not only medical care but retraining for another line of work. In workers compensation court, the farmer
was able to prove that the employee
lied about how he was injured, but
could not prove that the injury did nol
occur at work.
The farmer, who asked nol to be
idcntificd.spcnt nearly S40,000on ihc
litigation, and says he will have to sell
his farm to pay the fine.
"Wc thought if wc proved that he
was lying il would make adiffcrcncc."
the farmer said. 'The judge wasn't
interested in anything wc had to say."
Another focus of the reform efforts
is the proliferation of stress-related
claims that make it financially dangerous for an employer to terminate or lay
off workers. When a southern California company laid off 119 employees
last year, all bul four filed mental
stress claims, according to Kemper
Insurance Company.
Kemper said that of 211 claims filed
by that company's employees, 154
were handled by ihe same law firm.
Some lawyers blame ihe insurance
companies for the abuses in the workers compensation system. Attorney
Joseph Waxman, in an open forum in
the San Francisco Chronicle, said that
the largest portion ofthe workers compensation premium dollar goes to ihc
insurance companies. The minimum
rate statute entitles insurance providers to 32.8 percent for overhead.
"Medical care, which is rising in
all sectors of society and is not
limited to industrially-injured workers, takes 29 percent of the premium dollar, leaving just 38.2 percent lo be paid oul in benefits,"
Waxman said.
Waxman said that California
workers have four basic benefits:
temporary and permanenfdisa1>il-
ity, medical care and vocational rehabilitation. The benefits arc remarkably low, he said, and gave
these examples: Lossofsightinonc
eye rales 25 to 30 percent permanent disability or S15.000 to
S 18,000; amputation of a leg rates
75 percent, or $62,345. Both benefits are payable at a rate of $148
per week.
Hagcrman agreed that seriously
injured workers are entitled to benefits, but feels that lawyers groups
are really more interested in profits.
"If these guys care so much about
ihc injured worker," he said, "how
come they arc so concerned aboul
the low end of the scale? Wc don't
want garbage reform. There is now
more money for invisible injuries
so more people arc icmptcd to abuse
the system.
A lot of people blame ihc medical
community for the abuse. Major
reform legislation signed into law
by Gov. Wilson last month is expected to save employers S100 million to $300 million annually. It
targets the "bloated" cost of medical reports that some doctors gener-
Callcd "medical-legal evaluations." these reports arc sometimes
generated by computer without the
doctor even having conducted an
examination of ihe claimant According to the IBCAWCF, there is
evidence ihat some patients have
been offered a paid trip to Las Vegas by doctors for fully completing,
ihc prescribed course of treatment.
Claims made through this procedure amount to $1 billion annually,
according to an independent study
by the Workers Compensation Research Institute. The study said that
California doctors receive five to
10 times more lhan physicians in
other states for writing reports.
Other pending legislation targets
the minimum rate law, limits the
type of stress claims allowed and
prohibits doctors from referring patients to clinics in which they have
a financial interest Saving from
these measures arc estimated to be
in the $1 billion range.
While doctors, lawyers, insurance companies and employees filing fraudulent
claims benefit from workers compensation, employers and severely injured
workers lose. According to Assemblyman Steve Peace, a sponsor of reform
legislation,California workers rank48th
among the 50 states in the amount of
benefits granted to legitimately injured
workers. At the same time, California
employers arc paying ihe highest premiums in the nation.
Waxman said thai workers compensation in California pays very low benefits
for significant injuries. "For the past 16
years," he said, "I have had the almost
daily experience of informing workers
that even a career-ending injury will nol
entitle them io much of a settlement that
benefits would be lowered as well as the
expected wages when ihcy entered vocational rehabilitation, and that permanent disability, medical care and rehabilitation plans would be fought and
resisted by insurance carriers every step
of the way."
While lobbyists argue aboul who is
abusing the system. California businesses
continue to pour more lhan S12 billion
annually into workers compensation,and
that figure is rising. One Fresno-area
weekly newspaper company, for example, paid S 17,000 for workers compensation insurance last year, and received a $3,000 rebate when no claims
were filed.
The rates are based on degree of job
hazard. For example, aeons miction company would pay a higher rate for a carpenter lhan anewspapcrcompany would
pay for its employees. However, a newspaper company would pay a higher rate
for a press operator than for an editor.
If there is a claim, the company is reevaluated on its rates, allowing it to pay
the full cost of a claim in addition to its
insurance rates over ihe course of the
injured worker's claim.
While legislation aimed at workers
compensation reform has been iniro-
duccdevcry year, employers have gained
political clout and expect reform soon.
"By now every business in California
has been mugged by workers compensation fraud," Hagcrman said. "For two
years every newspaper and magazine
that has chronicled the California business exodus has quoted business owners
saying thai one of the key reasons ihcir
business has left the slate is the workers
comp system.
"We are dedicated to creating enough
political stress in the system to encourage legislators to grant us the necessary
relief."
Various trees to shade
Blackstone Avenue
By Jenny Steffens
Staff Writer
By June 1994, ihc asphalt of
Blackstone Avenue will be counterbalanced by numerous shades
of green. More than 850 iress
and 19,000shrubswillbcplantcd
in the five and a half miles of
medians as part of a project cal led
"Blackstone Beautiful."
Canary island pine, pear, valley
oak, Chinese tallow and southwest ash trees, plus a variety of
shrubs will grow in the islands
stretching from north of Olive
Avenue to Hemdon.
The project aims to improve the
look of Blackstone Avenue, filter dusi and pollution from the air
and provide
shade to rc-
and Barstow i
Blackstone Beautiful is an undertaking of Tree Fresno, a nonprofit, independent tree organization established in 1985 and
dedicated to educating the community about the advantages of
tree planting.
According to Jerry Bird, executive director of Tree Fresno,
Blackstone Beautiful is the single
largest project undertaken and
will cost an estimated S1.2 million to complete.
Approximately half of the
money will be provided through
State Proposition 111 funds, city
assessment funds and private donations. Publicdonations.aswcll
as individual and businesses
sponsoring the medians arc
needed for the remaining balance.
If the funds come in. the project
could be completed much sooner
than thcJune, 1994 goal,Bird said.
The desire to plant trees on
Blackstone Avenue has been ongoing for the last 10 years, but was
really only given serious consideration in the past three years. Bird
said.
Aside from Blackstone Beautiful, Tree Fresno was also responsible for the tree planting along
Mckinley Avenue that was completed in November 1990. Since
1985, Tree Fresno has planted more
than 7,000 trees in neighborhoods,
public parks, schools and streets.
"If there is a good cause wc will
find a way to get some trees and
planiihcmihcre/'BirdSaid. 'Trees
encourage
people to be outdoors."
Tree Fresno
started out of
concern of the
community's
environment
and quality of
air. The first
fundraising effort brought in
$27,000 in a
two-hour period.
"The interest and commitment in
the community was there," Bird
said.
CurrenUy Tree Fresno has 700
dues-paying members and several
corporate sponsors who support
their projects.
Volunteers do the the planting
and preparation for ihc planting, as
well asdonate time inTree Fresno's
office.
"The feeling you get from doing
somcihing good for the community and environment is very satisfying," Bird said. "Planting trees
is hard work, but il is really an
upbeat type of experience."
Organizations or individuals interested in volunteering in future
Tree Fresno projects should contact Jerry Bird or Susan Stiltz at
226-TREE.
May 13Thu 8:00-6:30
May 14 Fri 8:00-4:30]
May 15 Sat 10:00-2:30
May 17 Mon 8:00-6:30
May 18 Tue 8:00-6:30
May 19 Wed 8:00 - 6:30|
May 20 Thu 8:00-6:30
May 21 Fn 8:O0T-4:3O|
May 22 Sat CLOSED
May 24 Mon 8:00-3:30
May 25 Tue  8:00 - 3:30
Kennel Bookstore buys back
textbooks from students
Current edition textbooks, in
good condition will be
bought back at 50% of the
current price if an order for
that book is on file for next
semester. Overstocked and
books not on order will be
bought at a wholesale price,
Old editions cannot be
bought back.
Register To Win
Next Semester's
Textbooks*
*$200 Kennel Bookstore
Gift Certificate
Hands  with a Heart
mShiatsi
mUmiki
m Swedish Tlassaam
mBowtech (*ojt tu.uc h.c.1
ht«jh energy ywld)
255-7939 279-5990  pa.se,
The
TAJ
♦ WeekJy Drink Specials
♦ "Around The World"
♦ Domestic & Imported Beer
Javier's
Lunch Special (11:00 to 2:00)
largo Combination $3.00
Small Combination $2.85
660 S. Clovis Ave. Ronald Duron 252-4511
BULLDOGS LIQUOR
End of School
JELEBRATIOI
I 1    I 1
$1 OFF     I    | ALL 12-PACK CANS
750 and 350 ml     I $5.99
LIQUOR +TAX+CRV
Expires May 19 Expires May 19     .
83 4968 N. Cedar Ave
226-0148
Next to Bulldog Mania
JENNIFER :
I am so glad that I met you this semester. I
had a lot of fun hanging out with you and getting to know you. Just think - no more silly
writing assignments! Good luck in Kentucky
this summer, and I'll see you next fall
Y/F,
LONDON   SEMESTER'94
Now Accepting Applications
Information Meetings
(Drop m «ny Dm during ttvt mp«clf>c<i hoor»)
May 4
12:30-1:30
USU 310
May 6
12:30-1:30
USU 310
May 11
11:00-12:00
USU 310
May 12
3:00-4:00
USU 308
meetings are ooen lo all interested
siudents   Individual conferences are available
any ume with Carta Millar at the London
Semester Office. San Ramon 4. Room 222.
FOR MORE INFORMATION CALL (209) 278-3056