A proposal to change California’s temporary disability benefits law would “create costly new oversight and compliance requirements for claims administrators,” according to details in a study by the California Workers’ Compensation Institute released Wednesday.
Introduced in February and now in committee, AB 1213 would change California’s 104-week cap on temporary disability benefits by excluding benefits paid or payable during the resolution of medical disputes if a utilization review treatment denial is overturned by independent medical review or the Board of Appeals.
WCRI used claims data to model how the proposal could affect the current system and found that the changes “would drive up IT and administrative costs 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 examined 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 of manual processes to identify and track claims”
; involving disability payments and medical reviews, WCRI said.“These requirements would apply to all workers’ compensation claims administrators in the state, further increasing California’s average loss adjustment cost,” WCRI said.
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