The area of California workers' compensation law will see some significant changes starting in 2012 after Governor Jerry Brown signed two new laws into effect this past weekend.

The first work comp bill signed by Governor Brown was Assembly Bill 378 (AB 378). This legislation - sponsored by the chairman of the Assembly Insurance Committee Jose Solorio (D-Santa Anna) - mandates that compound drugs be brought under the pharmacy fee schedule.

It is designed to eliminate the incentive for physicians to prescribe compound drugs, effectively limiting their financial reimbursement.

(For those unfamiliar with compound drugs, they are medications that are specially prepared by a pharmacist to meet the special needs of an individual patient. Essentially, the pharmacist mixes/adjusts the drug components, customizing the medication.)

According to the American Insurance Association (AIA), AB 378 was heavily favored by the insurance industry and employers "because it takes added and unnecessary costs out of California's workers' compensation system."

The second work comp bill signed by Governor Brown was Senate Bill 684 (SB 684). This legislation - sponsored by Senate Majority Leader Ellen Corbett (D-San Leandro) - is designed to introduce greater fairness and an element of transparency to all future work comp policies.

Specifically, the legislation measure would grant California employers the following protections when it comes to the execution of work comp policies:

  • All employers must receive written notification and be permitted to negotiate when a work comp carrier plans to use arbitration as the primary dispute resolution forum
  • All employers must have the right to determine whether they wish to negotiate/resolve arbitration disputes in a California venue and in accordance with California law

Stay tuned for further updates in the area of workers' compensation law from our San Diego firm ...

If you have questions or would like to learn more about workers' compensation benefits, contact an experienced legal professional.

This post was for informational purposes only and is not to be construed as legal advice.

Related Resources:

Insurance Journal "California Gov. Brown vetoes, signs workers' comp bills" Oct. 11, 2011