The California insurance industry agreed to a social plan known as Workers Compensation almost 100 years ago, and they have been scheming to figure a way to keep every bit of the premium dollar collected ever since. 30 cents of it just simply isn't good enough for them. They want all of the premium dollar, period!

Since the California Workers Compensation industry was deregulated at the end of the last century, numerous excuses have been given as to why it went to "hell in a hand basket!" Why several insurers went insolvent and eventually belly up. The cutthroat competition along with insurers getting suckered into reinsurance scams by unscrupulous agents just added fuel to the fire. It was about greed; plain and simple greed!

So how did they find a way out of the morass? Simply put, blame the injured worker, the primary stakeholder in this process, and those who seek to help them thru their medical and legal nightmares. It's much easier to make them the patsies, than focus on the true cause of our Workers' Compensation nightmare, the insurers themselves!

2004 was the "Year Of The Terminator." Governor Arnie was elected by a state unsatisfied by the performance of Gray Davis. So what did we get? We got worse than Gray Davis! We got a Senate Bill that literally intimidated every legislator in Sacramento! We got a governor who didn't know the foggiest thing about Workers Compensation except what his advisors told him, advisors like Warren Buffett, who I might point out, are profiteering hand over fist in this new millennium due to those changes.

So who is on the losing end here? It's the injured worker, the very person that this system was created to assist, in his or her time of need. I can just hear Hiram Johnson rolling over in his grave!

Industry experts know that claimant fraud is not a major cost driver in the Workers' Compensation system, in fact it is a very miniscule slice, no more than 1%, but insurers and employers have learned that the myth of rampant claimant fraud is a very valuable media tool in achieving their legislative goals. And in 2004, the insurance industry put millions of dollars behind a concerted effort to as they say "reform" Workers Compensation. But the dictionary defines a "reform" as an improvement and Senate Bill 899, which was passed in the middle of the night, (sounds real sneaky, doesn't it) improved only one thing, insurance industry profits, nothing else. It doesn't take a rocket scientist to figure that one out. Money well spent!

Unsubstantiated charges of rampant claimant fraud undermine public confidence in the system and discourage legitimately injured workers from seeking the benefits they need and deserve. Insurers must be investigated as well as employers who deny workers their rights. In California, a detailed investigation by state auditors found that workers' compensation insurers violated workers' rights in about half the claims it audited. The violations included "unacceptably high amounts" of unpaid benefits, late payments, inaccurate benefit notices and failure to notify injured workers of their rights.

First, let's get a couple of things straight. Contrary to Governor Schwarzenegger's ignorance, the attorneys who represent injured workers thru the legal process are NOT trial attorneys and they simply don't get paid like trial attorneys. They get paid a very small percentage of permanent disability recovery, and only at the end of the case, which in many cases can be anywhere from 2-10 years. So they don't get anything until the case settles and are essentially fronting all costs on the cuff. This area of law is so complex that unless one is a specialist in this field, they are at a distinct disadvantage.

In stark contrast, defense attorneys who represent the interests of the insurance companies get paid by the hour and essentially are running a taxi meter with no limits. They get paid for their accumulated time during the duration of the case, not just a lump sum payout at the end.

Applicants' attorneys are being hit from all sides; the end goal for the employers and insurers is zero attorney involvement in workers' compensation claims. This will make it easier for employers and insurers to provide only the lowest possible benefits and drastically cut legal expenses. Employers and insurers will focus more and more on ways to reduce litigation and the associated expenses of litigation in workers' compensation cases.

Despite the decline in workers' compensation indemnity and medical costs and in the frequency of claims, one group of costs that have not declined are loss adjustment expenses; the costs of settling a claim, including attorneys' fees, claim adjusters' salaries, medical bill auditing expenses, and utilization review expenses. These expenses total about 13% of premium, up from 10.7% in 1990, 9.5% in 1985, and 8.4% in 1980. These costs are coming under greater scrutiny.

So keeping in mind what we have just stated, who here really has the financial incentive to drag these cases out for long drawn out legal fights? OK, now do you get the picture? This doesn't present a very level playing field, does it?

Reality is that Workers Compensation is not about truth and justice, nor is it about fairness and equity. It's not about compassionate medical care for those hurt at work, in many cases due to the gross negligence of their employers! It's simply about money and power and what you can try to prove in front of a judge. It's about medical-legal doctors who prostitute themselves and use more of their creative writing skills than their medical skills for those big money payoffs from the insurance carriers. A very sad anthem for the 21st century!

SB899 created the "Medical Provider Networks!" Now, when an injured worker goes to the doctor, the foremost goal of the doctor is to get repeat business from the employer, not take care of the injuries of the injured worker in an expeditious manner.

SB899 created "Utilization Review," which is nothing but a ploy to delay and deny treatment on a wholesale scale. Claims examiners requesting UR send case after case to these independent physicians with little or no documentation, so the review is doomed to failure from the start!

SB899 removed any meaningful penalties that kept insurers in compliance with the law. Now it's cheaper to pay the penalties than it is to comply with the law. And they don't even get a slap on the hand for committing the most heinous of crimes.

Where else can the gross negligence of the employer and insurer with reference to the incompetent delay or denial of medical treatment that leads to the death of an injured worker allow get them to get off scott free with no fear of recrimination or financial liability?

It's getting so bad that injured workers suffering in excruciating pain and getting a blind ear from the insurance companies and their defense counsel are simply committing suicide and that is a list that keeps growing and growing as time goes on with no relief in sight.

A report just released states that the list of available Qualified Medical Examiners is down by almost 25%. And many physicians are just plain disgusted by having their hands tied in this system when it comes to treating their patients and are not accepting occupational injury cases anymore. A recent article about Enloe Medical Center in Chico bears credence to that statement.

So where does that leave the injured worker? Simply, with a steadily shrinking pool of available legal advocates, as many applicants attorneys are no longer able to make a decent living since SB899 unfairly manipulated the permanent disability rating schedules by requiring the use of ACOEM guidelines, which ACOEM admits were never, ever meant for acute occupational injuries. And they are leaving the field in large numbers! It leaves the injured worker with fewer and fewer competent doctors who are genuinely concerned about their welfare, making them whole again and getting them back to work.

And now county District Attorneys are climbing on the bandwagon too by prosecuting injured workers for Workers Compensation fraud, with the most flimsiest of evidence, some that don't even meet the legal requirement to prove fraud at a preliminary hearing, and others using tainted or illegally obtained evidence that is "the fruit of the poison tree!" Their ulterior motive is to get a piece of that $43 millon dollar Fraud Assessment Fund that the Department of Insurance hands out for successful prosecutions. Your constitutional rights and protections simply don't matter here!

When our 24 hour around-the-clock governor broke his leg on vacation, he was admitted into the hospital for surgery so fast (less than 72 hours) that it would make your head spin. How many injured workers can attest to that fact? Did he use his own personal medical insurance to pay for the surgery or did he commit fraud by using it instead of informing State Compensation Insurance Fund of his injury?

We need to investigate every assertion of rampant claimant fraud, and publicize the results. Any assertion concerning rampant claimant fraud should be subjected to the closest scrutiny. Those who make false or unsubstantiated assertions about claimant fraud are slandering honest working people and grossly misleading the public and should be exposed.

Like other states that are pursuing workers' compensation fraud, New York has quickly discovered that the real drain on the system stems from employer and provider fraud. Insurance officials in Florida, which has pursued fraud on all levels more aggressively than most states, have flatly stated that employer & insurer fraud are by far the largest problem in that state. In California, Texas, and Wisconsin, detailed studies all indicate that the unsubstantiated claims of rampant claimant fraud are false, and that provider and employer fraud are a significant problem.

We have to turn the tables and force state legislatures and insurance commissioners to investigate the real fraud problem in workers' compensation: employer & insurer fraud. The best evidence from the states that have pursued fraud and generated detailed records indicates that for every $1 dollar lost in claimant fraud, at least $4 to $5, and in some states as much as $10, are lost through employer and provider fraud.