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SELECTED INDICATORS IN WORKERS’ COMPENSATION:  A REPORT CARD FOR CALIFORNIANS

As seen in the chart below, the focus of the investigations has been changing.  Applicant fraud investigations have dropped from nearly 80 percent of the total in 2001-02 to about 70 percent of the total number of investigations in 2004-05.  At the same time, there has been an increase in the percentage of investigations of uninsured employers and fraud rings, while the percentage of medical provider fraud investigation has dropped slightly.

Carve-outs:  Alternative Workers’ Compensation Systems

A provision of the workers’ compensation reform legislation in 1993, implemented through Labor Code Section 3201.5, allowed construction contractors and unions, via the collective bargaining process, to establish alternative workers’ compensation programs, also known as carve-outs.  

CHSWC is monitoring the carve-out program, which is administered by the DWC.

CHSWC Study of Carve-Outs

CHSWC engaged in a study to identify the various methods of alternative dispute resolution that are being employed in California carve-outs and to begin the process of assessing their efficiency, effectiveness and compliance with legal requirements.

Since carve-out programs have operated only since the mid-1990s, the data collected are preliminary. The study team found indications that neither the most optimistic predictions about the effects of carve-outs on increased safety, lower dispute rates, far lower dispute costs and significantly more rapid return to work nor the most pessimistic predictions about the effect of carve-outs on reduced benefits and access to representation have occurred.

For further information…

How to Create a Workers’ Compensation Carve-out in California: Practical Advice for Unions and Employers.” CHSWC (2006).  Available at

www.dir.ca.gov/CHSWC/chswc.html.

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