THIS WEEK IN SACRAMENTO

Prepared by Norwood & Associates

March 19, 2026

Workers’ Compensation Update

This week’s workers’ compensation developments have been all about uncertainties. As meetings continue between the “Big 5” and the “five & five” (labor and employer representatives), interested parties are beginning to wonder how this play to reform the workers’ compensation system will work out in the end. Governor Schwarzenegger has set the deadline for workers’ compensation reform for March 31 and all parties now seem committed to try to meet that deadline.

It is unclear how close legislative leaders are to a real compromise. And, if it is a compromise, is it conceptual or is it in legislative language? This week, Assembly Speaker Fabian Nuñez told reporters that the “Big 5” was 90% finished and there were only a few things that still needed to be worked out—mainly how the state should regulate insurance rates. Republican leaders however said legislators were substantially further apart and that there are still several key issues to be resolved.

If March 31 is indeed the deadline, language would likely have to be drafted and in print by some time next week. The bill would then have to be reviewed by all interested parties and heard in committee. The question then is would the bill be heard in policy and fiscal committees or in a joint legislative conference committee and on the floor of each house.

Speaker Accuses Republicans of Stalling Negotiations

The Speaker of the Assembly, Fabian Nuñez, is accusing Republican lawmakers of attempting to stall negotiations on workers’ compensation. Nuñez told reporters late Thursday that he believed Republicans were trying to delay any legislative deal so that they could use the Legislature’s failure to reform workers’ compensation insurance in the November elections. Nuñez also stated that claims by some Republicans that the on-going “Big 5” talks were not going well were a sign that they wanted the initiative to go before the voters. Republicans disagreed stating that they are pushing the initiative as a way to increase pressure for a legislative deal and to have an alternative measure if the Legislature does not act.

Nuñez did say that the talks between the “Big 5” have actually made considerable progress and that only a couple sticking points remain. The main sticking point is how to ensure that savings generated by any cutbacks are passed onto employers in the form of lower workers’ compensation costs. Several Democrats have insisted that rate regulation is the only way to ensure that savings are passed onto employers. However, Nuñez said he wasn’t necessarily saying that rate regulation had to be included in the reform bill as long as employers will benefit from the cuts to the system.

Governor’s Staff Members Attends Workers’ Comp Meeting at Chamber

The California Chamber of Commerce held a meeting this week to update employers on the status of the workers’ compensation discussions. Meetings between the “Big 5” and the employer and the labor representatives have continued, taking place two to three times per week. Reportedly, the meetings are focusing on five key issues—employer control of medical care, choice of physician, permanent disability, objective medical findings and apportionment. Although progress has been made in the negotiations, there have not been any official compromises.

Several rumors have been circulated this last week among employer groups claiming that the Governor was going to “sell out” employers and cut a bad deal so that he could claim victory for reforming the state’s costly workers’ compensation system.

In an effort to diffuse these rumors, Legislative Secretary Richard Costigan dropped by the meeting to ensure attendees that the Governor is committed to the initiative and is not “selling out” employers.

He stated that in this critical time we need to stick together because it’s the rumors that will divide the coalition. Costigan also mentioned that these “sell out” rumors have even led to fighting within the Republican Caucus of both houses. Interestingly enough, in response to questions, Costigan stated that insurer rate regulation was not an option for the Governor as part of the workers’ compensation deal.

Costigan encouraged attendees to contact him if they have any concerns or problems. In addition, phone calls, letters and emails should be going to all the members of the “Big 5,” not only the Governor.

Garamendi Urges Passage of Work Comp Clean-up Measures

California Insurance Commissioner John Garamendi released a statement this week warning that the billions of dollars in savings from last year’s workers’ compensation reform measures will never fully materialize unless the Legislature passes important clean-up measures to fine tune the new laws. Stressing that employers and the state’s economy can’t afford to wait any longer for relief, Garamendi urged the Legislature to take up the issue immediately.

AB 227 and SB 228 were passed primarily to reduce the medical costs within the workers’ compensation system. The new laws are slated to trim more than $5 billion a year from California’s $29 billion workers’ compensation system.

Garamendi identified the following areas that need immediate legislative action:

Clarify language to ensure that the 24-visit per injury cap on chiropractic and physical therapy treatment is only applied after appropriate guidelines have been superseded by a preponderance of the evidence. The guidelines to be used are from the American College of Occupational and Environmental Medicine (ACOEM), and those adopted by the Administrative Director from the Department of Industrial Relations.
Ensure that the 24 visit cap is not exceeded or abused by persons filing multiple injury claims for the same body part.
Ensure that the presumption for the use of the guidelines - either ACOEM or those adopted by the Administrative Director - is a presumption that affects the burden of proof and applies to all medical disputes regardless of the date of injury.
Qualified Medical Evaluators must receive mandatory training regarding medical treatment guidelines so that they can effectively determine what constitutes reasonable, evidenced-based medical treatment.
Ensure that all workers' compensation fraud penalties are consistently set at $150,000 in order to prevent those convicted of such crimes from arguing that they should receive a lesser penalty than intended by the Legislature.

Garamendi Unveils New Legislation for Elder Financial Abuse

Commissioner Garamendi, calling for more rigorous protection of seniors against financial fraud, unveiled two new bills to help seniors protect their savings and financial health against crimes by insurance scam artists.

The Commissioner is sponsoring SB 1273 (Scott) and AB 2316 (Chan). Senator Scott’s bill would give District Attorneys the ability to charge suspects with a felony in cases of “churning” of annuities sold to persons 65 and older. Current law makes this crime only a misdemeanor. AB 2316 (Chan) would establish the “Senior Protection Fund” by assessing up to $1 per each annuity of life insurance product sold in California. The fund would be used for the Department of Insurance and local District Attorneys fraud investigation activities and education efforts related to seniors.

Chamber Forms a Coalition to Address Outsourcing

The California Chamber of Commerce is forming a coalition to address the issue of outsourcing of jobs to other countries. The coalition, not yet named, has been meeting and plans further meetings with legislators on both sides of the aisle and the Governor’s office to educate them on this broad issue. In addition, the coalition is currently raising money to hire a public relations firm. To date, the coalition has raised close to $100,000. Members include several health plans, American Express, Citigroup and numerous financial institutions, technology companies, manufacturers and businesses. There are at least 14 bills that have been introduced in response to public concerns on the issue. The first bill, SB 1453 (Figueroa), which would require any employer that outsources jobs that would result in the replacement of 20 or more workers in California to give written notice of the contract to the Employment Development Department and the employees based in California whose jobs would be affected by the outsourcing, is scheduled to be heard in the Senate Labor & Industrial Relations Committee on April 14, 2004.

Norwood & Associates Announces New Hires

Norwood & Associates is pleased to announce that Michael Mattoch and Peter Conlin have joined the firm. Mattoch, former chief consultant and counsel to the California Assembly Insurance Committee, will become a partner in the firm, which will change its name to Norwood & Mattoch. Conlin, who worked as legal counsel to Assembly Speaker Pringle and represented the Senate Republican Caucus in recent years, has joined as a lobbyist.

Mattoch and Conlin will deepen the firm’s offering as one of the leading lobbying firms representing companies and trade associations in the insurance and financial services sectors. This development will also strengthen its position among the top 15 lobbying firms in Sacramento.

“We are extremely excited about the unique opportunity for an established firm to be able to add two professionals with such talent and experience,” said John Norwood, owner of Norwood & Associates. “Mike and Peter have extensive experience on insurance issues and will enhance our ability to represent our clients in the Capitol.” Mattoch, in particular, is considered an expert on workers’ compensation reform issues.

As chief consultant to the Assembly Insurance Committee, Mattoch advised members of the Legislature on issues related to financial privacy, tort reform, workers’ compensation, unemployment, health insurance and all areas of property and casualty insurance. Prior to this position, Mattoch held positions as vice president and chief counsel for the California Healthcare Association and associate director of government relations and legislative counsel for the California Medical Association.

Peter Conlin has been working in California politics since 1989, when he served as the Republican consultant to the Assembly Finance and Insurance Committee. From 1990 to 1995 he lobbied for Jackson/Barish & Associates and later for Heim, Noack & Spahnn. In 1996 he served as legal counsel to Assembly Speaker Curt Pringle. He was counsel to the Senate Republican Caucus during the 2001-02 redistricting process and subsequent litigation, as well as the Joint Legislative Audit Committee investigation of the Oracle Enterprise license agreement. He has also worked in private practice.

Norwood, Mattoch and Conlin are all members of the California State Bar.

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