Committee Moves MLFS Update and Cost-of-Living Bills to Suspense File

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May 7, 2025 | Sacramento, CA — MedLegalNews.com – Workers’ comp legislation faces a temporary setback as California lawmakers move the MLFS update and cost-of-living bills to the suspense file. This action stalls progress on critical reforms, including the Medical-Legal Fee Schedule (MLFS) changes and cost-of-living adjustment (COLA) proposals. By pausing these measures, the legislative committee has delayed potential updates that could significantly impact workers’ comp benefits, evaluation procedures, and wage replacement protections for injured workers.

The workers’ comp reforms under consideration are designed to address long-standing concerns about fair compensation for medical-legal evaluators and the need for periodic benefit adjustments tied to inflation. Advocates argue these updates are essential to preserving the integrity and adequacy of California’s workers’ comp system, especially as living costs rise. However, fiscal concerns over long-term liabilities have led to additional scrutiny, delaying immediate action on these reforms.

What Is the Suspense File?

The suspense file is a legislative mechanism used by appropriations committees in both chambers of the California Legislature to defer action on bills with significant fiscal impact. It allows lawmakers to temporarily pause proposals like the MLFS Update, ensuring that any measure with substantial budgetary consequences undergoes detailed financial scrutiny before moving forward.

Bills placed in the suspense file are typically reviewed during a single, high-stakes session known as “suspense day,” where committee members decide which proposals advance to a full legislative vote. The MLFS Update and similar reforms affecting workers’ compensation and cost-of-living benefits often face this hurdle, especially when fiscal projections raise concerns about long-term costs to the state or its employers.

This process ensures that California’s budget remains balanced while giving legislators time to assess the broader economic implications of major policy changes.

MLFS Reform Temporarily Halted

The MLFS Update is among the high-profile bills recently moved to the suspense file. This anticipated reform to the Medical-Legal Fee Schedule plays a crucial role in defining compensation rates for medical-legal evaluations within California’s workers’ compensation system. Stakeholders—including applicant and defense attorneys, Qualified Medical Evaluators (QMEs), and insurers—have been closely tracking the MLFS Update due to its potential impact on payment structures and reporting standards that could reshape QME workflows and administrative costs.

While critics warn that the changes may increase expenses and delay evaluations, supporters emphasize that updating the fee schedule is necessary to ensure fair compensation for evaluators and to sustain a reliable pool of independent medical experts.

For more information on the Medical-Legal Fee Schedule and its implications, visit the California Division of Workers’ Compensation.

Cost-of-Living Proposals Also Delayed

Also sidelined are multiple bills proposing cost-of-living adjustments (COLAs) to workers’ compensation benefits, which remain a focal point alongside the MLFS update. These proposals aim to safeguard the real value of benefits for injured workers amid economic shifts.

Key provisions in the proposed legislation include:

  • Automatic COLAs for permanently disabled workers to ensure their benefits keep pace with rising costs.
  • Benefit indexing directly tied to inflation rates or statewide wage growth trends.
  • Measures designed to prevent the gradual erosion of workers’ compensation benefits due to long-term increases in living expenses.

Labor groups have strongly advocated for these reforms, citing the financial vulnerability of injured workers in California’s high-inflation environment. Without these adjustments, injured workers risk falling below the poverty line despite receiving benefits.

However, business coalitions and insurance industry representatives remain wary, warning that automatic increases tied to inflation could significantly elevate the cost of administering workers’ compensation claims. They argue that these fiscal impacts could destabilize the system or lead to higher insurance premiums for employers.

The delay of these COLA proposals, coupled with the MLFS update, reflects broader legislative caution regarding any reforms that may impose substantial fiscal obligations on the state or private insurers. Stakeholders on both sides are expected to intensify lobbying efforts ahead of the suspense file’s critical review phase.

What Happens Next?

The fate of the MLFS update and COLA bills now rests with the appropriations chair and committee leadership, who will decide whether these measures advance during the committee’s suspense hearing—often scheduled just before key fiscal deadlines in May or August. While placement in the suspense file does not mean a bill is dead, history shows that many proposals, especially those with significant fiscal implications, do not reemerge without strong political advocacy and stakeholder support.

Policy Implications

The delay in advancing these measures could have lasting effects on California’s workers’ compensation system. If the MLFS update remains stalled, Qualified Medical Evaluators (QMEs) may continue to face outdated compensation rates, potentially exacerbating delays in medical-legal evaluations and contributing to a bottleneck in claims processing. This could ultimately affect the speed and quality of care for injured workers and complicate legal proceedings involving disputed claims.

The delay in advancing these measures could have long-term effects on workers’ compensation administration, particularly:

  • Access to timely and thorough QME evaluations
  • Adequacy of wage replacement benefits in an inflationary economy
  • Regulatory clarity for medical-legal billing and reporting

Both labor advocates and employer representatives will likely intensify lobbying efforts in the coming weeks to sway decision-makers ahead of suspense day.

For further coverage and expert perspectives on the MLFS update and related legislative developments, visit WorkCompCentral.

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