Posts on Workers’ Comp Fraud Panel Are Still Unfilled : Oversight: Critics say the council has been hamstrung and provisions of a 1989 law have been stymied.

While crusading against fraud in the workers’ compensation system, Gov. Pete Wilson and his predecessor, George Deukmejian, failed to fill key jobs needed to enforce a 2-year-old law aimed partly at fighting fraudulent claims.

The 1989 legislation, designed to cut costs for employers while increasing benefits for injured workers, created a new council to oversee doctors, set standards and weed out fraudulent physicians.

The bill took effect Jan. 1, 1990. But when Deukmejian left office one year later, only 1 of 28 staff positions assigned to the new council had been filled. In the first six months of 1991, the Wilson Administration has filled nine of the open slots, but 18 remained vacant as of Tuesday, according to a spokesman for the Department of Industrial Relations.

Rich Stephens, director of public relations for the department, said the vacancies remain because of a statewide hiring freeze intended to save money and help close the $14.3-billion budget shortfall.

Lloyd Aubrey, the department’s director, said later that the council’s vacancies would be filled soon with employees transferring from other state jobs. He blamed much of the delay on the cumbersome civil service hiring process. “Because of the way state hiring works, you have to have lists, go through interviews, rank people. It’s not as easy as in the private sector where you can find somebody off the street.”

Critics--including legislators and a Santa Monica doctor who is chairman of the council--allege that the Deukmejian Administration and, to a lesser extent, Wilson’s Administration, have intentionally hamstrung the council and blocked implementation of other provisions of the 1989 law. Their aim, these critics charge, was to discredit the overhaul effort as they sought more far-reaching changes in the workers’ compensation system.

In fact, Wilson has used that argument in recent days. He has described the earlier bill as an inadequate first step as he pushed for changes aimed at making it harder for workers to collect disability for stress related to on-the-job conditions. Wilson has repeatedly complained about so-called “stress mills” that recruit patients from unemployment lines and encourage them to file phony claims for workers’ compensation.

The governor and his Republican allies in the state Assembly have said they will not support a bill to raise income taxes on the wealthiest Californians unless Democrats agree to the changes in the workers compensation program.

The Democratic-dominated Assembly Insurance Committee approved a workers’ compensation measure Tuesday and sent it to the floor, but Republicans said it fell short of what they wanted. Negotiations are to continue today.

Democrats arguing against Wilson’s proposal have complained that the state has failed to fully implement the 1989 legislation that was supported by most of the special interest groups with a stake in the workers’ compensation system and hailed as a landmark reform of the system.

Among other things, that bill created the Industrial Medical Council, an independent, 14-member board to certify and oversee doctors who treat workers who say they were injured on the job. The council, half of whose members are appointed by the governor and half by the Legislature, has the power to set standards for treatment and monitor the practices of physicians involved in workers’ compensation cases.

The council has authority to hire its own staff, but in doing so is dependent on the personnel and administrative bureaucracy of the Department of Industrial Relations.

As of Jan. 1, according to the nonpartisan Legislative Analyst, only the council’s executive medical director had been hired on a permanent basis. Five clerical positions had been filled by temporary employees. The other 22 positions, including lawyers, doctors and clerical workers were vacant.

Dr. Ira Monosson, a Santa Monica physician appointed to the council by Democratic Assembly Speaker Willie Brown of San Francisco, said that the delay in hiring a staff has crippled the council’s ability to perform. He said the council wants to attack the “stress mills” that Wilson derides but has been unable to eliminate.

“We want to get rid of the fakers,” Monosson said. “If we had the staff to do it, we’d do it. Eventually, we will do it.”

Monosson said the council’s executive director, Dr. George Casey, for a time was working almost single-handedly to implement the council’s policies and run the office as an administrator.

He added that one of Casey’s assistants has been off work on a stress-related leave because she had been working 70- and 80-hour weeks and was frustrated by the lack of cooperation the council was getting from the employees in the Department of Industrial Relations.

“I think the governor wants us to fail,” Monosson said.

Times staff writer Carl Ingram contributed to this story.