The state Senate has approved legislation designed to rein in skyrocketing workers´ compensation costs by controlling prices charged by outpatient surgery centers and pharmacies to treat injured workers. The 90-year-old workers´ comp system has been rocked by cost increases that have more than doubled the average rate for the workers´ comp insurance that most businesses are required to buy.

Critics say that a major cause of the problem is the lack of cost controls for outpatient surgery centers and pharmacies.

The bill approved by a 37-1 vote would limit workers´ comp outpatient clinic fees to 120% of the amount paid by Medicare for the same service. Pharmacies´ workers´ comp charges could not exceed the amounts allowed by Medi-Cal, the state´s health care system for the poor.