Thursday, February 21, 2008, 10:36 PM - Understanding the CA WC systemA cold winter night.
Sometimes comp seems like a lazy backwater.
The legislature hasn't geared up. Action on comp anti-discrimination will move, but at a slow pace.
The WCAB is in transition, still sporting one vacancy.
Important DWC action on PD schedule reform and QME regs seems to drag on and on.
After quickly resolving one burning comp issue by its Brodie decision, the California Supreme Court is moving at a snail's pace in scheduling
hearings on other comp-related cases.
In the larger world, life goes on. Politics. Hillary and Barack have just finished a strange Texas debate where they pretty much agreed on everything except mandates on healthcare reform. John McCain is defending himself against a New York Times piece-heavy on unnamed sources-insinuating that he had an affair with a lobbyist doing business with his committee. Perhaps we're looking at another 4 years of Paula Jones and Gennifer Flowers payback. The world. Our Belgrade embassy attacked by Serbian thugs in the last gasp of pan-Serbian vitriolic nationalism. The economy. Concerns that we're entering a period of stagflation-inflation and recession.
Maybe it's a good night to wander in the wonkisphere.
Tonight's wonkisphere feature: the California Workers' Compensation Institute January 2008 analysis "Temporary Disability Outcomes Accident Years 2002-2005 Claims Experience". Written by Alex Swedlow and John Ireland, the research summary (and charts) are available by clicking here:
The bottom line? No big surprises here. SB 899 reforms have reduced the duration of TD claims and the average amount of TD paid per claim.
Very few claims are exempt from the 2 year TD limit. A small number of diagnoses provide the majority of TD claims. TD claims are being reported more quickly.
But there are many issues NOT addressed by this study. The quality of care in MPN networks. The lack of an income replacement system for workers with serious injuries who are unlucky enough to be disabled for more than 104 weeks. Abuses of a utilization review scheme that may in some cases prolong TD by failing to authorize testing and treatment on a prompt basis. The distribution of TD savings to employers rather than increased insurer profits. The inequity in exempting some specific types of injuries from the 2 year TD cap but not exempting others from the 2 year cap.
Do your own wandering through the wonkisphere.
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Sunday, February 17, 2008, 11:39 PM - Political developmentsAn important article surfaced in today's San Diego Union: "Race, Age, Gender Bias Hits Workers Across State".
The article by Deal Calbreath, full of examples of such bias under the current "apportionment" provisions of California's workers' comp law, can be seen by clicking here:
http://www.signonsandiego.com/uniontrib ... 7dean.html
Calbreath notes that next month the National Business Institure has scheduled a Sacramento seminar for workers' comp professionals entitled "How to Discriminate (Apportion) on the Basis of Sex, Age, etc".
It's an ugly trend-doctors deducting for so-called "causes" that in many instances stereotype individuals who had no prior problems but were unlucky enough to get injured at work.
The San Diego Union piece is yet another major newspaper piece-joining a piece in the Sacramento Bee last week-making the case for revision of California law to outlaw apportionment of disability based on age, race, sex, etc.
The folks at the Cal Chamber are going to look pretty heavy handed if they oppose this one. Californians don't like discrimination.
Stay tuned. I'll be covering the Migden bill in detail in coming posts.
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Wednesday, February 13, 2008, 11:39 PM - Political developmentsEver wonder if comp benefits paid out by carriers are only part of the insurance rate equation? What about the return on investments of insurers? Perhaps workers' comp payouts are only a sideshow in the three-ring circus of insurer finances?
Food for thought.
Meanwhile, consider the whopping writeoffs announced by multinational insurer AIG. Yesterday AIG announced losses of almost $5 billion (yep, that's billion)due to the subprime mortgage crisis. AIG stock has fallen by 33% over the past year. This comes on the heels of investigations in a number of states as to AIG's accounting and claims handling practices. Several years ago the axe fell on AIG chairman Hank Greenberg after revelations of questionable accounting practices. Shareholder class action suits followed.
Greenberg was said to be interested in leading a takeover of the New York Times Co. Quite a concept: discredited insurance baron as media mogul. Thankfully, it's a concept that failed to have wings.
AIG is a big player in California workers' comp.In the trenches, AIG is known for a certain inflexibility in California claims handling. It's a company that leaves few cards on the table. When settling cases they like to "structure settlements", hanging on to the money to invest in AIG subsidiaries.
Here's the article on AIG that appeared in the 2/12/08 New York Times:
http://www.nytimes.com/2008/02/12/busin ... nted=print
A Wall Street Journal article today questioned whether AIG is "on a slippery slope":
http://online.wsj.com/article/SB1202869 ... lenews_wsj
California insurance regulators need to keep a watchful eye on this behemoth.
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Tuesday, February 12, 2008, 09:13 AM - Political developmentsGung Hai Fat Choy! It's now officially the Year of the Rat.
Today I'm awarding Blue Cross my Year of the Rat award.
Blue Cross (owned by Wellpoint) has been sending letters to its participating doctors requesting the doctors to turn in patients who have conditions not disclosed on applications as preexisting. "Any condition not listed on the application that is discovered to be pre-existing should be reported to Blue Cross immediately" says the letter
(at the bottom of this post I have a link so you can see the actual Blue Cross letter).
It's a new concept: the doctor as spy for the insurer. Forget about doctor-patient relationships and confidentiality. Doctors, if you are in our plan you have an obligation to hold down costs by turning your patient in so that we can cancel their policy.
It's another example of Wellpoint's cherry-picking philosophy. Don't cover people who actually need healthcare. And if they do use coverage, look for reasons to rescind the coverage. Make plan participants nervous about using their coverage.
This Blue Cross letter is a politician's dream. Legislators and Insurance Commissioner Poizner will be lining up to condemn insurer meddling in the doctor-patient relationship.
The big healthcare reform package-AB1X-recently failed. Unlike Kaiser and several other insurers, Blue Cross was a major opponent of the plan . At the moment, in an election year and during a major budget crisis, there's probably not enough legislative energy to revive a big healthcare bill.
But one area that demands legislative action is health insurer conduct. Cherrypicking. Plan recissions. Preexisisting condition exclusions. Doctor-patient confidentiality. A bill prohibiting many of these abuses will be very popular with the public.
Way to go, Blue Cross. Your Year of the Rat Award makes you the poster child for the need for healthcare reform in California.
Here's the link to the Blue Cross letter:
http://www.calendarlive.com/media/acrob ... 508226.pdf
You can read more about this issue by looking at today's Los Angeles Times piece by Lisa Girion:
http://www.latimes.com/business/la-fi-b ... 9662.story
Stay tuned. Next I'll be covering the proposed bill authored by state Senator Carole Migden to outlaw workers' compensation apportionment based on age, gender, sex etc.
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Thursday, February 7, 2008, 10:54 PM - Political developmentsAs expected, the failure of Prop 93 (the initiative to change term limits)
has set off changes in Sacramento. Assembly Speaker Fabian Nunez and
California Senate Pro Tem Don Perata are both termed out at the end of this year's legislative session.
Nunez' Louis Vuitton shopping trips and expensive wine purchases made him the poster boy for anti-Prop 93 ads. Despite his backround at the Los Angeles County Federation of Labor, Nunez was unable to head off the 2004 dismantling of worker rights in the SB 899 reform.
The Nunez Speakership is rather thin on pro-labor accomplishments. In the last several weeks we've seen his well intentioned healthcare reform package, AB1X, crushed by the financial complexities of the looming state budget crisis and concerns about inadequate financing of the healthcare scheme. His friend-Los Angeles Mayor Antonio Villaraigosa-may have suffered a major political flameout due to last year's scandal involving dalliance with a political reporter.
Today, after closed-session meetings of Senate Democrats, Perata announced his successor-Sacramento State Senator Darrell Steinberg.
A formal vote will not be held til summer, however.
Steinberg is a savvy legislator with generally progressive values. Known as a problem solver, he has the chance to be a terrific leader in the California Senate. As with Perata, injured workers can at least expect a fair hearing under his leadership.
But what about the Assembly side?
For now it appears that Nunez will remain in his post until August 2008, but the scramble to replace Nunez is already on. Over the next couple of months there'll probably be lots of backroom intrigue as various Assembly Speaker wannabes try to put together enough votes to win the Speakership.
Among the interesting tidbits I heard about today was a rumor (which I can't personally vouch for) that Assemblyman Charles Calderon had been talking to Assembly Republicans about brokering a deal with them and a few Assembly Democrats to capture the Speakership. It takes 41 votes to cut a deal, so Calderon would need about 9 votes from democrats if he had a unanimous Republican caucus ready to back him.
It was only about a week ago that Calderon spoke to the California Applicant Attorneys convention in Rancho Mirage. A Calderon Speakership forged with Assembly Republican votes will please business interests but will not be hospitable to injured worker concerns. Remember the Gang of Five? Calderon had tried to dump Willie Brown during his speakership.
In 2007, Perata exercised "discipline" in the Senate by locking some of the so-called " business Democrats" out of their offices. Among those locked out of his office was Charles Calderon's brother, State Senator Ron Calderon, along with Gloria Negrete Macleod and Lou Correa.
For an analysis of other potential Speaker candidates, check out the
Anthony York piece "The Next Generation" in The Capitol Weekly by clicking here:
http://www.capitolweekly.net/article.ph ... eb4adlcv0h
The short list (in no particular order of seriousness) includes Karen Bass (D-Los Angeles), Alberto Torrico (D-Newark), Joe Coto (D-San Jose), Fiona Ma (D-San Francisco), as well as Mike Feuer (D-Los Angeles), Anthony Portantino (D-Pasadena) , Hector De La Torre (D-South Gate), and Kevin De Leon (Los Angeles). You can find some profiles on these
possible future leaders in today's Sacramento Bee by clicking here:
Some of these candidates are allied with Nunez. Some are close to being termed out themselves. Some, but not all, have lots of energy and intellectual juice. So it's a very fluid situation. as the Bee notes, connection with Nunez may or may not turn out to be an advantage.
Unless you follow politics closely, this may be a big yawn. But experience shows that legislation doesn't move in Sacramento without the support of the legislative leadership.
Going back many years, applicant attorneys generally had a sympathetic ear in the legislative leadership. James Mills, David Roberti, Bill Lockyer, Leo McCarthy, Willie Brown, Perata, and-til 2004, John Burton.
Steinberg probably fits. But it's shakier on the Assembly side.
I'll be covering this as further information emerges.
(you can see Mr. Young's bio by clicking here: