Tuesday, March 31, 2009, 07:31 AM - Political developmentsThe California Supreme Court will be hearing another workers' comp case.
On the Court's website is a note from its conference of 3/25/05 that the Petition for Review was granted in Hertz Corporation vs WCAB (Aguilar).
To se an earlier post I did on the Aguilar case, click here:
http://workerscompzone.com/index.php?en ... 223-213426
Stay tuned. I'll be commenting soon on the recent letter to the WCAB from John Duncan of the Department of Industrial Relations.
Wednesday, March 25, 2009, 10:15 PM"The Fight of the Century"?
We're not talking The Thrilla in Manila... Sugar Ray Robinson vs. Basilio..Marciano vs. Jersey Joe Walcott... Duran vs. Leonard...Foreman vs. Lyle... Hagler vs. Hearns... or Emile Griffith vs. Benny Paret.
Those were some bouts. Ah, the sweet science.
No, today we're talking comp. "The Fight of the Century", in comp, that is.
That's the hype for a seminar series sponsored by the defense law firm Bradford and Barthel on the recent WCAB en banc decisions in Almaraz and Guzman.
Bradford and Barthel represented Milpitas (a small city on the Santa Clara/Alameda County line) in the Guzman case. Almaraz arose out of Bakersfield. The cases could be headed toward different Courts of Appeals.
Bradford and Barthel has now filed a 100-plus page Petition for Writ of Review with the 6th District Court of Appeals. Courts of Appeals take workers' comp cases at their discretion, and most writ petitions in workers' comp are denied.
I'm aware that some in the comp community expect the courts to defer to the WCAB, particularly where the Almaraz/Guzman decisions were the result of unanimous decision by commissioners all appointed or reappointed by Gov. Schwarzenegger.
But the 6th District Court of Appeals has been somewhat unfriendly to worker interests. A recent 6th District decision, Hertz vs. WCAB (Aguilar) has been vociferously criticized by some comp commentators.
I'll be very surprised if the court does not elect to take the case.
Perhaps the "Fight of the Century" is not hype after all.
The Petition for Writ is long, and not for the faint of heart.
Click here to view the Guzman Petition
I'll be covering this in more depth in coming days.
Monday, March 23, 2009, 10:57 PM - Political developmentsAccording to the San Jose Merc, Lt. Gov. John Garamendi is said to have likened workers' comp issues to cockroaches, noting that they are impossible to kill.
Every half decade the system goes from broken to fixed to broken again.
The issue de jour? Fast rising workers' comp medical treatment costs.
The Merc's solution? Broadly based healthcare reform. Until health costs generally can be brought under control, treatment costs in the comp system will follow the general spiral.
Here's the Merc's take:
But in California, healthcare reform efforts have fizzled. In Washington, the rubber is about to meet the road. Trying to launch a major healthcare reform at this particular moment is like launching a vessel in the midst of a perfect storm. The recent Congressional Budget Office report, which questions underlying budgetary financial assumptions, threatens to ground Obama administration attempts to sculpt a healthcare reform by funding up front costs.
Here's the CBO's report:
http://www.cbo.gov/ftpdocs/100xx/doc100 ... Budget.pdf
It will take a lot more than thousands of canvassers from "Obama's
Army" to keep this plan on track. Look for Obama's budget to be undergo major surgery soon, with either more modest reform plans or some serious priority setting (which is more important, climate cap and trade policy or healthcare?)
Since I began this blog I've steadily supported efforts to create a plan which would include elements of universal coverage and limits on overhead and profits of health insurers. Or a single payer system.
But I have to agree with Democratic Budget Committee chair Sen. Kent Conrad. Speaking to George Stephanopoulos this past Sunday, Conrad noted this is not an issue that should be resolved through the "reconciliation process" (a parliamentary maneuver used to resolve some simpler budgetary issues in Congress). But there is great pressure from some to run with the issue, even if it means jamming a plan in the face of trillion dollar deficits.
Healthcare reform deserves debate (and compromise) of the old-fashioned variety.
The stakes are high. And there are implications for California workers' comp. If you're not watching, you should be.
Saturday, March 21, 2009, 12:31 PM - Political developmentsI recently attended a panel at the on the current California workers' comp insurance market at the DWC's annual conference in Oakland. As the panel wrapped up and took a few questions, I asked whether-given the turmoil at AIG's parent company-they had concerns about AIG's workers' comp subsidiaries as we go forward.
The response from the panelist who took the question? There is no great concern about the viability of AIG's units writing California workers' comp.
But is that the case?
Newsweek writer Michael Hirsh has published a piece, "The Next AIG Scandal?" (a link to the article is at the end of this blog post)
Hirsch cited allegations by an industry veteran that "AIG's supposedly solvent insurance business may be at least as troubled as its reckless financial-products unit".
Hirsch's source claims that the "as-yet-undiscovered problem" may be in reinsurance slight of hand and the way risks were carried on AIG's books, with "the vast majority of AIG's reinsurance contracts" being "negotiated internally among its affiliates".
These are serious allegations. Perhaps the allegations aren't true and are just sensationalist paranoia to kick the company more when it is down. But if they are true, and if there is a undiscovered iceberg lurking out there, this would be of great concern for the California insurance market. AIG is a major player in the California workers' comp market.
AIG has been a company that seemingly played by its own rules. But it's beyond the scope of my expertise and data access to fathom the truth of these particular allegations.
But one hopes that Commissioner Poizner's folks at the California Department of Insurance or AG Jerry Brown will look into these allegations and do whatever due diligence needs to be done.
Here's the link to the Hirsh piece:
(got a tip? got feedback? you can send it to me at email@example.com)
Wednesday, March 18, 2009, 10:43 PM - Political developments(The scene: Insurance Commissioner Steve Poizner's office; the Commish is at his desk, leaning back in a big leather chair, musing on matters great and small..........)
I didn't need this. Not now. Not ever.
These folks at the WCIRB have really put a turd in my pocket this time.
A recommended 24.4% mid-term rate increase! Que horror!
Well, it's better than the rumors circulating yesterday that the recommended increase could be 27%. But 24.4%? That's a whopper.
Puts the squeeze on me.
I held the line last year. Batted down the WCIRB's recommendation for a 16% rate increase and adopted 5% as the official target rate.
I never trusted those actuaries and industry sycophants at WCIRB anyway. Their forecasting track record is caca. I'd love to clean house there at WCIRB. That's why I've got a review of their operations going. But we're several months away from unveiling that.
Meanwhile, this is going to boil. I can see the headlines now in the business press. "Huge comp rate increases give incentive to California
employers to leave town". "California small business awaits signal from Poizner".
And Arnold? He fixed comp, but then again he didn't. The can is getting kicked downhill to me. "Arnold's legacy in Poizner's hands". Screaming headlines. It's a good thing no one reads newspapers anymore.
Didn't need it now, This turd in my pocket. I'll spend what it takes to succeed Arnold, but it's going to be a tough climb. Whitman is a lightweight, but then again I'm polling only 7% of GOP voters. Tough climb indeed.
Maybe I made a bad choice last year. I could have approved more than a 5% increase. It's advisory anyway, and carriers are going to do what they're going to do. I can't tell them how to price their risk.
Those comp insurers have been feasting since 2004. There's still plenty of meat on the bone.
But now we're rounding the bend toward my big race. This rate issue is going to be one of the highest profile things I've done.
(The Commish is now out of his chair, pacing back and forth.....)
One thing is for sure. We need to get a handle on those medical costs in the comp system. I don't really understand comp all that well. It's not my big thing. But it's pretty clear that there is a recurring theme here.
Medical expense costs are driving overall higher costs in the comp system. I'm no dummy.
Even the WCIRB says that permanent disability costs are not the major factor in rising comp costs. Those recent decisions by the WCAB.....the ones with the funny names....The WCIRB is telling me that effects of those decisions would justify only a 7% increase in rates.
Got to think all this through. I can sock it to the WCIRB.... Give em a black eye by really looking at their books and projections. Business folks will love me. Give em' half of what they're asking for. Screw it.
But this medical cost stuff worries me. I know we've got to get a handle on it. I gotta put together a commission or blue ribbon panel to pull something together on that. Maybe we'll look hard at that CWCI study on opioid treatment. That could be low hanging fruit.
After all, there's no leadership on this comp issue. Everyone's protecting their own turf. That Cheez Whiz panel will just study this thing to death.
Gotta figure out why these medical costs in comp keep spiraling. Arnold told me he straightened that out. What's he been smoking?
I need some hearings that I can manage. Some hearings to craft some answers. Hell, it could even help me form a platform for my race.
If I win this whole mess is going to be a thorn in my side for years.
Gotta do something now.
Gonna hold some hearings.
(The commish buzzes his secretary on his speaker phone....."I'll take press calls now...")