The WCIRB (California's Workers' Compensation Insurance Rating Bureau) has just released its report on workers' comp through 12/31/09.

These reports are always a treasure trove of information about how the industry is doing.

I'll be sharing some reflections in upcoming posts.

A couple of snapshots in the interim........

The average insurer rate for 2009 was $2.35 for every $100 of payroll. That compares with $2.37 in 2008 and $2.46 in the last half of 07. By comparison, in 2003 the rate was $6.45 for every $100 of payroll.

That's the kind of comparison that gets the CalChamber enthused.

Written premium declined to $8.9 billion ($6.3 billion when deductible credits are factored in). In 2006 the premiums were $16.4 billion (or $11.3 billion when factoring in deductible credits).

It's striking to see how premium has declined so much over the past few years, presumably reflecting the poor overall economy/financial meltdown and perhaps reflecting a continuing shift in the mix of California businesses.

More to come. Meanwhile, here is the WCIRB report:
https://wcirbonline.org/wcirb/resources/data_reports/pdf/123109_insurer_exp_report.pdf

Julius Young
www.boxerlaw.com

There's a Food Network. A Shopping channel. C-Span for political junkies. Fashion TV.

Now there's IWTN.

In my inbox yesterday was an announcement about IWTN, the Injured Workers Television Network. IWTN is the brainchild of injured worker Sam Gold. For several years Sam has produced and directed a show about workers' comp from the public access studios on Market St. in San Francisco.

Now Gold and his group, the National Organization of Injured Workers, have more ambitious plans.

Here's their press release:

"The National Organization of Injured Workers, America’s only national injured workers advocacy organization is pleased to announce the formation and launch in mid-April of the Injured Workers Television Network, (IWTN) an internet television broadcasting network utilizing the Microsoft Windows Media Player as a distribution platform. Their network will be capable of up to 3000 concurrent streams at any one time.

This will be a primary vehicle for “Injured On The Job,” their flagship television program now seen on Public Access cable stations around California.

IWTN will be broadcasting at start for 6 hours a day, three days a week from 4 till 10pm with information, videos and programs that are of importance to injured workers and their advocates. As laws change and significant events manifest themselves, they will comment and cover these events to the best of their abilities.

They are also looking into videotaping and re-broadcasting important committee meetings such as the Commission on Health Safety & Workers’ Compensation, Fraud Assessment Commission and DWC meetings, live streaming where at all possible.

It is hoped that IWTN will be a very loud media voice for injured workers and their advocates who up till now have had to rely on 2 minute video bytes on the 6 o’clock news to get their message out.

They also will be taking their cameras into the homes of the occupationally injured to show the human carnage that our dysfunctional system is causing on the working people of America.

IWTN will also be looking for interested organizations to underwrite their broadcasting infrastructure costs in exchange for network exposure.

To watch IWTN, simply go to the website located at www.injuredworkerstelevision.com and press the play button on the embedded Windows Media Player during broadcast hours ONLY or you will get nothing on the screen."
For further information contact:
Sam Gold
IWTN
640 Bailey Road, Suite 129
Pittsburg, CA 94565
Toll-Free 1 (877) 484-3990
Email: iwvideo@yahoo.com
www.injuredworkerstelevision.com

Stay tuned.

Julius Young
www.boxerlaw.com

Here in no particular order are my picks as the 2009 California workers' compensation "Top 10" events. I've included some brief commentary, along with links to posts I did during the year:

1. POIZNER CONTINUES TO REJECT WCIRB RATE INCREASE RECOMMENDATIONS
In the spring of 2009 the WCIRB recommended to Insurance Commissioner Poizner that comp rates (the "pure premium" or "benchmark") be increased by 24.4% (later amended to 23.7%). Poizner eventually responded with a July 2009 non-binding decision and order recommending no increase.

Poizner continued to criticize the WCIRB's methodology and forecasting.
The WCIRB itself was under scrutiny:
http://www.insurance.ca.gov/0400-news/0 ... 060209.pdf

Poizner did order a change in how the WCIRB accounts for medical costs. Here's my post, "Poizner's Directive Bears Fruit":
http://www.workerscompzone.com/index.ph ... 928-203224

Later in 2009 Poizner again rejected a whopping rate increase by the WCIRB (22.8%), recommending no increase in the benchmark rate for 2010. Here's my post on that, "Whac-a-Mole":
http://www.workerscompzone.com/index.ph ... 109-212346

As the year ended it is apparent that carriers are increasing their rates, but nowhere near the levels requested by the WCIRB. Figures from the California Department of Insurance and CHSWC show that average rates filed by insurers had fallen from 2004 as follows: -3.6% (1/1/04), -7.3% (7/1/04), -3.8% (1/1/05), -14.6% (7/1/05), -14.7% (1/1/06), -10.7% (7/1/06), -7.0% (1/1/07), -11.0% (7/1/07), -.05% (1/1/08), and -2.6% (7/1/08). In 2009, despite some claims of market deterioration by A.M. Best, the average rates actually charged rose modestly: 5.8% (1/1/09) and 8.5% (7/1/09).

2. VOCATIONAL REHABILITATION EXPIRES
By statute vocational rehab for pre 1/1/04 benefits expired 1/1/09 unless there was a vested right. Workers have lost a significant benefit. That's the bottom line of the Weiner decision, covered in my post "Sayonara":
http://www.workerscompzone.com/index.ph ... 611-215416

3. GROWING CONCERN ABOUT MEDICAL COSTS AS A SYSTEM COST DRIVER
Citing concerns about the role of medical treatment costs in California workers' comp, Insurance Commissioner Poizner held a special hearing on the issue. As part of its justification for a large rate increase, the WCIRB claimed that the average comp medical bill increased between 2005 and 2007 by 23% (for all claims) and 30% (for indemnity claims). WCIRB chief actuary David Bellusci claimed that drug costs are up 42%, medical containment costs (such as utilization review, nurse case management etc) are up 51% and medical legal expenses are up 59%. A June 2009 study by the California Workers Compensation Institute (commissioned by the WCIRB pursuant to a legislative mandate) documented many of these trends.

The California Workers Compensation Institute raised alarms about the i costs and problems (including drug induced deaths) associated with increasing opioid use in the California comp system.

Efforts to mandate an "explanation of benefits" letter to injured workers fell flat in 2009. Some had pushed this as a solution to the problem of medical provider fraud, on the theory that fraudulent doctors would not bill for bogus treatments if the worker was likely to see the bogus billings.

Later in the year the DWC announced a 12 point regulatory plan to control medical costs. This was largely in response to a RAND paper on regulatory actions that could reduce medical costs:
http://www.dir.ca.gov/chswc/Reports/2009/RANDpaper.pdf

Concern about increasing lien filings choking the WCAB (particularly those out of Southern California) led that to be a factor in "secret negotiations" about further system reform (see #9 below).

And throughout 2009, the system lived in the shadow of federal healthcare reform. The final direction of "Obamacare" could have profound secondary effects on workers comp in the long run even though the idea of "24 hour care" is dead.

4. DWC'S ANNOUNCEMENT THAT IT WILL NOT ATTEMPT TO MEET DEADLINE FOR STATUTORY PD RATING SCHEDULE REVISION
At year's end, DWC Chief of Legislation and Policy Susan Gard was
quoted as saying that the DWC will not move forward at this time on a revision of the 2005 PDRS (permanent disability rating schedule), citing concerns about the weakness of California's economy. The DWC has decided not to move forward on an earlier PDRS draft that would have resulted in a modest increase in permanent disability payments. The 2005 PDRS was under unsuccessful attack several years ago in the Boughner case; more recently the WCAB's Ogilvie decision (see more below) allows for a possible rebuttal strategy on the PDRS under limited circumstances. At year's end it was not clear what the legal and political ramifications of the DWC's decision will be. Meanwhile, the issue is not going away. Multiple studies have shown sharp reductions in payments to workers with permanently disabling injuries since the 2004 reforms.
Permanent disability indemnity costs continue to be a relatively small percentage of overall system costs.

5. ALMARAZ, GUZMAN AND OGILVIE DECISIONS ROIL THE COMP COMMUNITY

Groundbreaking decisions by the WCAB in the Almara, Guzman and Ogilvie cases were soon appealed. Almaraz I and Guzman I allowed doctors to go "outside the AMA" guides in rebuttal of the Guides.
The WCAB took the matter under further study and issue a revised decision, Almaraz II and Guzman II. Both allow rebuttal of the Guides, but only from "within the four corners of the Guides":
http://www.dir.ca.gov/wcab/EnBancdecisi ... ep2009.pdf

Ogilvie allows rebuttal of part of the rating "factors" in some cases, dependent on wage loss data and certain mathematical ratios of earnings losses:
http://www.dir.ca.gov/wcab/EnBancdecisi ... ep2009.pdf

These cases provide tools for lawyers to help some workers achieve a rating or settlement result that is more reflective of their true disability.
But the decisions have angered employers and insurers who seek to impose the more cut and dried approach of the "strict AMA" system.

It's the usual debate between system predictibility and individual justice.
Case law has confirmed for many years that the PD rating schedule is rebuttable. It's a loophole that the SB 899 reformers failed to close. To their credit, labor negotiators in the 2004 reform did not trade away rebuttability of the schedule.

Both Almaraz/Guzman and Ogilvie are being appealed, and it may be late in 2010 or even 2011 before all stakeholders can be sure what is the final result in these cases. A legislative deal or a new PD rating schedule may abrogate or moot one or both of these cases.

6. WCAB STRUGGLES WITH EFFECTS OF FURLOUGHS
Although the courts eventually exempted SCIF from furloughs, furloughs were imposed on the WCAB and its district offices. Morale among many WCAB employees suffered, and the division struggled to maintain service despite the furloughs. Many in the "comp community"
were puzzled that furloughs were applied to the WCAB given its "user funding". Unhappiness about this only increased as user funding assessments were substantially increased in the fall of 2009. User funding assessments (which also fund Cal-OSHA and labor standards enforcement programs) increases met resistance from employers.
Here's my post "Assessing Assessments":
http://www.workerscompzone.com/index.ph ... 129-222117
DWC acting administrator Carie Nevans defended the assessments:
http://workerscompzone.com/index.php?m= ... 204-070857

7. SCIF CONTINUES TO BE IN THE NEWS, WITH PLANNED SALE APPARENTLY STALLED
There were more leadership changes at SCIF. But the main reason SCIF was in the news was that the Governor's office hatched a plan to sell off part of SCIF in order to generate revenue to plug California's gaping budget hole. Legislators eventually went along with this plan, although there's much speculation that many voted to do so believing it was not likely to happen. At year's end the plan appears to be hopelessly stalled (see my post "2 Things Not Happening"):
http://www.workerscompzone.com/index.ph ... 229-224536


8. APPELLATE COURTS CONTINUE TO DEAL WITH SIGNIFICANT WORKERS' COMP CASES: BENSON, SMITH/AMAR; XYZZ; HERTZ (AGUILAR)

Disabled workers sustained a big loss in 2009 as the California appellate courts (in Benson, Forzetting and Vilkitis) upheld the WCAB's rationale in the Benson case. Due to the court's interpretation of SB 899 changes, doctors evaluating injuries must allocate PD to each injury separately (unless that is impossible), rather that combining permanent disability where successive injuries become stationary together. As a result, the long-held Wilkinson line of cases appears to have expired. Here's my post:
http://www.workerscompzone.com/index.ph ... 210-134830

One bright spot for workers in the courts this year was a 6th District Court of Appeal decision in the "XYZZ case" (actually now "John Duncan vs. WCAB and X.S."), clarifying when a cost of living computation begins for payments for workers with disability ratings of 70% and above.
My commentary is found here ("A Surprise in the COLA Decision"):
http://workerscompzone.com/index.php?m=11&y=09
The decision continues to be appealed and we may not have heard the final word on this issue.

In Smith v. WCAB and Amar v. WCAB the California Supreme Court overturned an appeals court decision allowing fees against the insurer for applicant attorneys fighting medical treatment denials. Applicant attorneys had convinced the lower appellate court to allow fees under Labor Code 4607 where they were successful in enforcing the right to treatment on behalf of workers who received denials of specific treatment requests. The Supreme Court held 4607 only authorizes an award of attorney fees when defendant institutes proceedings to terminate an award. The effect of this decision will likely make it hard for many workers experiencing treatment denials under their "future medical" awards to get attorney help challenging the denial. Here's my post "Smith is Here":
http://www.workerscompzone.com/index.ph ... 511-214324

In Hertz v. WCAB (Aguilar) the Court of Appeal dealt with the thorny issue of applying SB 899 rules in a case where the worker alleged inability to compete in the open labor market under the "old schedule" LeBoeuf case. Although the employer prevailed in the case, a concurring opinion by once justice raised the issue of whether we would start to see an "Aguilar factor" in cases alleging total impairment under LeBoeuf,
total earnings incapacity or Labor Code 4662 (permanent total disability according to fact). The case has now been taken by the California Supreme Court, although a date for argument is not currently set. At year's end, it was not clear whether, in light of the Aguilar case, one must be a "perfect man" before an injury to qualify as 100% disabled post-injury. Here's my post "An Aguilar Factor?" on the issue:
http://workerscompzone.com/index.php?en ... 223-213426


9. SECRET NEGOTIATIONS OVER FURTHER COMP REFORM POINT TO LIKELY FUTURE LEGISLATIVE TINKERING

Over the Summer of 2009 word leaked that secret negotiations over a "grand reform bargain" were being held by a couple members of CHSWC (notably, Sean McNally, a Grimmway Farms executive and Angie Wei of the California Labor Federation), with staff support from CHSWC.
The talks appear to have centered around cost savings generated by putting restrictions on lien claimants and ending the rebuttability of the PD schedule, in exchange for a one-time PD increase.
My post "Uncloaking" can be found here:
http://www.workerscompzone.com/index.ph ... 022-214830

The "secret negotiations" documents were released by CHSWC in November 2009:
http://workerscompzone.com/index.php?m= ... 105-110204

Most observers assume that talks among various stakeholders will increase in 2010. The 2010 governor's race looms large over any talks, as does the outcome of appeals in Almaraz/Guzman and Ogilvie.

10. LEGISLATIVE SESSION RESULTS IN MODEST CHANGES IN COMP

2009'S California legislative session resulted in no major change. Disabled workers received no legislative benefit increase, as a PD increase bill that had been vetoed in 3 previous years was not moved to the Governor's desk in 2009.
Notable bills that did get signed included these:
-AB 483, which requires establishment of an internet website to assist in determining whether an employer is insured for workers' comp
-AB 1093, Taneka's Law:
http://workerscompzone.com/index.php?en ... 011-220507
-SB 186, which extended the right to predesignate a doctor, which otherwise was schedule to sunset at the end of 2009

Readers who would like to pour over stats and graphs on California workers comp should download the 2009 CHSWC report:
http://www.dir.ca.gov/chswc/Reports/CHS ... rt2009.pdf

Check back soon to take my quiz on the likely developments in California workers' comp in 2010.


Julius Young
www.boxerlaw.com

(Workerscompzone awoke from a dream after seeing "Nine", the Rob Marshall homage to the Italian cinema era of Fellini and Antonioni, featuring Penelope Cruz, Nicole Kidman, Sophia Loren etc etc; but workerscompzone's dream was more pedestrian.....a choir was singing "The Twelve Days of Christmas" as the WCAB staff and comp community litigators left the local WCAB on Christmas eve....."

"On the first day of Christmas
My true love sent to me
A stip with an Ogilvie-eee"

"On the second day of Christmas
My true love sent to me
Two EAMS licenses
And a stip with an Ogilvie-eee"

"On the third day of Christmas
My true love sent to me
3 Benson filings
2 EAMS licenses
And a stip with an Ogilvie-eee"

"On the fourth day of Christmas
My true love sent to me
4 XYZ Colas
3 Benson filings
2 EAMS licenses
And a stip with an Ogilvie-eee"

"On the fifth day of Christmas
My true love sent to me
5 Premier liens
4 XYZ colas
3 Benson filings
2 EAMS licenses
And a stip with an Ogilvie-eee"

"On the sixth day of Christmas
My true love sent to me
6 Cheez-Whiz studies
5 Premier liens
4 XYZ colas
3 Benson filings
2 EAMS licenses
And a stip with an Ogilvie-eee"

"On the seventh day of Christmas
My true love sent to me
7 writs pending
6 Cheez-Whiz studies
5 Premier liens
4 XYZ colas
3 Benson filings
2 EAMS licenses
And a stip with an Ogilvie-eee"

"On the eighth day of Christmas
My true love sent to me
8 UR docs denying
7 writs pending
6 Cheez-Whiz studies
5 Premier liens
4 XYZ colas
3 Benson filings
2 EAMS licenses
And a stip with an Ogilvie-eee"

"On the ninth day of Christmas
My true love sent to me
9 Guides experts guiding
8 UR docs denying
7 writs pending
6 Cheez-Whiz studies
5 Premier liens
4 XYZ colas
3 Benson filings
2 EAMS licenses
And a stip with an Ogilvie-eee"

"On the tenth day of Christmas
My true love sent to me
10 RAND researchers writing
9 Guides experts guiding
8 UR docs denying
7 writs pending
6 Cheez-Whiz studies
5 Premier liens
4 XYZ colas
3 Benson filings
2 EAMS licenses
And a stip with an Ogilvie-eee"

"On the eleventh day of Christmas
My true love sent to me
11 judges furloughing
10 RAND researchers writing
9 Guides experts guiding
8 UR docs denying
7 writs pending
6 Cheez-Whiz studies
5 Premier liens
4 XYZ colas
3 Benson filings
2 EAMS licenses
And a stip with an Ogilvie-eee"

"On the twelfth day of Christmas
My true love sent to me
12 Almaraz ratings rising
11 judges furloughing
10 RAND researchers writing
9 Guides experts guiding
8 UR docs denying
7 writs pending
6 Cheez-Whiz studies
5 Premier liens
4 XYZ colas
3 Benson filings
2 EAMS licenses
And a stip with an Ogilvie-eee"

Happy holidays to my readers and all of my clients, friends and colleagues in the comp world.

Julius Young
www.boxerlaw.com

One large problem in California workers' comp has been the inability of the WCIRB to accurately assess workers' comp cost trends.

The WCIRB (Workers Compensation Insurance Rating Bureau) collects data from insurers and makes recommendations on rates to California's Insurance Commissioner who, in turn, makes a recommendation to the industry. With the industry deregulated, none of this is binding on individual insurance carriers. But it has political and symbolic effect.

Concerned over the WCIRB's less than stellar track record over the past decade, current Insurance Commissioner Poizner made a set of recommendations to the WCIRB in 2008.

In 2007, Poizner charged that from 1995 to 2000, WCIRB forecasts underestimated costs by 20 to 60%, while post 2004 reform forecasts by the WCIRB overestimated costs by by 30 to 50%.

Among the recommendations was for the WCIRB to change the way it assesses medical costs as part of its "Uniform Statistical Reporting Plan".

The WCIRB has now submitted a plan to revise the way it assesses costs.
Utilization review and medical bill review are to be handled differently.
The cost of medical cost containment programs will be moved from the medical loss column to the allocated loss adjustment expense category.

This will, over time, provide more transparency as to what the system costs really are.

Utilization review, nurse case management, and bill review and some other loss control schemes have become costly line items in and of themselves (and profit centers for many of the companies). Medical costs have risen, but cost containment expenses have also reisen dramatically.

As premium dollar volume has declined in California workers' comp, allocated and unallocated medical costs have loomed larger in relation to benefits actually paid out to disabled workers.

I have to credit Insurance Commissioner Poizner on this one. His recommendation to the WCIRB has come to fruition. Over the long run we may have a better system as a result.

To see the recommended changes in the WCIRB's reporting, you can click here (it's part of their amended rate filing):
https://wcirbonline.org/wcirb/resources/rate_filings/pdf/2009_09_22_Amended_01_01_10_PPR_Filing_COMPLETE.pdf

Julius Young