Monday, May 4, 2009, 08:15 PM - Political developmentsRadio is dying. So they say. No one advertises on it anymore. And everyone's on their iPod.
But it makes a helluva companion for a comp lawyer making that road trip to one of the Central Valley boards....in my case, today, Stockton. It's where I covered my first WCAB case years ago.
Radio. Where else can you hear Teri Gross interviewing a Montana entymologist on his research on battles between dung beetles. Turns out that in your back yard there's likely a war going on between some male dung beetles trying to get into tunnels dug by the females.Dung beetles the size of pencil erasers, with large horns.
Lots of violence and sex going on right in your back yard. And you thought nature was a placid Buddhist-style paradise. How wrong.
Where else can you hear talk radio speculations about the Taliban rolling on into Islamabad, flipping that weak government and getting a nuclear arsenal? Not so far fetched as you might think:
http://www.nytimes.com/2009/05/04/world ... amp;st=cse
Nothing on the radio about comp, though. It's an under the radar issue.
Of course, Steve Poizner is trying to give the issue exposure.
My trusty e mail box was filled with a Poizner e mail when I returned from Stockton. Here's a link to the Department of Insurance website, which contains links to pdf versions of the brief that Poizner recently filed in the Ogilvie and Almaraz/Guzman decisions:
http://www.insurance.ca.gov/0400-news/0 ... 057-09.cfm
I'll be posting the briefs of other stakeholders when I get my hands on them.
www.boxerlaw.com (you can contact me at firstname.lastname@example.org)
Sunday, May 3, 2009, 10:07 PM - Political developmentsThere's been a growing awareness that employer premium fraud is a major problem for California's workers' comp system.
Last week, out of Orange County, comes a primo example of the problem. Michael Petronella ran several roofing companies that vastly underreported payroll.
We're talking $29 million in actual payroll and $2.9 million in reported payroll, according to the Orange County Register's investigation.
The OC Register piece is worth reading as a textbook example of how some employers are fattening their pockets:
http://www.ocregister.com/articles/insu ... roll-kile#
The result is a system out of whack. System costs are skewed as honest employers subsidize dishonest ones.
Here's a link to a post I did called "It's the Employer Fraud, Stupid!-Part 1":
http://workerscompzone.com/index.php?en ... 501-214812
And a later post, "It's the Employer Fraud, Stupid!-Part 2":
http://workerscompzone.com/index.php?en ... 818-110358
Those posts contain links to the major employer fraud study done for CHSWC by UC Berkeley researchers Frank Neuhauser and Colleen Donovan. Though the studies are about 2 years old now, they are as relevant as the day they were written.
www.boxerlaw.com (have a gripe, an idea, a tip, feedback, gossip? you
can e mail me at email@example.com)
Thursday, April 30, 2009, 10:48 PM - Political developmentsI've just returned from an event sponsored by the Bay Area's Asian Law Caucus. The event honored Fred Korematsu (who died in 2006) and the legal teams that helped him in the 1940s and 1980s.
Korematsu was a principled man who contested the right of the U.S. Government to send Japanese-Americans to detention camps in California during World War II. He fought his case all the way to the U.S. Supreme Court, losing in 1944.
The court upheld compulsory excusion of Japanese during a time of war.
But in standing up for principle, Korematsu was much revered in Asian-American circles. Tonight, most of the heavy hitting law firms in Northern California had a table there in his honor.
Decades after his Supreme Court loss, a visionary group of lawyers (and a history professor) digging back into the case in the early 1980s, succeeded in overturning the Korematsu conviction (via a writ known as "Coram nobis") in Federal Court in 1983.
It's an inspiring story. The lawyers unearthed evidence of suppressed evidence and governmental manipulation. Judge Marilyn Hall Patel threw out the conviction.
It shows that in law, it's not over til it's over.
But on the workers' comp front, is the "Benson" issue almost over?
The California Supreme Court has denied the petition for hearing in the Benson case. I learned this today in speaking with Ms. Benson's attorney, Tim Timmons of Concord.
The same issues are pending in the California Court of Appeal in Southern California in several cases. But the Supreme Court's action in deciding not to hear Benson does not bode well for the position of the applicant bar in those cases. The result in Benson was the demise of the long held California rule rating many successive injuries as one rather than splitting awards between discrete dates of injury.
The Benson court's interpretation of the 2004 reforms means that some workers will see their indemnity payment awards reduced since the law
will no longer recognize the synergistic effect of successive incidents, even if those incidents involve the same employer and same body part.
That is, unless we see a differing result in the SoCal courts.
Meanwhile, today I joined other stakeholder wonks in Oakland at the CHSWC meeting. I'll be blogging in the coming weeks about several of the topics.
For the moment, I'll offer you a link to a DRAFT REPORT of a study of self-insurance groups that was done by CHSWC staff, including Lachlan Taylor:
http://www.dir.ca.gov/chswc/Reports/200 ... Report.pdf
There has been some concern about the self-insurance groups, and the report makes a number of recommendations. Note that it is a DRAFT REPORT and that the final report could be different.
Tuesday, April 28, 2009, 09:56 PM - Political developmentsToday was Steve Poizner's day in the limelight.
As California's Insurance Commissioner, Poizner presided over the CDI hearing on the recommendation of California's Workers' Compensation Rating Bureau (WCIRB) that the "pure premium rate" for comp coverage be raised by 23.8%
I attended the morning hearing session in San Francisco. More about the substance of the hearing later. Bit first some breaking news on Poizner's announcement.
The big news is that Poizner did not take the WCIRB's bait. According to a Department of Insurance press release, Poizner has rejected the WCIRB's projected rate increase call (note: carriers are free to price their comp insurance rates as they see fit, since the pure premium rate is advisory anyway).
Poizner's press release is here:
http://www.insurance.ca.gov/0400-news/0 ... 051-09.cfm
I received the e mail notice of the press release just after 1 pm today, so it appears that it did not take Poizner long to make up his mind on the WCIRB recommendation. Indeed, testimony was still continuing when I left the meeting at noon, so by my math it appears that the press release was probably prepared before the hearing started.
Whether you're for or against the rate increase, that strikes me as a bit strange. After all, the hearing involved complicated and controversial issues, all seen through actuarial assumptions .But the Poizner press release would appear to have been fashioned beforehand.
If I'm wrong, I'll stand corrected by one of my readers. Perhaps they had prepared multiple press releases for every conceivable conclusion. Possible, but doubtful.
As I've noted before, this current comp rate issue is a big test for Poizner, who has had little on his plate that is as high profile as this issue.
Poizner's press release makes him look strong. Perhaps my "Inside Poizner's Head" blog was spot on after all.....:
http://workerscompzone.com/index.php?en ... 318-224325
Giving Poizner credit, he presided over today's meeting well and asked some very incisive questions. He's clearly bright and capable.
On the downside, in the questions and remarks I heard from Poizner, I heard nothing that indicated great concern for the plight of the injured worker. His focus seemed to be on how the rates would affect jobs and the California economy.
That's important, and worker advocates who ignore focus on the relationship between jobs, the economy and comp are perhaps tone deaf.
But it would be great to hear some more empathy from Poizner about the situation of disabled workers and more concern over whether the system is providing adequate benefits. (In fairness, it should be noted that I had to leave the hearing at 12;15 and so did not hear all of Poizner's remarks).
Even if he doesn't care, the winds of politics will require that he project more empathy. A major question swirls around this guy's candidacy: whether he can connect with ordinary folks who comprise the California electorate.
In a somewhat awkward interchange, Poizner appeared to give Michael Nolan, President of the California Workers Compensation Institute, a hard time over whether CWCI is "licensed". Nolan handled that interchange with aplomb, noting that a wide range of comp think tanks (RAND, CHSWC, etc) collect and share comp data. I wound up wondering whether others in the room saw that "license" interchange as quite strange. But hey, I'm just a blogging attorney......
Back to the press release....
Poizner rejected the portion of the rate increase request attributable to projections of increased permanent disability costs as a result of the recent Almaraz/Guzman and Ogilvie decisions. In doing so, he noted that the decisions are not final and may be reversed. In remarks in the morning session, he indicated that the Department of Insurance would be filing a brief on the issue (I was not clear whether the "brief" will be with the WCAB or just in later appeals likely to come in Almaraz/Guzman/Ogilvie).
Poizner has called for a second hearing on June 8, in Sacramento. The hearing is to focus on medical treatment cost issues.
Strategically, this is probably smart. Medical costs do appear to be driving increased comp expenditures. This includes substantial increases in pharmaceutical costs, medical cost containment expenses, and medical-legal costs.
I'll be blogging much more on medical treatment costs over the coming month, as the issue remains under the regulatory microscope. Ultimately, Poizner has no say over how treatment cost issues are handled.
That's the province of the DWC (which has already hammered out most of the treatment guideline regulations) or the legislature.
But the June hearing gives Poizner another day in the limelight.In Sacramento, where he can show his gubernatorial bonafides. Of course, the legislature could hold its own hearings.........
The pure premium rate increase will have to wait........
Monday, April 27, 2009, 10:35 PM - Understanding the CA WC systemTuesday (tomorrow) April 28 the Department of Insurance holds a hearing on workers' comp rates.
Injured workers and labor activists are welcome to attend the meeting.
The hearing, slated to start at 10 am in the 22nd Floor Department of Insurance hearing room at 45 Fremont St. in San Francisco, is in response to the WCIRB's recommendation of a large price increase for comp insurance. The recommended increase is now a whopping 23.7%.
With his gubernatorial campaign sputtering (low in the early polls and lots of campaign staff turnover), the comp pricing issue is a high profile assignment for Insurance Commissioner Steve Poizner. Comp costs have been an ongoing concern in the business community, particularly in a tight economy. Politically the issue is a hot potato; how that is handled could prove to be an opportunity or a liability for Poizner. You can see my recent blog on that, "Inside Poizner's Head") by clicking here:
http://workerscompzone.com/index.php?en ... 318-224325
The Insurance Commissioner has no ultimate control over comp pricing.
He can accept the WCIRB recommendations or reject them and propose other price targets, but these are not mandatory. But the WCIRB/Department of Insurance rate filing process has great significance politically.
Poizner has criticized WCIRB forecasting in the past. And he's been willing to reject WCIRB recommendations.
In any event, it's pretty much all show. The pure premium rate that is set by Poizner is not binding on carriers Some will price their comp business below the pure premium rate and some may price it higher.
But the PR symbolism is important.
If Poizner accepts the large rate increase recommended by the WCIRB, the signal is that all is not well in comp. Injured workers' and their advocates know that, but employers and the public have been led to believe that the 2003/2004 reforms "fixed" the system.
Given the size of the WCIRB recommended rate increase, the press and the business community will demand to know what has occurred. Were the reforms oversold? Did the reforms result in artificial savings? Should employers accept that higher comp costs are simply inevitable? Is it possible to inocculate the comp system against medical inflation which is ravaging our healthcare system generally?
I don't expect any mind-bending epiphany tomorrow on the issue of why medical costs appear to be rising. That's complicated and probably demands more study data than the WCIRB has developed. Nor do I expect anything much on employer profits and broker fees. Poizner has shown no willingness to take on the broker community or carrier profits.
Recent past hearings have been notable for concern over the rising portion of comp premiums spent on loss adjustment expenses, i.e. insurer overhead expenses.
But it's clear that Poizner's department can blame permanent disability for only a small portion of any projected increase in costs. Even if the Almaraz/Guzman decisions went into effect, the WCIRB's figures project these to be responsible for only around 1/4 of the recommended premium increase.