Friday, June 4, 2010, 07:57 AM - Political developmentsWorkers' comp written premium continues to fall in California, as the industry continues to shrink.
According to stats from the National Association of Insurance Commissioners, the California Department of Insurance, and the California Workers' Compensation Institute, 2009 was the 5th consecutive year of large premium declines.
The decline in SCIF's market share has continued. In 09 SCIF had just under 19% of the California market, down from a pre-reform high of 53%.
The 03 and 04 reforms and profits generated by the reforms were a major factor in the increasing activity of other insurance carriers in the market.
Comp premium is now said to be at $6.9 billion, compared to over $16 billion in 2004. The lower premium reflects the precipitous decline in the California economy, of course, in addition to the effects of comp reforms. Meanwhile, Insurance Commissioner Poizner has discouraged any significant rise in comp rates, though his pure premium rate determinations are merely advisory.
So while employers may still be enjoying low workers' comp costs, many of those employers are out of business or hiring fewer workers anyway due to other negative economic trends.
As comp premium declines, allocated and unallocated loss adjustment expenses spike as a percentage of written premium. Overhead must be paid, and it's likely that we'll see high ratios of overhead expenses in relation to benefits paid out to or on behalf of disabled workers.
One would assume that barring a double dip recession (caused by a collapse of the commercial property market with resulting bank failures or a worldwide credit crisis started by collapse of the Eurozone economies?) we will see some pickup in the California economy and that premium will begin to rise.
Thursday, June 3, 2010, 11:31 PMThe pair?
Two en banc rulings from the WCAB today.
One invalidates a section of QME regs which limited insurer access to QMEs where the claim is denied. The WCAB found Rule 30(d)(3) invalid. That's Mendoza vs. Huntington Hospital:
The other en banc sets forth the respective duties of doctors, judges and raters.
That decision, Blackledge Vs. Bank of America, rejects the practice of some raters who offer unsolicited opinions on the application of the AMA Guides. Here's that decision:
http://www.dir.ca.gov/wcab/EnBancdecisi ... kledge.pdf
I'll be commenting more soon.
Wednesday, June 2, 2010, 09:18 AM - Personal injury and WCAmid all the images of oil soaked marshes and gushing oil pipes in the BP Deepwater Horizon disaster, it's easy to forget that this catastrophe killed
11 workers and injured at least 17 others.
Many of those were lost at sea.
America's tort system is villified by many people. Tort lawyers are seen as sharks and ambulance chasers.
There has been a concerted attempt to get "tort reform" to limit the rights of individuals to seek redress for wrongdoing.
But when cars crash because gas pedals stick or electronics go awry, or when corporations cut safety corners causing unbelievable human and economic damage, the public gets a quick lesson in why tort lawyers are necessary.
John Anton, my law partner at Oakland's Boxer and Gerson, is a tort trial lawyer who handled several of the cases arising out of a massive jet fuel pipeline explosion in Walnut Creek several years ago. The pipeline was ruptured due to negligence in a construction project.
Handling cases of that type takes both legal finesse and the ability to understand technical details. Oftentimes there are armies of defense lawyers representing the multiple defendants. As you might imagine, they will try to bury you with paper.
My hat is off to the lawyers who take on BP, Halliburton, and the other companies involved in the rig explosion. The facts they uncover in their civil lawsuits will be important as the government moves forward with hearings and possible criminal penalties.
Sunday, May 30, 2010, 10:17 AM - Political developmentsAmericans like to think of ourselves as in control.
That's one reason for a largely grumpy current public mood. Technology doesn't seem able to solve the nation's worst environmental disaster in Louisiana. Jobs that seemed secure have been outsourced or eliminated.
Many neighborhoods are still gripped by foreclosures and mortgage abandonment. The border with Mexico is still porous. Companies that the average person never heard of (Lehman) and places that seem so quaint (Greece) can collapse and bring down the house of cards.
And thus we have a recipe for anti-incumbency. The perceived lack of control is also an incubator for fringe solutions from both the right and the left.
It's not surprising that there are mixed messages that get great currency. Government is too powerful. Government isn't doing enough.
I was thinking more about all this after the Los Angeles stabbing of an attorney, Joseph Rippinger. David DePaolo, publisher of Workcompcentral.com did an excellent piece, "L.A. Stabbing: With Lack of Control Comes Desperation".
DePaolo noted that he suspects the culprit "has deep emotional scars from getting lost in the jungle of workers' compensation".
Here are some of DePaolo's observations on this perceived powerlessness (his comments included in quotes):
"I see evidence of this all the time, as I’m sure many in the industry do – desperate people fed up with the “system” act out in different ways – many of these desperate people vent their anger and rage in our Forums, sometimes they send me e-mails or letters documenting their frustration with the system and desperation to get better, and sometimes they just commit suicide because there no longer is any hope. "
"Workers’ compensation has seen its share of violence from such folk – Santa Cruz attorney Jay Bloombecker murdered in 2006 by a client, SCIF attorney Louise Armstrong assaulted in a parking lot in Anaheim, defense attorney Erwin Nepomuceno beaten with a hammer by an upset applicant in front of a medical clinic."
"It would be easy to blame the Division of Workers’ Compensation for not setting tighter security protocol such as metal detectors, but the issue is not just one of security. "
"And it would be easy to just blame the injured worker and assume that these are just crazy people who would act out in some manner regardless, and just happened to choose a workers’ compensation situation due to convenience."
"But I don’t think that the blame is so easy to assign, and I think the blame goes to the heart of what is fundamentally wrong with workers’ compensation: the one person whom the system is to benefit, the one person who is in the system involuntarily, is the one person who has no control over his or her fate – people pushed to the brink of sanity and then acting out in a violent, desperate manner in an attempt to get some relief."
DePaolo continues: "Think about that – once the injured worker ends up in litigation nearly all semblance of control over his or her destiny is taken away, from being told what doctor to see, what treatment can or can not be approved, the expiration of disability payments, whether he or she can go to work, etc. The injured worker has no say during the life of the litigated claim until it’s settlement time. "
"The litigation process in California workers’ compensation is designed to remove all responsibility from the injured worker, and ergo, remove all control from the injured worker. This may not be the intent of the process, but it is the result."
"Medical control essentially rests with the employer. This modification to the system was necessary, as are most rules and regulations, because a few bad apples decided to abuse the right to medical to control so that they could unfairly profit from the system."
"And not only has the right to medical control been usurped, the method of contesting medical decisions has been removed from the injured worker’s control – it’s in the hands of utilization reviewers with essentially no right of appeal."
"If you’re lucky enough to get to a hearing about a disagreement or conflict with the case, it’s likely months before any decision is made (which again is out of the hands of the injured worker) and it is very likely that the claims administrator may still not abide by the ruling, further delaying the claim and the fate of the injured worker."
"The injured worker cannot get back to work because the employer doesn’t want a broken employee. The physician will prescribe a permanent impairment assessment, but the injured worker has no understanding of what that fiction means, or what its ultimate relation to a settlement is."
"While all of this professional activity is going on around the injured worker, months or years go by and the injured worker has been off work for so long that there isn’t any motivation as he or she spirals down into depression."
"This is no excuse for acting out or the violence that has made recent headlines. It is an indictment of the “system” – a process that is so complex, so entrenched, so lacking of humanity, that it no longer does what it was supposed to do: provide protection for the injured worker so he or she can get back to work."
"Somewhere, at some time, some one with political power and clout will figure out that the problem with workers’ compensation is workers’ compensation itself – the system no longer serves the only involuntary participant. When that happens the system will cease, an industry will shift to another profit source, and perhaps the injured worker will regain some control over his or her life. Until then, expect more desperate acts from desperate people."
Note:David DePaolo, a former workers' compensation defense attorney, is chief executive officer and editor-in-chief of WorkCompCentral.
I'd have to agree with DePaolo. Getting entangled in the "system" is very frustrating for many workers. The judges and attorneys may see it as a "comp community" but to many of the claimants its a system rigged against them. Take an individual who has underlying emotional instability, add in a dose of frustration, pain and a lack of money...voila!....sometimes you can have a dangerous brew.
This is not to say that applicant and defense attorneys, adjusters and judges treat cases with kid gloves. But it is a wake up call for us in the system to pay attention to the real forces affecting the worker.
The alleged assailant in Los Angeles had apparently tried to back out of a compromise and release he entered into as a pro per (after dismissing his attorney). Although it is difficult to back out of a settlement, the WCAB did hold a trial on the issue of whether the claimant should be allowed to back out of the settlement. The trial judge did not find the assailant's claims of bias convincing. Apparently the worker continued to write letters to the WCAB.
Some workers fixate on their cases and this appears to be what occurred when he plunged the knife into a lawyer who wasn't even involved in his case. It's a cautionary tale.
Thursday, May 27, 2010, 07:11 AM - Understanding the CA WC systemWorkers' comp sometimes has a Theater of the Absurd quality.
Eugene Ionesco, Jean Genet or Samuel Beckett could have designed this one: a cost containment effort that becomes a major cost center problem itself.
I'm referring to the increases in California workers' comp cost containment, which jumped 86% from 2005 to 2008. Over the period from 2002 to 2008, cost containment expenses jumped from 6.6% of treatment expenses to 14.7% (using first year treatment expenses as a sample
Cost containment as a cost driver! Who's afraid of Virginia Woolf, Virginia Woolf?
Cost containment as a cost driver!
These cost containment figures are documented in the recently released report of the California Workers Compensation Institute which you can find on their download page, "Medical Development Trends in Calif WC 2002-09":