Sunday, August 15, 2010, 09:10 AM - Political developmentsHurricane season is upon us.
Unsettled weather brings tropical storms, some of which turn into hurricanes. Some hardly make a dent, like recent Hurricane Alex. Some look threatening, but fade into "tropical depressions", like recent Hurricane Bonnie.
But others, (like Katrina or the Hurricane Hazel of my childhood memories in the Carolinas) leave a swath of change in their wake.
These hurricanes start with peculiar atmospheric conditions. Our weather scientists track those as they arise, knowing that many times it will dissipate.
But not always.
So it is in California workers' comp. The last big comp hurricane was in 2003/2004.
Pressures inevitably develop. Winds begin to strengthen. Thunder is heard in the distance.
So it is right now.
The thunder this week was news that the California Workers' Compensation Insurance Bating Bureau will soon be filing a request for a 30% increase in workers' comp rates.
More thunder was heard, as some in the employer community began to sound alarm that the Schwarzenegger workers' comp reform agenda was threatened. The argument was made by John Kabateck executive director of the National Federation of Independent Business in a piece "Workers' Comp May Be Headed for Another Rough Ride in California":
Perhaps the storm will pass.
Insurance commissioner Poizner will hold hearings on the WCIRB request.
Insurers are free to raise rates no matter what Poizner does, of course.
But the hearings may provide shed important light on the strength of the gathering winds.
The WCIRB's recent decision to seek an increase of 30% broke down along insurer members of WCIRB versus the public members. And there have been recent charges that some WCIRB public members are not allowed access to key policy-setting meetings.
All this sturm and drang insures that there will be extra interest in the hearings surrounding the upcoming WCIRB rate hearing.
There will be analysis of how much the insurers are really profiting......whether they are getting a handle on controlling loss adjustment expenses....and whether results from SCIF are skewing figures applicable to the rest of the industry.
A major part of the brewing storm is medical treatment costs.
Within the past several weeks we've seen just how hard it is to control costs in the California comp system. No group wants to give ground.
Part of the DWC's 12 point cost cutting agenda was to achieve savings from ambulatory surgery center fees. An earlier plan to cut fees from ambulatory surgery centers had been expected to save $70 million in system costs.
A current proposal would cut the ambulatory surgery center fee structure by only about $40 million.
The surgery centers may have their reasons to object, and object they do to even the lesser cut.
Parties to the system don't want to take a haircut. And some of the surgicenter doctors threaten to pull out altogether if they are forced to take a hit.
We saw a version of this playing out last week with a bill to control the costs of compounded medicines. The bill, AB 2779 (Solorio), would limit reimbursement for compounded prescriptions unless they were proved to be medically necessary, and the Medi-Cal fee schedule would govern such medicines.
Increased use of compounded medicines appears to be a growing cost driver in the system and a tempting profit center for some physicians.
While there may be a case that can be made occasionally for their use under special circumstances, widespread use of compounded medicines would appear to be abusive.
AB 2779 passed out of a California Senate committee but may well be watered down if it moves forward at all.
Forcing haircuts is hard.
And we've seen that in recent efforts to devise a different fee structure for doctor payments.
On August 17th the DWC will be holding a hearing in Oakland on its efforts to reform the fee schedule:
http://www.dir.ca.gov/dwc/dwc_newslines ... 40-10.html
A recent version of the fee schedule elicited strong comments from doctors, some of whom.....well, you guessed it.....threatened to stop treating injured workers.
So let's take stock.
Some unhappy stakeholders. Employers perhaps facing significant premium increases in a down economy. Insurers claiming that they are losing money. Injured workers denied a statutorily mandated benefit adjustment.
It's starting to look like tropical storm time.
Whether this blows on through, or strengthens to a hurricane, time will tell.
Monday, August 9, 2010, 09:46 PM - Understanding the CA WC systemWhile attending a yearly meeting today in San Francisco for the Lexis Nexis California workers' comp editorial board, I got into a discussion with several attorneys about dabblers.
Dabblers are attorneys who dabble in workers' comp.
In the past, at the boards I've frequented (largely Oakland & San Francisco, and Sacramento earlier in my career) there were always a group of dabblers who came and went.
These were usually attorneys who did a handful of cases a year. Sometimes they were personal injury attorneys who handled an occasional comp case.
Sometimes they were general legal practitioners who decided to try their hand rather than refer out the comp case. Others were young attorneys who tried to get a foothold in comp but never attracted more than a smattering of cases. Some may have been induced to handle the comp case by their doctor or chiropractor friend who was treating the worker.
Some experienced attorneys tried to be welcoming of the dabblers. After all, everyone has to start somewhere.
But others winced as dabblers handled cases without even a patent understanding of comp terminology or case law. Any attorney who has sat as a judge pro tem, as I have, will understand.
Discussing the matter today during a java break, several of us noted that the dabblers are disappearing.
Comp has become too complicated for the dabblers. With UR deadlines and MPNs, Benson, Almaraz/Guzman, Ogilvie, lengthy EAMS forms, and AMA Guides that are so complicated, many of the dabblers are quickly flummoxed. Even top-shelf applicant attorneys feel challenged and stressed.
The day when young lawyers took a case or two and "fell into comp" is disappearing.
The dabblers need to dabble elsewhere.
Saturday, August 7, 2010, 09:49 AM - Political developmentsThe WCAB is facing another round of furloughs.
We're not alone. Yesterday's New York Times had a piece on the creative ways states and municipalities are dealing with their budget shortfalls.
Hawaii is imposing furloughs on its schools. There will be less class time. An Atlanta suburb has decided to close down its public bus system. Riders without access to a vehicle are out of luck. In Colorado, Colorado Springs has decided to cut off street lighting.
The American mood isn't in its usual glimmering late summer euphoria.
It's not a good time for President Obama to be going to Martha's Vineyard. After all, Michelle Obama was villified as a modern Marie Antoinette after visiting Spain with an entourage.
Before you escape into that podcast of eMeg parsing her immigration stance on the John and Ken talk radio show, before beginning that backyard supersoaker battle or embarking on that latest Stieg Larsson novel, perhaps you should check out a worthy piece in the journal The Nation that relates more about the backstory surrounding the AIG rescue.
Can't promise it will help your mood. But you'll be angrier and more ferocious with that supersoaker.
The article, authored by William Greider, is aptly titled "The AIG Bailout Scandal":
http://www.thenation.com/article/153929 ... l?page=0,2
Tuesday, August 3, 2010, 09:53 PM - Political developmentsIs the WCIRB violating open-access agreements?
That's the question posed in a report by the Workers' Comp Executive, a journal that covers important developments in the California workers' comp industry.
The Workers' Comp Executive has filed a flash report charging that the California Workers' Compensation Insurance Rating Bureau (WCIRB) is violating an open access agreement signed with the California Department of Insurance.
The WCIRB is important to the system, since it collects statistics and files reports with California's Insurance Commissioner. But the WCIRB itself is not a public entity.
WCIRB reports are often cited by the Legislature. And they are-at least in theory-the data on which California's Insurance Commissioner relies in determining an advisory "pure premium rate".
The flash report by wcexec.com notes that while John Garamendi served as California Insurance Commissioner, the WCIRB signed an open-meetings agreement. That agreement provided for public access to written materials if those were being provided to certain WCIRB governing or committee members.
The Workers' Comp Executive has charged that the WCIRB has refused to provide its reporters with materials that were being considered at some of its public meetings. Efforts to obtain the materials(efforts made by its ace reprorter, wcexec.com reporter Brad Cain) from the WCIRB information officer have apparently been rebuffed on at least some occasions.
Why does this matter?
The wcexec.com piece states the policy argument well:
"As a result, the public, the industry, the Legislature, and regulatory and executive branches of government are less informed and do not get a chance to analyze the data or methodology, to comment, or to clearly understand how the end result was derived. We can report that something happened, but not why or what data were used to reach the conclusions. Thus others are prevented from testing the data."
According to the Workers' Comp Executive, the WCIRB is avoiding transparency by delegating many items to subcommittees "not named in the MOU of Committee Openness Proposal". This is said to create a system where important decisions are made behind closed doors, with public meetings resulting in a "sanitized version".
Going further, the Workers' Comp Executive charges that"
"By its actions, WCIRB management demonstrates the literal analogy of foxes guarding the henhouse. Its governing board is made up of insurance executives from companies it analyzes plus a couple of public members."
And the Workers'Comp Executive charges that the WCIRB "has figured out how to keep the public members of its governing board in the dark as well", explaining how the WCIRB excludes some directors from some of the subcommittee meetings.
At a time when workers comp insurance premiums paid by employers may start to bounce upward-in the middle of a terrible economy-there needs to be more transparency, not less.
Employer stakeholders have a right to know what is going on in the industry, and California's Insurance Commissioner has a vital interest in insuring that the WCIRB is operating in a manner consistent with the public's interest.
A new Insurance Commissioner will be elected in November. This is an issue that should be on the to-do list for the next Commish.
Here's a link to the WC Exec piece, which itself has links to the WCIRB open access MOU and a story charging that public members Bruce Wick and Art Levine were excluded from meetings:
http://www.wcexec.com/WCIRB-Violates-Op ... tment.aspx
Monday, August 2, 2010, 09:56 PM - QME processFrom the it never hurts to toot your horn department of governmental affairs:
The DWC has issued a bulletin noting that they have finally cleared their backlog of QME panel requests. Between April and June 2010 they processed about 41% of the number of QME panels they processed in 2009.
You can do the math on the back of that envelope. In two months they have issued almost as many panels as in 6 months in 2009.
Seems the DWC Medical Unit (or, more likely, the higher-up powers that be) finally got the message.
There had been widespread dissatisfaction in the comp community about how the DWC Medical Unit was handling panels. Adjusters, defense attorneys, applicant attorneys, and judges all were unhappy with the slow pace of issuance of panels, particularly in represented worker cases.
Part of the problem was staffing. But a large part appears to have been the administrative philosophy. For several years the DWC Medical Unit had allowed a slew of technicalities to slow issuance of panels.
In some cases this frustrated parties who were simply seeking to move the ball down field.
While some of the delays were undoubtedly caused by ambiguities in requests or improperly filled out forms, parties found that attempts to clarify or provide supplemental information to the unit were often ignored.
Now the Medical Unit appears to be focusing on getting the panels out.
Parties who believe they have valid objections to the panels may need to seek relief from a judge at the WCAB.