Wednesday, August 10, 2011, 09:34 PM - Understanding the CA WC systemAccording to a press release issued today, the WCIRB Governing Committee has voted to authorize the WCIRB to file proposed 2012 "pure premium rates".
The rate filing will be coming by August 19.
Here is the press release, quoted in entirety:
"Today, the WCIRB Governing Committee voted to authorize the WCIRB to file proposed January 1, 2012 pure premium rates. The proposed 2012 pure premium rates will reflect the anticipated cost of losses and loss adjustment expense expected to be incurred on policies incepting on or after January 1, 2012. As directed by the Commissioner, the WCIRB, in its January 1, 2012 filing to be submitted on or about August 19, 2011, will benchmark its proposed pure premium rates to the average insurer filed pure premium rates rather than the current advisory pure premium rates. In addition, the filing will analyze average insurer filed and charged rates as well as the impact of underlying system costs on pure premium rates. "
"The January 1, 2012 pure premium rates to be proposed by the WCIRB for each of approximately 500 industry classifications are projected to average $2.33 per $100 of payroll. This is 1.8% less than the corresponding average of insurer filed pure premium rates as of July 1, 2011. "
"While projected cost levels remain below pre-reform levels, the proposed 2012 pure premium rates reflect continued deterioration in experience since the reforms of 2002 through 2004 were fully implemented in 2005. Specifically, since 2005, the average cost of medical per indemnity claim has increased by 40%, the average cost of indemnity has increased by 31%, and the average cost of allocated loss adjustment expense per indemnity claim has increased by 55%. "
The press release concludes by noting "The WCIRB's filing and related materials will be available in the Regulatory Filings section of the WCIRB website once it is submitted to the California Department of Insurance on or about August 19, 2011."
The WCIRB was ordered to adopt new methodology in its rate request proceedings, so it will be interesting to see how the numbers play out.
An e-mail blast this afternoon from Brad Cain of the Workers' Comp Executive claimed that the requested rate increase would be substantial, though Cain noted that his publication was "working to nail down hard numbers."
What is interesting at this point is the numbers comparing the growth in various kinds of costs.
Indemnity costs increases have lagged way behind rising medical costs.
And the increase in "the average cost of allocated loss adjustment expense" is a whopper. Up by 55% since 2005, loss adjustment expenses have increased almost twice as fast as indemnity costs.
One can only look forward to the details in the filing, but it appears that the expenses of loss control are blowing out the doors.
Tuesday, August 9, 2011, 10:22 PM - Understanding the CA WC systemA decision rendered today by the California Court of Appeals, 3rd District, is likely to be of wide interest to the California workers' comp industry.
The decision in Salas V. Sierra Chemical Co. was authored by Justice Andrea Hoch and joined by Justice Vance Raye and Justice Harry Hull. Hoch is well known in workers' comp circles, having served as Administrative Director of the Division of Workers' Compensation for a while after the 2004 reforms.
Hoch adopted the 2005 PD rating schedule and later served Schwarzenegger as a legal adviser.
Salas v. Sierra Chemical is actually an employment law/FEHA case. But it may have impact on workers' comp discrimination cases under Labor Code 132A.
Salas sustained several injuries at Sierra Chemical, which employed him on a seasonal basis for its swimming pool chemical business. When recalled after a layoff, Salas was told he would have to produce a full release. Salas alleged that the employer had a "100% healed" policy. The allegation was that Sierra Chemical failed to make reasonable accommodation for his disability and failed to engage in an interactive process to consider reasonable accommodations.
Salas had not been terminated, but the reasonable accommodation issue arose in the context of refusal to rehire.
The case was not a typical employment law case. Rather, Salas v. Sierra Chemical examines the interface between immigration law violations and refusal to hire cases.
Salas apparently was using a Social Security number that actually belonged to a resident of North Carolina. On I-9 and W-4 documents he had included the same false Social Security number. Affidavits filed by Salas failed to convince the court that there was a triable issue of fact regarding the legitimacy of his papers.
The court found the refusal to hire lawsuit barred on two grounds:
-the "after-acquired evidence doctrine" applied, barring his claim since he had no right to be rehired given the company policy of refusing to hire applicants who submit a false Social Security number
-the "unclean hands' doctrine barred his claim. The court stated that
"In light of the nature of the misrepresentation, the fact that it exposed Sierra Chemical to penalties for submitting false statements to federal agencies, and the fact that Salas was disqualified from employment by means of governmental requirements, we conclude that Salas's claims are also barred by the doctrine of unclean hands."
Salas argued that Senate Bill 1818, a 2002 California law, precluded application of after-acquired evidence and unclean hands doctrines based on his immigration status.
The SB 1818 argument was rejected by the Court of Appeals, which noted that while current California law provides that undocumented workers are entitled to "all protections, rights, and remedies available under state law", that SB 1818 did not expand the law to allow undocumented immigrants to maintain failure to hire claims.
It's quite likely that this case will be appealed to the California Supreme Court, which may or may not decide to hear the case. It won't surprise me if the case is eventually heard there, particularly since the legislative history and intent of SB 1818 is involved.
But at the moment, undocumented workers will not be eligible for backpay in failure to rehire claims.
Presumably the same logic would apply to Labor Code 132A claims in a failure to rehire context, since 132A includes backpay and reinstatement remedies.
Here's a link to the opinion in Salas vs. Sierra Chemical:
http://www.courtinfo.ca.gov/opinions/do ... 064627.PDF
Monday, August 8, 2011, 09:33 PM - Political developmentsThe LexisNexis workers' comp blog has now posted an interview with Jerry Brown's newly appointed Administrative Director of the Division of Workers' Compensation, Rosa Moran.
Moran was feted by the Bay Area workers' comp community at a gathering last Thursday held after work at the Elihu Harris State Building. In the audience were a good number of standout attorneys, judges and representatives of various stakeholder groups. Many have practiced before Moran and have great respect and fondness for Moran.
Those providing greetings to Moran included WCAB commissioner Ronnie Caplane, DIR head Christine Baker, State Bar Workers' Compensation Executive Committee chair Lisa Ivancich, current Oakland presiding workers' comp judge Mark Fudem, and evening emcee Ray Frost.
Baker repeatedly praised Moran and indicated that she was excited to work as a team with Moran, indicating that they were already jumping into many of the vexing issues in the comp system. Using a gardening image, Baker noted that there were needs to prune here , water there and tend to the garden to make it grow better.
Fudem reminded all present that Moran had taken risks in seeking the job and that she had distinguished herself in the competitive selection process.
For her part, Caplane noted that the board is excited to have Moran on board and is looking forward to good communication.
Moran's interview was conducted by former Oakland Presiding Workers' Compensation Judge Kenneth Peterson.
Here's a link to the LexisNexis workers comp page with the Moran interview:
http://www.lexisnexis.com/community/wor ... ation.aspx
It's a big job. There are lots of holdover issues from the Duncan/Nevans era, including undone efforts to finalize some of the "12-point" savings ideas announced several years ago. And as the interview noted, EAMS and the PD schedule will be prominent issues.
Here are good wishes for success for Baker and Moran. May they bring disparate interests together to make a better system for workers, employers and the system's various stakeholders.
To my knowledge, Moran
Thursday, August 4, 2011, 08:49 AM - Medical treatment under WCThere's been growing concern in workers' comp about "co-morbidities".
Obesity, high blood pressure, diabetes and other underlying conditions can make it more difficult to treat injuries. There may be more complications after accidents and surgeries.
And prolonged inactivity after an injury may worsen some of these conditions. If you're recovering from surgery, having lots of "procedures", and on lots of meds, there's a good chance you may be feeling like being a couch potato and doing channel surfing.
California workers' comp sometimes covers weight loss programs where doctors can make a convincing case that it is medically necessary to control weight in order to treat the effects of the injury.
In my experience, there's a lot of cynicism about such programs. That may be because losing weight and keeping it off is hard. It's seen by many as an issue of personal responsibility rather than an industrial
And yet we all know that if the population is growing fatter and less fit, workers' comp medical treatment costs will inevitably rise.
Another angle on all this comes into focus with publication of a study yesterday in the journal Health Affairs. The study, by Pablo Monsivais, an assistant professor in the Department of Epidemiology and the School of Public Health at the University of Washington, focuses on the cost of a healthy diet.
It turns out that eating healthy can be expensive. Healthy eating tends to mean spending more at the grocery store:
http://www.sanluisobispo.com/2011/08/03 ... ilege.html
So with many injured workers' having budgets that are stretched very thin, expecting that they will "eat healthy" (even if they knew how to do so) is difficult.
How far does the liability of the comp carrier extend in obesity situations?
In a 2011 panel decision, Navarro vs. Williams Associates and SCIF, the injured worker, a pre-diabetic, weighed over 300 pounds and sought lap band surgery. The worker had sustained an injury to her spine and lower extremities.
The Agreed Medical Examiner recommended bariatric surgery though in deposition he noted that he had no special expertise in such surgery.
Utilization review denied the bariatric surgery, claiming that it was not supported by treatment guidelines. The workers' comp judge denied the surgery and applicant filed for reconsideration.
On reconsideration, the board upheld the denial of the surgery. The panel of Lowe, Caplane and Moresi noted that it is true that the Labor Code may require treatment of a nonindustrial condition when such treatment is necessary to cure or relieve the effects of an industrial injury, citing the 1968 Granado case.
But in Navarro the WCAB was not convinced that the AME had sufficiently connected the dots in his analysis to justify medical necessity. The panel said:
"The health benefits of achieving and maintaining a reasonable weight are not in dispute. However, that losing weight is beneficial is not equivalent to the medical necessity of Lap Band surgery. What Dr. Wertheimer failed to explain-and what is necessary to satisfy applicant's burden of proof-is how weight loss by Lap Band surgery is reasonably required to treat applicant's industrial injury".
Moreover, the WCAB panel noted that
"The AME's testimony nowhere states that weight loss, by any method, is medically necessary. At most, he says that applicant would feel better if she were lighter, that she would be more active, and that her symptoms of both industrial and non-industrial conditions would be lessened."
The moral of the story? Doctors who advocate for weight loss treatments need to put some energy into explaining the how and the why
they recommend such treatments as medically necessary.
Monsivais, the author of the study, is associated with the University of Washington Center for Public Health Nutrition:
http://depts.washington.edu/uwcphn/pubs ... vais.shtml
Tuesday, August 2, 2011, 10:43 PM - Political developmentsWill Jerry Brown join unions to support a bill to regulate hotel sheeting choices and requiring long handled mops and dusters?
The hotel industry is obviously concerned, and has launched a PR offensive against the requirement of fitted rather than flat sheets:
So is a legitimate safety concern meriting specific health and safety regulation, or is this a further incursion of an over-regulating "Mommy State"?
Writing in The Huffington Post, Donald Cohen makes a good argument on
behalf of SB 432, "Heavy Lifting: Hotel Housekeepers Reprise Farm Workers' Struggle for Safer Working Conditions":
http://www.huffingtonpost.com/donald-co ... 16379.html
SB 432 is one of a number of bills working their way through this year's legislative process. Currently, the legislature is in recess. So stay tuned.