Wednesday, September 28, 2011, 10:14 PM - Understanding the CA WC systemI've been on the road the last couple of days, speaking as a guest lecturer at the California Workers' Compensation & Risk Conference, held in Monarch Beach in Orange County.
The conference is primarily attended by insurer claims representatives, self insured administrators, and some defense attorneys. Speakers this year included WCAB Commissioners Ronnie Caplane and Al Moresi as well as the new Administrative Director of the Department of Industrial Relations, Rosa Moran.
Presenting on panels from the viewpoint of injured worker advocacy were myself (on Almaraz-Guzman issues and the Ogilvie decision) and Los Angeles attorney Barry Hinden.
While gone, the California Workers Compensation Appeals Board release 3 en banc decisions. I'll be providing more commentary on those decisions in coming posts.
One decision dealt with claims of misconduct by a hearing representative who appears on behalf of lien claimants at workers' comp proceedings. That's In Re Daniel Escamilla, the text of which can be found here:
http://www.dir.ca.gov/wcab/EnBancdecisi ... Daniel.pdf
Another dealt with timeframe technicalities where applicant attorneys and defense attorneys are "racing" to be first to request a QME panel. It's a procedural case that addresses some uncertainties regarding how panel disputes are to be construed. The case is Tsegay Messele v. Pitco Foods, and the text can be found here:
http://www.dir.ca.gov/wcab/EnBancdecisi ... /Messele_T
The most significant of the 3 is Elayne Valdez v.Warehouse Demo Services.
The WCAB had issued a prior en banc from which the applicant appealed.
The text of Valdez II is here:
http://www.dir.ca.gov/wcab/EnBancdecisi ... ldez_E.pdf
Check back in the next couple of days for more in-depth commentary on these.
Monday, September 26, 2011, 09:35 PM - Political developmentsSome injured workers may assume that California's Insurance Commissioner has a lot to do with workers' comp benefits.
That's actually not the case, as the Insurance Commissioner is not involved in administering the system, setting policy and procedures, or legislative matters.
Still, the Insurance Commissioner must weigh in periodically on rates, which is why hearings are held on rate "filings". Although the rulings by the CDI are advisory only, they have political impact in that they get press and focus the attention of pundits and policymakers on trends in the system.
Tomorrow the California Department of Insurance will be holding a hearing in San Francisco on the WCIRB's rate filing for 2012. Here is a link to summary of the filing:
The lengthy filing for 2012 advisory rates can be found here:
It's good to know that consumer and worker advocate Dave Jones is running the California Department of Insurance. Jones is a friendly, bright and energetic new face on the political horizon in California.
In his limited time in office Jones has focused his energy on the healthcare arena, seeking to implement the Obama health reform. Jones has also focused on promoting legislation that would provide for some CDI regulation of health insurance rates. And he has backed a measure to give employers more rights to resolve disputes with insurers in California rather than other forums.
With all this in mind, I noted an article of interest in an insurance industry publication, headlined "Consumer-Friendly Dave Jones Rubs Some in Insurance Industry the Wrong Way" that does a capable job of summarizing some of the issues that have surfaced under Jones' tenure other than workers' comp:
Sunday, September 25, 2011, 03:52 PM - Political developmentsInterested in following the upcoming Tuesday morning hearings on workers' comp rates by the California Department of Insurance, but unable to get to San Francisco to attend in person?
The hearing may be very interesting as the WCIRB and the CDI shift from a former measure of workers' comp rates to a new measure.
There's a solution for those who can't show up in person.
The Workers' Comp Executive publication will be livestreaming coverage. The coverage is free for subscribers and available for a fee for non-subscribers.
Log on to www.wcexec.com for details.
It's good to see the workers' comp press expanding choices for those in the public who seek to follow these issues.
Wednesday, September 21, 2011, 09:44 PM - Understanding the CA WC systemThought that California workers' comp rates were largely determined by claims costs?
If so, you are like most people. Year after year reports by the WCIRB (California Workers' Compensation Insurance Rating Bureau) precede California Department of Insurance rate hearings on insurance carrier rates.
Indeed, next Tuesday September 27 Insurance Commissioner Dave Jones will be holding hearings in San Francisco on the latest WCIRB filing. In a report released this week the WCIRB said that rates actually charged by insurers are up 3% in 2011, from $2.31 per $100 of payroll in 2010 to $2.37 per $100 of payroll in the first half of 2011.
No one would argue that claims costs are irrelevant to the rate equation.
But a new study highlights another important factor in workers' comp rates.
That factor is Wall Street.
The study, by UC Davis Professor of Public Health Sciences and UC Davis postdoctoral scholar Abhinav Bhushan (now at Mass General Hospital) is published in the September-October issue of Public Health Reports.
A UC Davis press release notes that:
"...the study shows that higher premiums are instead associated with decreases in the Dow Jones Industrial Average and interest rates on U.S. Treasury bonds."
“Insurance companies appear to have been setting premiums according to their returns on the stock and bond markets, not according to the number of claims they have,” said J. Paul Leigh, UC Davis Professor of Public Health Sciences and senior author of the study. “They invest because they need a financial cushion to pay for claims and, if they lose, raise premiums to recoup their losses.”
"Understanding workers’ compensation trends is important so policymakers can establish regulations that protect workers and contain costs, said Leigh, who noted that, in 2009, between 3 million and 4 million cases of job-related injury or illness were recorded and costs to employers were close to $74 billion."
"In conducting the study, Leigh and UC Davis postdoctoral scholar Abhinav Bhushan examined U.S. Bureau of Labor Statistics data on incidence rates for injuries and illnesses, along with data from the National Academy of Social Insurance on workers’ compensation costs (to employers) and benefits (to workers and medical providers) from 1973 through 2007. Beginning in 1992, the Bureau of Labor Statistics began identifying cases involving more than 30 days away from work, providing the study team with the opportunity to evaluate the impact of more severe work-related injuries and illnesses on premiums. That information was compared with Dow Jones Industrial Average indices and Treasury bond interest rates.
The researchers found that while premiums increased from 1992-2007, claims decreased 1 to 2 percent each year. Claims for serious illnesses and injuries varied, but decreased overall."
"The team also discovered that for the entire 35-year timeframe of the study, rising premium rates were closely linked with the Dow Jones Industrial Average or Treasury bonds. As either the Dow or interest rates on Treasury bonds fell, premiums rose, and vice versa."
“The association of premiums with the stock market and Treasury bonds was consistent and strong,” said Leigh. “Increasing premiums had nothing to do with the number of injured workers, who often are incorrectly blamed for increasing premiums for employers.”
The study was partly funded by the National Institute for Occupational Safety and Health.
As policymakers move forward, they would do well to remember that with rates it's not necessarily all about the benefits and the claims.
It's about Wall Street, too. Insurers invest premiums, so claims costs are but one component of the picture.
Tuesday, September 20, 2011, 08:56 AM - Medical treatment under WCA récent Los Angeles Times article on prescription drug abuse is worth noting.
The article, "Drug Deaths Now Outnumber Traffic Fatalities in the U.S.", by Lisa Giron, Scott Glover and Doug Smith, is likely to add further weight to concerns about the expanded use of opioids in the workers' comp system.
The authors charge that:
"Public health experts have used the comparison to draw attention to the nation's growing prescription drug problem, which they characterize as an epidemic. This is the first time that drugs have accounted for more fatalities than traffic accidents since the government started tracking drug-induced deaths in 1979."
"Fueling the surge in deaths are prescription pain and anxiety drugs that are potent, highly addictive and especially dangerous when combined with one another or with other drugs or alcohol. Among the most commonly abused are OxyContin, Vicodin, Xanax and Soma. One relative newcomer to the scene is Fentanyl, a painkiller that comes in the form of patches and lollipops and is 100 times more powerful than morphine."
"Such drugs now cause more deaths than heroin and cocaine combined."
A link to the full article is at the bottom of this post.
Expanded use of opioids followed a paradigm change in the way pain was treated. Within the past several decades more aggressive pain treatment protocols have become popular.
Some pain meds that are often used for end stage cancer are used in the workers' comp system for orthopedic injuries.
After writing a post about this some months ago I received a handful of e-mails from injured workers concerned that I was criticizing them and the treatment that they say works for them. In response, I noted that I was not implying that their pain was not real or that the meds weren't indicated for their particular situation. Nor was I implying that they were abusing.
On the other hand, I noted that in the past I had had clients who overdosed and a client who was found to have been diverting narcotics for sale. So on an anecdotal level, I had some familiarity with concerns being raised by other journalists and researchers.
These issues are not confined to California. Florida's workers' compensation system has developed a reputation as a "pill mill".
Have medical treatment guidelines and limits on physical therapy actually encouraged doctors to default to a pharmaceutical approach faster? Are pain management doctors being chosen as primary treaters earlier in the process before other approaches are sorted out? What role do MPNs or attempts to escape from MPNs (especially in the Southlland) play in this?
Should California adopt a new algorithm that must be followed where doctors want to start workers on opioids? Should other controls be put in place? Should we make the process easier for doctors to get authorization for a detox program? Does in-office dispensing by physicians have a role in all of this, and how to control the "bad actors" without penalizing careful prescribers?
It's a complicated problem and at the moment I see little consensus on practical solutions. Although there is already research data from CWCI and CHSWC analysis data on medical treatment, moving forward with new regs or bill language to make some changes will not be easy.
Here is the L.A. Times article:
http://www.latimes.com/news/local/la-me ... full.story
Here is a link to an ear