Q2 &#8211; 2019 &#8211; August 5, 2019

Regional Interactive Tool Provides Updated Claims Data by Industry, Region and AY. CWCI’s updated Interactive Regional Scorecard tool gives members online access to detailed industrywide data through CY 2018 that they can use to examine claims experience for specific industries, regions, accident years and for all claims or just indemnity claims. To get to the data, members can log on to www.cwci.org/research.html, go to the Research tab at the top of the page and click the Interactive Research Tools from the drop down menu. Interactive Research Reports are also available in the Research section of the website to provide a users’ guide to each app.

Study Flags Potential Risks Associated w/Gabapentin & Pregabalin. CWCI’s March 2019 analysis of Calif WC Rx drug utilization under the MTUS formulary documented a significant increase in the off-label use of 2 anticonvulsants in the gabapentinoid drug class: pregabalin and gabapentin. Though they may be less harmful than opioids, these drugs come with their own set of risks. A recent Swedish study found that “gabapentinoids were associated with both increased and decreased risks of important adverse outcomes, and that these associations varied with age and type of drug.” The authors recommended further research into these risks and potential restrictions on off-label use of gabapentinoids, concluding that “If our findings are triangulated with other forms of evidence, clinical guidelines may need review.”

Survey Shows Regional Variation in Job Burn Out. A recent survey by the Robert Half staffing company compared the level of job burn out reported by workers in 28 cities around the country – including several in Calif. The survey, which asked workers to rate their workplace burnout on a scale of 1 (low) to 10 (completely burned out) found workers in L.A. and Orange Co. had the worst burnout rating in the state and in the country, averaging 6.61 on the scale, with 1 in 9 workers reporting they were completely burned out. Sacramento ranked 2nd, with an average burn out rating of 6.11, but 1 out of 6 Sacramento workers rated themselves at level 10, one of the highest levels in the nation. As of April, Sacramento’s unemployment rate was just 3.5%, and a spokesman for Robert Half surmised that employers in the region may be having difficulty hiring, so the existing workforce is being stretched thin, causing workers to feel overburdened. In the Bay Area, however, survey results were closer to the nationwide norm, averaging 5.68 on the burnout scale, and only 6% of the respondents said they were completely burned out. San Diego workers were a slightly more stressed than their Bay Area counterparts, with 11% reporting complete burnout and the avg burnout level was 5.92. Lack of career growth was the #1 factor fueling a sense of burnout (cited by 29% of respondents); followed by constant interruptions at work (noted by 21% of the workers surveyed); a heavy workload & long hours (listed by 17% of the respondents); and a “toxic culture” in the workplace (cited by 7% of the surveyed workers).

Bulletin (5/20/19) (members only)

California 2018 Workers’ Comp Direct Written Premium and Rankings of Largest Insurers. Data from the National Association of Insurance Commissioners shows California workers’ comp insurers total direct written premium declined 3.8 percent to $12.3 billion in 2018, as 9 of the 10 largest insurer groups saw a decline in their aggregate DWP. CWCI ranks the largest carriers in the state based on premium volume and shows how much their premium changed between 2017 and 2018.

4^thQ 2018 Insured Experience. Highlights from WCIRB’s report on statewide 4th Q 2018 WC insurer loss and premium experience, including the declines in total DWP for all of 2018 and the average charged rate for policies incepting in 2018; the estimated combined ratio for 2018 of 91% — the 6th consecutive year that the combined ratio has been below 100%, though the 2018 rate was up 6 points from 2017 due to increased claim severity and lower premium rates; the claim closure rate for 2018, which hit a 19-year high; the increased prevalence of CT cases among indemnity claims; the ongoing decline in lien filings since SB 1160 and AB 1244 were enacted; a 69% decline in the avg prescription drug cost per claim from 2012 to 2017, which continued in the first half of 2018 after the MTUS formulary took effect.

CWCI Research Update (4/22/19) (public)

IMR Decisions: January 2014 – December 2018. CWCI’s study on the IMR process shows that after dipping for the first time ever in 2017, the number of decision letters rose to an all-time high in 2018, though in about 9 out of 10 cases IMR physicians upheld the modified or denied service requests. The study is based on a review of nearly 830,000 IMR decision letters issued from 2014 – 2018. As in prior studies, the researchers used data from the letters to identify changes in the volume, timeliness, and regional distribution of IMRs; determine the number, mix, and uphold rates for the medical service requests that were reviewed; examine the distribution and outcomes of pharmaceutical IMRs by drug category; and measure the percentage of 2018 IMRs associated with high-volume medical providers.

News Release (4/22/19) (public)

Statutory/Regulatory

Bill Would Allow WC Insurer Access to CURES. The Senate Business, Professions and Economic Development Committee scheduled a hearing for July 1 on AB 528, which was amended in mid-June to allow WC insurers access to the state’s CURES prescription drug-monitoring database that tracks Schedule II, III and IV prescriptions. The amended bill called for the Dept. of Justice to adopt rules by January 1, 2021 detailing the conditions under which insurers could access CURES as part of a WC claim review, and limitations on how the data could be used — including a requirement that insurers be prohibited from using CURES data as the sole factor in evaluating a claim for approval or denial. The bill also would require the state to start monitoring Schedule V prescriptions.

July 1 Minimum Wage Increases. Calif employers are subject to federal & state minimum wage laws, but several cities & counties also have their own minimum wage rates for employees working in their jurisdictions. The federal minimum wage is currently $7.50/hr, the state minimum is $11 for employers w/25 or fewer employees and $12/hr for employers w/more than 25 employees (and will go up to $12 and $13, respectively in 2020). But, when there are conflicts between local, state, and federal minimum wage laws, employers must follow the standard that is most beneficial to the employee, so wages for most Calif workers are subject to the higher local minimum wage requirements, which are particularly prevalent in heavily populated urban areas. Although the state’s minimum wage adjustments take effect on January 1 of each year, employers with operations around Calif should note that the several jurisdictions, including Los Angeles, Santa Monica, Pasadena, San Francisco and Berkeley have enacted ordinances requiring local minimum rate increases that take effect July 1. Minimum wage eligibility rules vary by location, so employers should check the local ordinances in jurisdictions where they employ workers and update their wage posters accordingly.

Proposed Self-Insured Regs. OSIP is working on revised regs for public self-insured entities, with the latest round of public comments, submitted May 20. Proposed regs include a new aggregate claims information form which, rather than focusing on existing data that S-I employers already compile and submit to WCIS, would require new data elements. Despite strong pushback from the public S-I community during the earlier comment period, the proposed form would still significantly expand the data that cities, counties, JPAs and other public S-I entities would have to report to OSIP. OSIP would also like to compile regional data for benchmarking and to assess regional variations in claim costs. The initial draft proposed regional reporting requirements that would have required public S-Is to report the top 5 ZIP codes where the majority of their employees work, but in the latest round of comments, CWCI recommended adoption of geographic regions defined by the WCIRB to align self-insured reporting with what is reported by insurers.

2nd 15-Day Public Comments (6/18/19) (public)

Legislative Update… As the deadline for each house to amend its bills approached, the Senate approved and sent to the Assembly: SB 416, which would extend the back injuries, pneumonia, heart, and hernia presumptions (currently granted to firefighters, CHP, and other specified peace officers) to school district police officers; SB 542, to create a presumption that PTSD is a compensable condition for firefighters and peace officers. The presumption would be retroactive and apply to claims filed or pending o/a January 1, 2017 — including, but not limited to, claims filed on or after that date that have previously been denied, or that are being appealed following denial: SB 731, the CAAA-backed bill to prohibit consideration of race, age, gender, marital status, sexual orientation or genetic characteristics when apportioning PD to non-industrial factors; SB 537, which would require DWC to report on potential physician payment alternatives to the OMFS; post medical provider data using individually identifiable info on the number of injured workers treated and number of UR modifications & denials; and post web addresses of approved MPNs. SB 537 would also require MPNs to post updated provider rosters on their websites starting in 2020; prohibit MPNs from contracting with providers to render services at rates lower than Medicare’s; prohibit MPNs from altering billing codes on provider invoices or altering MTUS-compliant treatment plans without consulting the physician; and specify that Saturdays, Sundays, and holidays do not count as “business days” in calculating UR response times.

WC Legislative Update.

An update on WC bills introduced in the 2019 legislative session, including:

SB 416, which would have extended peace officer presumptions for cancer, low back, hernia, & heart trouble to school district police officers, but was sent to the suspense file;
AB 1107, which was amended to delete UR prohibitions and add a provision that would allow injured workers to pursue LC §5814 penalties for unreasonable benefit delays in cases where a UR determination that a requested medical service failed to meet evidence-based treatment guidelines is overturned by IMR.
Several bills that would limit the scope of the California Consumer Privacy Act (AB 25 would clarify that the definition of “consumer” does not include an employee acting w/in the scope of employment; and AB 981 would exempt insurance institutions, agents, and support organizations subject to the Insurance Information and Privacy Protection Act (IIPPA) from the CCPA, while adding CCPA-like provisions (such as notice requirements) to the IIPPA.
SB 731, CAAA’s latest attempt to prohibit apportionment based on race, age, gender, marital status, sexual orientation, and genetics;
AB 932, which would extend WC benefits to firefighters who are off duty and outside of the state if they’re injured in the course of protecting life or property;
AB 346, which would add police officers employed by a school district to the list of public employees entitled to leaves of absence w/salary continuation in lieu of TD;
AB 1400 which would expand cancer presumptions granted to firefighters and peace officers to city, county, city & county, district, or other municipal employees whose job duties cause them to be regularly exposed to active fires or health hazards directly resulting from firefighting operations.

Significant Decision Summary (5/13/19) (members only)

Legal

Wilson v. State of California Department of Forestry and Fire Protection. CWCI and the California Chamber of Commerce filed an amicus brief in support of the defendant in a case involving the question of whether apportionment of permanent disability applies to an injured worker who has undergone bilateral total knee replacements, where the need for that surgical intervention was the result of both industrial and non-industrial causes. The brief argues that the WCAB ruling incorrectly focused on whether or not the issue of apportionment is controlled by Hikida v. WCAB and that the case is best guided by the DCA ruling in City of Petaluma v. WCAB (Lindh).

Amicus Brief (6/18/19) (members only)

Last Call for 2019 Case Law Update Seminar. CWCI’s 21st annual Case Law Update Seminar will be held on Tuesday, May 7th at The Grand Event Center in Long Beach and Thursday, May 9 at the Hotel Nikko in San Francisco. The seminar is the longest-running program of its type in the industry, and will feature defense attorneys Saul Allweiss and Richard Jacobsmeyer and applicant’s attorney Elizabeth Hudson. The sessions will be moderated by the CWCI General Counsel, Ellen Sims Langille. Continuing Ed units will be offered to attorneys, claims examiners, and hearing reps, and the seminar flyer and online registration are available on CWCI’s website.

Other

No CIGA Surcharge for 2020… For the 2^nd year in a row, the Calif Ins Guarantee Assn (CIGA) will not impose a surcharge on policies incepting in 2020. In recent years CIGA issued assessments ranging from 1% to 2.6% on WC policies to cover its debt and pay off a $750 million special bond authorized by state lawmakers to pay for claims of insolvent WC carriers. But with the bond now paid off, and continued favorable loss development (particularly from lower medical losses) CIGA’s reserves have improved significantly, and its WC account now boasts a $480 million surplus. As a result, the CIGA Board announced that there will be no assessment for the 2020 policy year, just the 2^nd time in the past two decades that WC insurers will not need to advance any funds to CIGA in July or add a CIGA surcharge to policies incepting in 2020.

Meeting Minutes (5/8/19) (members only)

Minutes from the Legal Committee Meeting. The meeting was held May 8 by webinar. The agenda included an update on recent case law (Gund v. Co. of Trinity; Vazquez v. Jan-Pro); status updates on the Institute’s amicus participation in Travelers v. WCAB (Mastache) and County of Santa Clara v. WCAB (Justice), and Universal Furniture v. WCAB (Morales). No new are pending for amicus consideration. Members were advised that the Institute will hold a moot court session for the defense attorney in Gund. The update on regulations noted that most regs are in limbo, but there were brief updates on the MTUS Drug Formulary, OSIP reporting requirements, the MLFS, and CCPA privacy disclosures. Ms. Langille provided an update on legislation related to CCPA exemptions, Dynamex, IMR/MPNs, publication of physician IMR data and MPN requirements, apportionment, firefighters, and presumptions. The committee also reviewed the 3 outstanding audits mandated by legislature’s joint audit committee, the member-only webinar on non-IBR dispute resolution, WCAB personnel changes, CWCI’s upcoming case law seminar.

The Perilous Procedures of Non-IBR Dispute Resolution Training Webinar. CWCI has produced a free, on-demand webinar to help our members’ claims and legal staff to better understand and effectively address the troublesome topic of Non-IBR dispute resolution. The program includes an overview of the nature of Non-IBR disputes; examples showing how some med-legal providers use Non-IBR dispute rules to gain an advantage; a discussion of payer obligations; requirements for filing a Petition for Determination of a Non-IBR Med-Legal Dispute; issues of WCAB jurisdiction and a review of the various ways defendants can lose the right to perfectly valid and complete defenses to these challenges; tips & defense strategies to assist claims organizations during negotiations and litigation; a checklist of things to keep track of during a Non-IBR dispute. The 40 minute webinar is available to members through the Institute’s website.