Q4 – 2023 – November 30, 2023
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Research CWCI Interactive Applications Updated With Data Through June AY 2023. CWCI completed and posted updates to 4 of our online, interactive applications: the Claims Monitoring, Regional Scorecard, Medical Services, and Prescription Drug applications, which now include IRIS data on California WC claims valued through 6/30/23. All four apps are available to CWCI members who log on to our website (www.cwci.org) with their username and password. Once logged in, users can access the apps from the drop-down menu under the Research tab on our home page. The applications offer detailed data that can be used to examine and compare industry data on key metrics. Examples of recent findings were included to showcase the types of data available and demonstrate how members can use the apps. Executive Memo (12/28/23) (members only) CWCI Summary of FY 2022/23 Public S-I Experience. CWCI analyzed the Office of Self-Insurance Plans (OSIP) annual summary of initial public self-insurance experience for the 12 months ending 6/30/23 (FY2022/23) and noted 120,328 new public S-I claims last year, 24,348 fewer (-16.8%) than the record 144,646 claims in the FY 2021/22 initial report. The Institute associated that decline to the drop in COVID claims, as our COVID-19/Non-COVID-19 Application shows that COVID claims by public safety/govt workers alone fell by 31,123 cases (-78.1%) in FY 2022/23 compared to a year earlier. The Institute further noted that the decline in public S-I claim volume occurred despite an increase of 71,138 public S-I workers last year. With the covered workforce up and claim volume down, public S-I claim frequency dropped from 7.2 to 5.8 claims/100 EEs, as M-O frequency fell from 2.6 to 2.5 claims/100 EEs and indemnity claim frequency fell from 4.6 to 3.3 claims/100 EEs. Initial benefit payment data on the FY 2022/23 public S-I claims show that the sharp decline in claim volume drove 1st report total paid benefits down 12.8% from a record $585.0 million in FY 2021/22 to $510.3 million last year, even though avg paid indemnity/claim was flat ($2,636 vs. $2,654) and avg paid medical rose 15.6% from $1,389 to $1,605. Public S-I’s avg incurred losses at 1st report rose 10.0% to $12,774, (+12.5% medical, +7.7% indemnity) but w/24,348 fewer claims in FY 2022/23 than in FY 2021/22, public S-I first report total incurred losses still declined by $142.4 million to $1.537 billion (-8.5%). Executive Briefing (12/20/23) (members only) Bulletin (12/13/23) (members only) News Release (12/14/23) (public) WC Death Claims Plummeted in 2023 as COVID Death Claims Declined. After the pandemic hit in 2020, the number of Calif WC death claims soared as 1,611 COVID death claims w/2020 and 2021 injury dates were filed. In AY 2020 alone there were 1,103 COVID death claims – more than half of the record 2,191 work-related deaths claimed that year. In AY 2021, total COVID death claims fell 53.9% to 508 claims as COVID vaccines became available, but the number of WC death claims remained above pre-pandemic levels as COVID deaths still accounted for more than a third of the 1,463 death claims that year. Death claims are often reported well after the injury date, so the totals for recent years will increase as more claims are filed, but current data for AY 2022 and the first 11 months of AY 2023 indicate that the number of WC COVID death claims continues to dwindle, with 81 COVID deaths (out of 868 deaths) claimed in AY 2022 and only 7 COVID deaths (out of 506 deaths) claimed for Jan – Nov of 2023, helping to drive down the overall number of death claims in the system. Executive Briefing (12/20/23) (members only) Where COVID Claims Came From in 2023. Data on COVID claim volume through the first three quarters of 2023 show dramatic reductions in the number of claims involving the coronavirus across all regions of the state and all industry sectors. As of Nov. 20, DWC had received reports of 20,052 COVID claims with Jan. to Oct. injury dates, so barring a year-end surge, the total number of claims in 2023 should only be about a quarter of the 109,861 claims reported in 2022. Unlike CY 2022, when public safety and government workers accounted for 31,314 COVID claims (32.2% of the total for the year), the health care sector led all sectors w/6,409 COVID claims through the third quater, or 35.9% of the total reported, while public safety/government workers ranked second, with 4,799 claims (26.9% of the total). With schools open, the education sector ranked third with 1,543 COVID claims (8.6% of the total) through October, ahead of the retail sector (5.8%) and manufacturing sector (5.1%) – the first time that had happened since the pandemic began in 2020. The geographic distribution showed that as in 2022, the Central Valley has had the most COVID claims this year (4,693, or 23.6% of the claims through October), but the Bay Area ranked second with 4,231 claims (21.3%); moving ahead of L.A. Co., which had about a quarter of the state’s jobs, but only 19.4% of the 2023 COVID claims. The Inland Empire/Orange Co. continued to rank fourth in COVID claim volume with 18.0% of the 2023 claims, well ahead of San Diego Co. which accounted for 7.6% and the Central Coast with 5.1%. The sparsely populated N. Counties/Sierra had 3.5% of the 2023 COVID claims, with out-of-state claims (0.7%) rounding out the balance. CWCI now updates our COVID/Non-COVID Claim App on a monthly basis so the next update will include claim experience reported to DWC through late December. Executive Briefing (12/20/23) (members only) Regional Shifts in Indemnity Claim Distributions by Industry. The Institute used Regional Scorecard Application data to measure changes in the regional mix for indemnity claims in Calif’s top 8 industries during the pandemic, comparing the indemnity claim distributions for each sector for the 3 years leading up to the pandemic (AY 2017 – 2019) to pandemic era results from AY 2020 – AY 2022. The summary table showed the most prominent regional shifts were in Construction, Manufacturing, and Food Service, though the pandemic era results are preliminary and likely to change, especially in L.A. Co. and the Inland Empire/Orange Co., which have heavy concentrations of CT claims that are often reported years after the alleged injury date. Executive Briefing (11/29/23) (members only) Work Injury & Illness Data Show Impact of Job Growth & COVID Reporting. Updated data from DIR’s Office of Research annual Survey of Occupational Injuries and Illnesses (SOII) show a sharp increase in Calif work injuries & illnesses in 2022, but those numbers reflect injuries & illnesses reported by employers to OSHA, which in many cases were never WC claims. A CWCI analysis links the surge in reported work injury & illnesses to increased employment and mandatory employer reporting of COVID claims, as evidenced by a nearly 7,600 percent increase in respiratory illness cases between 2019 and 2022 as the number of these cases jumped from 1,800 to 138,400 during that period. Executive Briefing (11/29/23) (members only) Bulletin (11/21/23) (members only) Monthly COVID Claim Count Continued to Fall in October. New data from CWCI’s COVID-19/Non-COVID 19 Claim App reported as of November 20, 2023 shows that after peaking in August, the number of COVID claims has continued to fall, with 1,295 cases reported in October and the Institute projecting an ultimate total of 1,688 cases for that month. Total COVID claims since the pandemic began total 331,933 through October, including 1,688 death claims. COVID/NonCOVID App Update (11/20/23) (public) Regional Variation in Pandemic Era Indemnity Claims. The latest update to CWCI’s Regional Scorecard Application spotlights regional differences and trends in claimant demographics, benefit mix, average payments, attorney involvement, claim closure rates, and employer and carrier notification for specific accident years or periods. CWCI recently used the updated data to take an initial look at insured and S-I pandemic-era (AY 2020-2022) indemnity claim experience in the 5 most heavily populated regions of the state. Workers living in L.A. Co. accounted for the largest share of the state’s indemnity claims during the 3-year period (24.7%); followed by workers from the Central Valley (21.0%); the Inland Empire/Orange Co. (19.9%); the Bay Area (18.1%); and San Diego Co. (7.2%). The summary quantified key aspects of pandemic-era WC claim experience in each region, while aggregated data from all 7 regions (including the Central Coast and the N. Counties/Sierras) provided statewide results for each metric. Altogether, the statewide sample encompassed 168,614 indemnity claims for injuries occurring during the 3-year study period, with total expense and benefit payments of $4.9 billion. Bulletin (10/31/23) (members only) Q2 2023 Insured Experience. The Institute summarized WCIRB’s Q2 2023 Insured Experience Report based on statewide WC insurer experience valued as of 6/30/23. Key findings included:
Executive Briefing (10/26/23) (members only) Monthly COVID Claim Counts Surged in July/August But Were Far Below 2020-2022 Levels. New data from CWCI’s COVID-19/Non-COVID 19 Claim App shows a late summer increase in the monthly volume of COVID-19 claims reported to the DWC, with the number of reported COVID-19 claims for August more than tripling from the June level to nearly match the 2023 high point from January, though the total number of COVID-19 claims reported for this year is still well below the corresponding totals for 2020, 2021, and 2022. Bulletin (10/9/23) (members only) COVID/NonCOVID App Update (9/22/23) (public)
Statutory/Regulatory 2024 Medical Mileage Rate Increase. CWCI announced that the mileage rate that workers’ comp claims administrators pay injured workers for travel related to medical treatment or evaluation of their injuries will increase from 65.5 cents per mile to 67.0 cents per mile for travel on or after 1/1/24, regardless of the injury date. The current rate of 65.5 cents per mile will still apply for travel from January 1 through December 31, 2023. The IRS normally adjusts the standard mileage rate each fall for the next calendar year based on an annual study of the fixed and variable costs of operating an automobile. Although gasoline prices have recently declined, they either did not do so prior to the calculation of the latest increase or the recent reductions failed to offset the increases from earlier this year. As a result, the standard mileage rate for miles driven on or after January 1, 2024 will increase to 67.0 cents per business mile driven. The IRS announcement is in the agency’s online newsroom https://www.irs.gov/newsroom. The DWC has downloadable mileage-expense forms that show the applicable rates based on the travel date posted under “Medical Forms” on its website. CWCI advised that given the holidays and the relatively short lead time, claims administrators alert their claims staff and programmers of the pending change. Executive Briefing (12/20/23) (members only) Executive Memo (12/14/23) (members only) Bulletin (12/14/23) (members only) News Release (12/14/23) (public) DIR Announces User 2024 Funding Assessment Rates for 6 Funds. The California Department of Industrial Relations issued the 2024 assessments that workers’ comp insurers are required to collect from policyholders to cover the budget of the state Division of Workers’ Compensation (DWC) and 5 related programs set up by state lawmakers. Insurers should apply the following rates against their policyholders’ estimated annual assessable premium for policies incepting January 1, 2024 through December 31, 2024. The rates for self-insured employers and legally uninsured employers were also released, along with instructions for payment. Executive Briefing (12/20/23) (members only) Executive Memo (11/29/23) (members only) Bulletin (11/30/23) (members only) News Release (11/29/23) (public) No 2024 TD/PTD Increase. The Labor Dept. reported that Calif’s State Average Weekly Wage (SAWW) fell for the 1st time since 2009 last year, so after climbing steadily for 13 years, including a 5.159% increase in 2023 on top of a record 13.521% increase in 2022, TTD and PTD rates will remain at current levels for injuries o/a 1/1/24 (the min. weekly rate is $242.86, the max.is $1,619.15). The SAWW decrease also means there will be no COLA adjustments to life pension and PTD benefits on claims with injury dates on or after 1/1/03. CWCI sent an Exec Memo last week to alert member company staff and issued Bulletin and news release to alert the community. Executive Briefing (12/20/23) (members only) Executive Memo (11/22/23) (members only) Bulletin (11/22/23) (members only) News Release (11/22/23) (public) Executive Briefing (11/29/23) (members only) Medicare Plan to Expand WCMSA Reporting. Medicare officials announced in November that by early 2025 they plan to require insurers to begin reporting additional WC Medicare Set Aside info beyond the currently required Total Payment Obligation to the Claimant. While plans for the new requirements are still in the works, the new information that Medicare intends to collect includes: the MSA period (number of years); the funding choice (lump sum payment or annuity); the amount of seed money (if funded by an annuity); and the annual payments (if funded by an annuity). The new reporting requirements will affect all WC case resolutions involving current Medicare beneficiaries and are separate and apart from CMS’s current voluntary WCMSA review and approval process. Executive Briefing (11/29/23) (members only) PAR and FCA Audit Standards for 2024 Announced. The DWC announced the 2024 audit standards, based on 2020-2022 audit results. The PAR standard will be 1.54500; the full compliance audit standard will be 1.84625. Executive Memo (11/7/23) (members only) 2024 Claims Kits. Heads up to those compiling claims kits for 2024 renewals: none of the WC statutory changes enacted this year require revisions to posting notices, new hire pamphlets or claim forms, which were last changed in 2015. You may still use current new hire pamphlets; posting notices; DWC-1 claim form/Notice of Potential Eligibility; or benefit notice letters. The regs allow insurers, employers or private enterprises to develop their own posting notice and new hire pamphlet, and CWCI updated and obtained DWC approvals for its versions when the regs were revised 8 years ago, so you may continue to use those. CWCI continues to stock these materials in our Forms/Publications Store, so members that need to reorder can go to www.cwci.org/store.html or call 510-251-9470. CWCI members are eligible for a 15% discount on orders with subtotals over $1,000. Executive Briefing (10/26/23) (members only) Executive Memo (11/2/23) (members only) CWCI’s Annual Summary of Enacted Legislation for 2023. 2023 was a relatively quiet year for workers’ comp legislation, as several controversial measures failed to make it out of the Legislature or were vetoed by Gov. Newsom. CWCI, however, identified 19 bills of interest to the WC community that were enacted during the 2023 legislative session and in its annual summary provides links to the final bills and a description of each bill. The Institute also noted several measures that either failed to make it to the Governor’s desk or that were passed by the Legislature but vetoed by the Governor. Executive Briefing (10/26/23) (members only) Bulletin (10/16/23) (members only) Medicare Plan to Expand WCMSA Reporting. Medicare officials announced in November that by early 2025 they plan to require insurers to begin reporting additional WC Medicare Set Aside info beyond the currently required Total Payment Obligation to the Claimant. While plans for the new requirements are still in the works, the new information that Medicare intends to collect includes: the MSA period (number of years); the funding choice (lump sum payment or annuity); the amount of seed money (if funded by an annuity); and the annual payments (if funded by an annuity). The new reporting requirements will affect all WC case resolutions involving current Medicare beneficiaries and are separate and apart from CMS’s current voluntary WCMSA review and approval process. Executive Briefing (11/29/23) (members only) PAR and FCA Audit Standards for 2024 Announced. The DWC announced the 2024 audit standards, based on 2020-2022 audit results. The PAR standard will be 1.54500; the full compliance audit standard will be 1.84625. Executive Memo (11/7/23) (members only) Medicare MSA Reporting Penalties. Medicare has published its final Medicare Secondary Payer reporting rules which authorize civil penalties of up to $1K/day/claim ($365K/year) against Required Reporting Entities (RREs), including WC insurers and S-I employers, that fail to report any beneficiary record w/in 1 year of a settlement, judgment, award, or other payment, or the effective date where on-going payment responsibility for medical care was assumed by the entity. The rules establish a tiered penalty schedule for non-group health RREs:
The rules also include an annual inflation adjustment that will push penalties above the amounts noted above, but they also expand the safe harbor provisions, so CMS will not penalize an RRE that is unable, despite a good faith effort, to obtain a claimant’s name, birthdate, Medicare beneficiary identifier, SS # or the last 5 digits of the SS #. CMS also will not assess penalties for noncompliant incidents associated w/specific CMS reporting policy or procedural changes in effect for less than 6 months (or 12 months if CMS could not provide at least 6 months’ notice prior to implementing the change). To flag potential noncompliance, each year CMS will audit a randomized sample of 1,000 beneficiary records rather than issuing penalties based on automated monitoring of all RRE submissions as originally proposed. The rules take effect 12/11/23, but penalties will not be assessed until at least 10/11/24 or 1 year after the coverage effective date or settlement date an RRE is required to report. Executive Briefing (10/26/23) (members only) COVID Presumptions to Expire. In early 2023 Gov. Newsom lifted scores of COVID orders and provisions put in place after he declared a public health emergency in 2020, but 27 directives still remain in effect. On Oct. 23 Newsom announced that the state’s emergency declaration for COVID will end on 3/28/24. As for WC, in 2022 Newsom signed AB 1751, expanding COVID presumptions for “critical workers” to include not only police and firefighters, but active firefighting members working for a number of state departments and extending the expiration date to the end of 2023. This year, however, the Legislature made no attempt to extend the COVID presumptions, which will expire 1/1/24 — welcome news for employers, who will no longer need to report every positive COVID test to their WC insurers and for claims administrators who have had to keep tabs on the reports. Executive Briefing (10/26/23) (members only) AB 1213 Vetoed. Gov. Newsom vetoed AB 1213, a CAAA-backed bill that would have altered the 104-week cap on TD benefits by excluding TD paid or due during the resolution of medical disputes if a UR treatment denial is overturned by IMR or the WCAB. A CWCI white paper published in June and provided to state lawmakers estimated that AB 1213 would provide a nominal increase in benefits for 0.9% of TD claims (less than 0.3% of all WC claims) but would create costly new oversight and compliance requirements for insurers, self-insured employers, and TPAs. Chief among those would be automation and programming costs to update claims systems and ongoing administrative costs for manual processes to identify and track claims with TD payments and UR and IMR activity, which would have applied to every claims administrator in the state, further increasing California’s average loss adjustment expense, which has historically been the most expensive in the country. Executive Memo (10/9/23) (members only) New Electronic Record Submission Rules For High-Hazard Industries. Fed-OSHA issued an order expanding rules for electronic record submission of job injury and illness data. The order, posted on the Federal Register, takes effect 1/1/24. OSHA already requires most employers to maintain illness and injury logs and post a summary each year at their worksite, but only those with 250 or more employees and businesses in certain high-hazard industries with 20 or more employees must provide the OSHA 300A Summary of Work-Related Injuries & Illnesses. Under the new rules, as of 2024, in addition to Form 300A, employers with 100+ employees in certain high-hazard industries must electronically submit information from the Form 300 (Log of Work-Related Injuries & Illnesses) and Form 301 (Injury & Illness Incident Report) and include their legal company name. To allow employers, employees, potential employees, employee reps, current and potential customers, the public and researchers to access information about a company’s safety and health record, some data will be posted on OSHA’s website. Individually identifiable information on employees will not be posted, but employer incident data and injury descriptions will be. The rules could increase an employer’s exposure as OSHA will use the data to target employers for inspections; could predetermine if employers should fall under its instance-by-instance citation policy; and use the data to conduct targeted interviews of injured workers instead of random interviews. Now that much of the data will be public, employers that are subject to the new rules should carefully evaluate all injuries and illnesses to make sure that the OSHA standards require them to be recorded before completing and submitting OSHA Forms 300, 301, and 300A. Executive Memo (10/6/23) (members only)
Other Save the Date: CWCI’s 26th Annual Case Law Seminar. The Institute will hold the 2024 Case Law Update Seminar on Thurs., May 9 from 9 am to 3:30 pm at the Oakland City Ctr Conference Ctr, 500 12th St, Suite 105, Oakland. More details will be sent early next year but save the date. Executive Briefing (11/29/23) (members only) Save the Date: CWCI 2024 Annual Mtg. CWCI’s 60th Annual Meeting will be held as a live event on Tuesday, March 19 at Oakland’s Scottish Rite Center, overlooking Lake Merritt at 1547 Lakeside Dr., just a few blocks from CWCI’s office. More details including the agenda and guest speakers will be forthcoming, but in the meantime, save the date on your 2024 calendar. Executive Briefing (10/26/23) (members only) Executive Memo (10/24/23) (members only) CWCI Quarterly Summary. Quarterly listings of all CWCI publications, including publication dates, brief summaries of each topic and the various formats in which the information is available (e.g., research report, Bulletin, Executive Briefing, news release), so users can choose the level of detail they want to view. Listings include live links so users can click into the CWCI website to access specific documents quickly and easily. |