Q2 &#8211; 2020 &#8211; September 21, 2020

News Release (5/21/20) (public)

IMR Decisions: January 2014 Through March 2020. A CWCI study on the Independent Medical Review (IMR) process used to resolve California workers’ comp medical disputes found that the number of IMR determination letters — fueled by a sharp decline in prescription drug disputes — fell 11.3% from 2018 to 2019, with data from the first quarter of 2020 showing the decline is continuing. The CWCI study examined data from more than one million IMR decision letters that were issued from 2014 through March 2020 in response to applications submitted to the state after a Utilization Review (UR) physician modified or denied a medical service requested for an injured worker.

Research Update (5/18/20) (public)

Bulletin (5/17/20) (members only)

News Release (5/18/20) (public)

2019 Insured Experience. The Institute’s review of WCIRB’s new data on insured experience for Q4 2019 notes that between CY 2018 and 2019, California workers’ comp DWP fell 6% from $17 billion to $15.9 billion. The avg charged rate per $100 of insured payroll fell 12% from $2.26 in 2018 to $2 in 2019, bringing the net decline since the 2014 peak to 33%. With the continued decline in premium rates, the Rating Bureau projects the AY 2019 combined ratio will climb to 95%, up 6 points from the 89% combined ratio projected for AY 2018. The report also notes that the pandemic is expected to “significantly reduce employer payroll and insurer premium in 2020” and could increase overall costs, which may lead to further increases in the combined ratio.

Statutory/Regulatory

Pharmacy Fee Schedule Regs. On June 15, DWC posted draft revisions to the OMFS regs that govern maximum reasonable pharmaceutical fees. Under the Labor Code, the fee schedule for dispensed drugs is based primarily on the Medi-Cal pharmacy payment system. Medi-Cal has implemented a revised payment methodology approved by the CMS utilizing “National Average Drug Acquisition Cost” (NADAC) based on survey data compiled by CMS and the Wholesale Acquisition Cost (WAC) instead of the “Average Wholesale Price” (AWP). The Medi-Cal methodology also updates the dispensing fee from $7.25 to a 2-tier fee of $10.05 or $13.20, depending on the total volume of all pharmacy claims (not just WC pharmacy claims) processed by the pharmacy. The proposed regs have separate provisions for pharmacy-dispensed and physician-dispensed drugs in order to implement statutory provisions w/additional fee caps for some physician-dispensed drugs. DWC will accept Forum comments on the draft changes until 5 p.m. on Friday, July 3, 2020, and CWCI comments will be on our website.

EEOC Guidance on COVID-19 Testing of Returning Workers. As businesses reopen, employers are raising questions about proper protocols for bringing employees back to work. On June 17, a U.S. Equal Employment Opportunity Commission (EEOC) bulletin addressed COVID-19 issues arising under EEOC laws, CDC guidelines and the ADA. The EEOC noted that employers may test workers for COVID-19, but under the ADA, which applies to private employers w/15 or more employees and to state and local governments, they may not require workers to take an antibody test, which the ADA considers a physical exam. Also, because antibody tests may not give accurate results and the duration of immunity is uncertain, results cannot be used to make decisions about immunity and an employee’s ability to RTW, so they do not meet the ADA’s business-necessity and job-related requirements. Under the ADA, employers may take employees’ temperature and ask if they have COVID-19 symptoms, and they may require workers to stay home if they do but must treat such information as a confidential medical record. Lack of antibody testing could affect WC claims if workers who are not immune to COVID-19 return and then fall ill and file a claim. A federal law, passed in March, could help some employers avoid comp claims because it requires two weeks of paid sick leave for sickened workers, and gives business a tax credit. But the law exempts companies with more than 500 workers and smaller businesses that apply for an exemption and does not require testing for the disease.

Newsom Issues Exec Order Affecting WCAB Rules. On June 5 Gov. Newsom signed Executive Order N-68-20 which included provisions related to WC, most notably an additional 60-day extension to the deadlines for WCALJs to make their trial decisions and for WCAB commissioners to act on Petitions for Reconsideration (LC §§ 5909 and 5315), which were initially extended in his May 7 EO (N-63-20).

Emergency Regs Require Recalculation of WC Premiums. On June 17 Commissioner Lara approved emergency regs that make changes to the Unit Stat Plan and Experience Rating Plan designed to address the pandemic. The regs take effect July 1 and mandate that WC insurers recompute policyholder premiums to reflect the reduced risk of loss consistent with Lara’s April 13 and May 15 Bulletins. Under these regs, employers may reclassify employees whose duties have changed to a clerical classification that has less risk than the employee’s prior classification. This will reduce premiums for employees who are a lower risk because they work from home even if they previously did so. The change is retroactive to March 19 and will continue for 60 days after the order is lifted. The regs also exclude from premium calculations payments to an employee, including sick or family leave, while the employee is not performing duties of any kind for the employer.

The Future of the COVID-19 Presumption. The COVID-19 presumption granted via Executive Order N-62-20 only covers the period from March 19 to July 5, so state lawmakers introduced several bills to codify a COVID-19 presumption. Most notably, SB 1159 (Hill) which was amended and approved by the Senate Appropriations Committee in mid-June and is modeled after the presumption granted by Newsom’s order. It would establish a rebuttable presumption, but due to criticism of the presumption granted by the EO which failed to include a defined date of injury for COVID claims, SB 1159 includes a provision that would set the date of injury as the last date the employee performed labor or services at the employee’s place of employment at the employer’s direction. With COVID cases spiking statewide, employers are wary of assuming the burden of proof in COVID-19 claims and having to show that exposures are not work-related, but negotiations to broaden the presumption to encompass injuries that occur outside of the original time frame were continuing.

Executive Memo (6/18/20) (members only)

COVID-19 Changes to Uniform Stat Reporting & Experience Rating Plans. Insurance Commissioner Lara approved amendments to the Workers’ Compensation Uniform Statistical Reporting Plan—1995 (USRP) and Experience Rating Plan (ERP), designed to address the COVID-19 pandemic that take effect July 1. Under the revisions, the costs of COVID-19 claims with dates of injury on or after 12/1/19 are excluded from an employer’s experience rate calculation, as the WCIRB notes such claims are unlikely to be a strong predictor of that employer’s future workers’ compensation claim costs. In addition, any employer payments to employees who remained on staff but performed no activities are excluded from covered payroll. This rule will remain in effect for the duration of the statewide stay-at-home order and for up to 30 days after it is lifted for employees who continue not to work. Lastly, employers will be allowed to temporarily assign Classification Code 8810, clerical office employee to employees whose work shifted to clerical tasks during the SIP order. This rule will also apply for the duration of the SIP order and for up to 60 days after it is lifted for workers who continue to meet the definition of clerical office employee.

Fed-OSHA Guidance on Recording COVID-19 Cases. On 5/19/20, Fed-OSHA issued revised guidance to its enforcement officers on when employers must record COVID-19 cases, stating that as of 5/26/20, COVID-19 is a recordable illness, so employers must report confirmed cases that are work-related. This updates guidance issued in April which stated that OSHA will not require employers to determine whether COVID-19 is work-related unless there is objective evidence of a causal relationship reasonably available. That said, OSHA does not expect employers to undertake extensive medical inquiries to determine where an employee contracted the disease. In most cases it is sufficient for an employer that learns of an employee’s COVID-19 illness to ask the employee how he believes he contracted the COVID-19 illness and while respecting employee privacy, discuss with the employee his work and out-of-work activities that may have led to the COVID-19 illness. Employers also should review the employee’s work environment for potential SARS-CoV-2 exposure. If after a reasonable, good faith inquiry an employer cannot determine whether it is more likely than not that exposure in the workplace played a causal role to the COVID-19 case, the employer doesn’t need to record it.

COVID-19 Treatment Guideline. DWC announced plans to eventually incorporate ACOEM’s Coronavirus (COVID-19) Clinical Practice Guideline into the MTUS, but because the evidence-based recommendations are evolving it will wait until the frequency of updates slows to a point where the formal adoption process can be completed. In the meantime, the DWC said COVID-19 treatment recommendations should follow the MTUS medical evidence search sequence, which requires a search of the latest version of ACOEM’s recommendations, and the COVID-19 guideline meets that criteria.

More COVID-19-Related Changes at the WCAB. On 5/28/20, DIR announced that the DWC and WCAB were expanding hearings at WCAB district offices. Most hearing and document filing procedures set forth since March were unchanged but there were minor changes or other procedures to note: 1) Effective Monday, 6/8/20 each WCALJ will hear up to three (3) lien conferences per calendar session on their individual conference line. Lien conferences in excess of that number will be continued; 2) Documents relating to any matter currently pending before the Board, including but not limited to cases in which a petition for reconsideration has been granted for further study may be filed by email to WCABEmergencyBox@dir.ca.govare subject to statutory time limits, such as petitions for recon, removal, disqualification, applications for adjudication, and petitions to reopen, may be filed directly to the district office having venue. Documents that are not subject to statutory time limits may not be filed via email. If such documents cannot be e-filed or JET filed, they must be filed via U.S. mail. DWC will reject documents that are improperly filed via email. DWC reminds parties to only use this alternative filing option for these limited documents.

Local COVID-19 Supplemental Sick Leave Ordinances Impact TD/4850 Benefits. In late May, Long Beach In late May, Long Beach became the 6^th Calif locality to adopt a COVID-19 supplemental paid sick leave ordinance impacting employers w/in their jurisdiction. The others are the City of Los Angeles, the County of Los Angeles (unincorporated areas), Oakland, San Francisco and San Jose. The 6 ordinances, however, vary in terms of who qualifies for the COVID-19 sick leave. Because Executive Order N-62-20 requires employees with COVID-19 specific paid sick leave benefits to exhaust those benefits before TD or 4850 salary continuation benefits are due, claims administrators will need to review the local ordinance whenever a COVID-19 claim comes in from an employer in one of these areas to determine if and when TD/4850 payments are due. The Institute provided web links to the ordinances.

WCAC Data Call. A Doctors’ First Report of Injury (Form 5021) must be filed w/the employer’s insurer (or the employer if self-insured) w/in 5 days of an initial exam. The forms are currently only available on paper, but DWC wants to eventually phase out paper copies. As a first step, DWC announced a pilot program in which doctors can volunteer to submit their 5021 reports to the Division via an electronic portal, though they will still have to send copies to claims administrators. Large volume filers such as hospitals were also invited to participate in the pilot program. The announcement did not provide a timeline for the project, but DWC posted a web page with more info on the pilot program, and a statement that the Division plans to draft regs requiring electronic reporting “in the future” with the intent to phase out paper filing. CWCI will track the project and post proposed draft regs when available.

Executive Memo (5/22/20) (members only)

OSIP Regs Approved — Effective July 1, 2020. SB 863 enacted revisions to LC §§3701 and 3702.2, et al specific to annual reporting requirements of private and public self-insured employers in order to ensure substantial DIR oversight. Enhanced reporting requirements were deemed necessary to evaluate costs, benefit expenditures, and proof of solvency and performance on a regular scheduled basis. The annual reports of individual private self-insured employers are due each March 1^st, while annual reports of individual public self-insured employers are due on October 1^st for the valuation period July 1^st through June 30^th. The rulemaking process for the revised regs began in 2014, but on December 19, 2019, OAL issued a Decision of Disapproval of the submitted Public-Self-Insurance regs. The regs were subsequently re-submitted for approval on April 2, 2020, approved on May 14, 2020, and are effective on July 1, 2020. The regulatory documents, including comments submitted by CWCI and a clean copy of the final regs are posted on our web page under the Regulations tab at the top of our home page.

Executive Memo (5/27/20) (members only)

CWCI Suggested Areas of Clarification Related to the COVID-19 Presumption. DWC established an FAQ web page dedicated to addressing inquiries and clarifying issues related to the COVID-19 presumption granted by Governor’s May 6, 2020 Executive Order (EO N-62-20). However, claims administrators have noted a number of practical issues related to the COVID-19 presumption that still need to be addressed in order to expedite the handling and adjudication of these claims and to avoid costly penalties and unnecessary litigation. On May 21, CWCI Claims/Medical Director Jackie Secia submitted a memorandum detailing issues related to the presumption – which in some cases include conflicts with existing regulations — that the DWC should consider clarifying, either through emergency regulations or by adding information to its COVID-19 FAQ web page. The categories of topics included:

The Date of Injury, Employer Reporting, and Claim Form Requirements
Temporary Disability, Salary Continuation, and Benefit Notice Requirements
Medical Certification of Disability, MPN, and Testing Issues

Member companies were invited to alert Jackie to any other COVID-19 claim issues that they would like to see the DWC address.

Executive Memo (5/21/20) (members only)

Newsom Grants 60-Day Extensions of Procedural Deadlines by Executive Order. In response to the COVID-19 State of Emergency, on May 8, Gov.Newsom signed Executive Order N-63-20 which effective immediately extended a number of procedural deadlines included in regulations or statutes by 60 days. Among the 60-day extensions affecting workers’ comp:

the deadline for the AD’s approval of WC MPN applications, modifications and reapprovals (LC § 4616(b)(1), CCR §§ 9767.2(a) and (b) and CCR § 9767.8(d))
the period within which DIR’s Return to Work Supplement Program (RTWSP) must receive an application for the RTWSP benefit (CCR § 17304), and the deadline to file a RTWSP appeal or any reply or responsive papers (CCR § 17309)
the deadlines for WCALJs to file decisions (LC § 123.5 and CCR §§ 9713, 9714, and 9714.5)
the deadline for the WCAB to act on a WCALJ decision (LC § 5313)
the timeframes for Cal/OSHA and Occupational Safety & Health Standards Board (OSHSB) reports on proposed standards or variances (LC §§ 142.2 and 147)
the deadlines related to appealing Cal/OSHA citations, notices, or orders (LC §§ 6319, 6600, 6600.5, 6601, and 6601.5)
the deadlines for issuing Cal/OSHA citations (LC 6317)

The May 8, 2020 news release from Governor Newsom’s Office announcing the Executive Order is posted at https://www.gov.ca.gov/newsroom.

Executive Memo (5/11/20) (members only)

Comments on Proposed Emergency Regulatory Action (2020-0504-)1E); QME Emergency Telehealth Regulation in Response to COVID-19. CWCI’s comments to the OAL reference attorney in response to the emergency regulations governing QME telehealth requirements submitted on May 4.

Emergency Regulation Comments (5/7/20) (members only)

Member Alert: COVID 19 Presumption and CWCI Webinar. As widely anticipated, on May 6 Governor Newsom signed an Executive Order creating a presumption of compensability for COVID-19 as it relates to certain California workers. CWCI provided members with a synopsis of the EO, with key information and details, and announced an Ask the Experts webinar would be held for members on Thursday, May 7.

Executive Memo (5/6/20) (members only)

COVID-19 Presumption Bills. CWCI’s review of three bills that would grant COVID-19 presumptions of compensability to various groups of essential workers that were under consideration in early May.

AB 664 (Gonzalez/Cooper) would create a conclusive presumption for firefighters, peace officers, and health workers who provide direct patient care in acute care hospitals. If these workers are diagnosed with COVID-19, it would be presumed that they contracted the virus while on the job, and the burden of proof would shift to the employer to show that the COVID-19 was non-occupational. The conclusive presumption in AB 664 would apply to claims filed up to 90 days following termination of employment. AB 664 did not include grocery workers, truckers, ag workers, or other “essential workers” in Gov. Newsom’s 3/39/20 order, but on 4/28/20 the author announced she would introduce a separate measure to extend COVID-19 presumptions to these workers.

SB 1159 (Hill) would create a rebuttable presumption for first responders and “critical” workers, a group that was not specifically defined, but would include public or private sector employees working to combat the spread of COVID-19. Under this proposal, the employee would still have the burden of proving that the disease arose out of and in the course of employment.

SB 893 (Caballero/Skinner) would create rebuttable presumptions for respiratory diseases (including COVID-19, chronic obstructive pulmonary disease, asthma, other conditions caused by novel pathogens), and for musculoskeletal injuries and infectious diseases (including tuberculosis, meningitis and MRSA skin infections) for workers who provide direct patient care in acute care hospitals. The presumption would apply for up to 120 months following termination and accrue at a rate of three calendar months for each full year of employment.

The State Senate was still in recess so prospects for the COVID-19 bills were unclear, though the Institute noted the governor might issue executive orders mandating temporary changes to the WC system, including a COVID-19 presumption, despite employer pushback.

COVID-19 Codes Added to the OMFS. On 4/15/20, DWC adopted changes to the Pathology & Clinical Lab section of the OMFS, adding new COVID-19 testing codes and fees adopted 4/14/20 by Medicare. The new codes are for tests performed with “high throughput technology” that uses automated processing of more than 200 specimens/day, and the codes provide higher reimbursements than the prior codes due to more intensive training and resources required for high throughput devices. This was the 2nd set of changes to the Pathology & Clinical Lab section of the OMFS in April, and the latest revision supersedes the one from 4/6/20. The 4/15/20 order adopting the OMFS change is effective for services o/a 4/1/20, except that specified new COVID-19 testing codes, specimen collection codes and fees are adopted retroactively to CMS effective dates.

WCAB Adopts More COVID-19 Emergency Changes.

On 4/3/20, the DIR announced that as of 4/13/20 it was adopting a modified calendar and temporary WCAB hearing and filing procedures. As of that date, the WCAB ceased in-person hearings, continued trials and lien conferences, and began hearing MSCs, priority conferences, status conferences and expedited hearings via toll-free conference lines and access codes assigned to each WCALJ. Then on 4/23, DIR announced that the WCAB had issued an en banc order allowing limited filing of specified documents by email directly to the WCAB and to DWC district offices, and to offer guidance on emailing those documents. On 4/28, more WCAB hearing and filing procedure changes were announced, including expansion of the remote hearing program put in place to replace the Court Call system include all case-in-chief trials (effective 5/4/20), though lien trials and lien conferences were still to be continued and walk-through documents, walk-in filings or in-person requests would still not be accepted at local boards; and other temporary changes in regard to the timing and procedures for filing trial documents and non-trial documents will take effect.

Also on 4/28, the WCAB issued a 3^rd en banc order suspending or modifying the Rules of Practice and Procedure to adapt to the COVID-19 pandemic. This order, followed the 4/23 en banc order that allowed for limited filing of documents via email to the WCAB and DWC district offices, suspended the 20-day requirements for filing documentary trial exhibits in WCAB Rules 10620 and 10670(b)(3), giving WCALJs discretion to receive into evidence documents not filed 20 days prior to trial. The order was to remain in effect until further notice. DIR also clarified that as of 4/13, electronic signatures will be accepted on all settlement documents, Applications for Adjudication, pleadings, petitions, and/or motions. All temporary changes to the WCAB rules of practice & procedure adopted in response to the pandemic are posted at https://www.dir.ca.gov/wcab/.

Fed-OSHA to Consider Good Faith Safety Efforts. Conceding that infection control measures such as physical distancing limit many employers’ ability to provide training, inspections, testing, auditing, and “other essential safety and industrial hygiene services,” Fed-OSHA advised its compliance officers that “good-faith efforts” by employers to comply with safety regs during the pandemic should be taken into “strong consideration.” The agency noted that it “may issue a citation if it finds an employer cannot demonstrate any efforts to comply” and that “Once normal activities resume,” Fed-OSHA will develop a program to review random samples of cases “where the agency noted, but did not cite, violations” to ensure corrective actions were taken. OSHA also noted that “Employers unable to comply with OSHA requirements because local authorities required the workplace to close should demonstrate a good-faith attempt to meet applicable requirements as soon as possible following the reopening of the workplace.”

Executive Memo (4/22/20) (members only)

WCAC 2020 Data Call Delay. Department of Insurance has notified the Institute that the release of the WCAC 2020 Data Call for claims adjuster and medical bill review data, including this year’s submission deadlines, have yet to be released due to the COVID-19 situation. Pursuant to California Insurance Code §11761 and CCR, Title 10, §§2592 – 2592.08, claims organizations must submit data annually to certify that their workers’ comp claims adjusters, including those working for medical billing entities, meet minimum standards of training, experience, and skill. The data call used for this certification typically issues in April, but according to CDI, as of April 22 point there was no timetable for its release.

When the department issues the data call, it will send out a circular along with instructions and the applicable due dates, and the Institute will alert our members.

WCIRB Approves COVID-19 Unit Stat & Experience Rating Plan Changes. WCIRB authorized the submission of proposed changes to the Uniform Statistical Reporting Plan—1995 and the Experience Rating Plan—1995 in response to the COVID-19 crisis to the insurance commissioner. If approved the changes would exclude COVID-19 claims w/injury dates o/a 12/1/19 from experience rating calculations because the Bureau says such claims are unlikely to be a strong predictor of an employer’s future claim costs; exclude payments to employees who continue to be paid while not working from reportable payroll. The exclusion would apply while the statewide stay-at-home order is in place and up to 30 days thereafter if the employee continues not to work. WCIRB notes this change reflects the extraordinary circumstances resulting from the shelter in place order and that these employees have little to no work injury exposure; and allow employees who are working from home during the shelter-in-place order to temporarily be classified as “clerical office employees,” provided their responsibilities meet the definition in Classification Code 8810. The change would apply during the stay-at-home order and up to 30 days after if these employees continue to meet the classification, but it would not apply to the payroll of those whose classifications explicitly include “clerical office employees.”

Telehealth Fees Increased in the OMFS. DWC adjusted the WC Physician Services / Non-Physician Practitioner Services Fee Schedule to encourage expanded use of telehealth during the COVID-19 crisis. The changes are based on Medicare’s public health emergency Physician Fee Schedule interim revisions which adopt an expanded list of services that may be provided through telehealth, and which modify the “Place of Service” code for telehealth. Medicare’s telehealth code list specifies the types of services that may be provided by “eligible distant site providers” if they are “medically appropriate” and identified by modifier 95. According to the DWC, “adoption of the Place of Service code revision will encourage use of telehealth by equalizing the payment for a service whether provided in a physician’s office or through telehealth using real time audio and video telecommunications. DWC encourages the provision of medical treatment by telehealth in lieu of in-person visits whenever medically appropriate, in order to protect patients and health care providers and to support the crucial effort to slow the community spread of the COVID-19 virus. Increased use of telehealth for WC treatment aligns with the goals of the Governor’s ‘stay at home’ order and the Executive Order regarding telehealth services.” The DWC order and revised reg text, effective for services rendered on or after 4/15/20, are posted on the Physician and Non-Physician Practitioner fee schedule web page.

Executive Memo (4/13/20) (members only)

WC Insurers Ordered to Refund Excess Premium Related to COVID-19 Impact. Insurance Commissioner Lara ordered all California workers’ comp insurers to refund “excess premium” for March and April to reflect the impact of the COVID-19 pandemic on business operations. The order also applied to private & commercial auto insurance, commercial liability and multiple peril insurance, medical malpractice, and “any other line of coverage where the measures of risk have become substantially overstated as a result of the pandemic.” The refunds, due w/in 120 days, may be in the form of a premium credit, reduction, return of premium, or other appropriate premium adjustment. More details are in the CDI Bulletin 2020-03.

MLFS Overhaul.

Even before the State Auditor’s report from the fall of 2019 recommended Med Legal fee increases, DWC began a series of meetings w/stakeholders (including CWCI) to get input on potential MLFS improvements and/or revisions. Current proposals from stakeholder meetings include:

Flat fees for: 1) comprehensive initial evaluation ($2,000); 2) follow-up evaluation ($1,325); 3) supplemental report ($650); and 4) failed/missed appointments ($500).
A ban on fees for supplemental reports issued in response to unanswered questions and/or unaddressed issues in the original report.
Hourly billing for: 1) M-L deposition testimony (minimum of 2 hours at $425/hour) and incremental charge thereafter; and 2) sub-rosa review ($350/hour billed in .25-hour increments).
Per page record review fees depending on type of M-L evaluation: $3/page in excess of the base number of pages included in the flat fee charge per category.
Fee Modifiers: 1) AME (1.25) applied to the flat fee and per page charge; 2) interpreters required (1.1) applied to evaluation flat fee but not to per page rate; and 3) extraordinary circumstances (1.5) applied to flat fee per category charge and record page review and limited to psychiatric, psychologic, and toxicology evaluations.

The linchpin for containing costs is creation of a “Records Organizer,” where an independent copy service would serve as a clearinghouse to receive records from opposing parties prior to a PQME exam, remove duplicate pages or submissions, and scan them to a disc to be submitted to the PQME as the only authorized records. It was unclear whether DWC has authority to adopt this process w/o a statutory change, and the outlook for a bill in the current session is cloudy due to the COVID-19 crisis.

Labor & CAAA Pushing COVID-19 Presumption Bills. The Calif Labor Federation sent a letter to Gov. Newsom calling for a WC presumption that a COVID-19 exposure or positive test is work-related for employees deemed essential by his March 19 EO, workers subsequently deemed essential, and disaster workers. Other labor groups then asked CAAA to draft language for an executive order establishing a conclusive (rather than rebuttable) presumption that COVID-19 is compensable for all workers who continue to work during the crisis and are therefore exposed to COVID-19 daily. The labor groups hoped Newsom had the power to issue the order once it was in his hands; if not, they planned to draft a bill to establish the presumption. That said, the Legislature recessed on March 16. The Senate passed a rule allowing senators to meet and vote remotely, but the Assembly did not, which may stymie efforts to enact many more bills this year. After the statewide shelter in place order was extended, Senate Pro Tem President Toni Atkins announced that the Legislature would not reconvene on April 13, leaving it unclear when they will return. The shortened session, and the impact of rising unemployment and the plunge in the stock market on the state budget, reduced the odds for 2020 bills to be enacted.

When Is Covid-19 Recordable? OSHA recordkeeping requirements (29 CFR Part 1904) require employers to record certain work injuries & illnesses on their OSHA 300 log. On March 14, Fed OSHA issued guidance to employers and safety professionals to clarify that COVID-19 can be recordable if a worker is infected as a result of performing work-related duties, but employers are only responsible for recording COVID-19 cases if all of the following are met:

The case is a confirmed case of COVID-19 (see CDC info on persons under investigation & presumptive positive and lab-confirmed cases of COVID-19);
The case is work-related, as defined by 29 CFR 1904.5
The case involves one or more of the general recording criteria set forth in 29 CFR 1904.7 (e.g. medical treatment beyond first-aid, days away from work).

See OSHA’s Injury and Illness Recordkeeping and Reporting Requirements page for more info.

Significant Decision Summary (6/23/19) (members only)

Legal

WCAB Issues En Banc Decision in Todd v. Subsequent Injuries Benefit Trust Fund. In an en banc decision, the Appeals Board outlined the proper method to determine the liability of the Subsequent Injuries Benefit Trust Fund and mandated the use of addition rather than the combining disabilities. Significance: In an SIBTF case, to the extent they do not overlap, prior and subsequent permanent disabilities shall be added instead of combined. This decision will affect only a small subset of cases for most WC attorneys, and largely restates settled law, but the mandate to use addition instead of the CVC chart should be of some concern, as well as the apparent ease with which the WCAB condoned alternative methods of combining disabilities.

CWCI to Broadcast 2020 California Workers’ Comp Case Law Update Program. The Institute announced its 22^nd annual Case Law Update program would be broadcast rather than held as a live seminar due to the pandemic. The full-day program was slated for July 7 and as in the past, speakers were Saul Allweiss, Jake Jacobsmeyer, Elizabeth Hudson and the program was moderated by CWCI General Counsel Ellen Sims Langille. The program examined how recent trends in decisional law are reshaping California workers’ compensation, and the speakers offered insight into negotiation and defense strategies for claims personnel, attorneys, hearing reps, and others with negotiating authority.

Executive Memo (6/9/20) (members only)

News Release (6/9/20) (public)

Seminar Flyer (6/9/20) (public)

Q & A from CWCI’s Ask the Experts Webinar on the COVID-19 Presumption. The Institute posted a list of Q&As from CWCI’s May 7, 2020 “Ask the Experts” Webinar on the COVID-19 presumption of compensability granted by Governor Newsom in his Executive Order N-62-20. The answers to webinar participants questions were produced by CWCI General Counsel Ellen Sims Langille, and provide information and commentary on a wide range of topics related to the presumption, including paid leave; evidence; time to investigate a claim; the Constitutionality/legality of the governor’s Executive Order; apportionment; death benefits; and an employer’s direction to come into a worksite.

Executive Memo (5/13/20) (members only)

Dennis v. Dept. of Corrections. In a series of en banc decisions, the WCAB exercised its power to invalidate a regulation against 8 CCR 10133.54 on the basis that it improperly vested adjudicatory review of SJDB voucher disputes and constituted an invalid assertion of jurisdiction that exceeded the statutory authority. The WCAB further held that in order to avoid the obligation to provide a SJDB voucher, an employer must offer regular, modified, or alternative work — regardless of the employer’s ability to make such an offer, and regardless of an employee’s ability to accept. In order for an offer of employment to be bona fide, it must be genuine and made in good faith at the time conveyed.

Significant Decision Summary (4/13/19) (members only)

WCALJ Toll-Free Conference Lines and Access Codes, Effective Monday April 13 The WCAB and DWC announced that the state has adopted a modified calendar and updated WCAB hearing and filing procedures to allow the workers’ compensation claims adjudication process to continue during the COVID-19 crisis. Effective Monday, April 13 WCAB District Offices suspended in-person hearings, and all trials and lien conferences were continued until further notice. In addition, instead of using the Court Call system that had been utilized up to this point, all WCALJs in the state began to hold hearings (including mandatory settlement conferences, priority conferences, status conferences and expedited hearings) using toll-free conference lines and access codes. Parties could call the conference line for the judge in front of whom the case is set, at the designated hearing time listed on the hearing notice. When prompted, parties could enter the access code assigned to that line. A DWC staff member would then answer the call and direct the caller on how to proceed. Depending on the judge’s calendar, callers might be asked for their email address and be instructed to call back once the judge becomes available. Additional details on the new process were included in an email attachment from WCALJ Joel Harter. DWC is maintaining a list of Judges’ Conference Lines under “Office Closure Information” on its website.

Executive Memo (4/10/20) (members only)

Other

No CIGA Surcharge for 2021. For the 3rd year in a row, CIGA has announced that it will not impose a WC policy surcharge on policies incepting in 2021. Up until 2019, 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. That bond has been paid off, and with favorable loss development CIGA’s WC reserves have improved, and its WC account now has a surplus rather than the $4 billion deficit of just a few years ago. As a result, the CIGA Board voted in May not to issue an assessment for PY 2021 so WC insurers will not need to advance any funds to CIGA in July or add a CIGA surcharge to 2021 policies.

Meeting Minutes (5/14/20) (members only)

CWCI Elects News Board of Directors for 2020. Matthew Zender of AmTrust North America was elected Chairman of the California Workers’ Compensation Institute (CWCI) Board of Directors for 2020. Mr. Zender, who served as the Vice-Chair of the Board in 2019, replaces Rose Barrett of North American Casualty Company, who will continue to serve on the Institute’s Board and Executive Committee this year. Joining Mr. Zender and Ms. Barrett on CWCI’s 2020 Executive Committee will be Martin Brady of Schools Insurance Authority, an associate member; Kris Mathis, CopperPoint Insurance Companies; David Mitchell, Republic Indemnity Company of America; Vernon Steiner, State Compensation Insurance Fund; and Sharon Thaler, AIG. Representatives of 13 other members were also named to serve as Board members for 2020.

WC Premium Refunds. On April 13, Ins. Commissioner Lara ordered all Calif WC insurers and insurers in 5 other lines to refund “excess premium” for March and April to reflect the impact of the COVID-19 pandemic on business operations. The refunds, due w/in 120 days, may be in the form of a premium credit, reduction, return of premium, or other appropriate premium adjustment. WC insurers may comply with the order by reclassifying exposures to reflect the current environment or reducing the exposure base to reflect the actual or anticipated exposure w/o CDI’s prior approval for rate or rule changes as long as the changes are consistent w/their existing rating plan. In order to provide oversight and ensure that insurers are complying with the order, the CDI also requires that w/in 60 days, insurers file a report w/the dept. detailing the actions they have taken or plan to take to refund premium. Details on the required content of the report are in CDI Bulletin 2020-03. Within 120 days of the April 13 date of the order, insurers must notify each affected policyholder of the amount of the refund; send a check, premium credit, reduction, return of premium, or other appropriate premium adjustment; and note the basis for the adjustment, including a description of the policy period used to determine the premium refund and any changes to the policyholder’s classification or exposure basis. Insurers must also offer each insured a chance to provide their individual actual or estimated experience.

Potential Delays in Scheduled Minimum Wage Hikes. Four years ago, Gov. Brown signed SB 3, mandating a series of incremental increases in the state’s minimum wage intended to push the state’s minimum up from the $10/hr level that was in effect in 2017 to $15/hr for “large” employers (those w/26 or more employees) by 2022, and to $15/hr for all employers in 2023. After that, the minimum will be adjusted annually under a specified formula. But before he signed it, Brown insisted om a provision giving the governor the right to put a scheduled increase on hold in the event of a significant economic downturn. Specifically, the law allows an increase to be delayed if the governor’s finance director determines that unemployment has risen and sales and tax receipts have fallen; or estimates that the state budget is projected to run a deficit either in the current fiscal year or in the near future. Given the toll the pandemic has taken on the Calif economy employers are pushing for Gov. Newsom to invoke his right to delay next year’s scheduled increase. Labor leaders, on the other hand, are ready to fight any delay, arguing that such a delay would further damage low-income workers who have been most hurt by the COVID-19 crisis. Newsom’s decision is expected by July.

No Mid-Year Rate Filing. At the end of March, WCIRB’s Actuarial Committee voted against recommending a mid-year advisory pure premium rate filing. Q1 2020 claims data indicated relatively stable claim frequency, settlement and lien volume, but the data, which likely would not have warranted any change in the pure premium rates, was compiled before the COVID-19 shelter in place order took effect. Though there may be a significant downward impact on WC claim frequency in the short term, that would be countered by shrinking payroll, a change in the mix of jobs and claims, statutory and regulatory changes, and increased litigation. Given the fluid situation the Actuarial Committee decided to wait for things to stabilize before recommending any changes to the premium rates, though the recommendation was still awaiting approval by WCIRB’s Governing Committee.

Big Drop in the Price of Calif WC’s #3 Anti-Inflammatory. TWC payers with Meloxicam (Mobic) in their WCMSAs, which is likely a growing number since Meloxicam is prescribed both for osteoarthritis and increasingly, as a non-opioid analgesic and is now the 3^rd most common NSAID in Calif WC. CWCI’s interactive drug tool shows that in the first half of 2019, Meloxicam accounted for 12% of anti-inflammatory scripts dispensed on Calif WC claims. But, because Meloxicam is relatively cheap, it accounted for just under 3% of anti-inflammatory payments. When used for osteoarthritis, Meloxicam dosages typically start at 7.5 mg/day, but daily doses may be increased to 15 mg to reduce pain, joint swelling, and stiffness in joints. Recently, the average wholesale price for 7.5 mg Meloxicam dropped from $2.75 to $0.05 and the AWP for the 15 mg dosage dropped from $4.25 to $0.05. The good news for WC payors is that as of 4/1/20, the $0.05 price became available in CMS’ Workers’ Comp Medicare Set-Aside (WCMSA) Portal. To put this price cut into perspective, Optum Settlement Solutions calculates that a WCMSA agreement that allocates for 30 15-mg Meloxicam/month over a 20-year life expectancy will decrease by $30,240; and an agreement that allocates for 60 7.5-mg Meloxicam/month over a 20-year life expectancy will decrease by $39,312. Bottomline: the new lower price should be used for any WCMSA submitted for CMS’ review and approval, as well as for those that were previously prepared but not submitted to CMS for review and are still being prepared for settlement negotiations.

CWCI Offers 2020 Annual Meeting Presentations Offered as Via Webinar. Three presentations developed for CWCI’s 2020 Annual Meeting were recorded and made available free to Institute members. The 90-minute program “The Future Ain’t What It Used to Be: COVID-19 Intersects with Liability, The Economy, & Access to Care,” was initially presented on 3/24/20, then made available as an on-demand webinar through April 24. In the first session, CWCI General Counsel Ellen Sims Langille provides a brief overview of the potential workers’ compensation liability for COVID-19 claims, discussing the burden of proof that most workers would face in meeting AOE/COE standards of compensability, even in situations where they may have been exposed to the virus at work. The session explores cases applicable to cold and flu, Valley Fever, and presumption of compensability. The second presentation features Dr. Mark Schniepp, Director of the California Economic Forecast, who shares his thoughts on the current economic outlook for California and the U.S., including his data and observations on the impact of COVID-19 on the California and national economies and what the future may hold. The third presentation by Dr. Richard Riemer, Senior Associate Dean at the Touro University of Osteopathic Medicine and Medical Director for the Schools Insurance Authority reviews ongoing issues in access to care, the development of the next generation of occupational medicine providers, and how COVID-19 is exacerbating the stress points in our local and national healthcare system.