Q2 – 2022 – August 4, 2022
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Research COVID-19/Non-COVID-19 App Updated With Claims Data Reported a/o 6/13/2022. CWCI’s COVID-19/Non-COVID-19 Interactive Claims Data App with data on work injury and illness claims through May of AY 2022 valued as of June 13 found 268,261 COVID claims with dates of injury through May 31 (1,455 were death claims). Since the pandemic was declared in March 2020, 1,546,784 workers’ comp claims have been reported to the WCIS, of which 17.3% have been COVID-19 claims. Among other findings, the update noted dramatic fluctuations in the number of reported COVID claims had continued for 6 months as the Omicron wave began to build in December, pushing the monthly COVID claim tally up to 23,873 reported claims (vs. 3,565 claims in November), then crested at a record 53,892 COVID claims in January. The COVID claim count then plummeted to 5,192 claims in February and 1,295 claims in March as the Omicron surge subsided. But as Omicron variants began to spread this spring, COVID claim volume began to surge again, climbing to 2,302 claims in April and 5,431 claims in May. CWCI’s ultimate claim projections show the same sharp fluctuations over the past 6 months, with the latest projections showing the COVID-claim count will be 24,350 for December; 54,970 for January; 5,438 for February; 1,334 for March, 2,532 for April, and 7,060 for May. If the December through May projections hold, COVID claim volume for the 6-month period will be up 27.3 percent from the corresponding year-earlier total, which was when the second wave of COVID claims hit the state and then receded. Executive Memo (6/20/22) (members only) Impact of the New Med-Legal Fee Schedule on the Utilization and Payment of Med-Legal Services. A CWCI study compares the utilization and reimbursement of med-legal services rendered before and after the new schedule’s April 1, 2021 effective date, using data from AY 2015 through 2021 claims, with service dates limited to January through October of each year to account for the timing of billing and payment. The results indicate that replacing the three levels of evaluations with a single comprehensive evaluation reimbursed at a flat fee of $2,015 likely had the biggest impact on average payments. Basic evaluations (previously billed under ML102) accounted for about 40% of the evaluations paid under the new ML201 comprehensive service code, and the new flat fee increased the payment for these services by 222%. More complex evaluations (previously billed under ML103) represented 18% of the new ML201 evaluations, and payments for these services increased by 115%. Overall, the findings show payments for med-legal services have risen sharply under the new fee schedule, with the increase in aggregate med-legal fees in the first seven months after the schedule took effect far exceeding the 25% increase anticipated by the DWC. Executive Briefing (6/23/22) (members only) Changes in the Distributions of California Workers’ Comp Prescription Drugs by Volume and Payments, 2012 – 2021 Fill Dates CWCI’s analysis of service-level data on prescription drugs dispensed to California injured workers from 2012 through 2021 identified changes in the rankings of the top 10 therapeutic drug groups based on the number of prescriptions and total amounts paid. The analysis, based on updated figures from CWCI’s Prescription Drug Interactive Application, found that the distribution of workers’ comp prescriptions by therapeutic drug group, and the payments for those medications, has shifted dramatically over the past decade, with opioids becoming far less prevalent and anti-inflammatory drugs (NSAIDs) accounting for an increasing share of the prescriptions and the total drug spend within the workers’ comp system. Bulletin (6/8/22) (members only) California WC DWP and Rankings of the Largest Insurers for 2021. CWCI analyzed NAIC data on California workers’ comp direct written premium for 2021 and calculated the rankings for the 27 WC insurers that had at least a 1% share of the market, including their year-to-year change in premium volume and their change in market share. The Institute noted that with hundreds of thousands of Californians returning to work last year covered payroll rose sharply, which more than offset the decline in insurers’ average charged rates, so total DWP in the system edged up from $10.1 billion in 2020 to $10.4 billion in 2021 – the first increase since 2015 – as three of the top 5 largest insurer groups saw their total DWP increase by more than 10 percent. Bulletin (6/8/22) (members only) CWCI Claims Monitoring Interactive Tool. An interactive application that shows average paid indemnity and medical losses on claims from AY 2009 through December of AY 2021 at nine levels of development (with payments valued through December 2021). The tool provides results for indemnity claims or for all claims, allows data to be viewed for specific industries and regions, and segments the medical payment data into medical treatment, pharmacy & DME, medical-legal services & medical cost containment expenses. Interactive Tool (6/7/22) (members only) Prescription Drug Interactive Tool. An online application that can be used to examine and compare industrywide prescription drug data derived from prescriptions dispensed to injured workers between January 2007 through December 2021. This tool can be used to view statewide or regional prescription drug data either for all claims or for just indemnity claims, for open and/or closed claims; for specific drug groups; by opioid drug name; for generic and/or brand drugs; for specific industries; and for specific accident years or service years. Interactive Tool (6/7/22) (members only) IRIS Regional Scorecard Interactive Tool. An interactive application based on updated IRIS data on AY 2008 through December 2021 claims from 8 different regions of the state that can be used to compare regional results to statewide data on key metrics, compare results between specific regions, and identify regional and statewide trends that have developed. Interactive Tool (6/7/22) (members only) IMR Update Through Q1 2022. CWCI’s review of IMR outcomes, based on data from nearly 1.2 million IMR final determination letters issued from January 2015 through March 2022 showed that the number of independent medical review determination letters issued in response to California workers’ compensation medical disputes fell to a new low in 2021, largely due to the ongoing decline in prescription drug disputes and a statewide decline in claim volume during the first year of the pandemic. Data from the first quarter of 2022 showed that the decline in IMR was continuing, as the letter count from the first three months of 2022 was down 6.7 percent from the corresponding period of 2021, falling to a record low 30,823, with the 9,555 letters issued in February representing the lowest monthly output in the past four years. Bulletin (6/6/22) (members only) Detailed Statistics (6/6/22) (members only) COVID Claims Hit Self-Insureds. CWCI’S COVID-19 Interactive Application shows that in the 25 months after the pandemic was declared, more than a quarter million COVID claims were reported, and those claims were nearly evenly split between self-insured and insured employers. By comparison, over that same period, self-insured’s accounted for 32.2% of non-COVID claims, which is more in line with their share of Calif’s work force. The prevalence of COVID claims among self-insureds is somewhat expected given the number of “essential workers” employed by self-insured entities, many of whom worked throughout the pandemic, and many of whom have COVID presumptions. But drilling down further on the self-insured/insured breakdown of COVID claims reveals a notable change between the first and second years of the pandemic and more recently. Comparing COVID claims from the first year shows that 43.6% of the claims involved self-insured employers vs. 56.4% involving insured employers; but in year 2 of the pandemic the distribution shifted, with self-insureds accounting for 59.6% of the COVID claims vs. 40.4% for insured employers. Self-insureds’ share of COVID claims edged up to 60.5% during the Omicron wave (Dec 2021-Jan 2022), then peaked at 66.8% in Feb 2022 as the wave receded and COVID claim volume statewide fell more than 90%. The distribution of claims by industry shows the shift in the mix of COVID claims toward self-insured employers coincided with the increasing share of claims coming from public safety and government workers, which rose from 17.5% of the COVID claims in year 1 of the pandemic to 33.5% in year 2. On the other hand, once vaccinations became widely available in year 2, health care workers’ share of the COVID claims fell from 31.3% to 22.9%. More recently, the public safety/government sector’s share of the COVID claims rose to 35% during the Omicron surge, then peaked at 38.3% in February 2022. Executive Briefing (5/24/22) (members only) COVID Claim Volume Indicates a Spring Surge. The May 16 update to CWCI’s COVID-19/Non-COVID-19 App encompassing 2.3 million claims with dates of injury from January 1, 2019 through May 16, 2022, showed that the monthly tally of reported COVID claims surged to an all-time high of 53,098 in January 2022, then plummeted more than 90 percent in February and another 75 percent between February and March before rebounding to 1,805 claims in April, fueled by the spread of infections involving Omicron variants and subvariants. The Institute projected there would ultimately be 2,292 COVID claims with April injury dates, which would be an increase of 65.2 percent from the 1,387 claims projected for March, though that total would still be 95.8 percent below the all-time high of 54,425 COVID claims projected for January. Bulletin (5/18/22) (members only)
Statutory/Regulatory Update on WC Bills Heading into Summer Recess… With the July 1 summer recess looming, several WC bills remained alive, while one, SB 213, which would have created a presumption that specified conditions including musculoskeletal injuries, infectious diseases (including COVID) and PTSD are compensable for hospital workers providing direct patient care, failed to get out of committee. Among WC measures that were still alive: SB 1127, which would shorten the time employers have to investigate claims for conditions that are presumed to arise out of employment. The bill was amended in June to allow employers 75 days instead of the originally proposed 30 days to make a liability determination on the first responder presumption claims; remove a provision that would have reduced investigation periods for all other claims from 90 to 60 days; extend the maximum TD period for first responders with presumptive cancer claims from the current 104 weeks w/in 5 years of the date of injury to 240 weeks with no limit on the time from the date of injury; and reduce the cap on a proposed penalty for unreasonable denial of a first responder presumption claim from $100K to $50K. Also moving forward are SB 1002 which would allow employers to add licensed clinical social workers to their WC MPNs, while also adding the services of a social worker to the list of services employers must provide injured workers; AB 1751 which would extend the COVID-19 outbreak and first responder presumptions from 1/1/23 to 1/1/25; AB 2614 which would call for a CHSWC study on labor contractors use of staffing agencies to reduce WC premiums; and AB 2848 which would extend until 7/1/23 the deadline for DWC to complete a study on the impact of exempting certain treatments provided by MPNs w/in the first 30 days from prospective UR. The Assembly Ins. Committee analysis says the author intends to amend AB 2848, so it is a potential vehicle for a larger WC reform package. Executive Briefing (6/23/22) (members only) New Copy Service Fee Schedule Takes Effect on 7/15… DWC announced in mid-June that long-awaited revisions to the Copy Service Fee Schedule regs have been approved by OAL and would take effect on July 15. Under the new schedule, the base fee for a set of records (up to 500 pages) will increase from $180 to $230, with a rate of 10 cents per page beyond that. Instead of paying tiered rates for an additional set of records ordered after 30 days, reimbursements for additional sets will be set at a flat rate of $10. Claims administrators will also be subject to a surcharge of 25% of any portion of a bill not paid or contested w/in 30 days of receipt. Bulletin (6/9/22) (members only) News Release (6/9/22) (public) Executive Briefing (6/23/22) (members only) CDI 2022 WCAC Data Call Deadlines. On May 24 the Dept of Insurance issued its annual notice to workers’ comp insurers advising them of their 2022 adjuster certification and medical bill review data (WCAC-2022) reporting obligations required under Ins. Code §11761 and CCR, Title 10, Chapter 5, Subchapter 3, §§2592–2592.08. CWCI issued a reminder to members noting that insurers must return the WCAC-2022 Data Workbook and affidavit by Wednesday, July 6, 2022, although CDI will allow companies to request a 5- or 10-day extension for submitting the data workbook if they submit an extension request by Friday, June 24. Extension requests should include the company name and NAIC number. The Institute included a circular letter that was attached to the notice and that included more details and reporting instructions. WC Bills Move Forward… Several WC bills advanced through the state Senate and Assembly fiscal committees last week, prior to the May 20 deadline. Most notably, SB 1127, this year’s version of SB 335, which would reduce the time employers have to investigate claims for most injuries from 90 to 60 days and create a $100K penalty for unreasonable denials of some first responder claims. In addition, the Assembly Appropriations Committee passed several WC bills that originated in that chamber including AB 1681 which would allow local DAs to meet w/insurers and S-I employers and the CDI to discuss suspected fraud; AB 1751 which would extend the COVID presumption created in 2020 (set to expire on 1/1/23) until 1/1/25. The bill would also presume that first responder COVID claims are compensable if not denied w/in 30 days and presume that claims by other workers are compensable if not denied w/in 45 days; AB 2614 which would require CHSWC to study the use of staffing agencies to inappropriately reduce WC premiums; AB 1643 which would create a committee to study how extreme heat impacts workers, businesses and Calif’s economy; and AB 2848 which would extend until 7/1/23 the deadline for DWC to complete a study on the impact of exempting certain treatments provided by MPNs w/in the first 30 days from prospective UR. Executive Briefing (5/24/22) (members only) Will Social Workers Be Added to MPNs? Another WC bill that advanced in early May was SB 1002, which would allow licensed clinical social workers to join WC MPNs. Proponents say the bill would allow social workers to assist w/the intake, early screening, and referrals of a growing number of injured workers w/mental health claims, which have increased during the pandemic. SB 1002 was passed unanimously by the State Senate on May 5 and was referred to the Assembly Ins. Committee for additional hearings. Executive Briefing (5/24/22) (members only) WCIRB’s Pure Premium Rate Filing. WCIRB’s Governing Committee authorized a Sept. 1 Pure Premium Rate Filing calling for a 7.6% increase in advisory pure premium rates. The Actuarial Committee noted a sharp increase in 2021 claim frequency; a projected 1.0% increase in indemnity severity and a projected increase of 1.5% in medical loss ratios but increased payroll and projected improvement in the LAE ratio (32.1% vs. 33.5% in the year earlier rate filing) allowed for a relatively minor increase from the recommended avg. advisory pure premium rate per $100 of payroll compared to the rate recommended a year ago ($1.55 vs $1.54). In addition to reflecting insurer experience through the end of 2021 (excluding COVID claims) the recommended rate includes an average 0.5% provision for the projected cost of COVID claims to be incurred on policies after the start of September, which would bring the average rate to about $1.56 per $100 of payroll. At a hearing, WCIRB Chief Actuary Dave Bellusci noted that including COVID claim costs should provide an incentive for employers to take steps to protect their employees. Slides presented to the Governing Committee showed COVID claim costs for AY 2020 were about $600 million — $100 million below the estimate included in the Bureau’s Jan. 1. 2021 rate filing. That translated to 6.1% of total losses and LAE in AY 2020. Estimated COVID claim costs for AY 2021 of $300 million were also well below WCIRB’s $520 million projection, which works out to 2.4% of the estimated losses and LAE for AY 2021. The Committee rejected a slight rate cut (just over 2%) recommended by the actuary for public members of the panel. When approving WC rates in the past, Commissioner Lara has split the difference between the rates recommended by the public members’ actuary and those recommended by the Governing Committee. The rate filing is posted here and the slides to the Governing Committee are here. Executive Briefing (4/28/22) (members only) DWC Makes Rules for Electronic Service of ML Reports Permanent. In mid-March the DWC announced that rules allowing electronic service of medical-legal reports rather than requiring service by mail have been made permanent. The rules had been in effect for nearly two years during the pandemic, during which time the Division determined that allowing electronic service reduces printing and postage expenses, results in faster delivery of ML reports, and expedites delivery of benefits to injured workers. All documents related to the adoption of the revised reg (CCR 36.7) can be found on the DWC rulemaking page, here. Executive Briefing (4/28/22) (members only) Calif Revises Workplace Pandemic Rules Again. California employers will see more changes to coronavirus prevention procedures under new Cal/OSHA rules adopted in late March that will apply in almost every workplace in the state. Cal/OSHA’s COVID-19 emergency temporary standards (ETS) take effect on May 6 and will remain in effect through the end of 2022. Many of the rules are tied to Dept of Public Health guidelines. One of the most controversial elements is the requirement that employers pay a workers’ wages and maintain their seniority and other benefits for as long as they can’t work because of a COVID exposure or infection, unless the employee is paid disability or the employer can prove the close contact wasn’t job related. This differs from the state’s sick leave law included in SB 114, which applies only to companies with 26 or more employees and expires Sept. 30. That law provides employees up to one week of paid time off if they get coronavirus or are caring for a sick family member, and a 2nd week of paid sick leave if they or family members test positive. But with approval of the Cal/OSHA ETS, employers must still pay employees who have a work-related COVID exposure the Cal/OSHA sick leave (100% of their wages until they can return to work) through 2022. Employers have 2 options for dealing w/employees who come in close contact during a COVID outbreak: the employee must either test negative, or if they decline a test, they are given a week off w/pay, which employers complained creates an incentive for workers to not get tested. Other provisions in Cal/OSHA’s revised ETS: no distinctions in the treatment of vaccinated and unvaccinated employees; a broader definition of a COVID-19 test, which will now include both self-administered and self-read tests if the results can be verified; changes to the definition of what constitutes a face covering; where masks are required; elimination of cleaning and disinfecting procedures; a requirement that symptomatic employees be tested regardless of vaccination status; workers who test positive but remain asymptomatic or whose symptoms resolve can return to work after the 5th day; workers who test positive and have symptoms that are “not resolving” (not defined in the reg) may return only after 10 days or after their symptoms resolve; partition requirements have been replaced with a requirement that employees maintain a physical distance of 6 feet or as much distance between persons as feasible; and testing will be “required” (rather than simply “made available”) for major COVID-19 outbreaks (20 positive tests in 30 days). Executive Briefing (4/28/22) (members only) Fed-OSHA Form 300A Enforcement. Fed-OSHA announced a program to identify and cite employers who fail to submit Form 300A (the summary or workplace injuries and illnesses that must be posted each year from Feb through April) via its Injury Tracking Application (ITA). Companies w/250 or more employees and those in specified high-risk industries must submit the summaries annually. The new Enforcement Program will match newly opened inspections against a list of potential ITA non-responders and refer all matches to local OSHA offices. If the area office determines that the establishment on the list is the same establishment where the inspection was opened, OSHA will issue citations for failure to submit OSHA Form 300A Summary data. Executive Briefing (4/28/22) (members only)
Legal Will the Supreme Court ‘Just Say No’ to WC Marijuana. In May, the U.S. Solicitor General issued a 19-page amicus brief urging the U.S. Supreme Court not to jump into the debate, noting that while dozens of states have eased restrictions on medical marijuana, it remains illegal under the Controlled Substances Act so possession is still a crime under federal law and “A state law that requires a 3rd party to subsidize such conduct is preempted by federal law.” At issue are 2 cases brought by Minnesota workers who use medical marijuana for WC injuries and want their employers to pay for it. WC judges in Minnesota granted their requests, but were reversed by the MN Supreme Ct. The Solicitor General’s brief noted that “If states could enforce laws compelling third parties to subsidize federal crimes, they could directly undermine congressional determinations.” Attorneys for the injured worker in the 2nd case filed a Petition for Writ of Certiorari urging the Court to “provide crucial guidance” on the WC issue, noting that parties in that case had stipulated that their client’s use of marijuana complied with state law and was “reasonable, medically necessary, and causally related to her work injury, as required to support a WC award.” Ultimately the justices may take their cue from the Solicitor General who advised that: 1) “Given the novelty of the issues, this court would benefit from further development of the relevant preemption questions in the lower courts before potentially addressing them itself;” and 2) “Additional issues surrounding medical marijuana and workers’ compensation should be left to the legislative and executive branches.” Executive Briefing (5/24/22) (members only)
Other Total DWP Declined in 2021, Insured Claim Frequency & Combined Ratio Rose. WCIRB’s Quarterly Report on Insured Experience as of 12/31/21 shows total DWP fell 2% from $14.0 billion in 2020 to $13.7 billion last year, while the 2021 premium total was down 14% from the 2019 level and 24% below 2016’s record $18.1 billion. Last year’s decrease was fueled by the continued decline in insurers’ average charged rate per $100 of covered payroll, which fell to $1.81, down 7% from $1.94 in 2020, more than offsetting the increase in covered payroll that occurred as roughly a million Californians rejoined the workforce following the pandemic shutdown. Executive Briefing (6/23/22) (members only) CDI Schedules Virtual Hearing on Proposed Advisory Pure Premium Rate Increase. The Dept of Insurance (DOI) will hold a virtual public hearing Tues., June 14 to hear testimony on WCIRB’s recommended 7.6% increase in the advisory pure premium rate. WCIRB’s proposed rate hike would increase the average pure premium rate to $1.56 per $100 of payroll for policies incepting on or after Sept. 1. The DOI hearing will begin at 10 a.m. More information, including a link to register for the hearing and a copy of the rate filing, is here. Executive Briefing (5/24/22) (members only) Calif Population Drops for 2nd Year in a Row. the Dept of Finance reports that Calif lost 117,552 residents in 2021 (-0.3%), only the 2nd decline since 1900, though that was less than in 2020 when the state lost 182,083 residents (0.46%). The report cites a slowdown in the birth rate while deaths increase as Baby Boomers age; a surge in COVID deaths, increased out-migration and a drop in foreign immigration due to delays processing migrants. Calif’s 2021 population was 39,185,605, down from 39,538,223 in 2020, according to the Census. There have been population shifts in recent years, with the strongest growth in the Central Valley, where relatively inexpensive homes haves lured residents, as well as Yolo and San Benito counties outside the Bay Area. Since the 1990s, Calif has often lost more residents to out-migration than it’s gained, largely due to housing, but until the pandemic, the declines were offset by foreign immigration, which has slowed. Calif had a net gain of 43,300 immigrants in 2021, but that was less than a third of the average before COVID. Meanwhile, employers report worker shortages have driven up wages, and while Calif’s labor force grew by nearly 350,000 people in 2021, typically a sign of economic recovery, it was still nearly 400,000 people below the pre-pandemic high. Executive Briefing (5/24/22) (members only) Legal Committee Minutes. The Feb 10 meeting was held via Zoom. The discussion of amicus activity and case law update covered 5 cases: See’s Candies; Kuciemba; Banerjee; CCPOA (Martin); and Manuel. The Executive Committee has endorsed Institute participation in the Moot Court for Kuciemba and the Legal Committee unanimously voted for the Institute’s amicus participation in the case. Ms. Widener-Brightwell reviewed recent regulatory activity regarding WCAB Rules of Practice and Procedure, the DWC Emergency QME Telehealth regs; QME Electronic Service; the Copy Service Price Schedule; and the CMS WCMSA Policy Update. Ms. Langille led the discussion of pending legislation, which includes AB 1465, the MPN study bill; AB 1681, a bill to allow local DAs to convene fraud meetings with claim administrators; AB 1751, which will extend COVID presumptions; AB 399 the MPN Identification bill; SB 213, the hospital worker presumption bill; AB 1400, the single payer health care bill; and SB 114, the COVID Supplementary Paid Leave bill signed by the governor in February. In the update on the litigation environment, Saul Allweiss, Ms. Langille and Ms. Widener-Brightwell reported on presentations from the CAAA Winter Convention; Mr. Swedlow asked for input on QMEs providing testimony outside the scope of their practice, and Ms. Langille noted ongoing staffing shortages at the WCAB offices and WCAB chair Zalewski’s recent confirmation. Meeting Minutes (5/5/22) (members only) CWCI Seeks Paralegal/Legal Assistant. The California Workers’ Compensation Institute posted a job listing noting it was accepting applications for a Paralegal/Legal Assistant to assist with the General Counsel’s administrative activities. News Release (4/8/22) (public) 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. |