Q2 – 2023 – July 18, 2023
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Research Updates to CWCI’s Interactive Applications Through December 2022: Claims Monitoring, Rx Drug, Regional Scorecard, and Medical Services. These four CWCI online applications, which provide data and analytic tools for CWCI members who log on to the Research section of our website, were updated with data through December 2022. In addition, the Institute’s COVID-19/Non-COVID-19 Interactive Application, providing detailed data on COVID-19 claims and comparative data on Non-COVID-19 claims, was updated every two weeks through June 12. Interactive Tool (6/30/23) (members only) Are Migraine Meds Becoming a WC Headache? A review of CWCI data from the Prescription Drug App found that although Migraine Drugs accounted for only 0.5% of Calif WC prescriptions in 2021, that proportion is up from 0.2% in 2018, while Migraine meds’ share of the total drug spend more than quadrupled from 0.4% to 1.9%. Two relatively inexpensive drugs, Sumatriptan (brand name Imitrex) and Rizatriptan (brand name Maxalt) accounted for more than 60% of the Migraine meds dispensed to Calif injured workers in 2021, but both are available as generics, so in 2021 payments for Sumatriptan averaged $77 and payments for Rizatriptan averaged $45. However, the application identified 5 other Migraine meds that have been approved by the FDA in the last 5 years that have become cost drivers in this group: Erenumab-aooe (Aimovig Autoinjector) approved in 2018; Ubrogepant (Ubrelvy) approved in late 2019; Rimegepant Sulfate (Nurtec) approved in February 2020; Fremanezumab-vfrm (Ajovy injector), approved in 2018; and Galcanezumab (Emgality injector), approved in 2018. All 5 are only available as brand drugs, and in 2021 their average payments ranged from $629 for Galcanezumab to $1,395 for Ubrogepant. Together, these drugs accounted for 26.3% of the Migraine Meds dispensed in 2021, but because of their high average payments, they consumed 62.9% of the Migraine Med total drug spend, so claims administrators and PBMs may want to keep them on their radar. Executive Briefing (6/21/23) (members only) COVID Claim Update. Good news on the COVID front as the June 12 update to CWCI’s online COVID-19/Non-COVID-19 Claim application showed COVID WC claim counts continue to trend down, as the number of reported claims w/May injury dates fell to just 841. That was just 1.9% of all claims reported for the month and represented the 5th consecutive monthly decline and the lowest number of reported COVID claims in 2 years. COVID claims for May were still coming in, but the projected total for the month was 1,245, also a low-point for the year and the lowest total since June 2021. Unlike 2022, which began with a record 56,219 COVID claims in January, plummeted in February and March, then rebounded to more than 9,000 claims in June and July, there has been no surge in COVID claims in 2023. While claim volume has declined across the board, the mix of COVID claims by industry changed, w/health care workers accounting for nearly a third of the 2023 reported claims (vs. 24.4% in 2022); while public safety/government workers’ share dropped from 32.3% in 2022 to 29.5% this year. Meanwhile retail workers’ share of the COVID claims fell from 10.9% in 2022 to 7.1% so far this year, while education workers’ share increased from 3.3% to 8.1%. CWCI continues to update its COVID-19/Non-COVID-19 app on a biweekly basis. Executive Briefing (6/21/23) (members only) Private Self-Insured Claim Volume Up But Paid & Incurred Losses Are Down. Last year we noted a shift in the mix of COVID claims between insured and S-I workers that began in the 2nd year of the pandemic (March 2021 through Feb 2022) when S-I’s share of the COVID claims hit nearly 60%. That shift continued as COVID claim volume rose to a record 56,219 claims in January 2022, w/S-I’s share of the COVID claims finally peaking at 66.8% in February 2022. But for all of 2022, S-I employers still accounted 61.2% of the 112,298 reported COVID claims. Nearly 1/3 of those involved government and public safety workers, while health care and retail workers – many working for private S-I employers – together accounted for about 35% of the 2022 COVID claims. Those claims, which often have little to no medical expense and tend to be relatively inexpensive, were evident in the state’s initial summary of CY 2022 private S-I claims experience released in June. Given the influx of low-cost COVID claims, CWCI’s found that even though private S-I claim volume was up 11.5% in 2022 — including an additional 7,314 indemnity claims – total paid losses fell 1.2% to $311 million, as private S-Is’ avg paid medical fell 14.3% and avg paid indemnity fell 8.7%. Likewise, total incurred losses fell 3.3% to $811.8 million, as avg incurred medical losses fell 15.9% and avg incurred indemnity fell 9.8%. Executive Briefing (6/21/23) (members only) Bulletin (6/19/23) (members only) News Release (6/19/23) (public) An Analysis of AB 1213’s Proposed Change to the 104-Week TD Cap. A CWCI analysis examining the legislative proposal to alter the TD cap by excluding TD that is paid or due from the UR treatment denial date to the date of the treatment authorization if the denial is overturned by IMR or the WCAB. The analysis considers the percentage of injured workers that would be affected by the proposal (less than 0.3%) in light of the required IT costs to update claims systems and the ongoing administrative costs for manual processes to identify and track claims with TD payments and UR and IMR activity. Executive Briefing (6/21/23) (members only) Impact Analysis Report (6/14/23) (public) Bulletin (6/14/23) (members only) News Release (6/14/23) (public) CWCI Summary of NAIC Market Share Report. Continued growth in the state economy last year led to an increase in WC covered payroll, so despite another decline in insurers’ average charged rates, total direct written premium increased for the second year in a row, climbing from $10.4 billion in 2021 to $11.6 billion in 2022, slightly above the pre-pandemic level recorded in 2019. WC insurers’ average charged rate fell 7% to $1.68 per $100 of covered payroll last year, the lowest level in decades according to the WCIRB’s quarterly report on insurer experience valued through Q4 2022. However, the 2022 market share report from the National Association of Insurance Commissioners (NAIC), posted this week by the Calif Department of Insurance, shows that as premium rates continued to decline, rising employment and increased wages pushed up covered payroll, so total direct written premium jumped by $1.2 billion to $11.6 billion, up 11.5 percent compared to 2020. The Institute also used the NAIC data to rank the top WC insurer groups based on DWP, and noted the year-to-year change in their rankings. Bulletin (6/8/23) (members only) The Costliest Opioid in Calif WC. Even w/the decline in the use of opioids in Calif WC, data from CWCI data shows Opioids were still the 3rd most prescribed drug group in 2021, accounting for 9.4% of all prescriptions dispensed to injured workers that year. But because the most heavily prescribed Opioids were cheap meds like hydrocodone/acetaminophen (Vicodin), tramadol HCl (Ultram), and oxycodone/acetaminophen (Percocet), all of which are available as low-cost generics, the avg amount paid for Opioid prescriptions in 2021 was only $53 — half of the all-time high of $107 in 2014. Notably, the #1 Opioid in terms of total drug spend was buprenorphine, which is used for severe pain and to diminish the effects of withdrawal and reduce overdoses for patients w/Opioid Use Disorder who are being weaned off other Opioids via Medication-Assisted Treatment (MAT) plans. In 2021, brand varieties accounted for 42% of the buprenorphine dispensed in Calif WC, w/payments averaging $594, more than triple the $195 avg for generics. That drove the overall avg payment for the drug up to $363. Buprenorphine comes as a tablet, which tends to be less expensive, or as a film or patch, where depending on the quantity dispensed, avg payments run from a few hundred dollars to over $1,000 per prescription. With buprenorphine now widely used for MAT plans lasting 6 to 12 months, it accounted for 5.2% of the Opioids dispensed in 2021 (5th among all Opioids), but w/its high avg payment, it was #1 in terms of the Opioid drug spend, consuming 35.4% of all Opioid payments — far ahead of Vicodin, which represented 47.9% of the 2021 WC Opioid prescriptions but w/an avg payment of $18, consumed only 16.2% of the Opioid dollars. Executive Briefing (5/30/23) (members only) Insurer Experience Through Q4 2022… The WCIRB has released its Quarterly Experience Report on insurer experience valued through the end of 2022. Highlights of the report include: • Spurred by higher wages and the economic recovery, total DWP gross of deductible credits increased to $15.7 billion last year, up 14% from 2021 Executive Briefing (5/30/23) (members only) Cost-Driver Medications in the Top California WC Drug Groups: Part 2, Dermatologicals, Opioids, and Antidepressants. The second in a 3-part research series on workers’ compensation medications that represent a relatively small share of the dispensed prescriptions within their therapeutic drug group, but due to their high average reimbursements, account for a disproportionate share of the total drug spend within their group. Part 2 of the series focuses on Dermatologicals, Opioids, and Antidepressants. Report to the Industry (5/22/23) (members only) Bulletin (5/22/23) (members only) News Release (5/22/23) (public) Resolving Medical Disputes: Factors that Drive IMR Volume and Outcomes in the California Workers’ Compensation System. A CWCI Report to the Industry provides an in-depth look at the dispute resolution process in the California workers’ compensation system and examines IMR activity and outcomes from 2014 through 2022. In addition, slides containing detailed IMR data though Q4 2022 were posted in the IMR section under the Research tab on our website. Executive Briefing (5/30/23) (members only) Report to the Industry (5/12/23) (members only) Bulletin (5/12/23) (members only) Detailed IMR Statistics (5/12/23) (members only) News Release (5/12/23) (public) Update on COVID-19 Death Claims. A recent update to CWCI’s COVID-19/Non-COVID-19 Claim App shows that that during the 1st year of the pandemic (AY 2020), the number of reported death claims in the state soared by 176% from 748 to 2,064 claims, w/COVID accounting for over half of those claims (51.6%). With the introduction of vaccines, COVID death claims declined in 2021, but there were still 478 claims, which was 35.9% of all work-related deaths claimed that year, so the total number of fatality claims remained 78.1% higher than the pre-pandemic total of 748 from 2019. The death claim data for AY 2022 and the first quarter of 2023 is relatively green, but the total number of COVID-19 deaths appears to have dropped sharply, with 66 COVID death claims reported for last year (9.4% of all death claims), and just 2 COVID death claims in the Q1 of this year (1.7% of job-related death claims). While everyone hopes the downtrend will continue, it is hard to ignore that COVID deaths have accounted for 1,611 Calif WC death claims (38.2% of the total) since the pandemic began. With the potential emergence of new variants and the impact of long-COVID still largely unknown, CWCI will continue to monitor COVID death claims w/in the system. Executive Briefing (4/25/23) (members only) COVID Claim Update as of April 3. The April 3 update to CWCI’s COVID-19/Non-COVID 19 Claim Application showed the number of COVID-19 claims reported to the DWC surged this winter, though the increase paled in comparison to the prior two years, and since New Year’s the number of COVID claims – with the exception of claims from the education sector – has been declining. CWCI’s Appl has data on 2.1 million California WC claims from March 2020 through March 2023, of which 316,227 (15%) are COVID claims, including 1,605 COVID death claims. A review of reported COVID claim counts for the most recent six-month period (through March 2023) showed that after falling to 1,553 claims in October (the second lowest total for all of 2022), the COVID claim volume more than doubled to 3,354 in November, then peaked at 4,680 in December, when COVID accounted for 9.8 percent of reported claims. COVID claim volume began to decline after New Year’s, with the April 3 data showing 2,853 reported cases for January (3,126 projected), 2,538 reported cases for February (2,850 projected), and 980 reported claims for March (2,850 projected). Bulletin (4/18/23) (members only)
Statutory/Regulatory WCIRB Rate Filing… On April 18, WCIRB’s Governing Committee approved a proposed rate filing based on loss and loss adjustment experience as of 12/31/22 calling for an avg 0.3% increase in advisory pure premium rates for policies incepting o/a 9/1/23, taking the avg pure premium rate to $1.50/$100 of covered payroll. WCIRB said the proposed changes reflect lower-than-projected losses for AY 2022 claims, modestly lower loss development on earlier years, a reduced LAE provision and a slightly lower claim frequency projection. The 8 insurer members of the committee supported the 0.3% rate hike, while the 4 public members voted to support their actuary’s proposed 7.3% rate reduction, which used a different methodology to calculate indemnity and medical cost trends. The filing was scheduled to be submitted to the Dept of Ins. by the end of April after which CDI would schedule a hearing and post a Notice of Proposed Action and Public Hearing. Executive Briefing (4/25/23) (members only) FDA Revises Opioid Warning Labels… On April 13 the FDA adopted updates to the prescribing information for immediate-release and extended-release/long-acting opioid painkillers, including a new warning that opioid use can lead to increased pain and sensitivity to pain. Among the drugs subject to the new labeling mandate are Oxycodone, (e.g., Oxycontin, Xtampza XR) and Tapentadol HCL (Nucynta and Nucynta ER), which CWCI highlights in its research series on low-volume/high-cost drugs. Although use of Opioids has dropped sharply, accidental exposure, addiction, and overdose remain problematic. The revised safety labels are designed to clarify appropriate patient populations for Opioid treatment, appropriate dosages and methods of administration, and to update warnings about the risks of Opioid use. Executive Briefing (4/25/23) (members only) Heads Up on WCAC Data Call. In late May the Dept. of Ins. sent all insurers admitted to transact WC in the state a reminder of their 2023 WC adjuster certification & medical bill review data (WCAC-2023) reporting obligations mandated by I.C. §11761 and CCR Title 10, Ch 5, Subchapter 3, §§2592–2592.08. This year, insurers were required to email the WCAC-2023 Acknowledgement of Receipt Form back to the CDI by 6/9/23; while the WCAC-2023 Data Workbook was due by 7/7/23 — the Friday of the 4th of July week. CDI allowed companies to request a brief extension for submitting the WCAC-2023 data workbook if requests were emailed by 6/23. CWCI posted the circular letter attached to the notice which had more details and instructions. Executive Briefing (5/30/23) (members only) Executive Memo (5/26/23) (members only)
Legal CWCI Makes 2023 Case Law Update Program Available On-Demand. On May 23, CWCI presented the 25th Annual Calif WC Case Law Seminar as a live and on-line event. The seminar was recorded and in June the Institute made it available to member company claims and legal staff as an on-demand webinar so they could view the 5-hour program either in part or in total at their convenience any time within two months. CWCI received certification to offer 5.0 hours of MCLE credits (including 5.0 hours of specialization credits in WC) from the State Bar of Calif for this program and will also provide registered attendees with certificates of attendance upon completion of the program which may be submitted to the Assn of Hearing Representatives of Calif and for verification of hours to apply toward the Dept of Insurance WC claims adjuster certification requirements. Executive Briefing (5/30/23) (members only) Executive Memo (5/30/23) (members only) CWCI’s 2023 Case Law Seminar. CWCI will conduct its 25th annual California Workers’ Compensation Case Law Seminar on Tuesday, May 23 from 9 a.m. to 3:30 p.m. The 2023 program will be held as an in-person session at the OCC Conference Center, 500 12th Street, Suite 105, Oakland CA 94607 and simultaneously presented as a live, online video broadcast. The Conference Center is adjacent to 12th Street BART, on the upper level of the Oakland City Center complex. To ensure adequate space for social distancing, the number of in-person seats is limited, and they are available on a first-come / first-served basis, so those wishing to attend in person should register early. Executive Briefing (4/25/23) (members only)
Other Member Advisory: Mark Webb: The Institute sent out a notice to the membership that our long-time colleague and friend Mark Webb, one of the most knowledgeable and active workers’ compensation industry advocates in Sacramento, had passed away after a battle with cancer. Executive Memo (4/10/23) (members only) On-Demand Annual Meeting. CWCI recorded our 59th Annual Meeting and is making it available as a free, on-demand program. Presenters included Sarah Bohn, VP of Research & Sr. Fellow at the Public Policy Institute of Calif, who discussed the impact of the evolving Calif economy and demographic shifts on the state’s industries and workforce; Dave Bellusci, WCIRB Chief Actuary on the intersection of the Calif economy and WC rates; Legislative Advocate Jason Schmelzer and CWCI General Counsel Sara Widener-Brightwell on the political environment and key players in 2023 reform efforts; and CWCI Sr. VP of Research & Operations Rena David and President Alex Swedlow who reviewed research on issues that are likely reform targets in 2023. An Exec Memo to members has further details. Executive Briefing (4/25/23) (members only) Executive Memo (4/3/23) (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. |