Q2 2026 – August 25, 2026

RESEARCH

New Drug Starts Showing Up in WC.  CWCI’s Feb 2025 Exec Briefing noted that Suzetrigine (Journavx), a first-in-class non-opioid analgesic, had been approved by the FDA as a treatment of moderate to severe acute pain. Suzetrigine targets sodium channels in the peripheral nervous system so pain signals are blocked at the spinal cord level before they reach the brain. With no generic version, Suzetrigine costs much more than other drugs in its class, and taken twice a day, the cost is higher than generic opioids used for acute pain, but because it comes w/o the long-term risk of addiction, it has been touted as safer and potentially less expensive in the long run for acute pain patients. Since its approval last year, Suzetrigine has been used sparingly in Calif WC, and it has not been listed in the MTUS Formulary at this point, so as an Unlisted Drug it is subject to prospective UR. CWCI’s Rx Drug App, updated through Dec 2025, shows that Acetaminophen ($9/Rx) remains the dominant non-narcotic analgesic, accounting for 95.8% of all WC Rxs in this drug group last year, while Suzetrigine represented only 0.3%, though that percentage was 0.7% for indemnity claims. But, because it is only available as a brand-name drug, the avg payment for Suzetrigine was $581/Rx, so it had a disproportionate impact on the total drug spend in its drug group. In its first year it accounted for 17.1% of all non-narcotic analgesic drug payments, and 28.4% of all payments for non-narcotic analgesics in indemnity claims, illustrating how low-volume/high-cost drugs can drive up Rx drug costs. Currently the FDA guidelines recommend a strict 30-day timeframe for Suzetrigine as it is only approved for acute pain, but WC claims organizations may see requests for longer-term, off-label use so they should be prepared to respond to those that extend beyond the FDA recommendations and monitor claims in which Suzetrigine is approved for acute pain so they can contact the medical provider if usage exceeds the FDA guidelines. For now, its formulary status and UR have limited the use of Suzetrigine, but its manufacturer is studying whether it can help manage long-term neuropathic and spinal pain which may open the door to use for long-term chronic pain. If the FDA approves it for chronic pain and it is added to the Formulary, use of Suzetrigine in could increase quickly as payers and providers continue to seek non-opioid painkillers. Given the interest in this drug and the fact that generics won’t be available for years, Suzetrigine bears watching.

Private S-I Claim Frequency Declines, But Loss Costs Don’t.  CWCI’s review of the Office of Self-Insurance Plan’s Summary of 2025Private Self-Insured Claims experience found that for the 3^rd year in a row, private S-I claim volume fell last year, dropping 2.7%, while the covered workforce was down 1.5%, so claim frequency in this sector fell to 3.83 claims/100 employees, 18.5% below the pandemic-era peak in 2022 and the lowest level since 2020. While private S-I claim frequency continued to improve, the initial loss data on the 2025 claims points to rising claim costs. Total paid losses on the 2025 claims was essentially flat, coming in at $352.4 million, but total incurred losses jumped 4.8% to $979.2 million as avg incurred losses per claim rose 7.7%, driven primarily by higher medical reserves. The Institute also found that avg paid and incurred losses were up sharply over the last 3 years: avg paid losses increased 39.0% and avg incurred losses increased 48.1%. Medical losses were the primary driver, as the avg incurred medical loss/claim climbed 55.2% from the pandemic era low noted in 2022. Bottomline: while private S-I employers are reporting fewer claims, the cost of those claims continues to trend upward.

Recent Shifts in the List of the Largest California Workers’ Compensation Insurers. For the fourth year in a row California WC direct written premium showed little change in CY 2025, coming in at about $11.8 billion, though a CWCI review of NAIC data did note recent shifts in the rankings of the largest workers’ comp insurers in the state.  

Bulletin (6/18/26) (Members Only)

Medical Inflation & Cost Drivers in California Workers’ Comp.  Based on WC medical payments from 2017-2024, this CWCI analysis found that while WC fee schedules continue to control inflation for most scheduled medical services, a growing share of treatment is being billed under unlisted codes that fall outside fee schedule pricing controls, creating a significant and expanding source of medical cost growth. Among the study’s findings:

• Avg payments for professional services rose 33.2% from 2017-2024, outpacing the Medicare Economic Index.
• Reimbursements for unlisted professional service codes more than doubled during the study period, w/their share of professional service payments rising from 5.6% to 14.4%.
• Unlisted code 97799 (physical medicine & rehab) represented nearly half of all unlisted professional service payments in 2024.
• Unlisted DMEPOS codes grew to represent more than half of all DMEPOS payments in 2024, surpassing scheduled codes for the first time.
• Med-legal costs increased sharply following implementation of the revised Med-Legal Fee Schedule, while interpreter expenses rose primarily due to increased utilization.
• Pharmacy spending continued to decline, reflecting the impact of formulary and opioid-prescribing reforms, and inpatient hospital utilization maintained its long-term downward trend.

The study concluded that while the OMFS remains effective at controlling payments for scheduled services, its influence is diminishing as more treatment is billed under unlisted codes. As use of multidisciplinary pain programs, platelet-rich plasma injections, specialized medical equipment, and other unlisted services continues to grow, policymakers and system stakeholders may face increasing pressure to address the widening gap between fee schedule-governed and market-rate pricing.

Report to the Industry (6/16/26)                      (Members Only)

Bulletin                        (6/16/26)                      (Members Only)

Press Release              (6/16/26)                      (Public)

Executive Briefing       (6/29/26)                      (Members Only)