Q3 – 2020 – October 22, 2020
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Research COVID Claims Update through August Reported as of Sept. 21. After climbing steadily over the first 7 months of this year, the number of California workers’ comp COVID-19 claims reported to the state fell sharply in August, even after accounting for the lag in COVID-19 claim reporting, according to new data from CWCI’s COVID-19 and Non-COVID-19 Interactive Claim Application. The latest version of the CWCI app, which provides detailed information on California workers’ compensation claims from comparable periods of 2019 and 2020, contains updated data on 839,184 claims from the first 8 months of accident year (AY) 2019 and the first 8 months of AY 2020, reported as of September 21. The app shows there were 41,861 COVID-19 claims reported to the DWC — 11.2 percent of all work injury claims reported. Those claims included 224 death claims, up from 140 reported as of August 10. Even with the addition of COVID-19 claims to the 2020 total, however, overall claim volume was down 19.8 percent from the corresponding period of 2019, or 11.6 percent after factoring in projected claim development. That decline reflects the sharp drop in employment, the high number of workers now working from home, and the pandemic-driven slowdown in economic activity in the state. Bulletin (9/30/20) (members only) News Release (9/25/20) (public) IMR Volume Declines. CWCI’s latest analysis of IMR show that with the California economy battered by the pandemic, unemployment spiking and claim volume falling, the number of independent medical reviews fell sharply in the first half of this year. The Institute noted that 70,273 IMR decision letters were issued in the first half of 2020 – down 17.6% from the 85,318 letters issued in the first half of 2019. As in the past, about 40% of those letters had decisions on multiple services, but with the decline in letter volume, the number of primary service decisions fell by 19.3% from 148,069 in the first half of 2019 to 119,514 in the first half of 2020. Though IMR volume is down, the process continues to produce consistent outcomes, as IMR doctors upheld the UR physician’s modification or denial of the service in 88.8% of the IMRs in the first half of this year – up slightly from the 88.2% uphold rate from 2019. Bulletin (9/18/20) (members only) News Release (9/18/20) (public) Changes in Medical Treatment Trends After 20 Years of Incremental Workers Comp Reform. Institute research tracks changes in California workers compensation treatment patterns, including utilization and payment trends for different categories of medical services, following the implementation of major legislative and regulatory reforms enacted over the past two decades. The study has been released as a Research Note which includes background on the reforms, plus exhibits and analyses for the various service categories. A news release is in the Newsroom, and members and subscribers can log in to view a summary Bulletin as well as the full report. Research Update (9/15/20) (public) Bulletin (9/15/20) (members only) News Release (9/15/20) (public) The Unfolding Pandemic in Calif WC. CWCI’s 3rd iteration of the COVID-19/Non-COVID-19 Interactive Data App has data on 721,361 claims reported to WCIS as of Aug 24 for the first 7 months of AY 2019 and 2020, including all 36,617 COVID-19 claims from AY 2020 –10.9% of the 320,129 WC claims reported this year. The new figures show that L.A. County continues to lead the state in terms of COVID-19 claim volume with 29.5% of the statewide total — a relatively high percentage given that during this 7-month span L.A. Co. accounted for 24.7% of California’s non-COVID claims, which was similar to the 25.3% of all claims that came from the region at the same point last year. Neighboring Orange Co./Inland Empire had 24.2% of the state’s COVID-19 claims; the Central Valley had 19.5%; the 9-county San Francisco Bay Area had 15.1%; San Diego had 5.9%; the Central Coast had 4.2%; the No. Counties/Sierras had 1.2%, and 0.5% of the COVID-19 claims came from out of state. So far this year, growth patterns for COVID-19 claims – as with the virus itself – have varied by region, w/the Inland Empire/Orange Co. and Central Valley showing the steadiest growth in COVID-19 claims, while L.A. County and the Bay Area have seen more fluctuations. Executive Briefing (8/27/20) (members only) Executive Memo (8/28/20) (members only) An Initial Look at COVID-19 Death Claims. A review of the initial 168 COVID-19 death claims reported to WCIS as of August 24 yields some interesting findings:
Most COVID-19 death claims reported to WCIS as of Aug 24 came from either L.A. County, which had 67 claims, or Orange Co./Inland Empire which had 41. Beyond that, 22 of the COVID-19 death claims originated in the Central Valley, 20 came from the Bay Area, 7 were from San Diego, 6 came from the Central Coast, 4 involved out-of-state workers, and in 1 claim the location where the claim originated was unknown. Executive Briefing (8/27/20) (members only) COVID Claims Update Through July Reported as of August 10. Healthcare workers accounted for nearly 39 percent of all COVID-19 workers’ compensation claims in California in the first seven months of accident year (AY) 2020, and the latest iteration of CWCI’s COVID-19/Non-COVID-19 Interactive Data App reveals that workers in skilled nursing facilities, hospitals, and physician practices/outpatient clinics accounted for a disproportionate share of the health care industry’s COVID-19 claims. CWCI’s data app tracks COVID-19 and non-COVID-19 claims in the California workers’ compensation system using data from DWC’s WCIS database, the BLS, and CWCI’s own IRIS database. The initial version of the app released two weeks ago, was based on claims reported to WCIS as of July 6 for the first 6 months of AY 2019 as well as comparable data on claims from the first 6 months of AY 2020. The update, released this week, features data on 710,224 claims from the first 7 months of AY 2019 and AY 2020, including all 31,612 COVID-19 claims from AY 2020 recorded by WCIS as of August 10. Bulletin (8/20/20) (members only) News Release (8/18/20) (public) COVID-19 & Non-COVID Claim Interactive Application. CWCI’s interactive data tool allows users to examine data on COVID-19 and non-COVID-19 claims in the California workers’ compensation system. The first iteration of the tool, built as an online application, uses data on claims with dates of injury in the first half of 2019 and the first half of 2020, compiled from DWC’s Workers’ Compensation Information System (WCIS), the Bureau of Labor Statistics, and CWCI’s IRIS database. CWCI will expand the tool as more data on claim type and cost are released, but the first iteration offers four areas of analysis:
Breakouts: Additional COVID-19 and Non-COVID-19 claim metrics on denial rates, nested combinations of industry/region/age groups, and top industry class codes for various industry sectors. Online Tool Update (8/3/20) (members only) Bulletin (8/3/20) (members only) News Release (8/3/20) (public) Update on Pregabalin in WC… CWCI’s 3rd iteration of the COVID-19/Non-COVID-19 Interactive Data App has data on 721,361 claims rIRIS data show opioids were dispensed w/in the 1st 3 months of development in 20.2% of all 2014 claims, but after the adoption of the MTUS Drug Formulary and pain treatment guidelines that dropped to just 2.5% of all 2019 claims. As opioid use has declined, other drugs are being used to treat pain. A year ago, the FDA approved 9 generic versions of pregabalin (Lyrica), Pfizer’s high-priced, brand-name anticonvulsant, which has been increasingly prescribed as an off-label, non-opioid alternative for neuropathic pain. At the time, IRIS drug data (valued as of Dec. 2018) showed pregabalin share of Calif WC Rxs more than tripled from 0.5% in 2005 to 1.7% in 2018, and because of its high cost, payments for pregabalin soared from 1% to 12% of the total drug spend, making it the #1 WC Rx drug in terms of total cost. After the FDA announcement, several companies began distributing generic pregabalin at a fraction of the cost of Lyrica. New data from CWCI’s Rx Drug Interactive tool, updated to include Rxs dispensed through Dec. 2019, show generic pregabalin is yielding savings, as 35% of the pregabalin dispensed in Calif WC last year was generic, at an avg cost of $372 vs. $587 for the brand drug. Pregabalin accounted for 2.1% of all WC Rxs last year, but even w/the introduction of less expensive generics, it remained the #1 drug in terms of cost, consuming 11.9% of the WC total drug spend. Pregabalin is a non-exempt drug in the MTUS formulary, so it is subject to prospective UR, giving payors significant control over whether brand or generics are dispensed. Executive Briefing (7/24/20) (members only) Summary of WCIRB State of the System Data. CWCI’s review of key findings from WCIRB’s latest update on the state of the Calif WC system:
WCIRB expects the economic downturn and surges in COVID-19 and post-termination claims will have a significant impact on claim frequency for 2020. Executive Briefing (7/24/20) (members only) CWCI Claims Monitoring Interactive Tool. An interactive application that shows average paid indemnity and medical losses on claims from AY 2006 through December of AY 2019 at nine levels of development (with payments valued through December 2019). 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. Executive Briefing (7/24/20) (members only) Executive Memo (7/24/20) (members only) IRIS Regional Scorecard Interactive Tool. An interactive application based on updated IRIS data on AY 2007 through December 2019 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. Executive Briefing (7/24/20) (members only) Executive Memo (7/24/20) (members only) Prescription Drug Interactive Tool. An online application for examining and comparing industrywide pharmaceutical data derived from prescriptions dispensed to injured workers between January 2007 and December 2019. The tool can be used to view statewide or regional prescription data either for all claims or 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. Executive Briefing (7/24/20) (members only) Executive Memo (7/24/20) (members only) Initial Data on 2019 Private S-I Claims Experience. A CWCI review of 1st report data on CY 2019 claims reported to the Office of Self-Insurance Plans (OSIP) by private self-insured employers shows overall claim frequency was relatively flat last year, (-1% from 2018), w/marginal declines in the incidence of M-O and indemnity claims. Comparing 1st report data over the past 15 years CWCI found that claim frequency among private S-I employers peaked in CY 2007, then slowly trended down until 2016, fueled primarily by declining M-O claim frequency as there were only minor fluctuations in indemnity claim frequency during that period. After bottoming out in 2016, both M-O and indemnity claim frequency increased in 2017 and 2018 before leveling off again last year. Bulletin (7/13/20) (members only) News Release (7/13/20) (public) Executive Briefing (7/24/20) (members only)
Statutory/Regulatory CWCI Offers Webinar On Calif’s COVID-19 Workers’ Comp Presumption Bill. Beginning Sept. 16, CWCI will make available to the public a one-hour, on-demand webinar on SB 1159 (Hill), the compromise bill passed by California lawmakers on the final day of the 2020 legislative session that establishes a workers’ compensation presumption of compensability for COVID-19 cases. The bill was passed as an urgency measure and will take effect immediately upon the governor’s signature. CWCI began studying the details of the compromise legislation as soon the final bill was passed by the Legislature on Aug. 31, and initially presented the one-hour training session as a member-only training program on September 14 to explain the complicated aspects of how the presumption of compensability now applies to various segments of the California workforce. The webinar, SB 1159, The Proof Is in the Presumption, is presented by CWCI’s General Counsel Ellen Sims Langille and the Institute’s Claims and Medical Director Jackie Secia, who explain the different sets of rules that apply depending on the date of injury, occupation, and positivity rates. In addition, the program covers the important new COVID-19 notification rules for employers that were mandated by SB 1159 as well as AB 685 (Reyes), which has also been sent to the governor, but with a January 1, 2021 effective date. Executive Memo (9/9/20) (members only) Executive Memo (9/14/20) (members only) News Release (9/14/20) (public) Public Comments on Proposed Amendment to the Medical Treatment Utilization Schedule. CWCI’s 30-day public comments on the DWC’s proposed adoption of ACOEM’s March 27, 2020 Antiemetics Guideline to the Med-Legal Fee Schedule. 30-Day Comments (9/9/20) (members only) SIU REGS Take Effect Oct. 1. On July 1 CWCI issued an Exec Memo to alert our members that the CDI had filed proposed changes to the regs governing insurers’ Special Investigation Units. On July 30, OAL approved the regs and filed them with the Sec’y of State. The effective date is Oct 1. These are the 1st amendments to the SIU regs since they took effect 15 years ago and they impose strict mandates on insurers, including but not limited to, investigation of suspected fraud (IC §2698.36), referral of suspected fraud (IC §2698.37), and anti-fraud training (IC §2698.39). SIUs should pay special attention to the anti-fraud training for internal claims staff provisions because as of Oct. 1, CDI will require 5 hours of annual SIU training rather than leaving the duration of such training up to claims administrators. CWCI sent a follow-up Exec Memo on Aug 12 to alert members to the changes, and in Sept CDI will offer training on the regs (format and dates are pending). In the meantime, the regs are under the Regulation tab on our website. Executive Briefing (8/27/20) (members only) Executive Memo (8/12/20) (members only) MSP Compliance Regs Include Huge Fines. Public comments on Medicare & Medicaid’s proposal to enforce Mandatory Medicare Secondary Payer (MSP) reporting compliance by assessing civil monetary penalties (CMPs) closed in April. MSP compliance focuses on 3 key areas for a Responsible Reporting Entity (RRE) or their Reporting Agent (RA): “conditional payments” (reimbursement to CMS for past Medicare payments); Medicare Set Asides (allocation of money by the primary payer for future treatment); and reporting requirements pursuant to MMSEA (Section 111 of the Medicare Medicaid and SCHIP Extension Act of 2007). Key elements of the reporting rules include potential penalties of up to $1K/day per claim (limit/claim of $365K annually) which could be imposed if an RRE fails to register and/or report Medicare eligible individuals; RREs report quarterly as required but exceed a 20% threshold of error tolerances; or the data reported is contradicted at the time CMS attempts to recover conditional payment amounts from the RRE. CMS plans to push through the proposal, so the penalty exposure is huge. Comments on the proposed regs detailed many of the industry’s specific concerns. Executive Memo (8/4/20) (members only) MMSEA Section 111 Reporting Regulations Update. CWCI provided initial information to our members in March about proposed Federal regs introduced by the CMS for which public comments closed April 20, 2020. The tougher rules proposed by CMS represent a revival of prior efforts to enforce reporting compliance by assessing civil monetary penalties (CMPs). These penalties were first incorporated in the original Section 111 reporting legislation at 42 U.S.C. 1395(b)(7) and (8) enacted in 2007, but the Strengthening Medicare and Repaying Taxpayers Act of 2012 gave CMS discretion to regulate enforcement and penalty limits for which further required regulatory action failed to materialize – until this year. Mandatory Medicare Secondary Payer compliance requires 3 major areas of focus by the Responsible Reporting Entity (RRE) or their Reporting Agent (RA). These are: 1) “conditional payments” (reimbursement to CMS for past Medicare payments); 2) Medicare Set Asides (allocation of money by the primary payer for future treatment); and 3) reporting requirements pursuant to MMSEA (Section 111 of the Medicare Medicaid and SCHIP Extension Act of 2007). The key components of the new reporting rules incorporate CMP penalty exposure of up to $1,000 per day per claim (limit per claim of $365,000 annually) and can be imposed if the RRE fails to register and/or report Medicare eligible individuals; RREs report quarterly as required but exceed the 20% threshold of error tolerances; or the data reported is contradicted at the time CMS attempts to recover conditional payment amounts from the RRE. But CMPs cannot be imposed more than 5 years after the date of noncompliance and the statute of limitations would only commence prospectively after the regulations are enacted. It is indisputable that the Non-Group Health Plans reporting requirements set forth in the Mandatory Reporting User Guide are confusing and complicated. Now that CMS intends to push through this legislation, the exposure in terms of CMPs is likely to be formidable, if not punitive. Executive Memo (8/4/20) (members only) New Public Self-Insureds Reporting Requirements. OAL approved OSIP regs that require public self-insured employers to submit reports with data that OSIP will use to monitor their WC expenditures, admin costs, solvency, and performance. The regs took effect July 1 and include 3 new reporting forms: The Joint Powers Authority Self-Insurer’s Profile and Financial Summary Report (Form J-1); the Self-Insurer’s Profile and Financial Summary Report (Form P-1); and the aggregate Claims Information (Form AR-2 Addendum). The new forms are posted here and must be submitted with the 2019-2020 annual report by October 1, 2020 and annually thereafter. Employers who need an extension should contact OSIP Chief Lyn Asio Booz at LAsioBooz@dir.ca.gov to request an extension. Deferrals of up to 60 days may be granted. Executive Briefing (7/24/20) (members only) Executive Memo (7/8/20) (members only) Public Comments on Proposed Amendments to Medical-Legal Fee Schedule Regulations. CWCI’s third forum comments on the DWC’s proposed changes to the Med-Legal Fee Schedule. Third Forum Comments (7/10/20) (members only) Revised SIU Regs Submitted to OAL. After a year of development, the Dept of Insurance submitted amended regulations governing insurer Special Investigative Units (SIUs) to OAL. The proposed amendments represent the first changes to the SIU regs since they first took effect in October 2005.The proposed changes include limiting the definition of “contracted entities” that are hired to perform SIU or integral anti-fraud personnel duties or functions on behalf of the insurer; clarification of the requirements for reporting suspected fraud when investigations remain open; a 60-day deadline for WC claims organizations to respond to information requests from CDI’s Fraud Division or other authorized governmental agencies and transmittal requirements for such information; specific elements that must be included in an SIU’s written summary of an investigation; a requirement that SIU personnel receive 5 hours of continuing anti-fraud training per year; and specific elements that must be included in the insurer’s SIU Annual Report to the CDI. The regs submitted to OAL on June 19 are under review with no effective date established pending a decision. A copy is on CWCI’s website under the Regulation tab at https://www.cwci.org/regulatory.html. Executive Memo (7/1/20) (members only)
Legal Gund v. County of Trinity. The California Supreme Court ruled that a couple who knowingly provided assistance in active law enforcement service is precluded from pursuing a civil action against the County for injuries sustained during the encounter. The court ruled that when members of the public engage in “active law enforcement service” at a peace officer’s request, Labor Code §3366(a) treats those members of the public as employees eligible for workers’ compensation benefits, and those benefits become the exclusive remedy. Significant Decision Summary (8/28/20) (members only) Virtual Trials & Expedited Hearings. In early August, the DWC announced that beginning Aug 17, WC judges will have the option of using virtual courtrooms for trials and expedited hearings. Judges will continue to hear mandatory settlement conferences, priority conferences, status conferences, case-in-chief trials, lien conferences and expedited hearings telephonically using the system set up in April and May, so parties should continue to use the individually assigned judges’ conference lines on the day of trial. However, judges now have the option of conducting trials and expedited hearings virtually. A judge who chooses that option will provide a link to the parties allowing them to log into the designated video platform called LifeSize. Certain system requirements are needed to fully participate in the video option, so all parties should test drive the software by downloading it prior to a hearing where a video option may be necessary. The move to virtual trials and hearings is the latest in a series of changes the DWC and WCAB have enacted so that they can continue to adjudicate claims during the pandemic. The Newsline announcing the virtual option for trials and expedited hearings, which includes a link for downloading the LifeSize software, is here. Executive Briefing (8/27/20) (members only) Executive Memo (8/13/20) (members only) County of Santa Clara v. WCAB (Justice). A CWCI letter to the California Supreme Court urging the court to deny the applicant’s Petition for Review In a case where the 6th DCA held that Hikida should be applied narrowly, disallowing apportionment only where the industrial medical treatment is the sole cause of the entire PD. The court subsequently denied the petition on 8/26/20. Letter in Opposition to Petition to Review (7/14/20) (members only)
Other WCIRB Suggests 2.6% Rate Increase for 2021. On Aug 12, WCRIB’s Governing Committee voted to submit a Jan 1, 2021 Rate Filing to the CDI proposing an avg increase of 2.6% in advisory pure premium rates. Absent the estimated impact of COVID-19 claims on 2021 policies, WCIRB would have called for a 1.3% rate decrease, but in addition to projecting COVID-19 claim costs on 2021 policies, the recommended rates included the impact of the economic slowdown on wages, claim frequency and severity. WCIRB submitted its Rate Filing to CDI yesterday (Aug 26) and CDI will hold a hearing on the filing. Once the Notice of Public Hearing issues. Executive Briefing (8/27/20) (members only) Minutes from the Legal Committee Meeting. The Aug. 13 meeting was held via Zoom webinar. The agenda included an update on CWCI amicus participation in County of Santa Clara v. WCAB (Justice) in which upon appeal the 6th DCA held that Hikida should be applied narrowly, disallowing apportionment only where the industrial medical treatment is the sole cause of the entire PD. Applicant filed a petition for review at the Supreme Court, and CWCI filed a letter brief in opposition. Case law updates included Gund v. Co. of Trinity: the Supreme Court granted review of the ruling in favor of the defense and held oral argument on June 2. [Subsequently, the Supreme Court ruled 7-2 in favor of the County]; the en banc decision in Todd v. SIBTF in which the WCAB held that prior and subsequent PD shall be added to the extent they do not overlap in order to determine the combined PD under LC §4751; Vasquez v. Jan-Pro: Dynamex a 9th DCA case in which a franchisee sought to apply the Dynamex decision retroactively to the claim of employment status. The case was fully briefed at the Supreme Court, and oral argument is pending; and Hom v. City & Co. of San Francisco, where the applicant’s appeal to the DCA has been denied. Ms. Langille reported no new cases have been submitted for amicus consideration and Mr. Allweiss reported that CalChamber has no new amicus activity. Committee members received an update on regulatory activity in regard to the MTUS treatment guidelines, revised OMFS for physician services retroactive to 3/1/20, new OSIP reporting requirements effective 7/1/20, approved SIU regs requiring continuing anti-fraud training effective 10/1/20 and new contractual language required in April 2021, and the MLFS, which has not moved into the formal regulatory process. Ms. Langille discussed 3 COVID-19 compensability bills (AB 664; AB 196; and SB 1159), as well as AB 685 dealing with employer COVID-19 notices. Other bills discussed: AB 398 (a per employee tax to cover municipal budget shortfalls due to COVID-19), SB 729 (COVID-19 supplemental paid leave), SB 893 (rebuttable presumption for acute care workers), AB 2447 a rebuttable presumption for private-sector emergency medical service providers), and AB 3012 (expanding CIGA’s covered claims to include benefits payable to California residents injured in another state). A review of the litigation environment and general discussion noted WCAB’s plan to introduce videoconference trials into the system as of Aug 17. Mr. Swedlow demonstrated CWCI’s new COVID-19 and Non-COVID-19 Data Application, an online tool that will be updated biweekly to provide members with detailed claims data. Meeting Minutes (8/13/20) (members only) Minutes from the Claims and Medical Care Committees Meeting. The meeting was held via GoToMeeting teleconference on July 15. Discussions included a review of regulatory activity in regard to the regs in the following areas (OSIP reporting requirements, SIU requirements, MTUS Guidelines, the Pharmacy Fee Schedule updates, the WCIRB mid-year regulatory filing, the QME Telehealth regs; QME Electronic Service regs, and the MLFS. Ms. Langille and Ms. Jones reviewed the fee itemization proposal for the Med-Legal Fee Schedule, and the potential for a Telehealth fee schedule, and Ms. Jones reviewed the discussion at IAIABC’s recent webinar on COVID-29 testing. Ms. Secia provided a comprehensive summary of WC issues related to COVID-19, including the Governor’s recent Executive Orders related to the presumption and WCAB rules and procedures; pending legislation in regard to COVID-19 presumptions; and information on practical issues related to COVID-19 claims (e.g. what is reportable vs. compensable; the expiration of paid COVID leave before TD commences, what happens after the 7/5/19 expiration of the presumption. Ms. David and Mr. Swedlow reviewed recent CWCI COVID-19 related research, including results of our survey on initial claims volume, and the development of a public interactive data tool based on current data from ICIS, WCIS and BLS. Ms. David also updated IMR outcomes data, discussed data from CWCI’s study on medical service practice pattern trends, and 2019 year-end statistics. Ms. Langille provided an update on case law activity and Ms. Secia noted the issues surrounding AB 2294 which was re-referred to the Assembly Insurance Committee in May. Meeting Minutes (7/15/20) (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. |