Q3 – 2024 – October 7, 2024
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Research Regional Scorecard Data on L.A. Co. Claims. CWCI’s Regional Scorecard app was updated at the end of June with IRIS data detailing variations in Calif WC AY 2010 – 2023 claims experience across 7 geographic regions (based on the injured workers’ place of residence). The Institute recently used the app to examine claims filed by workers from Los Angeles County, home to 9.7 million people and a quarter of all working Californians. For the 5-year period ending in 2023, L.A. County residents accounted for 23.2% of all Calif WC claims, 25.0% of all indemnity claims, and 26.7% of all claim payments. Other results from L.A. County’s 2019-2023 insured claims showed that the avg. age of injured workers from L.A. is 41.4 years old at the time of injury (the oldest in the state and a year older than the statewide average); they avg. 4.8 years of tenure (longest in the state, and half a year longer than the statewide avg; and females account for a 40.5% of the L.A. claims vs. 38.5% statewide. Industry data reveal that L.A. County accounts for more than a third of the state’s clerical (8810) claims; just under 30% of the food service claims; 28% of the manufacturing claims; and 27.4% of the transportation claims. The area remains a hotbed for litigation as over the 5-year period, 55.3% of indemnity claims in the region involved attorneys, well ahead of neighboring Inland Emp/Orange Co. (49.3%) which ranked second, and the 44.2% statewide rate. PD claims comprised 17% of L.A. Co. claims vs. 12.5% statewide. Though many of these claims were relatively young, PD accounted for 18.2% of paid losses on L.A. Co. indemnity claims vs. 15.1% statewide. Avg time to employer notice for an indemnity claim was 33 days in L.A. Co. vs. 20 days statewide and avg time to carrier notice was 48 days vs. 31 days statewide, underscoring that CT claims remain problematic in the region. Executive Briefing (9/26/24) (members only) Physical Medicine Data Update. The latest update to CWCI’s Medical Services Interactive Application shows that from 2016 through 2022, roughly 2/3 of all indemnity claims involved physical medicine (PM) – either chiropractic care or physical therapy – in the 1st year of treatment. Over that same 7-year span, the avg number of PM visits at the 12-month benchmark dropped steadily from 14.6 to 12.8 – the only exception being in 2020, the 1st year of the pandemic, when PM visits, including those rendered via telehealth, increased from 13.5 to 14.1 visits before falling to 13.1 visits in 2021 and 12.8 visits in 2022. Meanwhile, the avg payment per PM visit rose 20% from $110 in 2016 to $132 in 2022, not surprising given the conversion to the RBRVS Fee Schedule, an SB 863 reform intended to redistribute payments away from medical specialties and toward more heavily utilized Evaluation and Management and PM services. The cost impact of the higher payments per PM service, however, was largely muted by the decline in the avg number of PM visits per claim, so the avg amount paid per claim for PM at 12 months was relatively flat, fluctuating less than 13.5% during the 7-year period, and most recently, declining by nearly 6.8% from a peak of $1,813 in 2020 to $1,690 in 2022. Notably, in 2017, E&M and PM surpassed Major Surgery in terms of total medical payments, as the OMFS changes allowed significant increases in payments for some non-surgical services and the volume of Major Surgery services declined, so Major Surgery’s share of the total WC medical dollars hit a 14-year low. Executive Briefing (8/28/24) (members only) Q1 2024 WC Insured Experience. Total Direct Written Premium (DWP) in the first 3 months of this year was 3% lower than in Q1 2023, while total DWP for all of 2023 was just above the 2022 total, according to WCIRB’s Quarterly Experience Report valued as of 3/31/24. Other highlights:
Executive Briefing (8/28/24) (members only) Heads Up on 2023’s Most Expensive WC Opioid. CWCI’s 2023 analysis of low-volume/high-cost Opioids that have become WC cost drivers spotlighted Tapentadol, a dual-action pain reliever used when patients have nerve-related pain or when other pain meds do not work well or cannot be tolerated. Tapentadol is only available as a high-cost brand drug (Nucynta or Nucynta Extended Release), and last year’s analysis found that in 2022, it represented just 0.6% of WC Opioid prescriptions, but at $586/prescription, it accounted for 6.4% of the Opioid drug spend. The recent update to CWCI’s Rx Drug App based on 2023 fill dates reveals that Tapentadol’s share of the Opioid prescriptions and payments showed little change last year, as it represented 0.5% of the WC Opioid prescriptions dispensed last year and 6.4% of the Opioid payments, but the average payment per prescription jumped 26% from $586 to $738, making it the most expensive Opioid in WC. Notably, the patents on Nucynta and Nucynta ER are set to expire in mid- to late-2025, after which generic alternatives will likely hit the market, but in the meantime, Tapentadol is on the MTUS Formulary’s Non-Exempt drug list which makes it subject to UR, so payers should keep tabs on it and make sure it is only used when appropriate. Executive Briefing (8/28/24) (members only) CWCI Claims Monitoring Interactive Report. Recent results and trends from the latest update to CWCI’s Claims Monitoring Interactive Application which features AY 2009 – AY 2023 data (valued as of December 2023) on average medical payments, average paid indemnity, and combined medical and indemnity payments at nine levels of development ranging from 3 months to 72 months post injury. The report also provides a refresher on how the Application is formatted and how CWCI members can use it. Executive Memo (8/28/24) (members only) Interactive Research Report (8/28/24) (members only) Interactive Tool Update (7/1/24) (members only) COVID-19/Non-COVID-19 Interactive Claims Data Application. Data on COVID-19 and non-COVID-19 claims reported to the DWC’s Workers’ Compensation Information System through August 19, 2024. Those claims included 343,081 COVID-19 claims with dates of injury through July 31, 2024 (1,756 of which were death claims). Results include COVID claim volume by industry, region, age, gender, body part and denial status. COVID/NonCOVID App Update (8/19/24) (public) Oxycodone with Acetaminophen Ranks 2nd in Terms of Total Drug Spend as Use of Brand Versions Increases. Opioids, which a decade ago were the #1 workers’ comp drug group (27.2% of prescriptions filled in 2014) are now tied with antidepressants as the 4th most prescribed drug category in the system with 8.1% of all prescriptions dispensed in 2023, and they ranked 5th in terms of payments, consuming 5.5% of the total drug spend. The 2 most heavily prescribed opioids continue to be low-cost hydrocodone/acetaminophen (Vicodin) and tramadol HCl (Ultram), widely available as generics, with average payments of $18 and $28 last year. Since 2016, all hydrocodone/acetaminophen prescriptions have been generic, and since 2020 only generic tramadol has been used. In contrast, the 3rd most heavily prescribed opioid, a combination drug typically consisting of 5 to 10 mg oxycodone and 325 mg acetaminophen, available in generic and brand versions (Percocet, Endocet, etc.), had a much higher average payment ($114) last year, which more than doubled from $54 in 2021. Brand versions declined from 14% of the oxycodone/acetaminophen prescriptions in 2014 to 1% in the pandemic years of 2020 and 2021 but jumped back up to 3% in 2022 and 4% in 2023 while reimbursements for brand versions of the drug ranged from less than hundred dollars to several thousand dollars/prescription. Payments for brand versions averaged $1,756 in 2022, and $1,890 in 2023, so the growing proportion of brand oxycodone/acetaminophen prescriptions – especially those involving a large number of tablets – fueled the recent increase in the overall avg payment for this drug. Executive Briefing (7/26/24) (members only) NSAID Payments Drop as Fenoprofen & Ketoprofen Use Falls After CWCI Report. Three years ago, CWCI issued a report on WC Drug Cost Drivers that noted that anti-inflammatories had become the costliest drug group in Calif WC, consuming nearly a quarter of the total WC drug spend, largely driven by payments for low-volume, high-cost fenoprofen calcium and ketoprofen, used to treat arthritis and pain. Both drugs are on the formulary’s “Exempt” drug list and not subject to prospective UR, and neither is in the Medicaid database, so they had no Federal Upper Limit – a maximum fee allowed by Medicaid that works as a price control in the Medi-Cal and Calif WC Rx fee schedules. Instead, they are paid at 83% of their AWP which is based on the manufacturers’ pricing. Thus the avg payment for a fenoprofen calcium Rx soared from $193 in 2016 to $1,505 in 2021 (+680%), which drove its share of the WC anti-inflammatory payments from 0.1% in 2016 to 29.5% in 2021, as it surpassed Naproxen to become the #1 anti-inflammatory in terms of total drug spend, even though it represented only 1.1% of all Rxs in its drug group. Meanwhile the avg paid for ketoprofen rose from $100 in 2016 to $1,086 in 2021 as ketoprofen became the 3rd most costly anti-inflammatory drug in Calif WC, consuming 10.9% of the anti-inflammatory dollars in 2021, although it represented only 0.6% of anti-inflammatory Rxs. CWCI’s Rx Drug App shows that after CWCI shined the spotlight on these drugs fenoprofen calcium fell from 1.1% of the anti-inflammatories in 2021 to 0.4% in 2022 and to 0.1% in 2023, so its share of the drug spend in its drug group fell from 29.5% in 2021 to 10.6% in 2022, and to 3.8% in 2023. Ketoprofen fell from 0.6% of anti-inflammatory Rxs in 2021 to 0.1% in 2022 and 0.2% in 2023 and its share of anti-inflammatory payments fell from 10.9% in 2021 to 2.9% in 2022 and 2.8% in 2023. With these 2 key cost drivers representing a dwindling share of the prescriptions and payments, anti-inflammatories’ share of the WC drug spend fell from 24.7% in 2021 to 19.6% in 2022 and 16.9% in 2023, and they are no longer the most costly drug group, having been passed by dermatologicals. Executive Briefing (7/26/24) (members only) Private Self-Insured Experience for CY 2023. Private self-insured claim volume in the Calif WC system fell 9.5% in 2023, producing the biggest year-to-year decline in private S-I claim frequency in more than 15 years, but double-digit increases in the average amounts paid and incurred on these claims drove total paid and incurred losses for private self-insured employers sharply higher according to CWCI’s analysis of initial data from the state Office of Self-Insurance Plans (OSIP). OSIP’s annual summary of private self-insured data, issued June 27, provides the first look at California private, self-insured claims experience for cases reported in 2023. It includes the total number of covered employees, medical-only and indemnity claim counts, and total paid and incurred losses on those claims through the end of the year. The 2023 summary shows the experience of private self-insured employers who covered 2.34 million California employees last year (down from 2.42 million in the 2022 initial report) and who reported 94,386 claims in 2023, down from 104,278 claims in the 2022 initial report. Driven by higher wages and the improved job market, total DWP in 2022 was about $16 billion, up 14% from 2021 and up 4.1% from the corresponding figure from the first half of 2022. Bulletin (7/8/24) (members only) News Release (7/8/24) (public) Prescription Drug Interactive Tool – Updated 7-8-24. The latest iteration of CWCI’s online application that can be used to examine and compare industrywide prescription drug data derived from prescriptions dispensed to injured workers between January 2016 and December 2023. 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 Update (7/8/24) (members only) MTUS Formulary Interactive Data Tool – Updated 7-8-24. The Instititute’s online application that shows the breakdown of medications within each version of the MTUS Prescription Drug Formulary by formulary category: Exempt,, Non-Exempt,, Not Listed;,and Special Fill, and Perioperative drugs. The application allows CWCI membrs to identify which drugs were added to or dropped from the formulary and when; find where approximately 100 therapeutic drug groups and hundreds of specific drugs have been categorized; track changes in prescription and payment distributions among the formulary categories beginning with pre-formulary years (CY 2016 and 2017) and extending into the post-formulary years beginning with CY 2018; find the average wholesale price (AWP) and the average amount paid for specific drugs (by drug ingredient) over time; and view lists of the top 20 drugs by formulary category, broken out either by calendar year or by formulary version. Interactive Tool Update (7/8/24) (members only) IRIS Regional Scorecard Interactive Tool – Updated 7-1-24. An interactive application based on updated IRIS data on AY 2010 through December 2023 claims from 7 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 Update (7/1/24) (members only) Medical Services Interactive Tool – Updated 7-1-24. The latest update to CWCI’s Medical Services Interactive Application traces the use and cost of professional medical services over time, valued as of December 31, 2023. Utilization is measured on a per visit, per day or per line basis depending on the service category. Interactive Tool Update (7/1/24) (members only)
Statutory/Regulatory Gov. Newsom Vetoes SB 1299, Heat Injury Presumption for Outdoor Ag Workers. With the deadline for acting on 2024 legislation fast approaching, Gov. Newsom vetoed SB 1299 (Cortese), the UFW-/CAAA-backed bill that would have created a presumption of compensability for heat injuries among outdoor agricultural workers if a WCAB judge determined that their employer was out of compliance with Cal/OSHA’s Outdoor Heat Illness Prevention Standard. In June, a CWCI Legislative Impact Analysis of SB 1299 found that it would likely create more challenges than it would solve, entail significant administrative frictional costs, and was unlikely to have an appreciable impact on farmworker safety. SB 1299 would have opened the door to private sector presumptions and CWCI’s analysis indicated that evidence that the presumption is needed was lacking and that Cal/OSHA’s Heat Injury and Illness Prevention Standards seem to be working, as only 0.65 percent of the 100,000+ WC claims from the ag sector over the last five years have been for heat injuries or illnesses. The Governor’s veto message, which cited ongoing efforts to protect workers from the effects of climate change, concluded that “conditioning a workers’ compensation presumption on compliance with standards set and enforced by another regulatory division is not an effective way to improve working conditions.” Executive Memo (9/30/24) (members only) Newsom’s Vetoes. The Governor’s end of the legislative year included a few vetoes of interest to the WC community including SB 636 which would have required WC UR physicians for private employers to be licensed in Calif. In his veto message Newsom noted a lack of data to warrant the change and that existing law already provides a regulatory structure to hold UROs and UR doctors accountable for their decisions, and that SB 636 would lead to differential treatment of private and public sector employees and narrow the pool of UR doctors, delaying treatment and increasing costs. Newsom also vetoed AB 2872 which would have required that DOI and DOJ fraud investigators be paid the same, eliminating a 21% pay gap that makes it hard to recruit and retain DOI investigators. Commissioner Lara sponsored the bill, noting a 34% vacancy rate for DOI fraud investigators and that 75% of investigators who left DOI in the last 2 years cited pay inequity and transferred to the DOJ. In his veto message, Newsom said that requiring pay equity between the 2 departments “circumvents the collective bargaining process and the Calif Dept of Human Resources’ salary-setting authority” and that “by setting a salary for one state department’s employees in statute the bill limits the state’s ability to consider factors that impact the state or other state employee bargaining units when proposing compensation through collective bargaining. Newsom also vetoed SB 1058 which would have allowed county and special district park rangers to collect salary-continuation benefits in lieu of TD for up to a year. Executive Briefing (9/26/24) (members only) No More Fentanyl Lollipops. The FDA announced that after years of controversy, drug manufacturers will discontinue the sale of transmucosal immediate release fentanyl – including Actiq, (the fentanyl lollipop dispensed as a lozenge on a stick) and the dissolvable tablet Fentora. CWCI first brought the use of fentanyl lozenges in Calif WC to light 13 years ago in a Report, Prescribing Patterns of Schedule II Opioids: Fentanyl Prescriptions in Calif WC. Fentanyl, which is 75 to 100 times more potent than oral morphine, was first approved for breakthrough pain in cancer patients who are opioid tolerant, but Actiq, Fentora, and other forms of fentanyl were heavily marketed for off-label use. Because they are highly addictive, these drugs have been cited for fueling opioid overdoses and deaths and manufacturers have been sued for downplaying the risk of addiction and promoting off-label use. With greater awareness of the dangers, adoption of UR, IMR, and Opioid & Pain Mgt Guidelines and implementation of the Formulary, fentanyl use in Calif WC is down sharply. CWCI’s Rx Drug App shows fentanyl fell from 2.3% of all opioid prescriptions on indemnity claims in 2011 to 0.7% in 2023. In its press release on Actiq and Fentora being discontinued the FDA noted that patients using these drugs may continue to do so as long as supplies last but encouraged physicians to transition them to other alternatives. Executive Briefing (9/26/24) (members only) WC Posting Notice (DWC-7) Revision for 2025. On July 15, Gov. Newsom signed AB 1870, which adds language to the WC posting notice (DWC 7) to inform employees of their right to consult an attorney. The new language, which takes effect 1/1/25, must also note that “in most instances, attorney’s fees will be paid from an injured employee’s recovery.” Insured and self-insured employers are subject to the posting notice requirements which are in CCR §9881. CCR §9881.1 directs users to the DWC Form 7 (Rev. 1/1/16), a fillable form promulgated by the state that employers can complete online then print. LC §3550(f) requires that the AD make the form and content of the posting notice available to employers and insurers, and that insurers provide the notice to their policyholders with advice concerning the posting notice requirements and the penalties for failure to post. CWCI asked the DWC if it plans to update the DWC 7 with the new language before the 1/1/25 effective date and the DWC said its Legal Unit is working on this and hopes to have the revised notice out before January. CWCI will keep you posted on the Division’s progress. Claims organizations that developed their own version of the DWC 7 (per CCR §9883) should add the new language regarding attorneys and submit it to the AD for approval before 1/1/25 as failure to provide current information to employees can lead to loss of medical control for any injury occurring during the time of that failure [LC §3550 (e)], steep civil penalties for each violation [LC §6431], and the tolling of the statute of limitations for filing claims. An employer’s failure to keep the posting notice conspicuously posted also is considered a misdemeanor and prima facie evidence of noninsurance [LC §3550 (b)]. Executive Memo (9/13/24) (members only) Update on 2024 WC Bills… Legislators returned to Sacramento in early August to debate and vote on hundreds of bills in order to wrap up the 2024 legislative session by Aug. 31, which is the last day to send bills to the governor. The governor has until Sept. 30 to sign or veto them. This week SB 1205 (Laird) was placed in the inactive file. This bill, sponsored by the Calif Federation of Teachers, would have allowed injured workers to sue their employer for discrimination if they refused to allow time off during the workday for WC medical appts unless business necessity required the treatment to occur at a different time or on a different day. Among the WC bills that are still alive:
The governor will have until Sept. 30 to sign or veto legislation that is sent to him, after which CWCI will publish its summary of enacted WC bills from the 2024 session. Executive Memo (11/7/23) (members only) Executive Briefing (8/28/24) (members only) Reduction in Advisory Pure Premium Rates. On July 12, Commissioner Lara issued a decision on WCIRB’s 9/1/24 Pure Premium Rate Filing that was submitted in April. The WCIRB filing proposed an avg increase of 0.9% in the advisory pure premium rates that were approved 9/1/23, but after holding a public hearing in June, the commissioner approved advisory pure premium rates averaging $1.38 per $100 of covered payroll — 2.1% below the avg from a year earlier. The difference in the WCIRB proposed and the CDI approved rates reflects different assumptions regarding loss development and claim severity trends. Commissioner Lara’s decision is posted on WCIRB’s website here. Executive Briefing (7/26/24) (members only) Medical Travel Bill Amended. In June Sen. John Laird amended SB 1205, deleting a provision that mandated TD payments, transportation, meals, and lodging for WC medical appointments, even after the injured worker is determined to be P&S. But Laird added the following new language: “If an employer denies an employee’s request to attend scheduled treatment during regular work hours, the employer’s conduct constitutes a violation under the provisions of Section 132a.” Thus, the bill would require employers to let injured workers go to medical appts whenever they want, even in the middle of a shift, and allow them to sue their employer for discrimination if they refuse, resulting in additional penalties for employers. The bill, sponsored by the Calif Federation of Teachers, was approved by the Assembly Ins. Comtee in June, but it would increase costs for public schools and state and local govts so it was referred to the Assembly Appropriations Comtee to consider the fiscal implications. If passed by that committee, SB 1205 would need to be approved by the full Assembly, after which a conference would need to iron out the differences between the Senate and Assembly versions. Should that be successful, the bill would go to Gov. Newsom to either sign or veto. The deadline for each house to pass bills is Aug. 31. CWCI is monitoring all 2024 bills and will issue our annual summary of enacted legislation. Executive Briefing (7/26/24) (members only) CDI Asks for Study on Silicosis Claims. Silicosis is a progressive, incurable lung disease caused by the inhalation of crystalline silica dust, which typically occurs during the cutting and finishing of engineered stone countertops. Media reports, including an NPR report from last July, indicate that over the past decade the hazard has become increasingly prevalent among young Latino workers. In response to a growing number of WC claims for silicosis, Commissioner Lara has requested that the WCIRB conduct a detailed study on these claims, detailing the number of cases filed in the past 10 years; the avg age of the claimants; the acceptance and denial rates; the avg medical, TD, and PD costs of the claims; the avg allocated loss adjustment expenses on the claims; and the avg number of insurers associated with each claim. Lara’s letter noted that “This disease has a devastating impact on individuals and their families, and it is our duty to ensure they are supported. We need to gather comprehensive data on silicosis claims to make informed decisions and protect California workers effectively.” Executive Briefing (7/26/24) (members only)
Legal Castellanos v State of California. In 2020, voters passed Prop 22 giving app-based delivery companies an exemption from AB5/Dynamex and effectively confirming their drivers as independent contractors. A group of drivers successfully obtained a ruling from the Alameda Co. Superior Court declaring Prop 22 to be unconstitutional. That ruling is now before the 1st District Court of Appeal, and the sponsors of the original ballot measure have intervened. The 1st District Court of Appeal affirmed in part and reversed on 03/13/23. The DCA held Prop 22 does not intrude on Legislature’s WC plenary authority or violate initiative single subject rule, but its definition of amendment violates separation of powers principles. As those unconstitutional provisions can be severed, that portion of judgement affirmed, and otherwise reversed. A petition for review was filed on 04/21/23 and granted on 06/28/23. Oral argument was completed 5/21/2024 and the matter was submitted 6/3/2024. On 7/25/24 the California Supreme Court affirmed the judgment of the Court of Appeal holding that Business and Professions Code section 7451 does not conflict with article XIV, section 4 of the California Constitution Significant Decision Summary (8/2/24) (members only) Executive Memo (7/7/23) (members only)
Other Fed OSHA Severe Injury Report Dashboard. In September, Fed OSHA debuted a new online tool, The Severe Injury Report Dashboard, that allows users to search its severe injury report database and view work injury trends in states covered by federal OSHA. Data can be searched and downloaded by year, industry, state, establishment name, and Injury & Illness Class code. Federal law requires employers to notify OSHA of a work-related in-patient hospitalization, amputation or loss of an eye w/in 24 hours of the incident, and employer compliance assistance specialists and on-site consultations are available across the country to help employers. The dashboard includes information on all severe injuries reported by employers covered by fed OSHA since 2015. An instructional video guides users on how to use the dashboard. OSHA encourages workers and employers to use the dashboard to learn how severe injuries happen in their industries and how to use agency resources to help prevent work injuries. Executive Briefing (9/26/24) (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. |