Q4 – 2018 – February 11, 2019
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Research Q3 2018 Insurer Experience. A review of WCIRB insured data through Q3 2018 found DWP through Sept was $13.1 billion (3% less than in the 1st 9 months of 2017, primarily due to decreases in charged rates, which more than offset increases in covered payroll; the estimated avg charged rate per $100 of payroll through Q3 2018 was $2.28, 10% less than in 2017, while approved advisory pure premium rates for 1/1/19 averaged 42% less than 4 years ago; the AY 2017 combined ratio was estimated at 87% vs. 83% for AY 2016 due to declining premium and a moderate increase in claim severity; claim frequency edged down and was 4% below the 2014 peak, though CT claim rates fell slightly in 2016 suggesting that CT claim growth may be leveling off. WCIRB projected a 2% increase in severity for 2017 indemnity claims to about $69,500; and after a string of decreases in medical severity fueled by the SB 863 medical reforms, avg medical costs for AY 2017 claims were expected to be up about 2% from AY 2016. Executive Briefing (12/20/18) (members only) 2017 Workplace Fatalities. The Bureau of Labor Statistics annual occupational fatality report found that for the 2nd year in a row the number of work-related deaths in U.S. showed a marginal decline, falling from 5,190 in 2016 to 5,147 last year (-0.8%). At the same time, employment was up, so the rate of work-related fatalities per 100,000 full-time employees edged down from 3.6 to 3.5. Transportation-related incidents remained the most common cause of work fatalities, and truck drivers continued to account for the highest number of deaths. Executive Briefing (12/20/18) (members only) Report on Insurer 2017 Profitability. CWCI’s review of the latest National Association of Insurance Commissioners (NAIC) report on insurer profitability, which showed California workers’ compensation insurers return on net worth increased from 8.7% in 2016 to 9.9% in 2017, while their average return over the most recent decade was 6.3%. Bulletin (12/6/18) (members only) Regional Variations in Post SB 863 WC Experience in L.A., the Bay Area, San Diego County and Statewide. A comparison of the claims experience in the state’s 3 largest metropolitan regions derived from the recent updates to CWCI’s On-Line Regional Data Application. The summary provides AY 13-AY 17 claims data for each region, valued through 12/31/17, and compares results across multiple metrics to identify both the existence and the extent of regional differences in claimant demographics, benefit mix and average payments, attorney involvement, claim closure rates, and average employer & carrier notification time lags for the 5-year post-reform period. Executive Briefing (12/5/18) (members only) Q2 2018 Insurer Experience. A summary of WCIRB’s recently issued report on Calif WC insurer loss and premium experience through Q2 2018, which found that total DWP in the first half of the year was $9.1 billion, about the same as in the first half of last year; the average charged rate for policies incepting in the first half of this year was estimated at $2.35 per $100 of payroll, down 7% from the avg for all of 2017 and 21% below the 2014 peak level; the estimated ultimate combined (loss + expense) ratio for AY 2017 is 88%; and claim frequency edged down in the first half of 2018, continuing a trend that started in 2014 (after increasing 11% from 2009 to 2014, claim frequency has now declined 6% over the past 4.5 years). Executive Briefing (11/21/18) (members only) California WC Claim Monitoring, Medical & Indemnity Development, AY 2006- 2017. Updated IRIS data on California workers’ comp medical loss, indemnity benefit and medical cost containment (MCC) payments on AY 2006 – 2017 lost-time claims finds that while more developed data on older claims show average paid losses on lost-time claims are leveling out or declining, less developed data on newer claims indicate that average paid losses in the early stages of a claim are slowly trending up. Bulletin (11/16/18) (members only) Executive Briefing (11/21/18) (members only)
Statutory/Regulatory 2019 Benefit Increases. Year-end reminder to claims administrators: minimum and maximum TTD rates for AY 2019 claims will increase along w/other benefits tied to SAWW changes. The TTD maximum for claims w/dates of injury o/a 1/1/19 will rise to $1,251.38/week, the minimum will rise to $187.71. Executive Briefing (12/20/18) (members only) Medical Mileage Rate Increase. The WC medical mileage rate in Calif will increase to 58¢/mile for travel on or after 1/1/19, regardless of the injury date (NOTE: the 54.5¢/mile rate will still apply for travel from 1/1/18 thru 12/31/18. The DWC has posted downloadable forms in English & Spanish w/applicable rates based on the travel date on its Forms page. Executive Briefing (12/20/18) (members only) Executive Memo (12/14/18) (members only) Bulletin (12/14/18) (members only) News Release (12/14/18) (public) Minimum Wage to Increase on 1/1/19. In 2007, Gov. Brown signed SB 3 (Leno), calling for incremental increases in the Calif minimum wage over 6 years that will eventually increase the minimum by 50% from the $10/hr level in effect last year to $15/hr for “large” employers (those w/26 or more employees) by 2022, and to $15/hr for all employers in 2023, after which it will be subject to annual adjustments based on a specified formula. The increase slated for 1/1/19 will bump the minimum for “small employers” from the current $10.50/hr rate to $11/hr, while the minimum for large employers will rise from $11/hr to $12/hr, which in turn will boost salaried employees’ wages because to qualify as “exempt” employees in Calif they must meet the salary-basis test — which is 2 times the monthly minimum wage — as well as the duties test that is not impacted by the wage hike. Executive Briefing (12/5/18) (members only) 2019 User Funding Assessment Rates. The DIR has issued details on the 2019 assessments that workers comp insurers will be required to collect from policyholders and that self-insured and legally uninsured employers will pay to the state to cover the budget of the DWC and five related programs set up by state lawmakers. Executive Briefing (12/5/18) (members only) Executive Memo (11/29/18) (members only) Bulletin (11/29/18) (members only) News Release (11/29/18) (public) Cal/OSHA Adopts Emergency Regs on Electronic Injury Reporting. Quickly following up on AB 2334, the state has approved emergency regs promulgated by Cal/OSHA requiring Calif employers with 250 or more workers and employers w/at least 20 employees in high hazard industries (including construction, agriculture, wholesale trade, manufacturing, and grocery and specialty food stores) to electronically file their CY 2017 OSHA Form 300A injury logs by 12/31/18. To make these regs permanent, Cal/OSHA plans to put them through formal rulemaking next year, which will include a public hearing and comment period. Thereafter, beginning next year, affected employers will need to file their Form 300A summary data from the prior year by March 2. Executive Briefing (11/21/18) (members only) 2019 Claim Audit Standards. DWC conducts profile audit reviews (PARs) of every WC adjusting location at least once every 5 years, and each year calculates overall claim operation performance ratings based on composite scores. The ratings from the last 3 years are then used to set the standards for upcoming audits. DWC has announced that the 2019 ratings, based on 2015-17 audits, will be tighter than in 2018. The 2019 PAR standard will be 1.36133; the full compliance audit (FCA) standard will be 1.66166. Executive Briefing (11/21/18) (members only) Executive Memo (11/20/18) (members only) WCIS Implementation Guide for First and Subsequent Reports of Injury. CWCI’s first Forum comments on DWC’s proposed changes to the WCIS Implementation Guide for FROI and SROI Reporting. First Forum Comment (10/30/18) (public) Fed-OSHA May Be Reopening the Door for More Post-Injury Drug Testing. Fed-OSHA has issued a memo revising its Obama-era interpretation of a federal regulation to note that the reg “does not prohibit workplace safety incentive programs or post-work injury drug testing, noting that it believes that many employers who implement incentive programs and/or conduct post-incident drug testing do so to promote safety and health. In addition, the memo notes that evidence that the employer consistently enforces legitimate work rules demonstrates that an employer is serious about creating a culture of safety, and “most instances of workplace drug testing are permissible,” specifying several types of drug tests that are allowed. The memo supersedes other documents that may be inconsistent with these interpretations, clarifying that employers who want to do drug testing do not need to determine that a “reasonable possibility” exists that drugs or alcohol may have contributed to a work accident. Executive Briefing (10/25/18) (members only) Cal-OSHA’s Proposed Electronic Reporting Mandate. A heads up to loss control staff and large employers that Cal/OSHA has published an emergency reg that will require all employers w/250+ employees and employers w/20-249 employees in industries with historically high rates of occupational injuries and illnesses to submit their annual OSHA 300A Summary of Work-Related Injuries electronically. Under the reg, which is intended to bring Cal/OSHA in line with Fed-OSHA requirements, affected employers must submit their 300A summary data for 2017 by 12/31/2018. Cal/OSHA plans to submit the emergency reg to OAL in the fourth week of October, then posted it on the OAL website for 5-day public comment. After that, OAL will have 10 days to review the reg and comments, and barring additional changes, it will take effect after that. Executive Briefing (10/25/18) (members only) Executive Memo (10/19/18) (members only) Workers’ Comp Exclusion from the Insurance Payment Intercept Program. A late amendment to AB 2802, which mandates that a new Insurance Payment Intercept Program take effect 1/1/20, excluded workers’ comp claims from the new reporting mandate included in Ins. Code §13550 (c)(7), which deals with identifying individuals who are in arrears on their child support payments, though it specified that, “This section does not prohibit an insurer from cooperating voluntarily with the Department of Child Support Services to identify claimants who are also obligors who owe past-due child support and report those claimants to the Department of Child Support Services.” [Ins.Code §13550(h)]. Notably, existing law already allows DCSS to obtain an order directing a claims administrator to withhold up to 25% of an injured worker’s TD (and to pay the withheld amount to the department) without WCAB approval or filing a lien. Nothing in AB 2802 alters that obligation to withhold TTD if an assignment order is in place; but otherwise there is no new requirement to identify, report, or withhold. Executive Memo (10/11/18) (members only) No Changes in WC Claim Forms, Pamphlets and Posting Notices for 2019. The DWC-1 claim form/NOPE, the workers’ comp new hire pamphlet requirements, and DWC’s version of the posting notice are imbedded in regulation and no changes have been made to those regs since they were adopted in July 2015 with a January 2016 effective date. None of the statutory changes enacted this year will require revisions to the posting notices, new hire pamphlets, or claim form/Notice of Potential Eligibility, so you may continue to use current versions in 2019. CWCI continues to stock these materials and CWCI members are eligible for a 15 percent discount on their orders. Executive Memo (10/9/18) (members only) Modifications to the Pharmaceutical Fee Schedule Regulations. CWCI’s first Forum comments on proposed changes to the Pharmaceutical Fee Schedule. First Forum Comment (10/8/18) (public)
Legal Case Law Update. A summary of favorable court rulings from the 2nd half of 2018, including three (King, Black, Lindh) in which CWCI filed amicus briefs in support of the defense. The update also discusses the rulings in Barri, Fitzpatrick, and Angizoula. Executive Briefing (12/20/18) (members only) City of Petaluma v. WCAB (Lindh). A summary of the 1st DCA ruling that the new rules of apportionment do not require medical evidence that an asymptomatic preexisting condition in and of itself would have become symptomatic or disabling. Amicus Brief (12/11/18) (members only) Department of Corrections v. WCAB (Fitzpatrick). CWCI letter to the Supreme Court in opposition to the California Applicants’ Attorneys Association’s request to decertify the 9/25/18 published decision in the Fitzpatrick case. Opposition to Depublication Request (10/31/18) (members only) Suon v. California Dairies. In an en banc decision, the WCAB provided instructions for the application of its prior en banc decision in Maxham v. California Dept. of Corrections, applying a reasonableness standard for the time to object to provision of certain records to a QME and to terminate the evaluation upon discovery of a prohibited communication. Significant Decision Summary (10/25/18) (members only)
Other FDA Safety Advisory on Non-Approved Drugs in Intrathecal Pumps. The FDA issued a safety advisory in November to patients, doctors and drug compounders warning against the use of non-approved drugs in intrathecal pumps, which are often used to treat injured workers and others suffering from back pain. The FDA specifically noted it has not approved include fentanyl, hydromorphone, bupivacaine, clonidine, or any compounded mixture of two or more different meds for use in intrathecal pumps and warned that using unapproved meds for intrathecal delivery could result in dosing errors, accidental overdoses, withdrawal symptoms, infections, damage to the brain and spinal cord, and pump damage and failure. The safety advisory may prove helpful for those making WC treatment and Medicare Set-Aside decisions as the FDA is now on record stating that fentanyl, hydromorphone, bupivacaine, clonidine and compounded meds should not be used in these pumps. Executive Briefing (12/5/18) (members only) New Date for 2019 CWCI Annual Meeting. Due to a labor dispute at the City Center Marriott in Oakland, the hotel had to reschedule a number of functions, including CWCI’s 2019 annual meeting. Our meeting, originally scheduled for Thurs, March 28, will now be held on Thurs, March 21 at the City Center Marriott, 1001 Broadway, Oakland, CA. Executive Briefing (11/21/18) (members only) Minutes from the Legal Committee Meeting. The meeting was held Nov. 5 by webinar. The agenda included an update on regulations on the formulary, utilization review, interpreter fees, physician fees, and the RTW Fund; status reports on CWCI amicus activity (Black, Lindh, Barri, Mastach); consideration of amicus participation in Willette; review of three decisions (PacificCar; Suon (en banc); Fitzpatrick); Saul Allweiss’s update on CalChamber activity, which is currently focused on the Dynamex decision; an update on regulatory activity (URAC compliance, Physician/Non-Physician Fee Schedule, ML Fee Schedule, Pharmacy Fee Schedule, and WCIS FROI/SROI reporting); a review of enacted WC bills dealing with consumer privacy, coverage for off-duty police officers out of state, CURES, fraud reporting, debit cards for indemnity payments and OSIP. The impact of the recent election results on WC was discussed, as were appellate practice tips from the Chair of the Appeals Bd, recent instructions to WCJs on reviewing MSA settlements, recent clarifications regarding SJDB voucher, a review of the recent P&T Committee mtg, a clarification regarding the exempt status of naloxone, ongoing problems related to compounded creams, and a WCJ who has been requiring wet signatures on all petitions and submissions, including e-filings. Meeting Minutes (11/15/18) (members only) On Demand Data Application Tutorials. CWCI conducted a 45-minute webinar to provide a tutorial to our members on how to access and use our interactive tools, and that program was recorded and segmented into 4 tutorials covering each of the applications discussed. Members who log in can now access the tutorials and the applications from the drop down menu under Research on the home page of our website under “Interactive Research Tools.” Executive Memo (11/1/18) (members only) Minutes from the Claims/Medical Care Committee Meeting. The meeting was held October 23 at the Oakland City Center Conference Center. The agenda included an update and discussion of recent regulatory activity including recent changes to the OMFS, the Formulary, and MTUS guidelines; draft changes to the pharmacy and med-legal fee schedules and to WCIS regs; an update on recent CWCI research (data refreshes for the claims monitoring, Rx Drug/Opioid, Regional Scorecard and Inpatient Hospitalization Claim interactive applications, the polypharmacy study, early returns on the Formulary, and the copy service fee schedule white paper, and the latest UR/IMR outcomes; discussion of a UR data call and a review of the 2019 public policy research agenda; a legal update on recent case law and amicus activity (King, Lindh, Black, Fitzpatrick, Barri); and a summary of 2019 bills signed by the Governor Brown. The Claims Committee thanked outgoing chair Dale Clough (Travelers) for his years of service to the community and the committee, and announced the incoming chair will be Julie Riddle of The Hartford. Meeting Minutes (10/30/18) (members only) WC Motor Vehicle Accident Frequency Increases. NCCI reports that after declining steadily for more than a decade, the incidence of work-related motor vehicle accidents (MVAs) in the U.S. is now on the rise. The trend runs counter to WC claim frequency overall, but tracks with the increasing frequency of MVA-related injuries in the U.S. over the past 7 years, which has coincided with the growth of cell phone related distracted driving — now cited as a causal factor in more than a quarter of all MVAs. The report found that although MVA claims represented just 5% of all WC claims over the 5-year study period, they accounted for 28% of claims that cost over $500K, which is also associated with the fact that MVA claims were 12 times more likely to result in a fatality than a non-MVA claim. Executive Briefing (10/25/18) (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. Quarterly Summaries Q3/18 (10/3/18) (members only) |