Q4 – 2022 – January 6, 2023
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Research CWCI Finds WC Inpatient Hospitalizations Are Down But Respiratory Disease Stays Are Up… A CWCI t study found that after across-the-board declines in California inpatient hospital stays during the COVID-19 health care crisis of 2020, the number of inpatient stays began to rebound in 2021 for all payer groups except WC, which fell an additional 5.7% last year. The 2021 decline in WC inpatient hospitalizations brought the total decline over the past decade to 48.1%, more than triple the 10-year decline of 15.0% noted for hospital stays paid under private coverage, while those paid under Medicare were only down 5.2% and those paid by Medi-Cal increased by 11.7%, largely driven by the dramatic growth of the Medi-Cal population over that period. Using data from the Office of Health Care Access and Information (HCAI) on 35.3 million 2012-2021 inpatient discharges from Calif hospitals, the Institute noted that 163,249 (< 0.5 percent) involved injured workers. Not surprisingly, most WC hospital stays were associated with musculoskeletal and connective tissue disorders but the impact of COVID was evident in the recent data, as the percentage of WC inpatient stays related to diseases and disorders of the respiratory system nearly tripled from 2.6% in 2019 to 7.4% in 2020 and remained at an elevated level (7.0%) in 2021. The study also found that 67.2% of WC inpatient hospitalizations in 2021 were surgical stays, vs. only 24.7% for Medicare, 21.1% for Medi-Cal, and 31.5% for private coverage. The most common WC surgical hospitalizations last year were spinal fusions (17.6%) and major joint replacements (10.7%), though a closer examination of the joint replacement data found that nearly 88% of injured workers who underwent knee or hip replacement were diagnosed with primary osteoarthritis, which tends to develop from mechanical wear and tear, structural degeneration, and joint inflammation, rather than from an acute, direct trauma to the joint. Executive Briefing (12/29/22) (members only) Summary of WCIRB’s Q3 Update on Insurer Experience… WCIRB’s update on Calif WC insured experience valued through the Q3 2022 contained several highlights:
Executive Briefing (12/29/22) (members only) Calif WC CY 2020 Experience vs. Nationwide Results. CWCI’s analysis of (NASI) data on CY 2020 WC benefits, coverage, and costs across the U.S. estimates that in the first year of the pandemic California accounted for 11.9% of all jobs covered by WC in the U.S., 14.7% of covered wages, and 20.1% of all cash and medical benefits paid to injured workers. The NASI data show that state and federal programs, including insured and self-insured employers, covered 135.6 million jobs and an estimated $8.69 trillion in covered payroll in 2020. Benefits paid under these programs totaled $58.9 billion ($27.7 billion for medical care and $31.2 billion in cash benefits), 6.5 percent less than the pre-pandemic total of $63.0 billion for CY 2019. Most of that decline reflected the sharp reduction in paid medical, which fell by $3.6 billion after the pandemic hit as medical resources were diverted to treating COVID and many individuals chose to delay treatment. Though California was hit hard by COVID and the 2020 recession, its WC system remained the largest in the country, with more than 16.1 million covered jobs, nearly $1.28 trillion in covered wages, and close to $11.9 billion in paid benefits – just slightly below the combined total for NY, FL and PA, which ranked 2nd, 3rd and 4th respectively, and more than 3.6 times the total paid to injured workers under federal programs. Fourteen states had more than $1 billion in WC benefit payments in CY 2020, with the top 10 states accounting for 50.9% of the nation’s covered jobs, 54.7% of covered payroll, and 59.4% of the paid benefits. Executive Briefing (11/22/22) (members only) Bulletin (11/14/22) (members only) Nonfatal Injury & Illnesses Edged Up in 2021 After Sharp Rise in Public Sector COVID Cases. A CWCI analysis of annual workplace injury & illness data compiled by DIR’S Office of Research revealed that that the number of nonfatal work injuries and illnesses in Calif’s public and private sectors increased by 2,200 cases (0.5%) last year as the state continued to emerge from the 2020 recession. With employment back on track in 2021, the work injury & illness case count rose from a 10-year low of 448,300 in 2020 to 450,500 in 2021, while the work injury & illness rate edged up from 3.5 to 3.6 cases per 100 full-time employees (FTEs). CWCI’s analysis, however, noted dramatically different results for the public and private sectors, largely due to the continued growth of COVID-19 work illness cases reported among state and local employees, many of whom have a presumption of compensability for COVID. While work injuries and illnesses in the private sector were down, the Institute found that in the public sector, the number of work-related Respiratory Condition illnesses among state workers increased by 2,300 cases, which pushed the rate per 100 FTEs up from 103.8 in 2020 to 163.0 in 2021; while local governments reported an increase of 3,700 Respiratory Condition cases, so their incidence rate per 100 FTEs for these illnesses jumped from 72.1 in 2020 to 104.8 in 2021. Combined, the additional 2,300 Respiratory Condition cases among state workers and the additional 3,700 Respiratory Condition cases among local government workers accounted for 6,000 (71.4%) of the 8,400 additional work injury and illness cases recorded by public sector employees in 2021. Executive Briefing (11/22/22) (members only) Low Volume/High-Cost WC Meds. A recent review of data in CWCI’s Prescription Drug Application revealed that a handful of low-volume/high-cost NSAIDs and Dermatological drugs have a disproportionate impact on the total WC drug spend. Following that review, the Institute revisited the Application to determine if any other medications in the most heavily used therapeutic drug groups have an outsized impact on drug costs within their drug categories. Preliminary results identified nearly two dozen low-volume, high-cost medications that have become cost drivers within the system, including not only NSAIDs and Dermatologicals, but Anticonvulsants, Opioids, Antidepressants, Ulcer drugs, and Musculoskeletal drugs. The preliminary data show the percentage of the 2021 prescriptions for these medications that were dispensed as brand drugs, each drug’s share of the prescriptions within its therapeutic drug category, the average amount paid per prescription last year, and the drug’s share of the total drug spend within its category. Executive Briefing (10/27/22) (members only) Summary of Q2 2022 Insurer Experience. CWCI’s recent review of WCIRB’s report on Calif WC insurer loss and premium experience through Q2 2022 noted the following key findings:
Executive Briefing (10/27/22) (members only) Update on COVID-19 Claim Data. The arrival of new COVID variants in Europe late this summer raised the specter of another year-end surge in COVID infections in the U.S., but the update to CWCI’s COVID-19/Non-COVID-19 app, based on claims reported to the DWC as of 10/17/22, showed the steady downtrend in coronavirus WC claims that began in June was continuing, as only 1,543 COVID-19 claims with September injury dates were reported to the DWC (3.3% of all reported WC claims). The September count was the second lowest monthly tally in 2022 and well below the 4,258 COVID claims reported for August, the 9,005 claims reported for July, and the 9,511 claims reported for June, which was the peak of the summer surge. CWCI’s updated projections also continued to trend down, with estimates of ultimate COVID-19 claim counts anticipating 9,701 COVID-19 claims for June; 9,473 for July; 4,820 for August, and 2,037 for Sept. After factoring in that 4-month decline, COVID claims were down to 17.4% of all Calif WC claims reported for the first 3 quarters of 2022 (96,272 COVID cases out of 552,143 claims reported during the 9-month span), and that proportion would be far less if it not for the Omicron surge last winter, which resulted in 54,977 COVID claims in January, 57.1% of all 2022 COVID claims. Executive Briefing (10/27/22) (members only)
Statutory/Regulatory California WC Medical Mileage Rate To Increase To 65.5 Cents/Mile For Travel O/A 1/1/23. On 12/29/22 the IRS announced that the standard mileage rate for business miles will increase from 62.5 cents per mile to 65.5 cents per mile effective 1/1/23. As a result, the amount payable to California injured workers for travel related to medical treatment or evaluation of injuries also will increase to the new rate. Workers’ compensation claims administrators should apply the new rate for travel on or after 1/1/23, regardless of the date of injury, but should continue to pay the current rate of 62.5 cents per mile for travel that occurred between 7/1/22 and 12/31/22. Executive Memo (11/29/22) (members only) Bulletin (11/29/22) (members only) News Release (11/29/22) (public) User Funding Assessment Rates for 2023. The DIR issued the 2023 assessments that workers’ compensation insurers are required to collect from policyholders to cover the budget of the state Division of Workers’ Compensation (DWC) and five related programs set up by state lawmakers. Insurers should apply the rates against their policyholders’ estimated annual assessable premium for policies incepting January 1, 2023 through December 31, 2023. The Department also issued separate rates that self-insured and California legally uninsured employers must apply against the total amount of workers’ compensation indemnity they paid. The rate calculations and instructions were mailed to workers’ comp insurers and self-insured and legally uninsured employers. The first installment is due by January 1, 2023. governor to sign or veto bills. Executive Memo (11/29/22) (members only) Bulletin (11/29/22) (members only) News Release (11/29/22) (public) TTD And PTD Rates for 2023 Announced. The Dept. of Labor announced in mid-November that California’s State Average Weekly Wage (SAWW) rose 5.159 percent between the first quarter of 2021 and the first quarter of 2022. As a result, effective 1/1/23 California WC temporary total disability and permanent total disability rates will increase along with other workers’ comp benefits that are tied to the increase in the SAWW. The maximum weekly TD rate for 2023 injuries and illnesses will rise to $1,619.15 while the minimum weekly TD rate will increase to $242.86. Executive Briefing (11/22/22) (members only) Executive Memo (11/16/22) (members only) Bulletin (11/16/22) (members only) News Release (11/16/22) (public) DOSH’s Revised COVID Workplace Pandemic Rules Won’ Include Exclusion Pay. Cal/OSHA’s Standards Board announced in early November that it will not include controversial exclusion pay provisions in its proposed 2-year, non-emergency COVID-19 workplace standards as it would delay implementation by months and the nonemergency standard needs to be in place by 1/1/23. The exclusion pay provision in the current emergency standard that expires at the end of the year requires employers to provide employees who refuse to be tested for COVID after close contact during a work site outbreak a week off with pay, which employers say incentivizes workers to not get tested. The Standards Board will vote on the proposed reg at its December meeting, and the standard is expected to take effect at the first of the year. The new standard will sunset after two years but in the meantime, Cal/OSHA plans to develop a permanent airborne infectious disease standard for general industry. Executive Briefing (11/22/22) (members only) Qualified Medical Evaluator Regulations. CWCI’s comments presented during the 45-day public comment period on proposed amendments to the Qualified Medical Evaluator regulations. 45-Day Comments (11/15/22) (public) Public Safety Officers Scored Wins With 2022 WC Legislation. CWCI’s summary of 2022 enacted bills, (Bulletin 22-17) highlighted 25 bills of interest to the WC community that were signed by Governor Newsom. Among the big winners the 2022 legislative session were public safety officers (coincidentally, in March the governor named the former principal lobbyist for the Calif Professional Firefighters Assn as his Legislative Affairs Secretary.) Among bills benefiting public safety workers: SB 1127 which includes provisions that will reduce the investigation period for injuries presumed compensable under LC §§3212-3212.85 and §§3212.9-3213.2 from 90 to 75 days, create a penalty of up to $50K if the WCAB concludes that an employer unreasonably denied a presumptive injury claim, and allow first responders up to 240 weeks of TD (rather than the 104 weeks available to other injured workers) for presumptive cancer claims. AB 151, which extends 1 year of salary continuation in lieu of TD (and up to 3 years for severe burns) to Dept of Forestry firefighters. AB 551 which extends COVID disability retirement presumptions for certain firefighter, public safety, and health care workers to 1/1/24. AB 662 which will provide peer-to-peer resources for first responder suicide prevention.AB 1722 which permanently provides that safety members of CalPERS who retire with an industrial disability will receive a retirement benefit paid by a CalPERS trust fund equal to the greatest amount resulting from 3 possible calculations: an actuarially reduced service retirement; a service retirement allowance if the member is qualified; or 50% of their final compensation, plus an annuity purchased w/their accumulated contributions, if any. AB 1751, which extends the expiration date for COVID-19 outbreak and first responder presumptions to 1/1/24 and expands the firefighter presumption to include active firefighters in several state agencies. Executive Briefing (10/27/22) (members only) Update on COVID-19 Claim Data. The arrival of new COVID variants in Europe late this summer raised the specter of another year-end surge in COVID infections in the U.S., but the update to CWCI’s COVID-19/Non-COVID-19 app, based on claims reported to the DWC as of 10/17/22, showed the steady downtrend in coronavirus WC claims that began in June was continuing, as only 1,543 COVID-19 claims with September injury dates were reported to the DWC (3.3% of all reported WC claims). The September count was the second lowest monthly tally in 2022 and well below the 4,258 COVID claims reported for August, the 9,005 claims reported for July, and the 9,511 claims reported for June, which was the peak of the summer surge. CWCI’s updated projections also continued to trend down, with estimates of ultimate COVID-19 claim counts anticipating 9,701 COVID-19 claims for June; 9,473 for July; 4,820 for August, and 2,037 for Sept. After factoring in that 4-month decline, COVID claims were down to 17.4% of all Calif WC claims reported for the first 3 quarters of 2022 (96,272 COVID cases out of 552,143 claims reported during the 9-month span), and that proportion would be far less if it not for the Omicron surge last winter, which resulted in 54,977 COVID claims in January, 57.1% of all 2022 COVID claims. Executive Briefing (10/27/22) (members only) Executive Memo (10/19/22) (members only) Streamlining EAMS. In late October DWC released proposed rules that should reduce costs and improve the efficiency of the Electronic Adjudication Management System (EAMS). If approved, the changes will allow documents to be submitted with electronic signatures, which is consistent with Government Code and state regs that allow digital signatures on communications with public entities and allow for the electronic filing and service of all WCAB case documents in EAMS rather than requiring service by mail. The proposed regs were posted in an online forum with informal comments due by Friday 11/4/22, after which the proposed changes will go through the formal rulemaking process, including another comment period and a public hearing, before being adopted on a permanent basis. Executive Briefing (10/27/22) (members only) CWCI’s Summary of 2022 Enacted Legislation. The 2022 legislative session ended September 30 with a flurry of last-minute bill signings. CWCI’s annual review of enacted legislation summarizes 25 bills passed by state lawmakers and signed by the governor that should be of interest to the workers’ compensation community. The summary includes descriptions of each of the bills as well as links to their final versions and legislative history, posted on the California Legislative Information page. Bulletin (10/03/22) (members only)
Legal Amicus Curiae Brief: California Capital Insurance v. Employers Compensation Insurance. CWCI filed an amicus brief with the 4th DCA in support of Employers Compensation in the workers’ comp insurer’s appeal of a lower court’s ruling ordering equitable contribution to general liability insurer California Capital in a case where two employees were in a motor vehicle accident after drinking following their shifts at an insured restaurant. The GL carrier settled with the passenger for policy limits of $2 million and an assignment of rights from the insured. The GL carrier then sued the WC carrier for equitable contribution, alleging the two employees were in the course and scope of their employment. Amicus Brief (10/12/22) (members only) Amicus Curiae Brief: Kuciemba v. Victory Woodworks. In a joint amicus brief, CWCI joined with the California Chamber of Commerce, the National Federation of Independent Business, the National Association of Manufacturers, the Restaurant Law Center, and the National Retail Association to urge the California Supreme Court to hold that lawsuits by employees’ family members for “take home” COVID-19 injuries are barred by the derivative-injury rule and that employers do not owe a duty to protect non-employees from cases of “take home” COVID-19. Amicus Brief (10/12/22) (members only)
Other New Year’s Reminder on Benefit Increases. Claims organizations are reminded that effective for injuries o/a 1/1/23, TTD will increase along w/other benefits tied to SAWW changes. Max. TTD for claims w/injury dates o/a 1/1/23 will rise to $1,619.15 /week, min. TTD goes to $242.86/week. Also increasing: TTD paid 2 years or more after injury; Life Pension & PTD payments for injuries o/a 1/1/03; & installment payments on death claims. The increase also affects wage loss calculations. Benefit underpayments can lead to penalties, so adjustments should be reviewed by counsel to ensure accuracy. For details, refer to Bulletin 22-19 which was sent to your claims and legal staff. Executive Briefing (12/29/22) (members only) CWCI Annual Meeting Registration. Registration is open for CWCI’s 59th Annual Meeting, which will be held Wed, March 8 from 9 a.m. to 2:30 p.m. (Pacific) in the Hofmann Theatre at the Lesher Center for the Arts in Walnut Creek. The 2023 meeting will focus on ongoing economic and demographic changes in California and their influence on the California workers’ compensation system. The meeting is free to CWCI member company employees, but all attendees must pre-register. The meeting will kick off w/a Continental breakfast at 8:00 a.m., and will include a luncheon from noon to 1:00 p.m. Executive Briefing (12/29/22) (members only) Executive Memo (12/16/22) (members only) CWCI Accepting Applications For V.P. of Research & Development. The Institute is accepting applications for the position of Vice President, Research & Development to lead and conduct its research activities. Applicants must have strong presentation skills and a degree plus five years of experience in health services research, statistics, public policy, or a related field. Knowledge of the California workers’ compensation system is preferred. The job description, list of qualifications, and information on how to apply are posted at CWCI Job Opening. News Release (10/17/22) (public) Save the Date for CWCI’s 2023 Annual Meeting. CWCI will host its 59th Annual Meeting on Wednesday, March 8, 2023 in the Hofmann Theater at the Lesher Center for the Arts in Walnut Creek. Further details will be released in the coming weeks, but it the meantime CWCI members should mark their 2023 calendars to save the date. Executive Briefing (10/27/22) (members only) Executive Memo (10/06/22) (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. |