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Are alternatives to primary insurance on the
downswing?
ICW Group Pushes into Big Leagues
Wilson Brings Wealth of Experience to New Post
St. Paul Travelers Adds New Programs
MPN Cleanup Bill: Common Sense or Calamity?
Are SIGs Seeking Financial Ratings?
Remembering "Sandi" Sandberg
Remedy Temp Issue Still Ripe for CIGA
Publius Offers Subtle Insider Wisdom
Santa Cruz Employers Decry Minimum Wage Hike
Empire State Business Groups Put Heat on Legislature
No Workers' Comp for Hippie Game Injury
Hawkeye State Jockeys Request Coverage Boost
Inland Southern California Car Wash Owners
Nabbed for Suspected Fraud
Oroville Fraud Forum Features Former 'Long Island Don'
Fidelity Sub Acquires Southern California-Based VPA Inc.
Paltry Paybacks Drive Hawaii Physicians from Profession
Trench Victim's Kin Sue Developer, City and County
Cooperation Urged as West Virginia Expands Classifications
Dairy State Law Provides State-Backed Workers' Comp
Canada's Worker's Comp Boards Must Deal with Chronic Pain
Little Rhody Eyes Separate Settlement with AIG
Commentary: Did Spitzer Walk Away Too Quickly?
'Wage' Dispute Adds Insult to Injury
Commentary: 'Disturbing Is What It Takes'
Keystone State Park May Close over Unpaid Workers' Comp
Contractors Settle Wrongful Death Suit; Victim Was Son of
Former Fed-OSHA Official
Administaff Reports Strong Quarter
Former Riverside Prosecutor Pleads No Contest
to Insurance Fraud Policy Reversal
Will Boost West Virginia Rates: BrickStreet Exec Divided Ohio Court
Recognizes Governor's Executive Privilege
Aussies Try 'Competitive Federalism'
Beacon Mutual Exec Responds to Critical Report
Ottawa Wants Cancer Deemed Occupational Risk to
Firefighters
Vermont Bill Extends Comp Benefits to Volunteer
Firefighters
Changes to Ohio Rebate Program Expected
University Official Nabbed for Workers' Comp Fraud
Treasury Probes Disgraced Ohio Coin Dealer
Coin, Currency Collection Brings in $7.5 Million Bureau Recommends Another Double
Digit Rate Drop The Governing Committee of the Workers' Compensation Insurance Rating Bureau is recommending that the pure premium rate be decreased 16.4 percent for policies renewing or incepting July 1. This is the third double digit rate decrease in a year and amounts to a cumulative 55 percent decrease in the pure premium or in loss costs. Bureau actuaries also predict that loss ratios will probably stay in the 37 percent range and perhaps even dip a few points lower. The decrease reflects both the drop in frequency and continued declines in indemnity and medical costs thanks to the California workers' comp reforms. The Bureau predicts that rates will probably flatten out. But the permanent disability wars in the legislature are just beginning and challenges to utilization review may also emerge to dampen the future outlook. The biggest factor is the continuing decline in frequency which is down 17.7 percent in 2004-2005. Frequency declined 17.1 percent in 2003-2004 and 6.6 percent in 2002-2003. Bureau actuaries say the biggest decrease in frequency is in the permanent partial disability claims and conclude that because of the reforms there are fewer incentives to move claims into the workers' comp system.
Baller L.A. Cop Pleads Not Guilty to Workers' Comp Fraud
Coins, Bills Acquired with Ohio Funds on the Auction Block
Opinion: New York a Decade Late on Reforms
Workers' Comp Carriers Off the Hook for Florida Hurricane
Fund
Ohio: Seven Counts Added to Hedge Fund Suit
Arkansas School District Stays in Workers' Comp Group
SCIF EMPLOYEE CONDITIONS INTOLERABLE State Compensation Insurance Fund —in the midst of major downsizing –witnessed its rank and file union member employees picketing at 16 office locations today. The unions blame Governor Schwarzenegger's failure to negotiate a new union contract for its employees. But State Fund employees, many of whom may be laid off, need not look much further than their own front office to see who's really holding their contract hostage. Despite the usual union vitriol being spewed towards the governor, State Fund management is also involved in the negotiations – SCIF Management has a seat at the table – and may have suggested to its unions that it was the Governor not them who is calling the shots.
Injured News CA WCAB - 4610 Mandatory or UR Barred Worker's Comp Arnold makes new law.
San Diego DA Puts Kibosh on Roofers The San Diego District Attorney has slapped indictments on 12 roofing executives for participating in an alleged multimillion dollar payroll scheme to scam the California workers' comp system. It's the largest case of this type in San Diego. According to the San Diego DA, executives for Escondido-based Mayer Roofing Company have been indicted for premium fraud to the tune of $4.5 over three years. The indictment exposes a major problem in the roofing industry that costs the insurance industry millions in unpaid premium. "And that's just a three year period—2001 to 2003. They were with State Fund for about six years before that," says Ernie Marugg deputy DA, adding that Mayer has been with AIG since January for 2004. "We have evidence through 2004, and it's just an estimate, but it looks like $1.3 million," Marugg says. He says AIG auditors are still looking at the evidence, but Mayer's X-Mod was higher at AIG, so the loss could be higher as well. According to the DA, Mayer execs inflated hourly wages of low wage employees to qualify for the lower premium assigned to companies that pay $20/hour or more. Mayer had 450 employees.
Claims Frequency Hits An All Time Low New figures show claims frequency is down 13 percent in 2004 for California insureds. The decline continues the trend begun in the early nineties and has improved thanks to the workers' comp reforms, according to the California Workers' Compensation Institute. This record decline means savings for employers, but continued declines in frequency and rates hinges on what judges, regulators, and legislatures decide to do with California workers' comp this year. Tweaking has already begun on the new Permanent Disability Rating Schedule, and there may be more to come. After surveying 24 insurers that wrote more than three quarters of California's direct written premium in calendar year 2004, CWCI took into account 37.8 medical-only claims and 21.4 indemnity claims per $1 million of adjusted earned premium in 2004. Comparing those figures to the survey done last calendar year, this year shows the state's aggregate insured claim frequency rate per $1 million of adjusted earned premium was down 13 percent from 68.1 percent in 2003 to 59.3 in 2004. CWCI says this is the lowest level ever recorded by one of its surveys. CWCI has been doing frequency surveys since at least 1988.
Injured Workers Replace Almost 100% of Lost Wages Thanks to generous benefits increases in AB 749 authored by former Assemblyman Tom Calderon, temporarily disabled workers are replacing the majority of their wages through TD payments. The research backs up the observation from industry experts that AB 749 is more likely to continue to increase the benefits of seriously injured workers over time. According to data from the California Workers Compensation Institute 97 percent of temporarily disabled workers got back at least 2/3 of their average weekly wages in TD payments in the first quarter of 2005. This is up from 80 percent prior to the AB 749 benefit increases. California workers' compensation provides TD payments to injured workers who cannot return to their jobs right away, and they are designed to replace 2/3 of an injured worker's average weekly wage. In 2002, the legislature passed AB 749, which increased TD rates over three years starting in accident year 2003 and mandating that TD payments be tied to increases in the state average weekly wage (SAWW).
L.A. County Improving Anti-Fraud Efforts The Workers' Compensation Fraud Assessment Commission doled out $1,065,192 in reserve funding to county district attorneys yesterday for the 05-06 fiscal year of which $520,597 is going to Los Angeles County. The five percent reserve funding is additional funding given to district attorneys to cover unanticipated costs associated with litigation and investigation expenses. L.A. County is dealing with the unanticipated costs of two large premium fraud cases that have come up over the last few months. It's also doubling its output on investigations and trials this fiscal year, a big improvement over last year, according to Commission Chairman Bill Zachry. The Commission is also agreeing to fund the proposal submitted by the district attorneys in Kings, Fresno, Kern, and Tulare to combat premium fraud in the largely agricultural Central Valley. The Commission is recommending a combined amount of $173,454.
Dykes Decision Deals Blow to Employers In one of the first setbacks for employers regarding the proper amount of permanent disability, the California Fifth District Court of Appeals ruled that a Workers' Compensation Judge was correct in allowing the monetary amount from a previous disability as opposed to the percentage to be subtracted from the new disability. The case, E.J. Gallo vs. WCAB (Dykes), overturns an earlier en banc decision--Nabors v. Piedmont Lumber & Mill Company--currently up on appeal. The reasoning in Dykes not only increases costs for employers but "flies in the face of the statute, which states it's the 'percentage' that's subtracted (Labor Code 4664a)," says one defense attorney. Legal sources close to the case say Gallo plans to appeal to the California Supreme Court.
Draft Regs on Controversial Drug Repackaging Out As promised, the Division of Workers' Compensation releases a draft of proposed regulations regarding repackaged drugs for consideration with an advisory committee meeting planned to hash out the details. A regulatory solution may help slay a major cost driver and avert another legislative showdown on the issue this coming year. The draft regulation says in pertinent part that if the National Drug Code for a drug product as dispensed is not in the Medi-Cal database and the NDC for the underlying drug product from the original drug manufacturer is in the Medi-Cal database, the maximum fee shall be allowed pursuant to Section 14105 of the Welfare and Institutions Code using the NDC for the underlying drug product from the original manufacturer as it appears in Medi-Cal, calculated on a per unit basis. If the NDC from the original manufacturer is not in the Medi-Cal database the reimbursement shall be the average wholesale price of the lowest priced therapeutically equivalent drug minus 17 percent, calculated on a per unit basis. Doctors who dispense repackaged drugs out of their offices to injured workers are able to evade the pharmaceutical fee schedule charging for some drugs as much as a 700 percent markup over Medi-Cal. Both employers and labor consider the dispensing of repackaged drugs to be a major cost driver in the system. A bill authored by Sen. Jackie Speier (D-San Mateo) that would have capped repackaged drugs at Medi-Cal levels got tabled amid partisan bickering in August. Some employers are going ahead and forming their own pharmaceutical networks to control costs on their own.
Employers May Have to Pay Extra for Illegal Aliens Employers may be on the hook for additional permanent disability benefits even if they cannot lawfully return an employee to work because he's an illegal alien. Although the issue was not touched on at a public hearing on the proposed Return to Work regulations, the potential costs in higher premiums has the employer community very concerned. Under the current proposed regulations, an employer who makes an offer of return to work for the same or a modified job, the employee gets a 15 percent decrease in permanent disability benefits, whereas an employer who cannot make an offer must pay a 15 percent increase in permanent disability benefits. But according to industry testimony obtained by Workers' Comp Executive, employers by law cannot hire illegal aliens. Thus, if an employer found out an employee was an illegal alien after a claim form was filled out, an employer cannot legally give that employee a return to work offer.
Rates and Losses Down Again in 3rd Quarter Reflecting the California workers' comp market's continuing improvement, the average statewide insurer rate per $100/payroll for policies written in the third quarter—excluding deductible credits--is $4.42. This is almost 18 percent below the rates charged in the first 6 months of 2005 and 32 percent below the average rate charged for the second six months of 2003, according to the Workers' Compensation Insurance Rating Bureau. But written premium reported for the first nine months of 2005 was also down to $16.3 billion, 10 percent below the written premium reported for the first nine months of 2004. Most carriers lowered rates significantly for July 2005 and plan to do so January 2006, but the industry and the California Department of Insurance expect a slow down in rate decreases after January, as most of the reforms have filtered through the system.
PDRS Revision Study Moving Forward In addition, workers compensation judge and Commission staff member Lach Taylor recommends that once the formula is agreed upon that the PDRS be conclusive evidence and not rebuttable. The new formula will take the proportional wage loss data provided by the 2004 RAND data and divide it by the American Medical Association impairment guidelines. That figure would then be multiplied by a number representing the public policy goal of providing what's considered an adequate benefit to injured workers.
CA Reforms Slashing Overall Utilization The biggest decrease was in chiropractic manipulation where the percentage of indemnity claims receiving medical treatment was 21.4 percent in 2003 dropping down to 13.9 percent in 2004. Physical therapy declined from 67.4 percent in 2003 to 61.0 percent in 2004. Both chiropractic and physical therapy treatments were capped by the 2003 reforms. The Medicine section and Injections categories were also down, albeit slightly. But some treatments showed increases as well. Radiology increased from 30.2 percent in 2003 to 37.7 percent in 2004. Evaluation and Management (office visits) increased slightly as did the Surgery category.
Department Strikes Out Against Fremont The California Department of Insurance strikes out against Fremont General (NYSE: FMT) as a Superior Court judge tentatively rules from the bench to sustain Fremont General’s demurrer without leave to amend saying that the Department’s allegations of fraud are not “actionable.” Fremont General is the parent company of California workers’ comp carrier Fremont Indemnity that was liquidated in 2003. According to the court clerk the judge’s ruling reads in pertinent part: “There is no fiduciary duty. The alleged misrepresentations are either opinions of future events or failures to disclose. Neither categories are actionable.” The ruling caps an 18 month legal battle by the Department to hold Fremont General accountable for actions taken against its subsidiary Fremont Indemnity as it was spiraling toward insolvency. Earlier this year Judge Wendell Mortimer threw out all the charges related to Holding Company Act violations where the Department asserted that it had the authority to recover money from Fremont General. But the judge allowed the Department to pursue charges of concealment fraud for allegedly withholding information from the Department. And at an earlier hearing, the judge asked the Department to render more specifics. Repackaged Drugs Hinder Reform Savings Doctors who evade fee schedules by dispensing repackaged drugs to injured workers’ out of their offices is one of the main reasons that savings estimates from the 2002 pharmaceutical fee schedule have failed to materialize, according to a study by the California Workers’ Compensation Institute. The study says that despite the fact that repackaged drugs are only 30 percent of California workers’ compensation prescriptions they represent more than 43 percent of the pharmacy dollars billed, and more than half of all pharmacy dollars paid. This is more proof that repackaged drugs are a significant cost driver all on their own and must be addressed either through legislation or regulation next year. But despite these
trends, CWCI research also shows that average prescription drug payments did
fall 9.6 percent indicating that the pharmaceutical fee schedule is bringing the
prescription drug cost driver under control and providing better pharmaceutical
access for injured workers. Dear Commissioner: Time’s A’ Wastin’ It’s been six long weeks since California Insurance Commissioner John Garamendi presided over a rather dull (aren’t they all?) pure premium rate hearing. But he has yet to announce his advisory pure premium rate recommendation for Jan. 1. And every day the Department waits is one less day the California workers’ comp insurance industry has to announce and process even lower rates for employers beginning in January. The Workers’ Compensation Insurance Rating Bureau recommended a 15.9 percent decrease back on September 16. The Commissioner decided at that time to remove the Bureau’s proposed change to the Experience Modification formula from consideration, thus leaving the Department’s actuarial staff with nothing else to consider except for the usual numbers and data on reform.
FLASH: Medical Fee Schedules Costs Decrease by 6 Percent Fees for physician
services under the new fee schedules are falling by almost 6 percent on average
between 2002 and 2004, according to data from the California Workers’
Compensation Institute. The decrease is yet another indication that the workers’
comp reforms are reducing cost drivers in the system. CA Court Says Illegal Aliens Get Benefits The Second District
Court of Appeals ruled late yesterday that illegal aliens who obtain employment
dishonestly are still entitled to workers’ comp benefits. The ruling (Farmer
Brothers’ Coffee v. WCAB, Rafael Ruiz) leaves employers, even those who do not
knowingly hire illegal aliens, on the hook for the costs of their workers’ comp
benefits – both medical and indemnity.
State Supremes Deny Remedy Temp Petition The California
Supreme Court denies a petition to review in the Remedy Temp (General Casualty
v. WCAB (California Insurance Guarantee Association) case leaving CIGA on the
hook for workers’ comp claims when the general employer’s—a staffing
agency--workers’ comp carrier goes insolvent. The case is a body blow to CIGA
which is still trying to dig itself out of a financial hole.
Employer Beware: Discrimination Lawsuits Coming Fast Workers’ comp reform
may have wrought even more costly-and unintended-consequences for California
employers. Now they could find themselves outside the exclusive remedy and on
the wrong end of even more costly litigation, courtesy of both applicants’
attorneys and trial lawyers. Find out how the California business climate likely
is heading straight back to a deeper perdition than the one that reform was
supposed to help it climb out of.
Click here for the full
story. Lax reserving
practices of some self-insured employers have the California Self-Insurers’
Security Fund concerned enough that the Office of Self-Insurance Plans has
proposed new regulations to address some of the problems. Find out what some of
the problems are and how the new regulations propose to fix them, in the current
print edition of Workers’
Comp Executive. Research shows some
workers’ comp doctors sell drugs for as much as 490 percent of the Medi-Cal
schedule. Find out why this ripoff happens, who is to blame and what, if
anything, will be done about it.
Subscribe and receive the
current print edition of Workers’ Comp Executive. Could it be the
difference between Southern and Northern California? Or are some carriers
sharper than others? Regardless, the question of whether lien filings are
increasing or decreasing is a complex one. Find out where it’s happening and
why, in the current print edition of
Workers’ Comp Executive.
Applicants’
attorneys say they’ll need to be better lawyers to protect their clients in this
new system, so they’re looking for every loophole. Read about not one but two
new ways applicants’ attorneys have found to increase TD. Get the current print
edition of Workers’ Comp
Executive. The California
Workers’ Compensation Uniform Statistical Rating Plan—the term goes to the heart
of complexity and boredom in workers’ compensation. Changes to the X-Mod formula
have some brokers highly concerned. Find out what all the brouhaha’s about, in
the current edition of
Workers’ Comp Executive. In California, every
time the owner or occupant of a residence hires work done around the
house-including childcare-they potentially become the employer of a covered
employee for workers’ compensation purposes. In this recent Significant Panel
Decision, the Workers’ Compensation Appeals Board found that an unlicensed
painter injured in the first few hours of work was an employee of the homeowners
who hired him. Click here
to read more.. No TRIA equals
disaster, say industry experts, who fear that without government backing, even
the threat of a terrorist attack will be enough to cripple the workers’ comp
market. Get a glimpse of some of the latest predictions, in the current print
edition of Workers’ Comp
Executive. SISF is looking into an MPN…and will the Governor get to appoint another WCAB Commissioner? Find out what’s shakin’ in the current edition of Workers’ Comp Executive. OAL: Using Out-of-State Docs Complies with Law The Office of
Administrative Law says that using out-of-state doctors to review treatments
does not violate California state law. The statement clearly affirms the
legislative intent of SB 228, and for the sake of the market, keeps the costs of
medical utilization down. OAL: Pre-Designation Not An Emergency The Office of
Administrative Law disapproves the Predesignation of Personal Physician
emergency regulations saying that the inconvenience of injured workers not being
able to choose a personal physician does not rise to the level of an emergency,
according to the Division of Workers’ Compensation. DWC says predesignation
emergency regulations are crucial to avoiding disputes and expediting medical
care, and it plans to challenge OAL’s ruling to the governor’s Legal Affairs
Office. SB 1023 Vetoed "Injured workers denied their money at the savings to Insurance Companies" Webmaster T. Governor Arnold
Schwarzenegger applies the veto pen to SB 1023 authored by Sen. Joe Dunn
(D-Garden Grove). The legislation would have restored an oppressive 5814
penalty-like structure to the workers’ comp system increasing take home pay for
applicants’ attorneys and costs in the process.
View the only workers' compensation video news
update available today. Updated every Tuesday morning, it provides a quick
overview of what's new around the nation. The following linked stories are among
those topics covered in this weeks NewsLine Week In Review Video Report.
FLASH: Garamendi: It’s Obscene! Urges Bigger Decreases Sounding much like
he did during the May rate hearing, Insurance Commissioner John Garamendi is
calling the estimated 50 percent reduction in California workers’ comp costs
“extraordinary” and “unprecedented.” The Commissioner says that carrier rate
reductions neither reflect the decrease in workers’ comp costs nor the most
recent loss ratio of 38.5 percent.
To Heir Is
to Cash In Employers pay
compensation that may be not only unconstitutional but grossly inequitable. Tom
Calderon and the other Democratic engineers of that legislative monstrosity AB
749 were not content to direct their attention just to injured workers. Find out
about a special-interest statute that could cost employers hundreds of thousands
of dollars in one shot, and what attorneys are doing about it, all in the
current print edition of
Workers' Comp Executive. It's the producer
version of the Hatfields and McCoys. This feud between IBAWest and other
producer groups is about whether brokers should be required to disclose their
commissions to customers. State Fund's decision to disclose has just added a
whole new dimension. The acrimony is at fever pitch, with accusations of
complicity, "childish" emails, and a few off-the-record expletives for good
measure. Who's right? Perhaps you can decide after you read this intriguing tale
in the current edition of Workers' Comp Executive.
Click here to get the full
story. Will State Fund's
broker commission disclosure policy give the insurance industry a new coat of
ethics and integrity, or simply create alienation between brokers and their
customers? Does this policy tie California Department of Insurance Commissioner
John Garamendi's hands or just give him more to build on.
Click here to read the
whole text of this free article. Insurance lobbyist
Mike Mattoch is hanging up the gloves and leaving the workers' comp arena. Find
out where he's headed. Get the skinny on his greatest and not-so-great
accomplishments, in this print edition of
Workers' Comp Executive.
After California
workers' comp carriers celebrate the softening of the market, will the aftermath
of Hurricane Katrina spoil their progress? Find out what kind of exposure, if
any, those carriers have in the affected states, and where future losses might
be, in this edition of
Workers' Comp Executive. Publius, in a
telling, between-the-lines examination of Garamendi's statements on workers'
comp, provides an insider's look at current legislative motives. Not being one
to let fat, dumb, happy dogs lie, Publius exposes Sacramento's current thinking
about the commissioner's race and provides factual insight into who some think
will be the next commissioner. Read it now in this week's print edition of
Workers' Comp Executive.
A temporary
employment agency agreed to provide worker's compensation coverage for employees
it loaned to its customers. Unfortunately, the temporary agency's chosen carrier
became insolvent. Back in 2003, the Workers' Compensation Appeals Board ruled
that the customer's insurance policy for its permanent employees let the
California Insurance Guarantee Association ("CIGA") off the hook. In a
surprising turn of events, the Court of Appeal, Second Appellate District,
Division Seven (Los Angeles) changed its mind on rehearing and decided that CIGA
should not be dismissed from liability. In other words, the court held that the
parties' real-world business arrangements and expectations controlled. Imagine
that. Read More Here...
Thanks to the
recalcitrance of the legislature, certain doctors will continue to dispense
medication out of their offices at outrageous prices and be reimbursed by
workers' comp carriers. Lobbyists, apparently afraid that their doctor clients
would wind up homeless, tell a convincing sob story, or did money talk? Find out
what employers plan to do about it and the theories behind the bill's holdover,
in the current print edition of
Workers' Comp Executive.
As opposed to last September, the first half of the 2005-2006 session ended quietly and with little accomplished in workers' comp, despite heaping piles of legislation that were introduced. Find out what got out and what the consequences may be, in the current edition of Workers' Comp Executive. WCAB Commissioner Miller Wins Easy Confirmation Workers’ Comp
Appeals Board Commissioner nominee Joseph Miller skates through his confirmation
hearing earlier this afternoon getting the nod from the Democrat controlled
Senate Rules Committee by a 5 to 0 margin. Miller, who was nominated this spring
takes the helm as chairman, giving the WCAB its first full seven member board in
a long time. Study Shows PD Ratings Down Almost 40 Percent The latest study of
the new Permanent Disability Rating Schedule shows that PD ratings are down by
almost 40 percent compared to the old schedule. The study conducted by Frank
Neuhauser of UC Berkley was presented to the Commission on Health and Safety and
Workers’ Compensation. State Fund Leads Towards Transparency State Compensation
Insurance Fund of California announced minutes ago in a fax to its brokers that
it will begin making the commission brokers receive for placing business with it
available to policyholders. State Fund is also increasing commissions on some
types of business and offering a contingency arrangement to some brokers.
Second District Reverses Remedy Temp In a major blow to
the California Insurance Guarantee Association, the Second District Court of
Appeal reversed the ruling in Remedy Temp v. Miceli and remanded the decision
back to the trial level. The ruling came as a shock to both sides because at
least two judges on the panel are required to reverse the decision, and three
judges, in this case, concurred.
Bureau Recommends 5.2% decrease for Jan. 1 Continuing the
downward spiral in rates, the California Workers’ Compensation Insurance Rating
Bureau is recommending a 5.2 percent decrease in the pure premium rate for
policies incepting and renewing Jan. 1, 2006. The forth decrease recommended by
the Bureau, it represents the positive trend in loss adjustment development and
the impact of the workers’ comp reforms of those developments.
Fraud Commish Wants WCIRB Testimony The California Fraud Assessment Commission is wondering whether it can subpoena the Workers Compensation Rating Bureau - or anyone else -- to gather evidence of potential dual-classification fraud and abuse in the workers' compensation system. Commission Chairman Bill Zachry raised the issue after he announced that the WCIRB had failed to respond to the commission's request to testify - a statement that the WCIRB denied. In fact, Zachry said, it's hard to get anyone to show up to testify. Hoch Sticks with ACOEM Administrative
Director Andrea Hoch, in a long-awaited move supported by insurers and
employers, is adopting the American College of Occupational and Environmental
Medicine’s guidelines for the treatment of injured workers. The California
Division of Workers’ Compensation is soliciting comments on the proposed medical
utilization schedule regulation through July 8.
New Filings Show Sharp Rate Decreases Workers’
compensation insurers are reducing their rates dramatically, not pocketing
profits, as new evidence shows that the reforms to the system are kicking into
overdrive. Five companies submitted rate filings to the California Department of
Insurance showing decreases ranging from 10.4 percent to 18 percent, and
industry sources say that other filings are likely to exceed 20 percent.
New CIGA Exec Calls It Quits Gray Gordon Davis,
the man tasked to take over as the executive director of the California
Insurance Guarantee Association, has called it quits after less than four months
on the job, the Workers’ Comp Executive has learned. A new search is under way
to find his replacement.
Father, Son Sentenced In Workers’ Comp Fraud Case A former San
Francisco-area businessman and his son were ordered to pay $3.4 million in
restitution for workers’ comp premium fraud, employment tax evasion and grand
theft, following a lengthy probe that was prompted by State Fund investigators.
Leadership and Gov to Talk PD in the Next Few Days Governor
Schwarzenegger, Senate Leader Don Perata, and Assembly Speaker Fabian Nunez plan
to meet within the next 10 days to discuss California’s new permanent disability
schedule, the Workers’ Comp Executive has learned. The applicants’ attorneys
appear to be wielding significant influence on the looming conference.
Bureau Approves Bigger Rate Decrease The California
Workers’ Compensation Insurance Rating Bureau today recommended a 13.8 percent
decrease in the pure premium rate – 3.8 percent greater than its earlier
recommendation, to reflect the impact of new Permanent Disability regulations.
The Bureau will submit its filing to California Department of Insurance
Commissioner on Thursday. The new rate will take effect July 1.
DWC Responds in Supreme Court to Labor’s PD Challenge The California
Division of Workers’ Compensation, defending the new Permanent Disability
schedule before the state Supreme Court, says organized labor’s challenge to the
PD schedule is filed in the wrong court at the wrong time.
New York Legislature Approves Safeguards For Workers' Comp Fund New York lawmakers, riding to the rescue in the nick of time, approve new protections and an expanded revenue stream for that state’s Workers Compensation Security Fund (WCSF), which only weeks ago hovered on the brink of ruin. “We were not informed that there was a solvency problem until January,” says Kristina Baldwin, regional manager and counsel for Property Casualty Insurers of America. “It came as a surprise to us.” The final legislation authorizes the Superintendent of Insurance to borrow up to $70 million for the fund through loans from liquidated insurers’ estates, plus a doubling of the surcharge on workers’ comp policies, from the current 1 percent to 2 percent. Increasing the assessment is purely discretionary on the part of the Superintendent of Insurance, but should that assessment increase take place, it would bring in an additional $20 million, Baldwin says. The industry supports the legislation. Hoch Confirmed! Perata Votes Aye Administrative
Director Andrea Hoch was confirmed at the end of the day yesterday by the Senate
Rules Committee. Senate Leader Don Perata (D-Oakland) cast the deciding vote,
capping an emotional, divided hearing that ended with her supporters applauding
in gratitude and organized labor shouting betrayal. The vote was 3-2.
Critics Say Record Loss Ratio Should Spell Lower Rates Calling the
45 percent accident-year loss ratio for 2004 “unprecedented,” California
Insurance Commissioner John Garamendi says that this banner year should result
in decreased costs for employers. The Workers’ Compensation Insurance Rating
Bureau, noting that recent reforms are kicking in, says 45 percent is the lowest
loss ratio since the Bureau started gathering data.
AG TELEGRAPHS “NO SUPPORT” FOR HOCH Saying that
the issue before the Senate is an issue before the Senate and he won’t get
involved, Attorney General Bill Lockyer telegraphed support for the applicants’
attorneys, and not his former Chief Assistant Attorney General Andrea Hoch,
Lockyer told the Workers’ Comp Executive through his spokesman Nathan Barankin.
Hoch’s confirmation hearing is April 27th before the State Senate Rules
Committee. Applicants’ Attorneys Confirm Strategy At Small Rally At a rally
which turned out smaller than planned, and called by Voters Injured At Work, the
California Applicants’ Attorneys Association (CAAA) says it plans to appeal a
Superior Court ruling that tossed out the attorneys’ legal challenge to the
state’s new Permanent Disability Schedule. This comes as no surprise to anyone
familiar with the situation. First Workers Rated Under New PD Regulations
California’s first round of injured workers is being rated and evaluated under
the emergency Permanent Disability regulations that were required by SB899, the
workers compensation insurance overhaul enacted last year.
Rivals Share Concerns About Delays in Utilization Review The fear of
delaying or denying medical care to injured workers is emerging as the single
most crucial issue in the discussion over Utilization Review (UR). Even parties
who often are at opposite ends of the workers’ comp debate agreed today at a
public hearing that injured workers must receive care in a timely manner and
insurers should not use the UR procedure to delay authorization. Draft Treatment Guidelines Follow ACOEM New medical
treatment guidelines proposed by the California Division of Workers’
Compensation rely almost entirely on the protocols of the American College of
Occupational and Environmental Medicine, according to a copy of the 5-page
proposal obtained by the Workers’ Comp Executive. Comp Insurers Divided Over Hoch Confirmation Workers
compensation insurers who write the bulk of private coverage in California are
sharply divided over supporting the confirmation of Andrea Hoch as
Administrative Director of the California Division of Workers Compensation.
Judge Denies State Fund’s Petition on PEO Policy Sacramento
Superior Court Judge Lloyd Connelly, in a major legal setback for the State
Compensation Insurance Fund, rejects the State Fund’s attempt to block
California Insurance Commissioner John Garamendi’s order requiring changes in
State Fund’s underwriting policy for Professional Employer Organizations (PEOs).
FLASH: WCAB Slays Treating Physician Presumption The
Workers’ Comp Appeals Board (WCAB) in an en banc decision rules that the
complete repeal of the primary treating physician presumption in SB 899 applies
regardless of date of injury unless a final decision on a claim was issued prior
to the signing of the law. decision is a major blow to applicants’ attorneys.
The Martinez decision, if upheld on appeal, could be a major factor in lowering
California workers’ comp costs. Stan Slams Governor's Plan Stan Zax, the CEO of Zenith Insurance Co. and vice chair of the Little Hoover Commission, angrily denounced Gov. Arnold Schwarzenegger’s plan to eliminate 88 state boards as “revolting” and “ridiculous.” In a scathing rebuke delivered today to a top Schwarzenegger official at a Commission hearing, Zax said the administration didn’t fully understand the roles of key commissions. It was the single most important point of the hearing. Bigger Budget Sought for Workers' Comp Despite his proposed whacking of 88 Boards and Commissions, Governor Schwarzenegger's draft 2005-06 state budget actually boosts funding for workers compensation insurance programs, and adds some 124 new staff positions throughout the Department of Industrial Relations. In his proposal just sent to the Little Hoover Commission, the governor seeks a major revamp of government, including the elimination of the boards and commissions to save an estimated $34 million. Three on the hit list include the Workers' Comp Appeals Board, the Cal-OSHA Appeals Board and the Commission on Health and Safety and Workers' Compensation. DIR oversees the Division of Workers' Compensation and the three Boards proposed for elimination.
New PD Schedule: Potential for Savings The much awaited and anticipated permanent disability schedule has been released in draft form for comment. As intended by the legislature it is based on the AMA guidelines. But the final product hasn’t come without its modifiers, in this case, the future earning capacity data from the RAND study, required by SB 899. But, as usual, the applicant’s attorneys’ are howling like hyperactive hyenas in heat. Although not considered the same as the so-called cross walking concept opposed by the industry, sources tell the Executive that the RAND modifiers could still put a crimp in potential savings. The full impact won’t be known until actual cases start materializing. Quackamendi Lowers In an advisory pure premium rate decision that does not seem to mirror his earlier rhetoric, Insurance Commissioner John Garamendi, who has come to be known by the industry as Commissioner Quackamendi for what is thought of as his dishonest and publicity-seeking approach to governance, has recommended that workers’ comp rates be lowered by only 2.2 percent. The rates, if adopted will be effective Jan. 1. His teleconference was classic. The Commissioner did his Eliot Spitzer imitation. In fact, Quackamendi was doing that imitation before there was an Eliot Spitzer. Garamendi lowered rates by 7 percent in July for an advisory pure premium rate of 20.9 percent His latest decrease totals a 22.6 percent reduction for the year.
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All written word is "The Opinion" of Thomas A. unless otherwise noted...
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