Workers' Compensation Daily News for Apr 25, 2017
Physical Therapists File Suit Against One Call
Mon, 24 Apr 2017 11:09:16 - Pacific Time
The Independent Physical Therapists of California (iPTCA), is a non-profit association of California physical therapists dedicated to advocating for physical therapists and their patient.
Last month it announced that it has filed suit against One Call Medical, Inc, D/B/A One Call Care Management, and Align Networks in California state Superior Court- San Diego.
The Complaint in this unfair competition lawsuit alleges that iPTCA and its non-contracted members have suffered injury and lost money or property as the result of numerous unlawful, unfair, and deceptive or fraudulent business acts and practices engaged in by the defendants, which it alleges operate as unlicensed ‘middlemen’ between Workers’ Compensation payers and injured workers and their rehabilitation providers.
Dr. Paul Gaspar, DPT, President of iPTCA summarized the Complaint "The Complaint details numerous allegedly unlawful activities by the defendants, particularly a referral scheme where defendants demand that physical therapists accede to significant discounts or potentially lose the ability to provide physical therapy services to large numbers of injured workers."
For example, the suit alleges that "OCM has developed an opaque, unfair and illegal scheme whereby OCM maximizes the compensation it receives from its payor clients by referring injured workers to those of its contracted health care professionals who accede to the deepest discount. This system is nothing like a traditional "Preferred Provider Organization" ("PPO") where the PPO contracts with health care providers, payors let their beneficiaries choose to receive services from any of the health care providers who contract with the PPO, and then the payors pay the claims submitted by those contracted providers. OCM does not offer health care professionals the opportunity to be listed in a directory. Rather, OCM solicits (or extorts) deep discounts of a specified amount from its contracted health care professionals as an inducement for it to send them a specified number of additional referrals. "
iPTCA claims to have communicated its concerns regarding Defendants’ practices with the California Department of Insurance, the Senate Labor and Industrial Relations Committee, numerous state legislators, and leadership of other healthcare professional associations.
On April 17, One Call Medical Inc.,filed a Notice of Removal in the United States District Court, Southern District of California, case 17CV773 pursuant to 28 U.S.C. sections 1441 and 1446, asserting original federal jurisdiction under 28 U.S.C. section 1332(a), to effect the removal of the action, which was originally commenced in the Superior Court of the State of California in and for the County of San Diego.
iPTCA alleges that it is a corporation organized under the laws of California with its principal place of business in Encinitas, California. One Call Medical, Inc. is a New Jersey corporation .with its principal place of business in Jacksonville, Florida. And Defendant Align Networks, LLC is a Florida corporation with its principal place of business in Jacksonville, Florida.
One Call claims that the federal courts have original jurisdiction over this matter under 28 U.S.C. § 1332(a)(1) because the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and Plaintiff and Defendants are citizens of different States. 28 U.S.C. § 1332(a)(1).1111
At this time no other substantiative responsive pleading's have been filed in the federal court action. ` Read More...
Encino Dermatologist Settles Fraud Claim for $2.7 Mil
Mon, 24 Apr 2017 11:09:11 - Pacific Time
The owner of The Skin Cancer Medical Center in Encino has paid the United States nearly $2.7 million to resolve allegations that he submitted bills to Medicare for Mohs micrographic surgeries for skin cancers that were medically unnecessary.
Dr. Norman A. Brooks, M.D., a dermatologist and surgeon, paid the $2,681,400 settlement on April 10.
The settlement, which was finalized on March 31, resolved allegations in a lawsuit brought by a former employee of The Skin Cancer Medical Center. The settlement was announced when prosecutors learned that United States District Judge Philip S. Gutierrez had unsealed and dismissed the complaint that was filed under the False Claims Act.
The lawsuit alleged that Brooks falsely diagnosed skin cancer in some of his patients so that he could perform, and bill for, Mohs surgeries.
Mohs surgery is a specialized surgical procedure for removing certain types of skin cancers in specific areas of the body, including the face. The surgery is performed in stages during which the surgeon removes a single layer of tissue which undergoes a microscopic evaluation. The surgeon performs additional stages, if necessary, until all of the cancer is removed.
Given the complexity and time required to perform the procedure, Mohs yields a higher Medicare reimbursement than other procedures used to remove skin lesions.
As part of the settlement, Brooks entered into a three-year Integrity Agreement with the U.S. Department of Health and Human Services, Office of Inspector General. Under the Integrity Agreement, Brooks will establish and maintain a compliance program that includes, among other things, mandated training for Brooks and his employees and review procedures for claims submitted to Medicare and Medicaid programs.
The settlement resolves allegations made in a lawsuit filed by former Brooks employee Janet Burke under the qui tam, or "whistleblower," provisions of the False Claims Act, which permit private parties to sue on behalf of the government and receive a share of any recovery. For her role in the case, Ms. Burke will receive $482,652.
In settling the case, Brooks did not admit liability in the matter.
The matter was investigated by the United States Attorney’s Office and the U.S. Department of Health and Human Services, Office of Inspector General. The settlement was negotiated by Assistant United States Attorney Donald W. Yoo of the Civil Fraud Section.
The settlement resolved United States ex rel. Burke v. Norman A. Brooks, M.D., Inc. et al., CV14-6735. Read More...
26 Charged in $40 Million Comp Fraud Scheme
Fri, 21 Apr 2017 09:11:14 - Pacific Time
The Orange County District Attorney has filed charges against 26 doctors, pharmacists and business owners in a crackdown on an alleged $40 million workers' compensation fraud that involved overbilling for unnecessary compound creams and urine tests. The defendants billed workers' compensation insurers for $40 million and collected $23 million, according to the California Department of Insurance, which led the investigation.
The Kings are accused of pocketing more than $18.5 million from at least 27 insurance companies. Tanya Moreland King, 37, and her husband Christopher King, 38, both of Beverly Hills, own medical billing and medical management companies Monarch Medical Group, Inc., King Medical Management, Inc. and One Source Laboratoires, Inc. The defendants are accused of masterminding a complex insurance fraud scheme of recruiting doctors and pharmacists to prescribe unnecessary treatment for workers' compensation insurance patients.
Irvine pharmacists Charles Bonner, RPh., 56, and Mervyn Miller, RPh., 66, both owners of Steven's Pharmacy, are accused of conspiring with Christopher and Tanya King by selling more than $1 million in compound creams that were not FDA approved nor have known medical benefits.
The Kings are accused of making oral and written agreements with doctors across the state paying them each time they prescribed a compound cream or oral medication or ordered a urine drug test. The doctors or the companies connected to them are accused of labeling the payments "marketing expenses" in an attempt to conceal the kickbacks. The Kings are accused of rewarding doctors who provided higher volume by paying for office technicians.
Prosecutors also accuse the Kings of working with pharmacist and co-defendant Charles Bonner, owner of Stevens Pharmacy in Costa Mesa, to manufacture a variety of creams with unknown effects from Steven's Pharmacy that were not FDA approved. The Kings purchased the creams for between $15 and $40 per tube. These products were then billed to patients' workers' compensation insurance carriers for between $250 and $700 dollars per tube. Tanya King is accused of recruiting physicians to participate in this scam by paying a flat $50 rate or a share in the profits.
They allegedly purchased repackaged oral pain medications from two companies: NuCare Pharmaceuticals in Orange and A-S Medication Solutions in Costa Mesa. Using their company Monarch Medical Group as a cover, the Kings are accused of repackaging meds sent directly to the physicians involved in the scam. As the doctors dispensed the medication, the bar code on the packaging was scanned, notifying the Kings. The Kings are accused of billing workers' compensation insurance carriers without disclosing the wholesale cost or the fact they had purchased the medication on behalf of the physicians who ultimately prescribed it. Once the Kings received the payment, they are accused of splitting the profits with the prescribing physician based upon a pre-arranged agreement.
The Kings are also accused of providing technical staff to participating physician's offices through their company One Source Labs. The doctors are accused of ordering unnecessary urine tests, under the guise of verifying patients on workers' compensation insurance were taking their medications as prescribed. The urine samples were then tested by One Source Lab technicians or the doctors' staff and billed to the insurance company on behalf of the physicians by King Medical Management. The results were then referred to Pacific Toxicology Laboratory for additional testing, regardless of results. Through their company One Source Labs, the Kings are accused of paying Pacific Toxicology a flat rate of $60 per test and billing the insurance carriers hundreds of dollars per patient.
The following defendants are charged for their part in the fraudulent schemes. The list below may provide an opportunity to determine if there is any teeth in new law (SB 1160) that theoretically bans providers who are charged with medical fraud from collecting liens until the case is concluded.
- Tanya King, 37, Beverly Hills
- Christopher King, 38, Beverly Hills
- Charles Bonner, RPh., 56, Irvine
- Mervyn Miller, RPh., 66, Irvine
- Rafael Chavez, P.A., 53, Apple Valley
- Dr. Jerome Robson, 68, Modesto
- Dr. Eric Schmidt, 63, Santa Rosa
- Dr. Chris Chen, 55, Pleasanton
- Dr. Duke Ahn, 49, Los Alamitos
- Dr. Robert E. Caton, 65, Modesto
- Dr. Ismael Silva Jr., 63, Newport Coast
- Dr. Ismael Geli Silva, 38, Huntington Beach
- Dr. Paul A. Stanton, 54, Victorville
- Dr. William Pistel, 53, Modesto
- Dr. Kevin Park, 49, Buena Park
- Dr. Kourosh Shamlou, 49, Newport Coast
- Dr. Mannie Joel, 67, Pleasanton
- Dr. Parvez Fatteh, 46, Pleasanton
- Dr. Robert Fenton, 68, Ranchos Palos Verdes
- Dr. Michael Henry, 61, Granite Bay
- Dr. Howard Oliver, 70, Long Beach
- Dr. Eduardo T. Lin I, 55, Pleasanton
- Dr. Paul Kaplan, 76, Folsom
- Dr. Mohamed Ibrahim, 40, Danville
- Dr. Jonathan Cohen, 57, Modesto
- Dr. John Casey Jr., 65, Modesto
3 New Provider Suspensions on DWC List
Fri, 21 Apr 2017 09:11:09 - Pacific Time
Labor Code §139.21(a) provides for the suspension of physicians, practitioners, and providers from participating in CA ’s workers’ compensation system if they meet any of the following criteria:
A. Conviction of felony or misdemeanor that (i) involves fraud or abuse of the Medi-Cal or Medicare program, workers’ compensation system, or any patient; (ii) relates to the individual’s medical practice as it pertains to patient care; (iii) is a financial crime relating to Medi-Cal, Medicare, or the workers’ compensation system; or (iv) is otherwise substantially related to the qualifications, functions, or duties of a provider of services.*
B. Suspension due to fraud or abuse from the federal Medicare or Medicaid programs.
C. Surrender or revocation of the individual’s license, certificate, or approval to provide health care.
A suspension from participating in the workers’ compensation system means that they are unable to provide or obtain payment for any treatment, evaluation, or other service related to a claim for workers’ compensation.
*A physician, practitioner, or provider who has been suspended due to a conviction covered by paragraph (A) is also subject to having all pending lien claims consolidated and dismissed in a special lien proceeding, unless they can prove the liens did not arise from the conduct or activity that led to their suspension.
Julian Garcia, a National City DME Provider, and Jethro Marrujo and El Centro Interpreter were suspended under part A, and Peter Anthony Beoris a Montague Physician was suspended under parts (B) and (C) on 4/14/2017. They join a growing list of 13 suspensions since the adoption of the new law. Read More...
2nd DCA Affirms Dismissal of Adjusters TPA Suit
Thu, 20 Apr 2017 05:16:29 - Pacific Time
Plaintiff Karla Garcia-Laverentz filed a complaint against her employer Sedgwick Claims Management Services, Inc., alleging a myriad of disability-related claims under the California Fair Employment and Housing Act (Gov. Code, § 12900 et seq.; FEHA) and other laws.
Plaintiff suffered from depression and anxiety, which she controlled with medication. She also suffered from asthmatic bronchitis. Following her return to work after a bronchitis episode, she expressed concern about the environment and requested that the air ducts be cleaned. She then filed a workers' compensation claim alleging an unhealthy work environment after she suffered another episode.
While out on leave, plaintiff learned she was pregnant, so her doctor took her off of her psychotropic and other medications. When she returned to work she asked to be allowed to stay away from ill employees and for the first time requested Sedgwick change the location of her desk such that it is away from any heater or air conditioning vents.
Sedgwick retained engineers to conduct an air quality study, which did not uncover any dangerous air contaminants. Plaintiff experienced another attack of bronchitis and never returned to work after that. She was granted disability leave which was extended at times. Subsequently, she believed that Sedgwick had terminated her position. But her doctors continued to submit notes with estimates of return dates. But she never returned to work. Nor did she ever tell Sedgwick she could return. In fact, she had no contact with Sedgwick from late July 2010 until she moved to Fresno in October 2011.
Following her filing of a civil action, Sedgwick moved for summary judgment, which the trial court granted. In a detailed order, the trial court concluded the undisputed evidence demonstrated plaintiff did not suffer the adverse employment action of termination as she argued, and Sedgwick reasonably accommodated her disability and engaged in the good faith interactive process. Those holdings were dispositive of all of plaintiff’s claims. The plaintiff appealed. The Court of Appeal affirmed the dismissal in the unpublished case of Karla Garcia-Laverentz v. Sedgwick Claims Management Services, Inc.
The Court noted that "Throughout this litigation, plaintiff’s theory of adverse employment action has been a moving target. First, in her prelitigation complaint filed with the Department of Fair Employment and Housing (DFEH), in the FAC, and during discovery, she claimed she was terminated on May 27, 2010, as shown by the June 7 letter. In opposition to summary judgment, she expanded that theory to argue she was terminated when she received the July 28 letter indicating her position would be filled for business reasons. Now, for the first time in her opening brief on appeal, she further argues she suffered an adverse employment action short of termination when Sedgwick indicated in the July 28 letter it intended to fill her position. And in her reply brief, she argues the "retaliation" she allegedly faced for exercising her rights constituted an adverse employment action. .....We find she waived the last two theories because she raised them for the first time on appeal.
"In her declaration opposing summary judgment, plaintiff expressed her subjective belief the June 7 letter, and later the July 28 letter, indicated she had been terminated. Her belief alone is not enough to defeat summary judgment."
The trial court concluded plaintiff failed to raise a triable issue of fact over the reasonableness of two accommodations provided by Sedgwick: (1) granting plaintiff medical leaves of absence; and (2) moving her desk away from vents in the office. On appeal, plaintiff does not challenge the trial court’s holding that her leaves of absence were reasonable accommodations. Nor could she do so successfully. "[A] finite leave can be a reasonable accommodation under FEHA, provided it is likely that at the end of the leave, the employee would be able to perform his or her duties." Read More...
SCIF 2016 Premiums Decline
Thu, 20 Apr 2017 05:16:18 - Pacific Time
The State Compensation Insurance Fund released its 2016 Annual Report of financial performance for 2016.
State Fund’s premium continued to decline in 2016. The decline was attributed to the soft market and increased competition. In response to favorable loss development State Fund lowered its premium rate by 9.5% effective September 1, 2016 and implemented other initiatives throughout 2016 to create product and service values for its customers.
The President's Message pointed out "We welcome a robust market, as employers benefit when insurance companies must compete for their business. 2016 marked another year of healthy competition in the California workers’ compensation market. Although State Fund’s premiums declined somewhat, we were pleased to introduce a rate filing that included an overall decrease in collectable premium of 9.5 percent as well as an expanded pricing model, which further enhances pricing accuracy and makes our rates more stable year over year."
State Fund had a $478 million underwriting loss in 2016 compared to a $483 million underwriting loss in prior year. The 2016 underwriting loss decreased due to lower losses incurred resulting from reduced new claims reported and claims inventory compared to prior year. Its combined ratio was 130.2 percent.
However the underwriting loss of $478 million was offset by investment income of $627 million for the year producing an overall net profit for the year.
State Fund maintained a balanced investment portfolio that was focused on both credit quality and investment yield (93% of the $18.9 billion bond portfolio was rated NAIC 1, the NAIC's highest quality credit class). The weighted average credit quality of the overall bond portfolio was Aa2/AA- by Moody's and Standard & Poor’s, respectively. Book yield at December 31, 2016 was 3.32%, down from 3.53% at December 31, 2015.
In 2016, State Fund reached successful resolutions with most of the defendants in two Racketeering Influenced and Corrupt Organizations Act (RICO) suits filed in 2013 (the few outstanding plaintiffs were successfully resolved in the first quarter of 2017).
The purpose of the suits was to expose and prosecute a complex fraud scheme that was being perpetrated by a number of medical vendors in the California workers’ compensation system.
In settling these cases, it claims to have achieved some important benefits for injured workers. Many of the doctors involved will no longer treat our injured workers and will transfer care of their current patients. They also agreed to waive more than $40 million in liens at the Workers’ Compensation Appeals Board.
The National Health Care Anti-Fraud Association (NHCAA) honored State Fund’s Special Investigations Unit with their 2016 Investigation of the Year award. This award cited the Unit’s contributions to an FBI investigation that exposed a widespread workers’ compensation insurance bribery and fraud scheme, and resulted in 13 indictments.
SCIF doubled its annual fraud restitution collection rates to more than $2.1 million, which helps level the playing field for California businesses. Read More...
Lawmakers Considering DWC Fraud Unit
Wed, 19 Apr 2017 07:02:27 - Pacific Time
California lawmakers are slated to hear the details on a proposed law that would create an anti-fraud division within the state’s Division of Workers’ Compensation, according to updates posted on the state’s website that tracks bills.
A Committee on Insurance hearing is slated for April 19 on Assembly Bill 1697, which would amend the state’s labor code to better tackle workers comp fraud in the state.
Existing law creates the Fraud Division, within the Department of Insurance, to administer provisions related to insurance fraud. Existing law requires the Insurance Commissioner to ensure that the Fraud Division aggressively pursues all reported incidents of probable workers’ compensation fraud.
This bill would require the administrative director to establish an antifraud support unit within the Division of Workers’ Compensation. The bill would set forth the duties of the unit, including coordinating and advancing antifraud activities for the division and serving as the point of contact between the division and other agencies and entities engaged in antifraud activities.
According to the text of the bill to create an anti-fraud unit within the department, the state’s labor code section 139.8 would be amended to read: "The administrative director shall establish an anti-fraud support unit within the division. The unit shall perform all of the following duties: (a) Coordinate and advance anti-fraud activities for the division; (b) Serve as the point of contact between the division and other agencies and entities engaged in anti-fraud activities; (c) Act as the repository and clearinghouse for data on anti-fraud activities; (d) Ensure the efficient sharing of data among the division, other agencies, and other entities engaged in anti-fraud activities; (e) Research fraud in the workers’ compensation system."
A.B. 1697 was introduced by 10 lawmakers, including Assemblyman Tom Daly, D-Anaheim, chairman of the Committee on Insurance who in March requested that the state’s Joint Legislative Audit Committee investigate the state’s system to prevent, detect and prosecute fraud - an audit that office says is now underway and will be completed by 2018. Read More...
Uninsured Cal Fire Contractor Faces Felonies
Wed, 19 Apr 2017 07:02:22 - Pacific Time
Prosecutors in Monterey County have filed seven criminal counts against the small construction firm that employed Robert Reagan, the bulldozer operator killed last July while working the massive Soberanes Fire, the costliest wildfire in U.S. history.
Reagan’s death prompted investigations by Cal Fire and state workplace regulators, as well as the state agency that keeps tabs on California’s construction industry. The incident led to a wrongful death lawsuit against the state. And it brought attention to vulnerabilities faced by hundreds of private contractors that help battle California’s wildfires year after year.
The construction company, which is based in Coarsegold (Madera County), told the Contractors State License Board (CSLB) it had no employees and therefore did not need to provide worker’s compensation, board spokesman Rick Lopes said. This is not the first problem it has had with the Board. It has had its license suspended eight times by state regulators in the last four years.
In July 2012, CSLB investigators found that a crew employed by the company was not covered by workers’ compensation insurance. Czirban was then cited and fined $3,500. The company did not pay that fine right away, so its contractors license was suspended. The firm agreed to a payment plan with the agency to pay the fine - but it failed to make a payment and its license was suspended again.
The company’s license was then suspended several other times because its subcontractors and material suppliers were not paid, Lopes said.
KQED news reports that the Monterey County District Attorney’s Office is now charging Ian Czirban, the owner of Czirban Concrete Construction, with two counts of insurance fraud, two counts of filing a forged document, tax evasion, failure to collect taxes and failure to provide workers’ compensation insurance. Six of the seven charges are felonies.
Czirban has not been arrested. Prosecutors have sent him a "notice to appear" for arraignment in Monterey County Superior Court in Salinas on May 11.
Czirban’s lawyers have argued that he was not required to carry workers’ compensation insurance and that Cal Fire, not the company, was responsible for Reagan.
The charges come after state regulators moved to bar the company from working in California. The Contractors State License Board (CSLB) announced in March that the firm violated three state regulations in connection with its work on the fire.
Along with Czirban, a private company that hired a water tender driver seriously injured in the Soberanes Fire also did not have workers’ compensation insurance. Czirban Concrete is one of a number of companies Cal Fire has contracted with on the Soberanes Fire - a practice the agency employs on large fires.
"We have many companies that we contract with throughout the state and they can be utilized in any area," Cal Fire spokeswoman Lynne Tolmachoff said. "The only time they are hired is for emergency incidents. We do not use these contracts for day-to-day projects." Read More...
Applicants Must Show "Competency" to Mange MSA
Tue, 18 Apr 2017 09:38:07 - Pacific Time
Fernando Muniz Villalpando filed multiple claims for industrial injuries while employed as a laborer by two different employers, Martin Dusters and Doherty Brothers. He claimed injury to his lumbar spine at both employers and, additionally, to his cervical spine and bilateral shoulders at Doherty Brothers.
His three claims were settled by Compromise and Release. The parties' settlement included an MSA Agreement, through which SCIF would fund applicant's future medical treatment. The initial MSA proposal sent by Bridge Pointe to CMS provided that applicant would self-administer the MSA.
In an Addendum to the Compromise and Release Agreement, applicant agreed that Bridge Pointe would administer the MSA, with SCIF to establish the account with an initial payment to Bridge Pointe of $57,084.00, and $15,941.00 annually thereafter for 29 additional years. The Addendum also provided that SCIF would pay Bridge Pointe $3,555.00 as a fee to establish the MSA and for the initial year's cost of administration. Thereafter, Bridge Pointe would receive an administrative fee of$1,800.00.
The agreement between applicant and SCIF does not contain any language pertaining to any future contingency involving the administration of his MSA by Bridge Pointe. There is no reference to a potential change of administration to another third party administrator, or to applicant as a self-administrator, in the event Bridge Pointe fails to provide services as a third party administrator of applicant's MSA.
Applicant petitioned to replace Bridge Pointe and self-administer his MSA, based upon his claims that he has had problems obtaining medical services through the current arrangement. The WCJ denied his request to transfer the administration of his Medical Set-Aside Account from Bridge Pointe/NuQuest to himself, based upon the finding that applicant has not established that the MSA has been administered inappropriately.
Villalprando requested Reconsideration. The WCAB granted Reconsideration, rescinded the Joint Findings and Order and returned this matter to the trial level for further proceedings in the split panel decision of Villalprando v SCIF
The issue as framed by the WCJ does not address whether the terms of the parties' agreement to utilize a professional administrator included any provision for a change of administration in the event Bridge Pointe ceases to operate or withdraws from providing the contracted services any time over the 30 year life of the agreement. There is no record as to the specific rights, duties and indemnifications as between the parties enumerated in the Compromise and Release Agreement. Such terms would reasonably be found in the contractual agreement that led to the MSA being administered by Bridge Pointe.
In order for applicant to be allowed to self-administer his MSA, he should establish his competency to manage his affairs and comply with the CMS requirements for self-administration. If State Compensation Insurance Fund still opposes applicant's administration of his own MSA, it would then have to show good cause why the change should not be permitted.
Commissioner Zalewski dissented. She would affirm the Joint Findings and Order for the reasons stated in the Workers' Compensation Administrative Law Judge's Report and Recommendation on Petition for Reconsideration. Applicant's evidence of his dissatisfaction with the agreed upon administrator is not sufficient to establish good cause to set aside the parties' agreement, reflected in the Compromise and Release regarding the administration of the Medical Set-Aside Account. Read More...
WCIRB Says Combined Ratio Drops to 96%
Tue, 18 Apr 2017 09:38:00 - Pacific Time
The WCIRB has completed its report on statewide workers’ compensation insurer loss and premium experience through December 31, 2016.
California written premium (gross of deductible credits) for 2016 is approximately $18.1 billion, which is 3% above the written premium reported for 2015
The preliminary calendar year combined loss and expense ratio for 2016 reported by insurers is 96%, which is below the combined ratios for the last several years. The lower combined ratios reported for 2015 and 2016 are primarily a result of increased premium levels and significant reductions in insurer case reserves in 2015 and 2016.
The combined ratio is calculated by taking the sum of incurred losses and expenses and then dividing them by earned premium. The ratio is typically expressed as a percentage. A ratio below 100% indicates that the company is making underwriting profit while a ratio above 100% means that it is paying out more money in claims that it is receiving from premiums. Even if the combined ratio is above 100%, a company can potentially still make a profit, because the ratio does not include the income received from investments.
The WCIRB projects indemnity claim frequency for accident year 2016 to be 1.3% below the frequency for 2015 but 9% above the frequency for 2009 . The frequency increases experienced from 2009 through 2014 are largely attributed to increases in cumulative injury claims, late reported indemnity claims, claims involving injuries to multiple body parts, and claims from the Los Angeles Basin area. 2015 and 2016 represent the first consecutive years of projected indemnity claim frequency decline since before the Great Recession.
The WCIRB projects the average cost (or "severity") of a 2016 indemnity claim to be approximately $82,000, which is 4% higher than the projected severity for 2015 and 10% higher than that for 2013
The projected industry average charged rate (rates charged by insurers that reflect all rating plan adjustments except deductible credits, retrospective rating plan adjustments, terrorism charges, and policyholder dividends) per $100 of payroll for policies incepting between July 1, 2016 and December 31, 2016 is $2.67 (Exhibit 2). This is 6% below the average rate charged for the first six months of 2016 and 12% below the average rate charged for the first six months of 2015.
The WCIRB currently projects the total statewide ultimate losses on all injuries that occurred on or before December 31, 2016 to be approximately $4.6 billion less than the amounts reported by insurers. Read More...
Past Week News Archive
Operation "Psyched Out" Nabs More LA Pharmacists: Mon, 17 Apr 2017 10:13:32 - Pacific Time: Read More...
Is "Text Neck" a Cell Phone CT Epidemic?: Mon, 17 Apr 2017 10:13:25 - Pacific Time: Read More...
Orthopedists Review 30 Years of Advances: Thu, 13 Apr 2017 08:15:18 - Pacific Time: Read More...
National Academy Reports on Fake Medical Research: Thu, 13 Apr 2017 08:15:12 - Pacific Time: Read More...
Reseda Clinic Owner to Serve 51 Month Sentence: Wed, 12 Apr 2017 08:33:39 - Pacific Time: Read More...
San Rafael Pharmacy Resolves DEA Dispute: Wed, 12 Apr 2017 08:33:32 - Pacific Time: Read More...
Is There Subrogation Potential in Kimberly-Clark Class Action?: Tue, 11 Apr 2017 13:27:49 - Pacific Time: Read More...
DWC Spikes the Ball After WCIRB Announcement: Tue, 11 Apr 2017 13:27:43 - Pacific Time: Read More...
Lawyers Troll Carriers for MSP Recoveries - Who's Next?: Mon, 10 Apr 2017 06:45:49 - Pacific Time: Read More...
Cigna Reduces Opioid Use 12%: Mon, 10 Apr 2017 06:45:42 - Pacific Time: Read More...