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Workers' Compensation Daily News for Feb 08, 2010
Some Cash-Strapped States Raiding Workers Comp Funds
Mon, 8 Feb 2010 06:27:06 - Pacific Time
California is trying to sell off their State Fund to raise cash, while other states are simply grabbing available cash from theirs. The recession is driving some state governments to raid workers compensation funds to combat budget deficits, but employers, risk-sharing pools and insurers are fighting back. Employers, pools and insurers have gone to court seeking to stop the practice that is tapping money collected through assessments on insured premiums and self-insured entities. They argue that “sweeping,” or transferring employer assessments, is an unconstitutional confiscation of private money amounting to unauthorized taxation. In the battle, Kentucky's Supreme Court has handed employers a partial victory in one such lawsuit that sought to stop lawmakers from funneling employer workers comp assessments to the state's general fund. Additional lawsuits have been filed in Arizona and Kansas. The plaintiffs say they face additional assessments to restore the money states have taken from workers comp programs, such as the Special Fund of the Industrial Commission of Arizona. The Special Fund provides benefits to employees of insolvent insurers, uninsured employers, bankrupt self-insured employers and other workers comp-related claims. Similarly, self-insurance groups in Kansas sued Jan. 21 to stop the sweep of money into the state's general fund from a workers comp account that pays second injury and insolvent employer claims. Observers say they expect more states will try to tap workers comp funds for revenue as the recession continues to take its toll on government coffers. Read More...
Home Improvement Self-Insured Group Announces Record Growth
Mon, 8 Feb 2010 06:20:34 - Pacific Time
The Home Improvement Self-Insured Group (HISIG), a California Workers' Compensation program for home improvement and retail employers, has reported a 73% increase in membership in 2009 in advance of its annual meeting in Rancho Mirage on February 12. The HISIG Board of Trustees will report a strengthening financial position driven by a 45% reduction in the length of serious work injury claims and the introduction of a nurse triage program to assist employees immediately following an injury. The Home Improvement Self-Insured Group began operations in December 2005. HISIG is a California Workers' Compensation program approved and regulated by the Office of Self-Insurance Plans, Department of Industrial Relations. All Workers' Compensation self-insured groups in California are required to maintain claims reserves at a level that is 50% higher than is required for insurance companies.The annual meeting for the group at the Agua Caliente Resort in Rancho Mirage will feature expert presenters on employment law, Workers' Compensation claims issues and 2010 legislation. Advance registration for the meeting points to a 300% increase in attendance over prior years. Read More...
California AG Wins Suit Against Port Trucking Companies
Fri, 5 Feb 2010 05:58:42 - Pacific Time
In an ongoing investigation of the state's underground economy, Attorney General Edmund G. Brown Jr. announced a fifth legal judgment against trucking companies operating at California ports that deny workers "the Social Security, Medicare and workers' compensation benefits to which they are entitled under state law." Last month, the Los Angeles Superior Court found that Pacifica Trucks, a Southern California fleet operator, misclassified its drivers as independent contractors. The company failed to pay state employment-related taxes, contribute to Social Security and Medicare and provide W-2 forms to its employees. "We're sending a clear message that if you cheat your workers, we're coming after you," Brown said. "Pacifica Trucks claimed that its workers were independent contractors in order to avoid paying the Social Security, Medicare and workers' compensation benefits to which they are entitled under state law. This judgment validates our continuing effort to ensure that all employees are protected." In 2008, Brown filed a lawsuit against Pacifica Trucks for unlawfully classifying its workers as "independent contractors," circumventing state employment taxes and ignoring labor laws that guarantee workers' compensation and disability benefits. In the lawsuit, Brown argued that Pacifica Trucks had exclusive authority over its drivers and provided all of the trucks, equipment, gas, repairs, and other business-related expenses used by employees. Under these conditions, the drivers should have been classified as employees with legally mandated protections and benefits. Brown also argued that, in violation of California Business and Professions Code 17200, Pacifica Trucks had an unfair advantage over its competitors through the cost savings achieved by misclassifying its workers. The judgment requires Pacifica Trucks to permanently refrain from misclassifying truck drivers as independent contractors and to pay a penalty. Brown's office has pursued several other companies suspected of operating underground economy schemes and violating worker's rights. Recently, Brown filed a lawsuit against Auto Spa Express Car Wash in Los Angeles for forcing its employees to work nearly 60-hour weeks without overtime, ignoring minimum-wage laws and denying workers' compensation benefits to injured employees. Last year, Brown also filed a lawsuit against Charles Evleth Construction in Bakersfield to recover $4.3 million in lost wages and benefits for the company's employees. Read More...
CWCI Score Card Looks at Durable Goods Manufacturing
Fri, 5 Feb 2010 05:58:30 - Pacific Time
The California Workers' Compensation Institute has issued the 5th edition of its "Industry Scorecard" featuring detailed data on accident year (AY)2000-2008 claims experience of durable goods manufacturing workers in California. The Score Card reflects data from 208,159 work injury claims filed by employees who produce hard goods such as automobiles, appliances, furniture and tools, which are not consumed quickly and which usually last for several years. Paid losses on these claims totaled more than $2.4 billion. The Scorecard shows durable goods manufacturing workers accounted for just over 9% of all California job injury claims during the 8-year span of the study, and a similar proportion of paid losses, though those proportions have fallen steadily, with the most recent data showing durable goods manufacturing claims down to just 6.9% of 2008 California job injury claims and 6.1% of insured loss payments.The three most common injury categories for these workers are minor wounds and injuries (which account for about 23% of the cases, but tend to be relatively simple claims, accounting for less than 3% of the payments); medical back problems without spinal cord involvement (typically back sprains and strains, which represent 17% of the claims but, because they often linger and result in delayed return to work, account for 29% of paid losses in the sector); followed by other injuries, poisonings and toxic effects (11.5% of the claims, 13.1% of the losses). Given the mix of injuries, med-only cases represent a relatively high percentage of durable goods manufacturing claims, but a smaller share of the claims are temporary disability cases, while the proportion of durable goods manufacturing claims resulting in permanent disability, which is where the bulk of the loss dollars go, is about the same as for all industries. Average benefit payments for durable goods manufacturing claims dropped briefly following the 2004 workers' compensation reforms, but results for AY 2006 and AY 2007 show average amounts paid at 12 and 24 months have moved up sharply. For example, average first-year payments on a lost-time claim in this sector hit a recent low of $10,407 ($5,930 medical + $4,477 indemnity) in AY 2005, but by AY 2007 they had jumped 26% to $13,112 ($7,477 medical + $5,635 indemnity). Read More...
Apirl QME Examination Canceled
Thu, 4 Feb 2010 06:18:44 - Pacific Time
California has both a shortage of cash, and a shortage of QMEs. It seems that dealing with the shortage of cash is more urgent. Due to on-going budget constraints, the Division of Workers’ Compensation (DWC) Medical Unit will not be conducting the qualified medical evaluator (QME) examination which would have taken place Saturday, April 24, 2010. The exams are generally held twice a year on the last Saturday of April and October. "We are making budgetary adjustments wherever it makes sense," says acting Administrative Director Carrie Nevans. "When we consider the turnout for the exams and the increasing costs to actually administer them, it may very well make sense to conduct the exam once a year going forward." Applicants interested in future exams may download the exam packet from the DWC Web site at http://www.dir.ca.gov/dwc/medicalunit/exampacket.pdf or contact the Medical Unit at 510-286-3700. It is worth of note that all physicians are required to pay a non-refundable/non-rollover $125.00 fee to sit for any upcoming QME examination pursuant to Title 8, California Code of Regulations §11(f)(2). The examination is multiple choice answered on a computerized scoring sheet which is easily administered a scored. In addition to the examination fee, once a physician has passed the examination, they must pay an annual fee of between $110 to $250 depending on the number of evaluations they performed in the prior year, and an additional $100 annual fee per branch office. One might question why the costs of administering this examination are not covered by these fees, or if not, why the fees are not simply increased if needed. Read More...
California Insurance Commissioner Says His Post Should Be Appointed
Thu, 4 Feb 2010 06:01:45 - Pacific Time
California Insurance Commissioner Steve Poizner said that his position has become too politicized and should return to being one that's appointed by the governor. Poizner, who is seeking the Republican gubernatorial nomination, made the comments during a meeting of the California Newspaper Publishers Association in Sacramento. California's insurance commissioner became an elected position when voters approved Proposition 103 in 1991. "I do think that electing the insurance commissioner has politicized the position," he said in response to a question about whether the state has too many statewide elected officials. "And I do think that making the insurance commissioner appointed again, like they do in about 35 states, would be a step in the right direction to take some of the politics out of it." Poizner says the insurance commissioner acts as an important watchdog for consumers and should not be swayed by politics or campaign contributions from insurance companies and others seeking influence over the office. Poizner has refused to accept such donations. He said he also believes the governor's office should have more authority over education policy, which is partly overseen by an elected school superintendent. Gov. Arnold Schwarzenegger has at times expressed his frustration at having to work with constitutional officers whose policies are at odds with his, such as Attorney General Jerry Brown and former Lt. Gov. John Garamendi, both Democrats. "The governor believes that all the constitutional offices should be rolled into the administration, just like the president's cabinet," said his spokesman, Aaron McLear. Sarah Pompei, a spokeswoman for Poizner's GOP primary rival, Meg Whitman, responded to a request for comment by saying the insurance commissioner himself had politicized the job by not implementing Schwarzenegger's order to furlough state employees. Read More...
CorVel Announces Substantial Increases in Revenues and Earnings
Wed, 3 Feb 2010 07:03:45 - Pacific Time
CorVel Corporation is a national provider of sercvices and solutions in the field of disability management. They are headquartered in Irvine California. CorVel specializes in applying information technology and e-commerce applications to improve outcomes in the workers' compensation, group health, auto and disability management insurance markets. The Company provides claims management solutions in addition to networks of preferred providers, case management, utilization management and medical bill review to more than 2,000 clients nationwide. This week CorVel reported earnings per share of $0.54 for the quarter ended December 31, 2009, a 59% increase compared to $0.34 in the same quarter of the prior fiscal year. The Company reported quarterly revenues of $87 million, a 13% increase compared to $77 million in the same quarter of the prior fiscal year. Earnings per share for the nine months ended December 31, 2009 were $1.52, a 39% increase compared to $1.09 for the same period of the prior fiscal year. The Company reported revenues of $250 million for the nine months ended December 31, 2009, a 7% increase compared to $233 million for the same period of the prior fiscal year. The Company's results benefited from continued growth in the Enterprise Comp product line, CorVel's integrated claims management solution for workers' compensation claims. The Company's approach to claims management has been well received in the market and revenue growth in the quarter is reflective of several acquisition sales implemented over the last six months. The Company continues to strategically invest in this product with focus on integrating systems and efforts to develop unique workflow tools for the management of workers' compensation claims. Read More...
Not All CT Scans Are Created Equal
Wed, 3 Feb 2010 06:39:18 - Pacific Time
The diagnostic use of a CT scan is quite common in workers' compensation physical injury cases. UR professionals review the "reasonableness and necessity" and bill reviewers authorize payment based upon coding that specifies the type of scan. Yet, it is rare for anyone in claims to consider the quality of the scan for purposes of authorization or payment. Not all scans are equal, and there is a big difference between scans performed by state-of-the-art equipment and old outdated technology. This report illustrates the differences. A leading UK trauma center has ordered a SOMATOM Definition Flash CT from Siemens Healthcare. a next generation system to be used as part of the hospital's major trauma and stroke center. This system will allow rapid whole-body scanning. The system carries out the fastest available scanning speed in CT (430 mm/s) with a temporal resolution of 75ms and can image a person with a height of six feet six inches in less than five seconds. The need to sedate pediatric patients is also reduced as they do not have to remain still for as long. The Definition Flash will also perform acute stroke, vascular imaging and all emergency cases including pediatrics. With the addition of perfusion imaging software, the hospital will benefit from a 3D evaluation package for assessing blood flow in stroke patients. Furthermore, the Definition Flash can perform a scan of the entire heart in just 250 milliseconds, which is less than half a heart beat. It can also image hearts with a fast pulse or an irregular beat without using beta blockers. The Definition Flash will also perform acute stroke, vascular imaging and all emergency cases including pediatrics. It would seem from this report that there are major capability differences between generations of CT equipment. Perhaps questions should be asked about the quality of the CT system used in the treatment of injured workers as part of the claims process. Read More...
Immune Treatment Helps Chronic Pain Patients
Tue, 2 Feb 2010 00:39:40 - Pacific Time
Researchers from the University of Liverpool said a dose of a blood product called intravenous immunoglobin (IVIG) significantly reduced pain in almost half of patients with Complex Regional Pain Syndrome (CPRS) -- an unexplained chronic condition that can develop after injury to, or loss of, a limb. "The discovery is expected to have a real impact on the treatment of other unexplained chronic pain conditions; if one pain condition can be effectively treated with an immune drug, then it is possible that other types will also respond," said Andreas Goebel, an expert in pain medicine who led the study. IVIG is a human blood antibody used to treat immune disorders and some forms of leukemia. It balances immune systems, strengthening those that are weak and reducing activity in those that are overactive. The researchers, whose study was published in the Annals of Internal Medicine journal, gave a single low-dose transfusion of IVIG to 13 volunteers with pain syndrome and found it significantly eased the pain in just under 50 percent of them. The pain relief lasted five weeks on average and the treatment had few adverse side effects, they said. "The real effect of this treatment...may turn out to be even greater than what we have already seen," said Goebel. He said that while the patients in the study were given a single, low-dose infusion of IVIG, the treatment could in future be given in higher doses, and repeated to give extra benefits. The scientists said they were trying to develop ways to allow patients to administer IVIG treatment in their own homes. According to the researchers, complex regional pain syndrome -- also commonly called reflex sympathetic dystrophy -- can arise after any type of injury. Read More...
Zenith Income Plummets in Fiscal 2009
Tue, 2 Feb 2010 00:38:03 - Pacific Time
Net income dropped by 64 percent for the 2009 fiscal year at Zenith National Insurance Corp. when compared with the previous year. Still, the Woodland Hills-based firm’s president and chairman said the company was in excellent financial condition. "Over time, we expect recovery from the recession will improve hiring trends and provide improved profit opportunities," Stanley R. Zax said. For the year ending Dec. 31, Zenith reported net income of $34.4 million on revenues of $584.8 million. For the previous fiscal year, the company had a net income of $95.3 million on revenues of $682.8 million. The fourth quarter results looked somewhat better however when compared to the year before. Net income for the fourth quarter 2009 of $10.8 million compared to net income for the fourth quarter 2008 of $8.4 million, Workers' compensation net premiums earned decreased 20% and 24% in the three months and year ended December 31, 2009 compared to the corresponding periods of 2008. These decreases are a result of: 1) risk--reward strategy, which emphasizes pricing and underwriting discipline to maintain long-term profitability in a highly competitive environment, resulting in 14% fewer policies in-force compared to December 31, 2008; 2) increased unemployment as well as declining payrolls for many of insureds due to the recession; and 3) net reductions in premium rates. Insured payroll, the best indicator of exposure, decreased 11% in the year ended December 31, 2009 reflecting the impacts of competition and the recession. The 2009 accident year loss ratio, excluding loss adjustment expenses, increased to 50.3% compared to 43.0% recorded in 2008 for the 2008 accident year loss ratio. The 2009 accident year loss ratio is an excellent result in comparison to historical industry trends and current industry estimates, but is higher than 2008 primarily because of increasing average cost of claims. Read More...
Past Week News Archive
CIGA May Not Set Aside Stipulation Because of Change of Law: Mon, 1 Feb 2010 03:21:51 - Pacific Time: Read More...
Fontana Man Arrested for Alleged Worker's Compensation Fraud: Mon, 1 Feb 2010 03:21:37 - Pacific Time: Read More...
Calif. Insurance Commissioner Poizner Trailing in Governor's Race: Fri, 29 Jan 2010 06:46:21 - Pacific Time: Read More...
Travelers Sees Record Profits: Fri, 29 Jan 2010 06:46:14 - Pacific Time: Read More...
Too Many Rogue IRS Agents - Including Special Agent Suspected of Workers' Compensation Fraud: Thu, 28 Jan 2010 07:25:08 - Pacific Time: Read More...
Workers' Compensation Patients Get Less Benefit from Back Surgery: Thu, 28 Jan 2010 07:10:48 - Pacific Time: Read More...
CAAA Convention Draws Large Crowd: Wed, 27 Jan 2010 03:40:00 - Pacific Time: Read More...
Study Reveals Predictors Of Long-term Opioid Use For Back Pain: Wed, 27 Jan 2010 03:36:27 - Pacific Time: Read More...
$20 Million in Restitution in Staffing Services Inc. Fraud Case: Tue, 26 Jan 2010 05:25:46 - Pacific Time: Read More...
CWCI Scorecard Examines Agriculture Claims: Tue, 26 Jan 2010 05:22:05 - Pacific Time: Read More...