Workers’ compensation premium rates fell considerably nationwide, while California continued to see among the worst rates in the nation, according to a new study out from the Oregon Department of Consumer and Business Services. The department puts out its Oregon Workers’ Compensation Premium Rate Ranking Summary report every two years. The full report is due out in about two months, and is expected to include details such as classification code rankings for each state.

“We’ve noticed that generally everyone’s still moving down,” said Jay Dotter, who authored the report along with Chris Day. ‘It’s the most we’ve seen for a while.”

Day noted that majority of states saw rates move down on the index. He couldn’t say exactly why that was, but offered some possible explanations.  ‘For (National council on Compensation Insurance) states, loss costs have been dropping,’ Dotter said. ‘We’ve been seeing that the losses due to medical and indemnity have been going down.’

California was behind only New York as the state with highest index rate. New York was in third place in the prior study, and moved up to worst in the nation, which resulted in California moving to second worst.

According to the report in the Insurance Journal, the California Department of Workers’ Compensation, which has touted the success of system-wide changes that have been ongoing over the past six years, took issue with the state’s ranking.

“Oregon’s study is based on the industrial mix in their state and does not reflect actual costs in California’s workers compensation system,” a statement provided by a DWC spokesperson reads.

The Oregon report compares 50 classification codes with the largest losses for Oregon only and is based on payroll figures over a three-year period in that state from 2012 to 2014. This gives an overall index rate for the state based on state rates by class code weighted by premium. The authors of the report use a common set of class codes so they are comparing the rates without a class codes difference added in, since class codes vary broadly from state to state. However, the index rates are based on each state’s rates as of Jan. 1, 2018.

Since the 2012 workers’ comp reforms were enacted, California has seen a reduction in costs to employers while increasing injured workers’ benefits and improving access and quality of evidence-based care, according to the DWC statement.

“This is the result of our work to identify and reduce high litigation and administrative costs,” the statement continues.

The statement also notes that as a result of these changes, the Workers’ Compensation Insurance Rating Bureau has for the past three years consistently recommended that pure premium costs be lowered.

The WCIRB in August submitted to the insurance commissioner proposed advisory pure premium rates to be effective Jan. 1, 2019 that average $1.70 per $100 of payroll. That indicated average pure premium is 4.5 percent less than the average approved July 1, 2018 advisory pure premium rate of $1.78 and 20 percent less than the corresponding industry average filed pure premium rate of $2.13 as of July 1, 2018.

New York was the worst ranked state $3.08, or 181 percent of the study median. New Jersey ($2.84), Alaska ($2.51) and Delaware ($2.50) followed.

Oregon’s $1.15 index rate ranked 46th. North Dakota (.82 cents), Indiana (.87 cents), Arkansas (.90 cents), West Virginia ($1.01) were the top ranked states with the lowest index rates.

Oregon ranked 43rd on the previous list, the best performance since the list first started to be complied in the late 1980s, according to Dotter.  The state ranked 6th on the first report. Oregon later initiated reforms that included reducing litigation and sending contested workers’ comp cases through newly created administrative review processes, according to Dotter.