The focus of the WCIRB Actuarial Committee meeting held on June 22, was a review of recent system medical costs, along with a comparison of the effects of the COVID 19 pandemic.

Summary of the Medical Severity Trends through 2020

Pre-COVID-19 (before 3/15)

– Overall medical severity per claim increased slightly (+4%)
– Physician services, inpatient and medical-legal costs per claim increased despite a downward trend in prior years
– Pharmaceutical costs per claim continued to drop (-14%) mostly driven by continuously steep declines in opioid costs (-42%)
– Telemedicine services per claim increased at typical pre-COVID-19 rate (approximately 100%)

COVID-19 pandemic period (3/15 – 12/31)

– Overall medical severity per claim increased (+10%)
– – Increases in both service utilization and paid per transaction likely when shelter-in-place orders were lifted
– Increases in inpatient and outpatient costs per claim were driven mostly by higher paid per transaction
– Pharmaceutical costs per claim increased (+14%) mostly driven by increased use of non-opioids
– Telemedicine services per claim increased by more than 50-fold

Legislative Cost Monitoring Update – SB 1160 UR Provisions

– During the two years after the SB 1160 UR provisions became effective:
– – Number of physical therapy visits per claim increased in the first 30 days, while utilization of other types of medical services decreased during the same period.
– – Physical therapy services were provided earlier. The median time from injury to first physical therapy in the first 30 days decreased by 17%, from 12 days for AY2017 claims to 10 days for AY2019 claims.
– – There was less utilization of physical therapy services 5 months after the first 30 days.
– There is no indication of the SB 1160 UR provisions significantly impacting the cost of medical services through 6 months from the date of injury, and the increased medical severity is driven mostly by fee schedule updates.
– There is no indication of the UR provisions significantly impacting utilization review costs within two years of the reform implementation.

Summary of 3/31/2021 Experience (Excluding COVID-19)

– Almost 100% of market included – Main insights:
– – Loss development generally flat
– – Claim settlement rates continuing to decline
– – 1Q 2021 non-COVID-19 claim frequency up over 1Q 2020
– – Significant number of COVID-19 claims reported in first three months of 2021
– Projection methodologies are consistent with 9/1/21 Filing
– Projected loss ratio for September 1, 2021 to August 31, 2022 policies is 0.596 (same as 9/1/21 Filing)
– – Small increase (<0.005) from updated wage forecast
– – Small decrease (<0.005) from updated 2020 frequency trend