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The Workers’ Compensation Insurance Rating Bureau of California (WCIRB) has released Drivers of California Claim Duration report. This report describes duration drivers for California workers’ compensation claims, including how claim duration differs regionally across the state.

Average indemnity claim duration is significantly higher in California than in other states. It takes 7 years to close 90% of claims in California compared to 3 years for the median state.

Longer California claim duration is driven by four Duration Drivers:

– – California has a higher share of permanent partial disability (PPD) claims, with more than twice as many PPD claims per 100,000 employees compared to the median state. PPD claims close significantly slower than claims with temporary disability only.
– – California has a significantly higher share of cumulative trauma (CT) claims, with a proportion multiples higher than other states. CT claims are more complex, involve more legal disputes, and tend to remain open longer than specific injury claims.
– – California has a higher share of claims that involve medical-legal reports. 15% of PPD claims have four or more medical-legal reports and one-half of these claims are still open after 5 years compared to about one-tenth for PPD claims without medical-legal.
– – California claim duration differs regionally across the state. Claims in the Los Angeles Basin have longer duration as the region has more PPD and CT claims.

But, California claim duration improved significantly following the implementation of Senate Bill No. 863 in 2013. The incremental percent of open indemnity claims closed in the next year is almost 50% higher in 2019 compared to 2012

And claim closing rates declined during the pandemic in 2020 and were relatively flat in 2021. Claim closing rates are beginning to pick up again in 2022 but California remains an outlier compared to other states.

It takes longer to report and recognize indemnity claims in California. After one year, 22% of California indemnity claims are unreported which is double the comparison state median. Late reported claims typically close slower and many involve cumulative trauma injury.

Permanent partial disability (PPD) claims are more complex, more frequently litigated, and typically have longer duration than claims with only temporary disability benefits. California exhibits a much higher PPD claim frequency compared to other states. The frequency of PPD claims per 100,000 employees in California is 2.5 times the countrywide median.

Like PPD claims, claims involving a cumulative trauma (CT) injury are typically more complex, more frequently litigated, and have longer durations than non-CT claims. Compared to other workers’ compensation systems, California’s share of Carpal Tunnel indemnity claims are similar to other states. However, when comparing other cumulative natures of injury, California’s share is over five times that for other states at the second report level. These differences may be even larger at later maturities as CT claims are often filed later than non-CT claims.

Regional differences within California also drive the longer claim duration in California.Temporary-only claims in the Los Angeles Basin on average close slower than in other parts of the state. Although the closing rates for PPD claims are generally similar across California regions, the Los Angeles Basin has a significantly higher share of PPD claims (56%) compared to its share of temporary-only claims (48%).

For more details please download the Drivers of California Claim Duration report from the WCIRB website.