Author: WorkCompAcademy

Insurance Commissioner Dave Jones adopted and issued a revised advisory pure premium rate, lowering the benchmark to $1.94 per $100 of payroll for workers’ compensation insurance, effective January 1, 2018.

This is 17.1 percent less than the average pure premium rate of $2.34 California insurers filed as of July 1, 2017.

This decision results in an advisory pure premium rate that is slightly below the $1.96 average rate recommended by the Workers’ Compensation Insurance Rating Bureau (WCIRB) in its filing. Jones issued the advisory pure premium rate three weeks after a public hearing and careful review of the testimony and evidence submitted.

His adoption is only advisory, as the commissioner has no rate authority over workers’ compensation insurers.

“The continued decreases in costs to insurers should be passed along to employers through lower rates,” said Insurance Commissioner Dave Jones. “Workers’ compensation reform legislation should require that system cost savings be passed onto employers in the form of lower rates– the law does not require this currently.”

The WCIRB’s pure premium advisory rate filing demonstrated continued decreases in costs in California’s workers’ compensation insurance market.

The pure premium advisory rate reduction is based on insurers’ cost data through June 30 of this year. Insurers’ net costs in the workers’ compensation system continue to decline as a result of SB 863, SB 1160, and AB 1244 enacted by the Legislature and Governor Brown.

The WCIRB notes continued favorable medical loss development including acceleration in claim settlement.

The WCIRB will evaluate workers’ compensation insurance costs again in the summer and fall of next year when it files its pure premium rate benchmark recommendation with the Department of Insurance. That filing will provide an opportunity to assess whether medical costs continue to be lower and what changes, if any, there are in other costs in the system.

The purpose of the pure premium benchmark rate process is to review costs in the workers’ compensation insurance system and to confirm that rates filed by insurance companies are adequate to cover benefits for injured workers.

Kyle Pike was employed by the County of San Diego as a Deputy Sheriff Detention on July 31, 2010. He sustained an industrial injury to his right shoulder and received a combination of Labor Code section 4850 salary continuation benefits and permanent disability benefits between October 27, 2010 and November 15, 2011 and April 30, 2015 through June 19, 2015.

Pike received a Stipulated Award of 12% permanent disability on May 31, 2011, and filed a timely Petition to Reopen on May 26, 2015 as he claimed an entitlement to Labor Code section 4850 benefits for the period September 15, 12 2015 through March 28, 2016, and temporary total disability benefits from March 29, 2016 through August 18,2016 which was beyond the five year time limit from the date of his injury.

The County paid all temporary disability and 4850 benefits through the period ending five years from the date of injury. The issue to be determined was whether applicant could receive additional benefits for periods of temporary disability that extended more than five years from his July 31, 2010 date of injury. The parties submitted the issue on the record without testimony.

The WCJ concluded that when acting upon a timely petition to reopen, the Appeals Board may award temporary disability benefits more than five years from the date of injury, provided that applicant is limited to an aggregate of 104 weeks of benefits. A split panel decision denied reconsideration in the case of Pike v County of San Diego.

Labor Code section 4656( c )(2) provides that “Aggregate disability payments for a single injury occurring on or after January 1, 2008, causing temporary disability shall not extend for more than 104 compensable weeks within a period of five years from the date of injury.”

The majority held that because “the statutory language does not provide that no temporary disability benefits may be paid more than five years from the date of injury, the WCJ concluded that the legislature did not intend to prohibit otherwise temporarily disabled injured workers from receiving the full 104 weeks of benefits where such temporary disability occurs within five years from the date of injury.” The majority cited some panel decisions that have agreed with this view.

Commissioner Razo dissented. “I believe our ability to award temporary disability indemnity is constrained by the statutory language in Labor Code section 4656( c )(2), which expressly limits such an award to five years from the date of injury for injuries on or after January 1, 2008.” He cited several panel decisions that agreed with his view and against the majority.

In August the County filed a Petition for Writ of Review with the Court of Appeal. At the end of September the Court issued a writ and agreed to hear the case. On October 23 the CWCI was grated permission to file an amicus brief in the case, and it is expected that the CAAA, and other stakeholders will soon weigh in as well.

Among the several theories presented by the County and CWCI, they claim “the decision below relies upon an improper use of Labor Code Section 3202. As noted by our Supreme Court in Nickelsberg v. Workers’ Comp. Appeals Bd. (1991) 54 Cal.3d 288, 298 the rule of liberal construction stated in section 3202 should not be used to defeat the overall statutory framework and fundamental rules of statutory construction.

Purdue Pharma confirmed on Wednesday that it has become the subject of a U.S. criminal investigation related to its painkiller OxyContin as the drugmaker battles a series lawsuits seeking to hold it responsible for its role in the nation’s opioid epidemic.

U.S. Attorney Deirdre Daly is gathering documents about Purdue’s claim that OxyContin provides 12 hours of pain relief. A Los Angeles Times investigation, published last year, found that Purdue ignored evidence showing the drug’s effects failed to last that long in some patients, increasing the risk of withdrawal, abuse and addiction.

“Purdue is committed to being part of the solution to our nation’s opioid crisis and has been cooperating with the U.S. Attorney’s investigation,” company spokesman Robert Josephson said in an email. “We will continue to do so until this matter is resolved.”

Purdue is cast as the main villain in a wave of government lawsuits seeking to hold opioid makers and distributors responsible for an epidemic now killing thousands of people and costing the U.S. economy billions of dollars annually. Ten states and dozens of cities and counties have sued companies including Purdue, Endo International Plc, and Johnson & Johnson’s Janssen Pharmaceuticals, alleging that they triggered the epidemic by minimizing the addiction and overdose risks of painkillers such as OxyContin and Percocet.

Stamford, Connecticut-based Purdue invented many of the aggressive marketing techniques that made OxyContin a blockbuster drug and which government lawsuits now seek to frame as unlawful.

Purdue resolved a federal criminal prosecution in 2007. The company and three of its top executives pleaded guilty to “misbranding” OxyContin and collectively agreed to pay more than $630 million in civil and criminal penalties in one of the largest pharmaceutical settlements in U.S. history. The company specifically acknowledged that it trained its sales representatives to mislead physicians about opioid risks.

Purdue promoted the synthetic morphine substitute as a low-risk painkiller, according to court papers, although the drug is a habit-forming narcotic derived from the opium poppy.

The executives, former CEO Michael Friedman, General Counsel Howard Udell and Chief Medical Officer Paul Goldenheim, served no prison time and were sentenced to community service in drug rehabilitation centers.

Purdue has faced a wave of lawsuits by Louisiana, Washington, New Mexico, Oklahoma, Mississippi, Ohio, Missouri, New Hampshire and South Carolina, as well as several cities and counties. Many of those cases target other drugmakers as well.

The lawsuits have generally accused Stamford, Connecticut Purdue of deceptive marketing of OxyContin and convincing doctors and the public that its drugs had a low-risk of addiction and were effective for treating chronic pain.

Purdue is closely held and doesn’t release financial information, but the brokerage Sanford C. Bernstein & Co. estimates OxyContin alone generated sales of $1.3 billion in 2016. Purdue is also the focus of a Congressional investigation led by Senator Claire McCaskill, a Missouri Democrat, who’s demanding documents and information related to the sales, marketing and education strategies that opioid manufacturers used to promote their painkillers.

Orange County rejected workers’ compensation claims from four sheriff’s deputies injured in the shooting, paving the way for a court battle that could force appellate judges to eventually decide an untested issue touching several counties and cities in Southern California.

Los Angeles County is considering whether to grant claims from two of its deputies shot Oct. 1 at the Route 91 Harvest festival. Officials acknowledged they have no policy on how to handle such requests and said they expect the issue will result in litigation.

Several other officers from Southern California law enforcement departments also plan to file claims in the near future, according to police unions, potentially forcing as many seven other municipalities – including San Bernardino and Riverside counties  -to soon consider similar questions.

If the claims are approved, it could put taxpayers on the hook for years of medical expenses, allow officers to retire early on disability and guarantee injured officers paid time off in the short term. If officers begin to claim injuries related to PTSD suffered during the shooting – as two deputies in Orange County did – it also could open the door for scores of additional filings.

In San Bernardino County, which employs 11 deputies who attended the festival, including Sgt. Brad Powers, who was shot in the leg in Las Vegas, the deputies’ union has initiated talks with the sheriff’s department to advocate that Powers be treated as an on-duty injury.

Steve Nyblom, a manager in Los Angeles County’s risk management branch, which is weighing claims from local two deputies shot in Las Vegas, said legislative intervention may be needed to clarify the labor code in light of the looming disputes. “There is that vague issue, subject to interpretation, and issues relating to legislative intent should be clarified by the legislature,” Nyblom said.

Had all those officers been shot and injured while responding to a mass-killing in California, they likely would be taken care of without dispute. But because they were shot in Nevada instead, their life-saving efforts could cost them dearly.

California’s labor code states that public agencies are required to pay benefits to off-duty police officers injured while engaging in “protection or preservation of life or property, or the preservation of the peace anywhere in this state,” even if the officer “is not at the time acting under the immediate direction of his employer.” Out-of-state events are not mentioned, spurring multiple interpretations of the law.

“The statute does not allow counties to cover off-duty conduct outside of states,” Orange County Supervisor Todd Spitzer said, expressing a view shared by county lawyers. “These police officers went into their instinctive training mode – and I don’t think they should be punished because they trusted their instincts. But it requires a legislative fix to the statute to extend workers’ benefits for out-of-state conduct.”

However, local workers’ compensation attorneys disagree with Orange County’s interpretation of state law. And the union representing Orange County’s sheriff’s deputies has said that if the county denied its members’ claims, the agency would be abandoning officers who were acting in accordance with their department’s training.

“The sheriff’s department has an expectation of its sworn members to take whatever actions are necessary to preserve life wherever they’re at,” said Tom Dominguez, president of the Association of Orange County Deputy Sheriffs. “If they deny the claims, then the message that they’re sending to their peace officers is not to take action when it is certainly warranted.” “Everybody’s watching what happens with these cases,” Dominguez added.

Frank Neuhauser from the University of California, Berkeley published a new study on Qualified Medical Evaluators discussing trends in evaluations, availability to meet panel requests, and other issues. He used extensive electronic administrative data made available by the DWC Medical Unit and Disability Evaluation Unit (DEU), supplemented with summary data from several sources.

The study covers the period from 2007 through 2017. This period covers much of the evolution after the 2004 reforms which introduced utilization and treatment guidelines, a new permanent disability rating schedule based on the AMA Guides, and changes to the manner parties in represented cases can select QMEs. The key findings in this study included the following general observations:

– The number of providers registered as QMEs continues to decline (17% since 2007), but less rapidly than it did prior to 2007.
– The number of requests for QME panels has increased rapidly, 87% since 2007.
– The decline in QMEs and increase in panel requests means that the number of requests per QME has doubled (+101%).
– Coupled with a continuing increase in the average paid amount for QME reports, the average QME earns 240% more from panel reports now than in 2007.
– All the increase in panel requests is from represented track cases, up 400% despite the elimination of panels for most medical treatment issues (replaced by the IMR process). This increase was equally driven by requests from both parties, applicant and defense.
– Panel requests for unrepresented cases declined 55%, entirely driven by a decline in requests from injured workers. The number of requests by claims administrators in unrepresented cases changed little.
– The DWC began collecting the reasons for panel requests on represented cases in 2015. Those data show that the primary reasons for panels are: (1) Compensability (42.5%), Permanent disability (21.4%), and Permanent & Stationary (P&S) status (11.4%).

In response to the earlier study, SB 863 placed limits on the number of locations (10) at which QMEs can be registered. This has had the effect of distributing QME panels more evenly and widely among registered providers.

– Very-high-volume QMEs (with 11-100+ registered locations) have been eliminated.
– However, a high proportion of panel assignments (55%-60%) are still assigned to the busiest 10% of QMEs, nearly all of whom have exactly 10 offices and are in orthopedic specialties.
– Unlike the very-high-volume QMEs studied earlier, the top 10% and 5% of QMEs by number of panels in the current system produce reports that show less bias. Even the top 5% of QMEs by volume rate only slightly more conservatively than average.

Access to QMEs does not appear to be an important current problem, but there are signs that delays in getting an evaluation may be developing.

The DWC has made an effort to eliminate from the workers’ compensation system providers who are accused or convicted of fraudulent activity or violations of professional standards. This study examined the activity of these doctors in the QME process and how their suspension may impact QME evaluations. The study found:

– Of providers suspended or restricted under Labor Code sections 139.21 & 4615, 41 were registered as QMEs at least one year between 2007 and 2016.
– They represented a small minority of all QMEs (1.6%) and were assigned to a minority of all 3-doctor panels (4.6%).
– While these percentages are small overall, there were some areas where problem providers appear to be concentrated and represent a special issue. The “Pain” specialties (PAP, MAA, & MPP), stood out, with 40% -50% of QME panels including at least one restricted or suspended provider.
– The more general “pain” category (MPA) that is more commonly used now, as well as the Physical Medicine and Rehabilitation (MPR) and Internal Medicine–Hematology (MMH) had 15% – 17% of panels include a restricted or suspended provider.
– Overall, the restricted and suspended doctors gave much more generous evaluations to injured workers than the average QME: higher ratings, less frequent use of apportionment and more frequent “Almaraz” ratings.