Author: WorkCompAcademy

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.

The Division of Workers’ Compensation (DWC) has posted a revised version of the Workers’ Compensation Information System (WCIS) California Electronic Data Interchange Implementation Guide for First and Subsequent Reports of Injury (FROI/SROI) on its rulemaking forum.

Members of the public are encouraged to review the proposed regulatory revisions in the guide, and submit written comments. The comment period is open until 5 p.m. on Tuesday, October 30.

California’s WCIS uses electronic data interchange to collect comprehensive information from claims administrators to help the Department of Industrial Relations oversee the state’s workers’ compensation system. This information helps facilitate evaluation of the system and measure adequacy of benefits for injured workers and their dependents, and provides statistical data for research.

The revised implementation guide contains updates and corrections to the first reports of injury and subsequent reports of injury (FROI/SROI) reporting rules of the current version that took effect in March 2018. The proposed changes address the manner of transmitting data to WCIS, the filing of SROI, requirements for specific data elements and data edits.

Written comments can be emailed to DWCRules@dir.ca.gov, or mailed to: Division of Workers’ Compensation, P.O. Box 420603, San Francisco, CA 94142 – Attn: WCIS Rulemaking Forum.

The forum can be found on the DWC forums web page under “current forums.”

It’s no secret that the world is growing accustomed to the business of cannabis, but for $9.6 billion Canadian medical marijuana producer Canopy Growth, the future is approaching faster than many expect.

Canopy – which has gained traction on news of several-billion-dollar investments from Corona parent Constellation Brands – announced that it had shipped cannabis to the United States from Canada for medical research, a milestone in the U.S. government’s acceptance of what it considers to be a Schedule 1 drug.

“Under [Drug Enforcement Administration] approval, we shipped, for the first time, legally – and I highlight ‘legally’ – cannabis from Canada to the U.S,” Bruce Linton, the co-founder, Chairman and CEO of Canopy Growth, told CNBC’s Jim Cramer.

“The DEA-approved partner, which we haven’t announced yet, can actually begin to do medical research, clinical trials if necessary, [and] create the data set that enables people to know when, what, where, and maybe it can become federally regulated in the U.S. with some input that way,” Linton said in an interview on “Mad Money.”

Canopy’s news comes less than one month after competing Canadian marijuana producer Tilray announced DEA approval to import cannabis to the United States for medical research at the University of California San Diego Center for Medicinal Cannabis Research.

California is one of eight states, excluding the District of Columbia, to fully legalize medical and recreational marijuana use. Thirty U.S. states currently have laws legalizing medical marijuana use in some form.

Today, the world has its eyes on Canada, where full legalization of adult marijuana use is set to take effect on Oct. 17. While the windfall will likely be massive for producers like Canopy, Linton is focused on the longer-term global opportunity.

Canada’s legalization could be Canopy’s key to seizing on that opportunity more than it already has, Linton added.

“Last week I was in the EU, the U.K. They know about Oct. 17 intimately and they’re trying to figure out, ‘Hm, if we’re a government or businesses, how do we quit ignoring cannabis and govern it, regulate it, tax it and turn it into something that might be medicinal and for sure a much better formatted product for a party?'” he said.

“And so what’s going to be the big bump isn’t just Canada,” he said. “If we do it right, Canopy leads. That gives us the position globally that then, all of a sudden, you add a zero or two to the number of people we’re trying to serve.”

U.S. shares of Canopy, the first cannabis company to be listed on the New York Stock Exchange, gained 5.64 percent Friday trading as the rest of the stock market recovered from its multi-day losing streak.

The Department of Justice announced that it is requiring CVS Health Corporation and Aetna Inc. to divest Aetna’s Medicare Part D prescription drug plan business for individuals in order to proceed with their $69 billion merger.  The proposed divestiture to WellCare Health Plans, Inc. (WellCare), an experienced health insurer focused on government-sponsored health plans, including Medicare Part D individual prescription drug plans, would fully resolve the Department’s competition concerns.

“Today’s settlement resolves competition concerns posed by this transaction and preserves competition in the sale of Medicare Part D prescription drug plans for individuals,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division.  “The divestitures required here allow for the creation of an integrated pharmacy and health benefits company that has the potential to generate benefits by improving the quality and lowering the costs of the healthcare services that American consumers can obtain.”

The Department’s Antitrust Division, along with the offices of five state attorneys general, today filed a civil antitrust lawsuit in the U.S. District Court for the District of Columbia to enjoin the proposed transaction, along with a proposed settlement that, if approved by the court, would fully resolve the Department’s competitive concerns.  The participating state attorneys general offices represent California, Florida, Hawaii, Mississippi, and Washington.

CVS, the nation’s largest retail pharmacy chain, and Aetna, the nation’s third-largest health-insurance company, are significant competitors in the sale of Medicare Part D prescription drug plans to individuals, together serving 6.8 million members nationwide.

According to the Department’s complaint, the combination of CVS, which markets its Medicare Part D individual prescription drug plans under the “SilverScript” brand, and Aetna would cause anticompetitive effects, including increased prices, inferior customer service, and decreased innovation in sixteen Medicare Part D regions covering twenty-two states.  The complaint alleges that the loss of competition between CVS and Aetna would result in lower-quality services and increased costs for consumers, the federal government, and ultimately, taxpayers.

Under the terms of the proposed settlement, Aetna must divest its individual prescription drug plan business to WellCare and allow WellCare the opportunity to hire key employees who currently operate the business.  Aetna must also assist WellCare in operating the business during the transition and in transferring the affected customers through a process regulated by the Centers for Medicare and Medicaid Services, an agency within the U.S. Department of Health and Human Services.

CVS, headquartered in Woonsocket, Rhode Island, operates the nation’s largest retail pharmacy chain, owns a large pharmacy benefit manager called Caremark, and is the nation’s second-largest provider of individual prescription drug plans, with approximately 4.8 million members.  CVS earned revenues of approximately $185 billion in 2017.  

Aetna, headquartered in Hartford, Connecticut, is the nation’s third-largest health-insurance company and fourth-largest individual prescription drug plan insurer, with over two million prescription drug plan members.  Aetna earned revenues of approximately $60 billion in 2017.  

As required by the Tunney Act, the proposed consent decree, along with the Department’s competitive impact statement, will be published in the Federal Register.  

Any person may submit written comments concerning the proposed settlement within 60 days of its publication to Peter Mucchetti, Chief, Healthcare and Consumer Products Section, Antitrust Division, Department of Justice, 450 Fifth Street NW, Suite 4100, Washington, DC 20530.  At the conclusion of the 60-day comment period, the court may enter the final judgment upon a finding that it serves the public interest.

SB 880 which became law this summer, would authorize an employer, with the written consent of the employee, to deposit disability indemnity payments for the employee in a prepaid card account. This seemed like a new and novel idea. Unbeknownst to most of the industry, prepaid debit cards have been approved to pay workers’ compensation benefits in California for nine years. It is certainly not a new concept here.

Last April, the California State Fund let InsurCard know that S.B. 880 had been introduced in the California Legislature to allow debit cards as a method of payment for Workers Compensation (WC) claims. The bill at the time would have established a 5-year pilot program at the State Fund. If the pilot was successful, the program would then be expanded beyond the State Fund to other companies.

Bob Mendte, InsurCard’s President, was surprised to hear this news and noted, “We have been using debit cards for WC claim payments in California for nine years. In 2008, InsurCard received detailed written approval from the Workers Compensation Director and has offered the debit card in California since that time.”

InsurCard then contacted the current Workers Compensation Director, George Parisotto, and the Bill’s sponsor to make sure they were aware of InsurCard’s work and extensive experience in the State. Before they met in May, the Director’s staff had reviewed InsurCard’s credentials and the fact that its approvals had been confirmed by the State on several occasions beginning in 2008.

The Director affirmed that InsurCard’s prior approvals would continue to be honored and he recognized that no complaints have been received by the State in the nine years InsurCard has offered its debit card for WC. InsurCard will continue to offer the program in California, one of the 44 states where it does business.

After InsurCard met with the State, the California Legislature changed the bill to allow all payors to use debit cards when the Bill takes effect in January 2019.

InsurCard’s “Total Payment Solution” pays Workers Comp benefits to both claimants and healthcare providers with two network-branded cards: a personalized, reloadable plastic prepaid card for Workers Compensation indemnity payments to injured workers; and a virtual prepaid card for payments directly to healthcare providers. Both products have been praised by the industry for making electronic payments simpler, faster and secure.

InsurCard’s Instant-Issue Property card program lets adjusters deliver benefits to policyholders instantly and is used for property, auto, liability and catastrophe claims. The program is built on an existing, tested platform, ready to deliver in just a few weeks. For information, visit www.insurcard.com.