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Yet Another Study Questions Value of Meniscus Surgery

A new study published in the British Medical Journal says that exercise therapy is as effective as surgery for middle aged patients with a common type of knee injury known as meniscal tear (damage to the rubbery discs that cushion the knee joint).

The researchers suggest that supervised exercise therapy should be considered as a treatment option for middle aged patients with this type of knee damage.

According to the story reported in Medical News Today, every year, an estimated two million people worldwide undergo knee arthroscopy (keyhole surgery to relieve pain and improve movement) at a cost of several billion US dollars. Yet current evidence suggests that arthroscopic knee surgery offers little benefit for most patients.

So researchers based in Denmark and Norway carried out a randomized controlled trial to compare exercise therapy alone with arthroscopic surgery alone in middle aged patients with degenerative meniscal tears.

A randomized controlled trial is one of the best ways for determining whether an intervention actually has the desired effect.

They identified 140 adults (average age 50 years) with degenerative meniscal tears, verified by MRI scan, at two public hospitals and two physiotherapy clinics in Norway. Almost all (96%) participants had no definitive x-ray evidence of osteoarthritis.

Half of the patients received a supervised exercise program over 12 weeks (2-3 sessions each week) and half received arthroscopic surgery followed by simple daily exercises to perform at home.

Thigh muscle strength was assessed at three months and patient reported knee function was recorded at two years.

No clinically relevant difference was found between the two groups for outcomes such as pain, function in sport and recreation, and knee related quality of life. At three months, muscle strength had improved in the exercise group. No serious adverse events occurred in either group during the two-year follow-up.

Thirteen (19%) of participants in the exercise group crossed over to surgery during the follow-up period, with no additional benefit.

“Supervised exercise therapy showed positive effects over surgery in improving thigh muscle strength, at least in the short term,” say the authors. “Our results should encourage clinicians and middle aged patients with degenerative meniscal tear and no radiographic evidence of osteoarthritis to consider supervised structured exercise therapy as a treatment option.”

How did this situation – widespread practice without supporting evidence of even moderate quality – come about, ask two experts in a linked editorial? “Essentially, good evidence has been widely ignored,” say Teppo Järvinen at the University of Helsinki and Gordon Guyatt at McMaster University in Canada.

“In a world of increasing awareness of constrained resources and epidemic medical waste, what we should not do is allow the orthopaedic community, hospital administrators, healthcare providers, and funders to ignore the results of rigorous trials and continue widespread use of procedures for which there has never been compelling evidence,” they conclude.

Medical care under the California workers’ compensation system is based upon evidence based medicine.  One would hope that the UR and IMR process has physicians who are aware of the findings of these studies when they make a decision to allow or turn down a request for treatment.

New Study Supports Apportionment in Degenerative Joint Disease Claims?

Osteoarthritis (OA), also known as degenerative joint disease, is a condition in which cartilage – the tissue that protects the end of each bone in a joint – wears away, causing the underlying bones to rub together. This can cause pain, swelling, and poor joint movement.

As the condition worsens, the bones may lose shape. Additionally, growths called bone spurs may arise, and bits of bone and cartilage can break off and float around the space in the joint. This can trigger an inflammatory response that exacerbates pain, as well as cartilage and bone damage.

OA is the most common form of arthritis in the United States, affecting around 27 million American adults. While the condition can arise in all age groups, it is most common among people aged 65 and older.

There is no cure for OA, only therapies that can help manage symptoms. These include pain and anti-inflammatory medications, such as nonsteroidal anti-inflammatory drugs (NSAIDs) and corticosteroids. In some cases, joint surgery may be required.

Osteoarthritis is often a factor in workers’ compensation orthopedic claims, especially claims based on a continuous trauma theory. While it is true that OA may be aggravated by work factors, at the same time the permanent disability benefit can be apportioned to causation.

An now a new medical study reveals new information about the causation of OA.

A report in Medical News Today says that researchers have uncovered evidence that cellular senescence – whereby cells stop dividing – is a cause of osteoarthritis, and they suggest targeting these cells could offer a promising way to prevent or treat the condition.

Cellular senescence is the process by which cells stop dividing. Senescent cells accumulate with age and can cause severe damage to tissues and organs, contributing to a number of age-related diseases.

Study co-author Dr. James Kirkland, director of the Robert and Arlene Kogod Center on Aging at Mayo Clinic in Rochester, MN, and colleagues publish their findings in The Journals of Gerontology, Series A: Biological Sciences and Medical Sciences.

“Osteoarthritis has previously been associated with the accumulation of senescent cells in or near the joints, however, this is the first time there has been evidence of a causal link. We believe that targeting senescent cells could be a promising way to prevent or alleviate age-related osteoarthritis. While there is more work to be done, these findings are a critical step toward that goal.”

The concept that there is a relationship between degenerative joint disease and aging is not new. However, apportionment to the aging process is difficult in litigation when faced with arguments that the aging process alone as a causative factor is “speculative.” However, adding an understanding of the cellular mechanism behind degenerative joint disease to the apportionment argument in litigation weighs in on the side that any speculation is now less likely.

WCAB Permits Settlement of SJDB With “Thomas” Finding

Juan Pablo Beltran filed an Application alleging he sustained an industrial cumulative trauma injury to his head and back due to repetitive heavy work while employed as a laborer by Structural Steel Fabricators. The employer denied applicant’s claim based upon the affirmative defense that applicant did not report the injury prior to his termination for cause.

The parties submitted a walk through Compromise and Release Agreement settling applicant’s claim for $12,500.00, which included his potential entitlement to a Supplemental Job Displacement Benefit voucher. Upon receipt of the Compromise and Release Agreement, the WCJ suspended action on the settlement agreement and set the matter for trial, noting on March 24, 2016, that the parties may not settle or commute the Supplemental Job Displacement Benefit voucher. The WCJ then reset the matter for a status conference after defendant filed a Petition for Removal.

According to the WCJ’s Report and Recommendation on Petition for Reconsideration, the WCJ requested defendant strike the language that applicant was not entitled to a Supplemental Job Displacement Benefit voucher. When defendant would not agree, the WCJ approved the Compromise and Release Agreement with the additional language, “Parties may not settle or commute SJDV per LC §4658.7(g) CCR§10133.31 (h).”

The WCAB granted reconsideration in the panel decision of Juan Pablo Beltran v Structural Steel Fabricators and SCIF.

In 2012 the Legislature passed SB863 which amended the provisions of workers’ compensation law pertaining to Supplemental Job Displacement Benefits, which replaced vocational rehabilitation benefits that were terminated in 2004. A provision was added prohibiting the settlement or commutation of a claim for the Supplemental Job Displacement Benefit voucher. According to the Assembly Floor Analysis, the prohibition on settlement of the Supplemental Job Displacement Benefit voucher was to prevent the “cashing out” of the retraining voucher.

Defendant argues on reconsideration that where there is a good faith dispute as to the compensability of a claim of injury, the parties should be permitted to settle applicant’s entitlement to the Supplemental Job Displacement Benefit voucher, analogizing to the situation which existed with respect to the settlement of vocational rehabilitation benefits that was addressed in Thomas v. Sports Chalet (1977) 42. Cal.Comp.Cases 625 [Appeals Board En Banc].

The prohibition against settlement of the Supplemental Job Displacement Benefit voucher is analogous to the prohibition against settlement of vocational rehabilitation benefits, which Thomas held could be resolved in a Compromise and Release Agreement only when a serious and good faith issue exists, which if resolved against the applicant would defeat all right to compensation.

Here, an injured worker’s entitlement to the Supplemental Job Displacement Benefit voucher is conditioned upon both the acceptance of liability for a claimed industrial injury by the employer and the existence of permanent partial disability, or a determination of these issues after trial. Where an employer denies liability and raises an affirmative defense that could potentially defeat all right to compensation, a prohibition on settlement of the Supplemental Job Displacement Benefit voucher would require a trial to determine injury and the existence of permanent partial disability in every case. The Board in Thomas recognized that this would result in “effectively doing away with settlements,” despite the existence of good faith disputes that could totally bar recovery.

Accordingly, we hold that, as in Thomas, where the trier of fact makes an express finding based upon the record that a serious and good faith issue exists to justify a release, a compromise and release agreement may be: approved by the Board which will relieve the employer from liability for the Supplemental Job Displacement Benefit voucher.

9th Circuit Says DOJ Cannot Prosecute Marijuana Violators

The 9th Circuit Court of Appeal, which presides over California and other western states, just ruled that the Department of Justice cannot spend money to prosecute people who violate federal drug laws but are in compliance with state medical marijuana laws. The ruling in US v Steve McIntosh et. al, prevents federal law enforcement from funding prosecution of anyone who obeys a state’s medical marijuana laws.

Despite laws passed by various states to the contrary, the sale of marijuana is still illegal under federal law. However, in 2014 congress passed a budget rule which prohibits the Department of Justice from using federal funds to interfere in the implementation of state marijuana regulations.

The ruling involves ten cases that are consolidated interlocutory appeals and petitions for writs of mandamus arising out of orders entered by three district courts in two states within our circuit. All Appellants have been indicted for various infractions of the federal Controlled Substances Act (CSA). They have moved to dismiss their indictments or to enjoin their prosecutions on the grounds that the Department of Justice (DOJ) is prohibited from spending funds to prosecute them.

In McIntosh, five codefendants allegedly ran four marijuana stores in the Los Angeles area known as Hollywood Compassionate Care (HCC) and Happy Days, and nine indoor marijuana grow sites in the San Francisco and Los Angeles areas. These codefendants were indicted for conspiracy to manufacture, to possess with intent to distribute, and to distribute more than 1000 marijuana plants.

In Lovan, the U.S. Drug Enforcement Agency and Fresno County Sheriff’s Office executed a federal search warrant on 60 acres of land located on North Zedicker Road in Sanger, California. Officials allegedly located more than 30,000 marijuana plants on this property. Four codefendants were indicted for manufacturing 1000 or more marijuana plants and for conspiracy to manufacture 1000 or more marijuana plants.

In almost all federal criminal prosecutions, injunctive relief and interlocutory appeals will not be appropriate. Federal courts traditionally have refused, except in rare instances, to enjoin federal criminal prosecutions.

Here, however, the Court said that Congress has enacted an appropriations rider that specifically restricts DOJ from spending money to pursue certain activities. It is “emphatically . . . the exclusive province of the Congress not only to formulate legislative policies and mandate programs and projects, but also to establish their relative priority for the Nation. Once Congress, exercising its delegated powers, has decided the order of priorities in a given area, it is for . . . the courts to enforce them when enforcement is sought.” A “court sitting in equity cannot ‘ignore the judgment of Congress, deliberately expressed in legislation.’”

The Appropriations Clause plays a critical role in the Constitution’s separation of powers among the three branches of government and the checks and balances between them. “Any exercise of a power granted by the Constitution to one of the other branches of Government is limited by a valid reservation of congressional control over funds in the Treasury.” The Clause has a “fundamental and comprehensive purpose . . . to assure that public funds will be spent according to the letter of the difficult judgments reached by Congress as to the common good and not according to the individual favor of Government agents.”

The ten cases were therefore remanded back to the district courts. “If DOJ wishes to continue these prosecutions, Appellants are entitled to evidentiary hearings to determine whether their conduct was completely authorized by state law, by which we mean that they strictly complied with all relevant conditions imposed by state law on the use, distribution, possession, and cultivation of medical marijuana. We leave to the district courts to determine, in the first instance and in each case, the precise remedy that would be appropriate.”

Despite the outcome, however, Judge Diarmuid O’Scannlain wrote that medical marijuana purveyors should not feel immune from federal law. “Congress could restore funding tomorrow, a year from now, or four years from now,” he wrote, “and the government could then prosecute individuals who committed offenses while the government lacked funding.”

DCA Says WCAB Has Jurisdiction Over CHP 4800.5 Benefits

In 2004, Andrew Hernandez, a CHP sergeant in Valencia, slipped and fell while assisting in the pursuit of a suspect who had fled on foot, injuring his low back and cervical spine. Hernandez and the CHP through its adjuster State Compensation Insurance Fund agreed that his injuries were AOE-COE and that he was 35 percent disabled and would need future medical treatment for his low back.

The principal issue in the proceeding before the WCJ concerned payments for temporary total disability. In a February 2013 decision the WCJ found that Hernandez was temporarily totally disabled from July 18, 2011 to November 8, 2011. Although Hernandez received payments equal to the full amount of his salary during that period, a portion of those sums was charged against his accrued annual vacation leave.

Hernandez petitioned in January 2015 for recovery of the full amount he should have received as paid leave-of-absence benefits under section 4800.5, plus penalties for unreasonable delay under section 5814, subdivision (a), and interest.

The WCJ agreed Hernandez was entitled to the relief he had requested; but the Workers’ Compensation Appeals Board in a divided decision after reconsideration, rescinded her ruling, concluding (1) Hernandez’s claim for reimbursement of accrued leave involved employee benefits and was outside the jurisdiction of the Board; (2) the February 1, 2013 award by the WCJ barred Hernandez’s 2015 claim for additional section 4800.5 payments under the doctrine of res judicata; and (3) there was no basis for awarding a penalty because Hernandez had received the full amount of his salary during the period of his temporary disability.

The Court of Appeal in the published opinion of Hernandez v. WCAB disagreed, and annuled the decision of the Board and remand the matter with directions to award Hernandez additional compensation under section 4800.5 in an amount equal to the value of annual leave used during the disputed period of temporary disability and to hear and determine the issue of penalties and interest.

The Board has exclusive jurisdiction over all proceedings for “the recovery of compensation, or concerning any right or liability arising out of or incidental thereto” (§ 5300, subd. (a)), as well as for “the enforcement against the employer or an insurer of any liability for compensation imposed upon the employer by this division in favor of the injured employee, his or her dependents, or any third person.” (§ 5300, subd. (b); see also § 5301 [Board “is vested with full power, authority and jurisdiction to try and determine finally all the matters specified in Section 5300 subject only to the review by the courts as specified in this division:].)

Section 4800.5, subdivision (d), specifically confers Board jurisdiction to award and enforce payment of the benefits provided CHP officers by that provision of the workers’ compensation laws.

On the issue of jurisdiction over the 4800.5 issue the court went on the say that “In light of this clear violation of Hernandez’s rights under the workers’ compensation laws, the argument the Board lacks jurisdiction to provide a remedy borders on sophistry.”

On the issue of the source of benefits the court concluded that “There can be no dispute that section 4800.5 obligated the CHP to pay Hernandez his full salary, in lieu of disability payments, while he was temporarily disabled…”

Aetna Announces Exit Plans for 70% of ObamaCare Market

Aetna announced that it will walk away from more than two-thirds of the ObamaCare exchange markets it participated in this year, dropping from 778 counties to 242 counties next year. Aetna will maintain a presence in just four states, it says – Delaware, Iowa, Nebraska and Virginia – down from 15 states this year. Aetna covered about 838,000 people through the Obamacare exchange in its 15 states as of June 30.

Aetna, the third largest insurance company in the U.S. says the market’s financials are unworkable, pointing out that it has lost more than $430 million since January 2014 on its individual products. It’s not the only major player to walk away from the Obamacare exchanges.

“More than 40 payers of various sizes have similarly chosen to stop selling plans in one or more rating areas in the individual public exchanges over the 2015 and 2016 plan years,” CEO Mark Bertolini said in a statement. “As a strong supporter of public exchanges as a means to meet the needs of the uninsured, we regret having to make this decision.”

Aetna’s announcement comes on the heels of an announcement by Anthem that, in a reversal of expectations, it is now projecting mid-single digit losses on the individual plans it sells on the exchanges. Humana said it would dial back its participation on the exchanges from 15 states to 11 earlier this month. UnitedHealth Group plans to remain on “three or fewer exchange markets,” its chief executive, Stephen Hemsley, said on an earnings call in July. Cigna has said that it is losing money on the exchanges, but the insurer is planning to expand its marketplace presence to three new states in 2017.

Like other insurers, the company blamed its withdrawal on a pool of exchange participants that has turned out to be heavier users of their insurance plans than previously predicted. Insurers need healthy plan members to off set sick patients to balance the books.

The move also comes amid a fight between Aetna and the U.S. Justice Department over the government’s lawsuit attempting to block the company’s acquisition of insurer Humana. The government has said the deal violates anti-trust laws, but Aetna has said it will lower costs and improve choice.

One major issue is the risk pool – the balance of healthy and sick people who incur major medical costs. An analysis by the Centers for Medicare and Medicaid Services released last week showed that the per-month medical costs of members on the exchanges each month had barely budged between 2014 and 2015, suggesting that the risk pool was not getting worse.

Next year will be Obamacare’s fourth of providing coverage in the new markets. Aetna’s decision doesn’t affect people covered by the company this year, but when they look for coverage next year, they’ll need to pick a new insurer. The decision, which affects about 80 percent of Aetna’s customers in individual ACA exchange plans, raises the prospect that some consumers will only have one insurer to choose from when they buy 2017 coverage.

ObamaCare relies on privately run insurers to offer health plans that individuals can buy, often with government subsidies. About 11.1 million people were signed up for Obamacare plans at the end of March.  The workers’ compensation claims industry had believed that the availability of low cost insurance to those who were previously uninsured would reduce the filing of marginal industrial claims.

DWC Publishes Updated MTUS With Opioid Guidelines

The Office of Administrative Law has approved the DWC final version of the Medical Treatment Utilization Schedule (MTUS) regulations that updates the Chronic Pain Medical Treatment Guidelines and adopts Opioids Treatment Guidelines.

Following national reports of opioid misuse, DWC proposed issuing guidelines and began the process with a forum for public comment in 2014. The guidelines that have been added to the MTUS provide best practices in appropriately treating injured workers while also enhancing safety in using these medications to manage pain.

“We welcome this update and addition to the MTUS. The information in these Guidelines should aid in the provision of safer and more effective care for California’s injured workers,” said DWC Executive Medical Director Dr. Raymond Meister. The changes to the MTUS Chronic Pain Medical Treatment Guidelines are set forth in section 9792.24.2, the Opioids Treatment Guidelines are set forth in section 9792.24.4, and the clarifying changes to the meaning of chronic pain are set forth in section 9792.23(b)(1) of the California Code of Regulations. The MTUS regulations went into effect on July 28, 2016 and will apply to any treatment requests made on or after July 29, 2016.

Christine Baker, Director of the Department of Industrial Relations, said, “These guidelines are an important step toward improving appropriate and safe care for workers.”

DWC Acting Administrative Director George Parisotto said, “DWC will move forward shortly to initiate the process to update all of the current MTUS chapters. This process will include new chapters for chronic pain and opioids. Regardless, the new Chronic Pain Medical Treatment Guidelines and Opioids Treatment Guidelines should be consulted and relied upon when making treatment requests and determining the medical necessity of such requests.”

As a result of this regulatory process, claims administrators now have more clearly articulated guidance on when to approve, or send a request for opioid prescription medication to UR for a more comprehensive review. And UR and the IMR reviewers have much better guidance on how to make decisions.

For example, the regulations have precise requirements for prescribing opioids for “sub-acute” pain which is defined as pain beyond one month following an injury. The physician should “screen for risk using validated tools” and “administer a baseline urine drug test (UDT) in the office toward the beginning of the subacute period,” And this section concludes that “a history of opioid use disorder or substance use disorder is a relative contraindication to continued opioid use during the subacute phase.”

The Executive Summary of the new Opioid guideline is 135 pages in length, and it is not a trivial task to understand the nuances of what has now become a more rigorous set of limits on unfettered prescribing of addictive pain medication. On this topic, the new regulation may be a game changer on the administration of medical care for pain patients.

Yates Memo Leads to Corporate Healthcare Executive Convictions

On September 9, 2015, Deputy U.S. Attorney General Sally Yates issued a memo entitled “Individual Accountability for Corporate Wrongdoing” to all of the Department of Justice’s prosecutors and civil litigators.

Known now simply as the Yates Memo, this directive signaled a new priority in the DOJ’s pursuit of corporate wrongdoing – a priority of pursuing, punishing and deterring individual wrongdoers in addition to their corporate employers.

“Fighting corporate fraud and other misconduct is a top priority of the U.S. Department of Justice. … One of the most effective ways to combat corporate misconduct is by seeking accountability from the individuals who perpetrated the wrongdoing.” With these simple, straightforward words by Yates, health care executives and administrators were put on notice that the DOJ will continue to leverage and coordinate its extensive resources in order to identify and pursue individuals who may be responsible for corporate wrongdoing.

And now nearly a year later, some corporate executives have learned of the Yates Memo, and the equivalent federal policies that preceded it, the hard way.

On Oct. 25, 2007, more than 200 agents from the FBI and other federal and state agencies raided WellCare’s headquarters and began a six-year investigation into the handling of state and federal money meant for behavioral care for the poor.

Investigators said that by law, WellCare was required to spend 80 percent of the money it received from the state of Florida for mental health services directly on patients. Twenty percent could go to administrative costs and profits. If less than 80 percent of the money was spent on care, it was to be returned to the state.

Authorities said WellCare funneled millions of dollars to a subsidiary, disguising expenditures to avoid returning unused money to the tune of $40 million. A whistle-blower’s lawsuit put the figure at $400 million to $600 million.

In May 2009, WellCare agreed to pay $80 million to avoid conviction on a charge of conspiracy to defraud the Florida Medicaid program and the Florida Healthy Kids Corp., a program for low-income children. The same month, the company paid $10 million to settle a lawsuit from the Securities and Exchange Commission and was forced to restate several years of income downward as a result of the fraud. In June 2010, the company agreed to pay $137.5 million to the U.S. Department of Justice and other federal agencies to settle civil lawsuits.

But the federal effort went way beyond just the corporate identity. WellCare executives were ultimately indicted on charges of conspiracy to commit Medicaid fraud and making false statements. And a federal appeals court just upheld the convictions of four health care executives found guilty.

A 124-page opinion issued this month by a 11th Circuit U.S. Court of Appeals panel affirmed their convictions and found “overwhelming evidence” that the WellCare executives participated in a scheme to file false Medicaid expense reports.

Convicted were former WellCare CEO Todd Farha; former Chief Financial Officer Paul Behrens; William Kale, vice president of a subsidiary and former WellCare vice president Peter Clay.

The court found that the defendants overstated the amounts spent on Medicaid services on invoices, which allowed the company to keep millions of dollars in tax-subsidized funds that should have been refunded. The court rejected the defendants’ argument that their actions were simple routine contractual and regulatory disagreements.

The advice for the non-convicted corporate executives that orchestrate schemes of health care fraud is simply this. Read the Yates Memo !

Employer’s Failure to Provide DWC-1 Prevents Carriers’ Laches Defense

Ng Kwok was employed as a restaurant manager and waiter by Nu Square Corporation, doing business as Har Lam Kee Restaurant. The owner of the restaurant was King Tak Cheung. Mr. Cheung is the older brother of Kwok’s wife, Yuk Lin Cheung.

On the morning of January 10, 2005, rain was coming into the restaurant dining area. Kwok went out to the backyard area with a ladder to inspect the leak. A few minutes later, Kwok was found lying on the ground unconscious with the ladder next to him. Kwok sustained a brain hemorrhage and was and continues to be paralyzed from the shoulders down. Since the accident, Kwok receives 24-hour medical care.

Ms. Cheung notified Mr. Cheung of Kwok’s accident by way of a phone call the day after it occurred. Mr. Cheung was then in Hong Kong for treatment of an illness.

Ms. Cheung, Kwok’s wife, filed a workers’ compensation claim for Kwok in July 2012, more than seven years after the accident. This came about because Ms. Cheung heard a radio program about workers’ compensation cases and began inquiring with attorneys.

The restaurant was insured for workers’ compensation by Farmers. Kwok’s claim first came to the attention of Farmers in July 2012. Farmers tried to verify coverage but it was difficult to verify the dates of coverage because it was a number of years since the date of injury. Coverage was ultimately confirmed through the Workers’ Compensation Insurance Rating Bureau.

Farmers investigated the claim to determine the owner of the business and the owner of the building. However, only limited information was obtained through the business owner and the owner of the building. The cause of the fall was unknown because no one actually witnessed the fall.

A copy of the application and a DWC-1 Employee’s Claim Form was served on Farmers on July 27, 2012. Farmers also confirmed that it signed a Notice Regarding Denial of Workers’ Compensation Benefits on behalf of Farmers dated March 21, 2013, and that Kwok’s claim was not denied within the 90-day period mandated in section 5402. Accordingly, Farmers agreed that section 5402 triggered the rebuttable presumption that the claim was compensable. However, Farmers did not treat Kwok’s claim as compensable.

The WCJ concluded that Kwok sustained a compensable injury and concluded that the statute of limitations did not bar Kwok’s claim. The WCJ did not address the issue of laches which was raised as an issue in the pre-trial conference statement. Farmers’ contention with respect to laches was that the “carrier was greatly prejudiced by the lengthy delay in filing an Application for Adjudication.”

A petition for reconsideration was denied. The Court of Appeal sustained the WCAB in the published case of Truck Insurance Exchange v WCAB.

Within one working day of receiving notice or knowledge of injury, the employer is required to provide to the employee a claim form and a notice of potential eligibility for workers’ compensation benefits. The WCJ concluded that in this case this “was apparently never done.” If an employer breaches this statutory duty, the limitations period is tolled for the period of time that the employee remains unaware of his rights. (Kaiser Foundation Hospitals v. Workers’ Comp. Appeals Bd. (1985) 39 Cal.3d 57, 60.)

Notice to or knowledge of a workplace injury on the part of the employer is deemed to be notice to or knowledge of the insurer. Since Farmers is deemed to have known of the injury the day after it occurred, Farmers cannot show delay in receiving notice of the claim, which is an essential element of laches

WCIRB Files Fourth Consecutive Premium Rate Decrease

The WCIRB Governing Committee voted to authorize the WCIRB to submit a January 1, 2017 Advisory Pure Premium Rate Filing to the California Insurance Commissioner.

The Filing will propose advisory pure premium rates that average $2.26 per $100 of payroll, which is 11.0% less than the corresponding industry average filed pure premium rate of $2.54 as of July 1, 2016, and 2.6% less than the average approved July 1, 2016 advisory pure premium rate of $2.32. This marks the fourth consecutive Filing that the WCIRB has advised a decrease in pure premium rates, totaling -18.6% when compared to the average of the approved January 1, 2015 advisory pure premium rates.

In his presentation to the Governing Committee, WCIRB Chief Actuary Dave Bellusci noted that the indicated January 1, 2017 average advisory pure premium rate, while only slightly below the July 1, 2016 average approved pure premium rate, is -7.5% from the average January 1, 2016 pure premium rate. Mr. Bellusci also identified some of the factors contributing to the reduced indicated pure premium rate:

1) Medical losses on 2014 and prior accident years continue to develop favorably
2) Medical claim costs on 2015 accidents are emerging at lower than projected levels
3) Indemnity claims are settling at quicker rates than in the recent past
4) Forecasts of future wage level growth in California have increased

Despite these positive trends, Mr. Bellusci acknowledged that post-SB 863 loss adjustment expenses (LAE) and indemnity claim frequency continue to emerge higher than projected, but these increases have been more than offset by the favorable medical loss trends.

The WCIRB will submit its January 1, 2017 Pure Premium Rate Filing to the California Department of Insurance (CDI) on or around August 19, 2016. The CDI will schedule a public hearing to consider the Filing and once the Notice of Proposed Action and Notice of Public Hearing is issued, the WCIRB will post a copy in the Publications and Filings section of the website.

For More Information please review the Governing Committee Meeting Presentation – August 10, 2016 and the Regulatory and Pure Premium Rate Filings