Author: WorkCompAcademy

The Workers’ Compensation Insurance Rating Bureau of California (WCIRB) has released its Quarterly Experience Report. This report is an update on California statewide insurer experience valued as of December 31, 2023.

Highlights of the report include:

– – After five consecutive increases, the projected loss ratio, including the cost of COVID-19 claims, dropped 2 points in accident year 2022, driven by a significant increase in premium due to higher payrolls and very modest changes in claim frequency and severity.
– – The accident year 2023 loss ratio is modestly higher than 2022, driven by the declining impact of COVID-19 claims and generally flat claim frequency and severity trends.
– – The average charged rate for 2023 continues to decrease; it is 5% lower than 2022 and the lowest in decades.
– – Indemnity claims had been settling more quickly through the first quarter of 2020, primarily driven by the reforms of Senate Bill No. 863 (SB 863) and Senate Bill No. 1160 (SB 1160).
– – Average claim closing rates declined sharply beginning in the second quarter of 2020 due to the pandemic.
– – Average claim closing rates have flattened in 2022 and 2023 and remain below the pre-pandemic level.
– – Projected severity on indemnity claims for 2023 is 3% higher than 2022 and 22% above 2017. – – The average severity in 2023 is the highest it has been in more than a decade, since before the SB 863 reforms.
– – Average Medical Cost Containment Program (MCCP) costs per claim have decreased by 14% since 2013, corresponding with the decline in average medical costs following the SB 863 reforms. Although MCCP costs increased modestly in 2023, MCCP cost levels have been generally declining over the last several years.
– – Pharmaceutical costs per claim decreased by 88% from 2012 through 2023. After increasing during the early pandemic period in 2020, average pharmaceutical costs per claim reverted to the pre-pandemic trend in 2021 and declined another 12% in 2022 and 2023.
– – Projected total statewide ultimate losses for 2005 through 2023 evaluations are below insurers’ reported amounts.

Join WCIRB actuaries to discuss the highlights of the September 1, 2024 Pure Premium Rate Filing and December 31, 2023 experience. They will also discuss their research into the impact of economic changes on the California workers’ compensation system. Please submit your questions when you register so that we may answer them during the webinar on Thursday, May 16, 2024, 10:00 AM – 11:00 AM PT. Please register for the webinar.

When Andrew Reynosa was employed by Advanced Transportation Services on March 3, 2017, he signed the company’s Arbitration Agreement which provided in part that he would arbitrate disputes he had with his employer.

On April 26, 2019, Reynosa filed a “complaint for damages” against ATS with the superior court of Tulare County. On July 8, 2019, the parties stipulated Reynosa would submit his claims to binding arbitration pursuant to the aforementioned agreement and the court proceeding would be stayed pending completion thereof.

On September 9, 2019, Reynosa filed a demand for arbitration with arbitration provider Judicate West. Under the heading “WHAT RULES OF ARBITRATION DO YOU PREFER,” he marked the checkbox for “CCP § 1280 et se[q].” Retired judge John L. Wagner would serve as the neutral arbitrator.

Certain arbitration fees were paid by the parties, and in July 2019 the case proceeded to unsuccessful mediation, and then multiple arbitration hearings at various states of discovery. Interim invoices were prepared along the way by Judicate West, and payments were made and posted.

On March 20, 2023, Reynosa filed a “motion to terminate arbitration and request for monetary and evidentiary sanctions” with the court. In the motion, Reynosa – citing section 1281.98 – asserted ATS materially breached the arbitration agreement because (1) it was given invoices on July 21, 2021, and December 12, 2022, respectively; (2) each payment was due within 30 days after the date of receipt; and (3) each payment was rendered after the grace period elapsed. Hence, Reynosa was “statutorily entitled to unilaterally withdraw his claims from arbitration and proceed in court . . . .”

In an attached declaration, Reynosa’s attorney, Deborah P. Gutierrez, averred that on March 17, 2023, she “inquired with [Judicate West’s case manager] if ATS had timely paid the arbitration fees in this matter” and the case manager “confirmed that Defendant had . . . paid the December 12, 202[2] [invoice] on February 22, 2023 . . . .”

In a minute order, Retired Judge Wagner conceded ATS’s payments were late but noted Reynosa “did have the opportunity to request this relief before significant work was done and non-refundable arbitration fees were paid” and nonetheless “elected on numerous occasions to proceed with the arbitration process after the alleged tardy payments occurred.” Wagner stated: (1) “[t]he first tardy payment was made on September [17], 2021, more than 18 months ago,” but Reynosa “sat on his rights under § 1281.98 and did nothing”; and (2) “[t]he last tardy payment was on February 22, 2023”; during the March 7, 2023 case management conference, Reynosa “successfully resisted [ATS]’[s] request for a continuation of the present April 17, 2023, hearing date” and Wagner “shortened the refundable date for the arbitration hearing fees to March 20, 2023”; and Reynosa “waited until that very date to file [his] Motion to Terminate Arbitration and advised [Wagner] of the filing of that motion on March 24, 2023, after the shortened non-refundable period had ended,” prejudicing ATS financially. Wagner vacated the hearing dates and stayed the arbitration proceeding “pending a decision on [Reynosa]’s Motion to Terminate Arbitration by the Tulare Superior Court.”

On April 18, 2023, the superior court held a hearing on Reynosa’s withdrawal motion and it was denied. The Court of Appeal reversed in the published case of Reynosa v. Superior Court -F086342 (May 2024).

The opinion noted that the clear and unequivocal language of section 1281.98, subdivision (a)(1) “establishes a simple bright-line rule that a drafting party’s failure to pay outstanding arbitration fees within 30 days after the due date results in its material breach of the arbitration agreement.” § 1281.97 “contains no exceptions for substantial compliance,unintentional nonpayment, or absence of prejudice”

Nevertheless, the superior court concluded the parties “mutually agreed upon” the February 23, 2023 due date, emphasizing Reynosa “did not object to the extended payment deadline when proposed.”

Under section 1281.98, subdivision (a)(2), “[a]ny extension of time for the due date shall be agreed upon by all parties.” The verb “agree” – of which “agreed” is the past participle – is essentially undefined by the statute.

“In our view, the construction of ‘agreed’ in section 1281.98, subdivision (a)(2) advanced by ATS and adopted by the superior court undermines the legislative intent: by letting a claimant’s silence, failure to object, or other seemingly acquiescent conduct (not amounting to direct expression) constitute a sufficient manifestation of his or her agreement to an extension, the need for the arbitration provider or the business/employer to actively procure such consent – e.g., by having the claimant sign an acknowledgement form – is obviated.”

“Reynosa did not directly express agreement with the February 23, 2023 due date. Therefore, pursuant to section 1281.98, subdivision (a)(2), the December 12, 2022 invoice was due upon receipt. Pursuant to section 1281.98, subdivision (a)(1), ATS had until January 11, 2023, to pay the arbitration fees and costs. By submitting payment on February 22, 2023, the company materially breached the arbitration agreement.

George and Sheila Byers filed a lawsuit against USAA, their homeowners insurer, as well as other defendants (Masters Distribution, Inc.; Clifton Michael Potter; and Crawford and Company). Among other causes of action in their operative complaint, the Byerses allege USAA is liable for breach of contract and breach of the covenant of good faith and fair dealing related to the installation of hardwood flooring at their Orinda home. The complaint’s prayer for relief includes a prayer: “For attorneys’ fees and costs.”

During discovery, the Plaintiffs responded to an interrogatory propounded by USAA, indicating that they were indeed pursuing attorney fees known as “Brandt” fees referring to Brandt v. Superior Court (1985) 37 Cal.3d 813, a California Supreme Court case that provides for attorney fees as damages caused by an insurer’s breach of the covenant of good faith and fair dealing.

USAA then served document requests asking Plaintiffs for production of “each and every fee agreement with YOUR attorneys in the instant litigation” and “each and every billing record, fee statement, invoice, receipt and proof of payment from YOUR attorneys in the instant litigation.”

The Plaintiffs refused to produce any documents for various reasons including “attorney-client privilege and/or work product doctrine.”

Following a hearing on USAA’s motion to compel, the trial court granted USAA’s motion. The Court of Appeal affirmed the trial court in the published case of Byers v. Superior Court -A169321 (May 2024).

On appeal Plaintiffs “assert several interrelated arguments. They contend that the trial court abused its discretion by forcing them to waive the attorney-client privilege during litigation as a condition of seeking Brandt fees.”

The Court of Appeal said that it “determined that writ review is warranted because the Byerses asserted that compliance with the order would violate a privilege or privacy rights and the petition raises ‘questions of first impression that are of general importance to the trial courts and to the profession, and where general guidelines can be laid down for future cases. ‘ “

And it went on to conclude “that the Byerses’ admission that they are seeking Brandt fees as an element of their damages is an implied waiver of the attorney-client privilege at least as to the attorney fees documents that the Byerses plan to rely upon to seek to prove the amount of fees they reasonably incurred to establish their right to benefits under USAA’s insurance policy.”

“The parties have not cited, nor are we aware of, any controlling authority specifically holding that a party claiming Brandt fees impliedly waives the attorney-client privilege as to documentation supporting the fees, including fees agreements and invoices.”

It “is well established in other contexts that ‘[w]here privileged information goes to the heart of the claim, fundamental fairness requires that it be disclosed for the litigation to proceed.’ “

“We agree with the trial court that USAA has a right to learn during discovery of the attorney fees aspect of the Byerses’ alleged damages and that by seeking such damages the Byerses have impliedly waived the attorney–client privilege. The Byerses have put at issue the attorney fees they incurred in an effort to seek coverage under their insurance policy, and disclosure of documents supporting their claim for such fees is necessary to fairly adjudicate the issue of damages.”

The owner and sole physician at a Bellflower medical clinic has pleaded guilty to submitting millions of dollars’ worth of false claims to a Medi-Cal health care program that provides family planning services to low-income and uninsured patients, causing more than $2.5 million in losses, the Justice Department announced today.

Robert Eyzaguirre, 77, of Torrance, pleaded guilty to one count of health care fraud, a felony that carries a statutory maximum sentence of 10 years in federal prison.

According to his plea agreement, Eyzaguirre owned and operated Dr. Robert’s Medical Center, a Bellflower-based medical clinic enrolled as a Family Planning, Access, Care and Treatment (Family PACT) provider run through the Medi-Cal public health program that California administered under Medicaid. At this clinic, Eyzaguirre employed and supervised Gary Lee Didio, 54, of Huntington Beach, and Sandra Rios, 51, of South Los Angeles.

From at least December 2013 through January 2020, Eyzaguirre conspired with Didio and Rios to submit more than $4.6 million in fraudulent claims to the Family PACT program for family planning services that were never provided. Specifically, Rios picked random names from an online phone-and-address directory and created fake patient files, including inserting fake vital signs and patient notes.

Eyzaguirre signed the fake patient files, falsely representing that he had provided family planning services to those patients. Eyzaguirre sometimes signed blank patient forms before the false vital signs and notes had been added. The fake patient files were then submitted to the Family PACT program for reimbursement. The Medi-Cal program paid more than $2.5 million on the fraudulent claims submitted by Dr. Robert’s Medical Center.

Eyzaguirre also falsely certified in the fake patient files that laboratory tests were medically necessary. Didio and Rios then referred the names of fake patients to a laboratory in Northern California, which then paid an illegal kickback of $30 cash for each referral. In total, the laboratory paid more than $372,000 in illegal kickbacks for the referrals of fake Family PACT patients from Dr. Robert’s Medical Center. The Medi-Cal program paid more than $1 million on the fraudulent claims submitted by the laboratory related to the scheme.

When Eyzaguirre learned that law enforcement was investigating the fraudulent scheme, he attempted to conceal the criminal activity by instructing Didio to remove the fake patient files from Dr. Robert’s Medical Center and hide them offsite. Once the files had been moved, Eyzaguirre attempted to shred the fake patient files to prevent law enforcement from discovering them.

Eyzaguirre admitted in his plea agreement to abusing his position of trust as a physician and obstructing justice.

Rios and Didio have pleaded guilty to conspiring to receive illegal remunerations for healthcare referrals. They are expected to be sentenced in the coming months.

United States District Judge Jesus G. Bernal scheduled a sentencing hearing for Eyzaguirre on October 28.

The United States Department of Health and Human Services Office of Inspector General and the California Department of Justice, Division of Medi-Cal Fraud and Elder Abuse investigated this matter.

Assistant United States Attorney Jason C. Pang of the General Crimes Section is prosecuting this case.

The Best States rankings from U.S. News & World Report show how each of the 50 U.S. states ranks in 71 metrics across eight categories. The data behind the rankings aims to show how well states serve their residents in a variety of ways. In calculating the rankings, each of the eight categories was assigned weights based on the average of three years of data from recent national surveys that asked nearly 70,000 people total to prioritize each subject in their state.

In the Health Care category, California ranked #6 in the nation this year. The top ten were 1. Hawaii, 2. Massachusetts, 3. Connecticut, 4. New Jersey, 5. Rhode Island, 6. California, 7. Maryland, 8. New York, 9. Delaware and 10. Washington.

Out of the eight categories, the Health Care Category follows the following three metric areas:

Health Care Access

– – Population Without Health Insurance: The percentage of adults ages 19 to 64 who reported having no health insurance coverage. (U.S. Census Bureau American Community Survey 1-year estimates; 2022)
– – Child Dental Visits: The percentage of children and young adults enrolled in Medicaid who received past-year preventive dental services among those eligible for the Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) benefit for 90 continuous days. (Centers for Medicare & Medicaid Services; fiscal 2021)
– – Child Wellness Visits: The percentage of children and young adults enrolled in Medicaid and eligible for the Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) benefit who received screening services among those who should have received such services. (Centers for Medicare & Medicaid Services; fiscal 2021)
– – Adults Without Dental Visit: The age-adjusted percentage of adults who reported not visiting a dentist or dental clinic within the past year. (Centers for Disease Control and Prevention, Behavioral Risk Factor Surveillance System; 2022)
– – Adults Without Wellness Visit: The age-adjusted percentage of adults who reported they had not visited a doctor for a routine checkup within the past year. (Centers for Disease Control and Prevention, Behavioral Risk Factor Surveillance System; 2022)
– – Adults Deterred From Care Due to Costs: The age-adjusted percentage of adults who reported there was a time in the past 12 months when they needed to see a doctor but could not because they could not afford it. (Centers for Disease Control and Prevention, Behavioral Risk Factor Surveillance System; 2022)

Health Care Quality

– – Preventable Hospital Admissions: The number of preventable hospital admissions per 100,000 Medicare beneficiaries. (Centers for Medicare & Medicaid Services; 2022)
– – Medicare Enrollees With Top-Quality Coverage: The percentage of Medicare Advantage enrollees with a health plan rated 4 stars or better, among plans with a published star rating and number of enrollees. (Centers for Medicare & Medicaid Services; enrollment data as of February 2024, performance data reflective of March-June 2023)
– – Nursing Home Quality Rating: An average index score per state reflecting a proportional scale between nursing homes rated by U.S. News as “high-performing” and those rated as “below average.” (U.S. News Best Nursing Homes; 2023-2024)
– – Hospital Quality Rating: An average index score per state reflecting a proportional scale between hospitals rated by U.S. News as “high-performing” and those rated as “below average,” among hospitals that perform or treat specific procedures or conditions. (U.S. News Best Hospitals; 2023-2024)

Public Health

– – Infant Mortality Rate: The number of infants who died before turning 1 year old, per 1,000 live births. (Centers for Disease Control and Prevention; 2021)
– – Mortality Rate: The number of age-adjusted deaths per 100,000 population. (Centers for Disease Control and Prevention; 2022 provisional data)
– – Obesity Rate: The age-adjusted percentage of obese adults, based on self-reported height and weight. (Centers for Disease Control and Prevention, Behavioral Risk Factor Surveillance System; 2022)
– – Smoking Rate: The age-adjusted percentage of adults who are current smokers, based on self-reported tobacco usage. (Centers for Disease Control and Prevention, Behavioral Risk Factor Surveillance System; 2022)
– – Poor Mental Health: The age-adjusted percentage of adults who reported their mental health was not good for 14 days or more in the past 30 days. (Centers for Disease Control and Prevention, Behavioral Risk Factor Surveillance System; 2022)
– – Suicide Rate: The age-adjusted rate of suicides per 100,000 population. (Centers for Disease Control and Prevention; 2022 provisional data)

Sadly, despite California’s high ranking in health care, it ranked #37 in terms of “Best States Overall.” This global category is based on ranking of the 8 sub-categories which includes health care. The California rankings in each of the 8 sub-categories was #34 Crime & Corrections, #34 Economy, #23 Education, #42 Fiscal Stability, #6 Health Care, #32 Infrastructure, #33 Natural Environment, and #50 Opportunity.

And out of the 30 Worst Places to Live, San Francisco was 3rd worst. The City by the Bay is one of the most expensive places to live in the U.S. The median income is higher here, but so are the costs for gasoline and utilities, which fall well above the national average. Job growth hovers just above 1%. Renters pay an average of $4,030 per month for a place to live. About 10% of the population lives below the poverty level. As for crime, the city experienced more than 50 murders and nearly 4,000 assaults in 2021.