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State Sen. Leland Yee Indicted in FBI Corruption Case

State Senator Leland Yee has been indicted for public corruption as part of another major FBI operation. San Francisco Police Chief Greg Suhr described the raids to KCBS as “massive.” “Hundreds of officers are involved in this,” he said.

Yee was taken into San Francisco’s Federal Building wearing handcuffs FBI agents and local police are serving arrest and search warrants throughout the Bay Area, with agents seen in locations in San Francisco and San Mateo, as well as Yee’s Capitol office in Sacramento. Targets of the raid are expected to appear in federal court in San Francisco this afternoon. Yee’s indictment likely ruins his candidacy for Secretary of State, and threatens Democrats’ ability to restore the state Senate supermajority that already has been broken by two other lawmakers’ paid leaves of absence to deal with criminal charges.

Yee represents San Francisco and a portion of San Mateo County. Before becoming the first Chinese-American ever elected to the state Senate in 2006, Yee was an Assemblyman from 2002 to 2006; a San Francisco supervisor from 1997 to 2002; and had been a member and president of the San Francisco Unified School District board. While in the Assembly, he was the first Asian-American to be named Speaker pro Tempore, essentially making him the chamber’s second-most-powerful Democrat.

Yee is the state’s third Democratic legislator recently tied to corruption allegations. In February, State Sen. Ron Calderon, D-Montebello, surrendered to authorities after being indicted on bribery charges surrounding proposed workers’ compensation law and Pacific Hospital in Long Beach. In January, Assemblyman Roderick Wright, D-Inglewood, was convicted of voter fraud and perjury stemming from a 2010 indictment.

Derek Cressman, who until last June was vice president of the non-partisan government watchdog group Common Cause, issued a statement Wednesday morning saying that Yee’s indictment must be “a wake-up call” given other Senate Democrats’ criminal charges. “We are clearly beyond the point of looking at one bad apple and instead looking at a corrupt institution in the California senate,” Cressman said. “The constant begging for campaign cash clearly has a corrosive effect on a person’s soul and the only solution is to get big money out of our politics once and for all.”

Defense Attorney Convicted of Stealing $2 Million From MTA

A former Rancho Cucamonga attorney who once handled some of the Metropolitan Transportation Authority’s toughest legal cases was convicted of stealing nearly $2 million from the transit agency by submitting phony invoices and pocketing settlement money. James Vincent Reiss, who also was convicted of stealing more than $1 million from other clients, pleaded no contest to two felony counts of grand theft. For 15 years, Reiss defended Metro in multimillion-dollar injury lawsuits involving rail and bus passengers until officials realized he was defrauding the agency, said Jane Robison, an L.A. County district attorney’s spokeswoman. Reiss, 52, made the plea as part of a deal in which prosecutors agreed to drop nine other felony counts of theft, forgery and fraud. He is set to be sentenced March 26, and the court is expected to require that he pay more $3 million in restitution and serve a decade in prison.

Reiss created fraudulent documents that led Metro to write checks that he ultimately kept for himself instead of paying plaintiffs who sued the agency. Karen Gorman, acting inspector general for Metro, said a State Bar of California investigation into problems with Reiss’ other clients in 2012 tipped off the agency to the potential for trouble, and officials immediately began auditing his cases. “We aggressively began to investigate – and working with the district attorney’s office we were able to bring Mr. Reiss to justice for his crimes.”

According to a Metro lawsuit filed against Reiss’ law firm in January for malpractice, forgery and negligence, Reiss cost the agency as much as $2.5 million. In 2011, Reiss allegedly told the MTA that it had negotiated a $2.5-million jury award down to $1.765 million. But when the Metro board authorized the settlement and ordered that two checks totaling $1.765 million be written, Reiss kept the money, according to the suit. Reiss then filed an appeal, delaying the case. Metro eventually resolved the case by paying $2.5 million. The suit alleges Reiss also submitted “numerous falsified invoices totaling at least $754,000,” for costs and kept the money.

Prosecutors said that in addition to the MTA, Reiss also took advantage of other clients. In one case, he settled a suit without the client’s knowledge, forged signatures on paperwork and pocketed the money, prosecutors said. In another case involving a trust, he opened a bank account, deposited a client’s money and wrote checks to himself, prosecutors said.

Reiss, was disbarred on March 16, 2013 after a state Bar Court judge called his case an illustration of the “disciplinary consequences of dishonesty,” The State Bar case went on to conclude “the most serious aggravation is found in Reiss’s 10-year pattern of deception in order to cover up mismanagement of his clients’ cases or for his personal economic gain. …Without a hint of remorse, Reiss has refused to acknowledge his misconduct despite overwhelming evidence of his dishonesty and the harm he caused to his clients. While the law does not require Reiss to be falsely penitent, it does require that [he] accept responsibility for his acts and come to grips with his culpability.”

Comp Rates Continue to Climb

Rates and premiums for workers’ compensation insurance are continuing to climb across the US, driven by factors including the prolonged low interest rate environment and rising medical costs. Meanwhile, implementation of the Affordable Care Act (ACA) and the potential expiration of the Terrorism Risk Insurance Program Reauthorization Act (TRIPRA) are two other factors that could make a significant impact on the workers’ comp market as 2014 unfolds.

As the U.S. unemployment rate shows modest declines and wages are slowly increasing, it’s no surprise that workers’ compensation premiums are continuing to show growth. A quick look back at the past 8 years tells us that the workers’ compensation market suffered through a 27% decline in premium from 2006 to 2010 before rebounding with growth in the past 3 years, including a 10% increase in 2012 to more than $39 billion according to an annual study by the National Council on Compensation Insurance (NCCI).

Wells Fargo took a look at what to expect through 2014 in the workers’ comp market in its 2014 Insurance Market Outlook, released at the end of January. In addition to concurring with the Marsh report regarding TRIPRA, the report forecasts continued rate increases for the first three quarters of this year, along with continued reduction in the combined loss ratio, resulting from higher prices seen over the past three years. The report includes several other predictions, such as continued movement away from guaranteed cost program structures into higher deductible program structures, either because they are a more appealing alternative or a necessity. One final prediction in the report says the continued use of predictive modeling analysis to improve risk selection, proper retention levels and pricing will result in more conservative underwriting by the insurers.

Health care reform hasn’t made a significant impact on the US workers’ comp market to date, but that isn’t expected to be the case for much longer. The effects could be both beneficial and detrimental. Ruth Estrich, chief strategy officer at Philadelphia-based MedRisk, a workers’ comp-focused managed care company, says the impact could come in a variety of forms. One way would be reduced severity in worker’s comp. If millions of people who were previously uninsured become insured, one would hope that these people will get healthier. For people that have chronic issues (such as asthma), having health insurance that allows them to manage their issues should impact how quickly they heal, become functional and get back in the workplace. Someone who is not getting care for their chronic issues will likely take longer to recover in a workers’ comp situation.

Estrich says another issue the industry is watching is access to primary care physicians (PCPs). “If you think about all of those folks who will start accessing health care through their PCP, we are headed toward a problem with access to primary care,” Estrich says. “People were already predicting that access to primary care will be a problem. It could be a perfect storm.” In worker’s comp, a lot of the treatment and first response in many cases comes via a person’s PCP. Estrich says it is conceivable that many PCPs, who are already in short supply, will elect to stop treating workers’ comp cases, which can be more challenging to deal with. This would obviously be a negative development for the workers’ comp market.

The third issue Estrich sees in the potential for a cost shift. People without health insurance have an incentive to ascribe their injury to a workplace event when it may well have happened away from the job, simply because they would be covered by workers’ comp and not covered if the injury occurs away from work. With more people being covered by health insurance, they would be less likely to claim an injury happened at work.

Painkiller Addiction Leads to “Lower Cost” Heroin Addiction

More than 12 million Americans reported using prescription painkillers in 2010 without a prescription or just for the high that they cause. Nearly 3 out of 4 drug overdose deaths are now caused by prescription painkillers. In 2008, some 14,800 deaths were attributed to the pills – more than cocaine and heroin combined. More than 475,000 emergency room visits were directly linked to prescription painkiller misuse or abuse in 2009, roughly double the number of five years earlier.

The global production of oxycodone, marketed as OxyContin in the United States, increased from two tons in 1990 to 135 tons in 2009. More than two-thirds of that supply was manufactured in the US, which, according to the United Nations Office on Drugs and Crime, increases the risk of its subsequent overprescription and diversion into illicit channels. Experts trace the rise of painkiller misuse in the US to 1996. That’s when the pharmaceutical company Purdue Pharma introduced OxyContin, a narcotic and derivative of opium. Andrew Kolodny, chief medical officer of Phoenix House, a national nonprofit treatment agency, describes OxyContin as essentially a “heroin pill.” It was made of oxycodone, a narcotic used to treat pain at the end of life. But the new pill would allow the company to reach a much wider audience.

“[Purdue] wanted a product that would be prescribed for common, moderately painful chronic conditions,” says Dr. Kolodny, who is also president of Physicians for Responsible Opioid Prescribing, an advocacy group. At first, the medical community balked. Using opioids for chronic problems seemed too risky given the nature of the pills’ highly addictive properties. But Purdue Pharma launched an aggressive marketing campaign arguing that it was a compassionate way to treat patients and, because of its extended-release characteristics, would be less prone to abuse. But before long, numerous cases of addiction to the painkillers began to surface. In 2007, Purdue Pharma pleaded guilty in federal court to misleading doctors and the public about OxyContin’s risks and paid a $600 million penalty. Kolodny says that the overprescribing of painkillers has now led to an “epidemic” of addictions, both among pain patients and recreational users.

And once a person becomes addicted to painkillers, it isn’t a long journey to heroin – itself a derivative of morphine developed in the late 1800s as a painkiller. Joseph Gfroerer of SAMHSA co-wrote a recent study that found that, of those who had tried heroin, about 80 percent had previously used painkillers without a prescription. From Los Angeles to Long Island, Chicago to New Orleans, parents and police are struggling with a rise in heroin use in suburban neighborhoods. The rise is being driven by a large supply of cheap heroin in purer concentrations that can be inhaled or smoked, which often removes the stigma associated with injecting it with a needle. But much of the increase among suburban teens, as well as a growing number of adults, has also coincided with a sharp rise in the use of prescription painkiller pills, which medical experts say are essentially identical to heroin. These painkillers, or opioids, are prescribed for things such as sports injuries, dental procedures, or chronic back pain. Yet in a disturbing number of cases, experts say, they are leading to overdependence and often to addiction to the pills themselves, which can then lead to heroin use. Once hooked, users look for doctors who will sell them prescription drugs and, failing that, turn desperately to the street, where the price can be as high as $80 for a single pill. When that becomes too expensive, users often resort to the drug that produces the same kind of high that painkillers do but is far cheaper: heroin.

The latest rise in heroin abuse was made more visible by the recent overdose death of actor Philip Seymour Hoffman. But use of the drug has been growing steadily across many levels of society for at least the past five years. And unlike the heroin surge in the 1970s, the current use of opiates is far more concentrated among suburban and rural whites than among African-American and Latino communities. The heroin that addicts used to shoot up with was 2 or 3 percent pure. Today, the street purity of the drug can be as high as 80 percent. That potency helps explain both the drug’s wider appeal and its new danger. Heroin once had to be injected for users to get the high they were looking to achieve, but it is now concentrated enough that they can smoke or snort it to get a similar effect – methods that make heroin easier for people to use it without feeling like a junkie. The higher purity is also more likely to trigger an overdose for those who do inject it.

So. Cal Water District Faces Insurance Crisis with JPA

Central Basin Municipal Water District is a public agency that purchases imported water from the Metropolitan Water District of Southern California and wholesales the imported water to cities, mutual water companies, investor-owned utilities and private companies in southeast Los Angeles County. There are 24 cities in Central Basin’s service area. The company is headquartered in Commerce California. The politically explosive District appears to be within a few days of financial armageddon after the agency was officially put on notice that its public insurance carrier is dropping them as a client.

According to the report by Hews Media Group-Community Newspaper, the Association of California Water Agencies and the Joint Powers Insurance Authority (ACWA-JPIA) officially informed Central Basin officials that their insurance coverage has been discontinued citing the “workings of a dysfunctional Board of Directors.” The District claims it is now “proactively reviewing all its available insurance options and alternative providers, in light of a pending decision by ACWA-JPIA regarding the District’s future relationship with the insurance provider.

During the past year, HMG-CN has published dozens of exclusive investigative reports documenting deep legal problems allegedly caused by Directors Robert Apodaca, James Roybal and Leticia Vasquez that could be the reasons for JPIA dropping the agency. HMG-CN disclosed the details of a sordid sexual harassment complaint lodged by a female employee against Apodaca;The newspaper has learned that the alleged victim in the case could be handed a high seven-figure settlement. Sources also tell HMG-CN that other females may be in the process of coming forward to file additional cases of sexual harassment activities against Apodaca.

HMG-CN also was the first news outlet to confirm and disclose the details of Director Leticia Vasquez’ filing of a highly controversial whistleblower lawsuit against her own agency. Vasquez, who denied she would be filing the lawsuit until it was revealed by HMG-CN, claims to have been “victimized” by many parties, individuals and law firms who have banked millions in questionable contracts with the agency during the past decade. Vasquez’s lawsuit also goes after her top political alley and heavy campaign contributor Ernest “Ernie” Camacho who is the owner of Pacifica Services. It also cited the Calderons, and other companies. Camacho and his company have banked millions in exclusive contracts with Central Basin.

Vasquez staged a bizarre press conference two weeks ago where she demanded that another director, Art Chacon resign his seat after it was learned that he had been involved in one accident while performing district business. The accident is in litigation, JPIA is fighting the fact that Chacon was working despite multiple sources coming forward to HMG-CN saying he was working, and is set for arbitration August of this year.

Former Central Basin District executive Ron Beilke also filed a complaint alleging wrongfully termination, retaliation, and harassment during his short tenure at the agency. Beilke confirmed to HMG-CN that he is plans to file a seven-figure lawsuit and plans to name Roybal, Apodaca and Vasquez individually in the complaint.

Phil Hawkins, who recently took over as President of the Board of Directors after Roybal was removed with the support of Apodaca and Chacon also chimed in on the current insurance crisis. “This District is hanging on by a thread and our General Manager and staff has done amazing things to right this ship. Our General Manager (Perez) just completed the biggest water sale in our District’s history and has aggressively been identifying potential long term recycled water customers, but somehow our Board continues to drag this agency through the mud,” said Hawkins a former state assemblyman from Cerritos. “What I will say to this Board is that the cancellation of our insurance is the ultimate wake-up call. Let’s settle down, let staff do their jobs and try to remember that it’s not about us, it’s about our 2 million customers,” Hawkins continued.

The agency is also being investigated by the Federal Bureau of Investigation, the Los Angeles County District Attorney’s Office, the Internal Revenue Service and the United States Attorney’s Office in connection with a case involving current State Senator Ronald Calderon and former Assemblyman Thomas Calderon.

Attorney General Says California Leads the Nation in Transnational Organized Crime

California has long been known as one of the epicenters of insurance fraud, medical fraud, and other organized crimes. And now, according to a new 118 page report by California Attorney General Kamala Harris, California leads all states in the number of computer systems hacked or infected by malware, the number of victims of Internet crimes, the amount of financial losses suffered as a result and the number of victims of identity fraud. The report says the state also is particularly vulnerable to thefts of intellectual property because of its leading role in developing new technologies and mass-media entertainment. The report should serve as a wake up call to any California businesses that maintain data on individuals such as insurance companies that digitize claim files, and third party administrators.

Between 2009 and 2012, the number of intentional breaches of computer networks and databases in the U.S. jumped by 280 percent, with California’s share leading the nation. Many of these breaches have been tied to transnational criminal organizations operating from Russia, Ukraine, Romania, Israel, Egypt, China, and Nigeria, among other places.

The report claims that transnational criminal organizations are increasingly taking advantage of new communications technology and the interconnectedness of the globalized world to further their trafficking activities in California. This creates new challenges for law enforcement. But transnational organized crime in California extends beyond drugs, weapons, and human trafficking. In the 21st century, the problem posed by transnational criminal organizations threatens the security of computer and data networks, the integrity of online bank accounts, and the rights of intellectual property holders. By virtue of its population and knowledge-powered economy, “California is the top target in the nation for this new generation of transnational criminal organizations – originating in significant numbers from Eastern Europe, but also Africa and China – whose purpose is to commit highly profitable hacking, fraud, and digital piracy crimes.”

California’s gross domestic product of $2 trillion, significant foreign trade activity and border with Mexico also makes the state an easy target for international money-laundering schemes, the report says. It estimates that more than $30 billion is laundered through California’s economy each year. Some is filtered through legitimate businesses or by using virtual currencies such as Bitcoin. But the report says backpacks and duffel bags stuffed with cash have been seized more frequently since Mexico began toughening its money-laundering laws in 2010. Seizures of bulk cash increased 40 percent by 2011 in California, which now leads the nation in the number of currency seizures.

Transnational criminal organizations are taking advantage of new communications technologies and social media to facilitate criminal activity, recruit new members, and intimidate or harass their rivals – even from inside prison walls. In 2011, for example, over 15,000 cell phones were seized from inmates in California prisons. The public safety threat posed by Mexico-based drug trafficking organizations has been amplified as cartels have formed alliances with California prison and streetgangs to control trafficking routes, distribute drugs, and kidnap, extort, and kill as necessary to protect their criminal activities. The Mexican Mafia, for example, provides protection for members of numerous cartels both inside and outside prison, and various Hispanic Sureño and Norteño gangs in Southern and Northern California have teamed up with Sinaloa, La Familia Michoacana, The Knights Templar, and other Mexico-based drug trafficking organizations.

Intoxication is No Defense to Claim Against Uninsured Employer

Sacramento Lopez was injured while working for Elena Delgadillo and and Jesus Cortez. He sued them in superior court, seeking damages for the injury and also alleging violations of various wage and hour laws. In response to an interrogatory request propounded during discovery, the employer admitted they did not have workers’ compensation insurance covering Lopez’s injury. The employer later reversed course and contended they did have insurance, relying on a workers’ compensation policy purchased for a different employment site, which they argued also covered the employment site where Lopez was injured. Their insurance company denied coverage and the employer filed a separate lawsuit against the insurance company and others (the insurance action), naming Lopez as an indispensable party. The employer voluntarily dismissed with prejudice the insurance action prior to trial in Lopez’s lawsuit.

After a jury verdict in Lopez’s favor, the trial court entered judgment awarding Lopez unpaid wages and penalties for the wage and hour violations, and damages (medical expenses and noneconomic losses) for the workplace injury. The trial court subsequently awarded Lopez attorney fees, including fees for work performed in the insurance action “because that action was closely related with this action and useful to its resolution.” The employer appealed, and the court of appeal sustained the judgment in the unpublished case of Lopez v. Delgadillo.

With respect to the arguments about the exclusive remedy under workers compensation, if an employer has failed to obtain workers’ compensation insurance or permission from the state to self-insure, the employee may bring a civil action for damages. (Labor Code, §§ 3700, 3706.). In this case the employer failed to properly plead and prove that it had proper workers’ compensation insurance.

The employer sought, over Lopez’s objection, to present evidence at trial of Lopez’s drug and alcohol use at the time of his injury. The trial court excluded the evidence as more prejudicial than probative under Evidence Code section 352, and refused appellants’ request for a jury instruction regarding intoxication. The court of appeal agreed with the ruling. In lawsuits seeking damages for workplace injuries when the employer failed to obtain workers’ compensation insurance (§ 3706), “it is presumed that the injury to the employee was a direct result and grew out of the negligence of the employer, and the burden of proof is upon the employer, to rebut the presumption of negligence. It is not a defense to the employer that the employee was guilty of contributory negligence” (§ 3708). After the California Supreme Court replaced contributory negligence with comparative negligence, this statute was construed to preclude a defense of the employee’s comparative negligence. (Logan v. Masters (1981) 120 Cal.App.3d 145, 147-148 [“[c]omparative negligence, like contributory negligence, is unavailable to the employer,” otherwise “uninsured employers would have a potential advantage over insured employers, a result clearly contrary to the Legislature’s intent”].) Accordingly, any evidence of Lopez’s drug and alcohol use to show his negligence was properly excluded.

Bipartisan Agreement Raises Hopes to Avoid 24% Physician’s Pay Cut

Hundreds of thousands of doctors who participate in traditional Medicare face a 24 percent pay cut on April 1, as part of a 1990s initiative to restrain federal spending on the government healthcare program, which today serves nearly 50 million elderly and disabled people.

Using language seldom reserved for Congress, the nation’s most powerful lobbies for physicians are heaping praise on rare bipartisan legislation heading to the floors of the U.S. Senate and House of Representatives perhaps within the next month to fix a flaw in how doctors are paid by the federal Medicare health insurance program for the elderly. After years of watching Congress delay, debate and dither on the repeal of Medicare’s “sustainable growth rate,” or SGR, reimbursement formula, a solution has passed three powerful Congressional committees and is headed possibly next month to likely passage.

According to the story in Forbes, the deal, which both the American Medical Association and the American Academy of Family Physicians have called a “bicameral, bipartisan” agreement to repeal SGR would bring an end to stopgap corrections to dramatic cuts in doctor payments from Medicare in what has since been labeled the “doc fix.” At the same time, the legislation heading for Senate and House votes would tie more physician reimbursement to quality and outcomes measures. “Legislators and staff have shown a Herculean effort in crafting this proposal,” Dr. Jeffrey Cain, chair of the American Academy of Family Physicians board said in a letter Monday to Congressional leaders including House Speaker John Boehner and Senate Majority Leader Harry Reid.

Congress has several times for a decade now merely made stopgap corrections to avert drastic payment cuts to Medicare payments under SGR, which was created by the Balanced Budget Act of 1997 in an effort to slow the growth of Medicare spending. Last year alone, Congress averted a fee cut of nearly 27 percent to physician payments. The AMA, family doctor group and other physician lobbies say Congress needs to act before March 31 when the latest stopgap measure that extends “the Medicare payment formula that includes the Sustainable Growth Rate expires,” Cain said. “The looming threat of frequent reductions also stifles innovation in case delivery and hinders the transformation of primary care practices,” Cain said. “Investments in process and quality improvement have proven difficult for most physicians under the current unpredictable payment structure.”

Should the legislation pass, it will increase payments 0.5 percent annually through 2018. Meanwhile, more Medicare payments would be tied to quality measures that include “clinical care, safety, care coordination, patient and caregiver experience and population health.” To get bonus payments, physicians would be compared to their peers and measures would be updated every year by the U.S. Secretary of Health and Human Services.

The move to new payment could also be good news to the health insurance industry with companies like Aetna, UnitedHealth Group, Humana and others seeing greater numbers of seniors flocking to their Medicare Advantage plans that contract with the Medicare program to provide seniors with health benefits. They need doctors to participate if they are going to provide seniors with adequate medical care provider networks.

Public Service Insurance Exits California Comp Market

Public Service Insurance Co.’s newly announced exit from California’s workers’ compensation market is not a reflection of the health of the state’s workers’ comp system, according to the California Department of Insurance. The workers’ comp carrier is part of the Magna Carta Cos.

A.M. Best this week downgraded the financial strength rating to B+ (Good) from B++ (Good) and the issuer credit ratings to “bbb-” from “bbb” of Public Service Insurance Co. and its affiliates, Paramount Insurance Co. (New York, NY) and Western Select Insurance Co.(Los Angeles, CA) The companies are collectively referred to as Magna Carta Cos., which operate through an intercompany pooling reinsurance agreement, according to A.M. Best.

The rating downgrades reflect the significant deterioration in Magna Carta Companies’ operating performance during the fourth quarter of 2013, due to a $57 million charge to strengthen reserves. Approximately $31.9 million of the group’s reserve strengthening actions were related to its workers’ compensation line of business. To provide protection against further unexpected adverse reserve development, management plans to implement an ADC, which will cover 100 percent of net losses within the ADC coverage limit. Inclusive of the benefit of the additional reinsurance protection, Magna Carta Companies’ overall risk-adjusted capitalization adequately supports its current obligations and those anticipated by its near-term business plans. While risk-adjusted capitalization is expected to remain at a level that supports the current ratings in the near to midterm, A.M. Best is concerned about the lack of clarity regarding Magna Carta Companies’ risk appetite and business strategy, which has contributed to the below-average underwriting and operating results in recent years. A.M. Best expects management will focus on these critical issues to return the group to profitability in the near term.

According to the story in the Insurance Journal, a call to Magna Carta wasn’t immediately returned, and spokespersons for Magna Carta or Public Service couldn’t be located.

Bryant Henley, assistant chief council for CDI, said the department has been aware of the exit. “We certainly were aware the Public Service Insurance Co. was planning to exit the market,” Henley said. Aside from that Henley declined to comment specifically on Public Service’s exit, but he said that it would have a negligible impact on the state. “The short answer there is that Public Service Insurance Co. was a very small part of the market share of California,” he said. According to CDI, the company wrote less than “One-half of 1 percent” of California’s workers’ comp business. Henley said the exit doesn’t portend any developing problems for California’s workers’ comp carriers. “No, we would not consider this a trend,” he said. “We don’t have a lot of workers’ comp business leaving California. We don’t anticipate it to be a larger trend of things to come.” He added: “the California market, it’s very vibrant and thriving.”

A spokesman for the state’s Workers’ Compensation Insurance Rating Bureau said the bureau wouldn’t offer a comment on the announced exit of the company, and a spokesman for the California Workers’ Compensation Institute also declined comment.

It’s estimated the company wrote less than $29 million in direct premiums amid the state’s $9 billion market.

DWC Proposes Regulatory Move from ICD-9 to ICD-10

The Division of Workers’ Compensation (DWC) has posted proposed changes to regulations reflecting transition from ICD-9 to ICD-10 to the online forum where members of the public may review and comment on the proposals.

Work on ICD-10 began in 1983 and was completed in 1992. ICD-10 is the 10th revision of the International Statistical Classification of Diseases and Related Health Problems (ICD), a medical classification list by the World Health Organization (WHO). ICD-10 is already in use in about 25 countries. The United States continues to use ICD-9, the prior edition of ICD. The new code set allows more than 14,400 different codes and permits the tracking of many new diagnoses. The codes can be expanded to over 16,000 codes by using optional sub-classifications. The detail reported by ICD can be further increased, with a simplified multi-axial approach, by using codes meant to be reported in a separate data field.

The deadline for the United States to begin using Clinical Modification ICD-10-CM for diagnosis coding and Procedure Coding System ICD-10-PCS for inpatient hospital procedure coding is currently October 1, 2014. The deadline was previously October 1, 2013. In preparation for this deadline, it is necessary for the DWC to update regulations and forms to refer to ICD-10, rather than ICD-9. Affected regulations are 8 C.C.R. §§ 9702(e), 9770(g) and 9789.16.2(a).

Affected forms are DLSR 5021 (Doctor’s First Report of Injury), PR-2 (Primary Treating Physician’s Progress Report), PR-3 and PR-4 (Primary Treating Physician’s Permanent and Stationary Reports).

The forum can be found online on the DWC forums web page under “current forums.” Comments will be accepted on the forum until 5 p.m. on Friday, March 28, 2014/