Pursuant to Section 11759.1 of the California Insurance Code, the Workers’ Compensation Insurance Rating Bureau has prepared its 2022 California Workers’ Compensation Losses and Expenses report containing estimated California workers’ compensation costs for 2022 based on insured employer experience.

The report also reflects payments made by the California Insurance Guarantee Association (CIGA) in the statewide loss payments for calendar years 2010 through 2022.

Highlights from the report are as follows:

– – Calendar year 2022 earned premium totaled $15.3 billion (as compared to the $13.6 billion of premium earned in 2021).

– – Total insurer paid losses (i.e., excluding payments made by CIGA) in 2022 were $8.3 billion, or 54% of calendar year earned premium. Combining insurer paid losses with a $0.8 billion increase in total insurer loss reserves resulted in total insurer incurred losses, excluding payments made by CIGA, of $9.1 billion, or 60% of the premium earned in 2022

– – In 2022, $4.4 billion, or 53% of total loss payments, were for medical benefits.

– – In 2022, $4.0 billion, or 47% of total loss payments, were for indemnity benefits (including vocational rehabilitation benefits).

– – In total, about $72 million in vocational rehabilitation-related benefits were paid in calendar year 2022. This was 1.8% of all indemnity payments in 2022, of which 92% was for education related benefits. (For comparison purposes, in 2021, vocational rehabilitation benefits paid was $67 million, or 1.8% of all indemnity payments, of which 90% was for education-related benefits.)

– – Insurer incurred loss adjustment expenses (allocated and unallocated) in 2022 were $2.7 billion, or 17% of earned premium. This includes the full cost to insurers of administering, adjudicating and settling claims. Incurred loss adjustment expenses include $850 million in defense attorney expenses incurred in 2022. (For comparison purposes, in 2021, incurred loss adjustment expenses were 16% of earned premium, including $806 million in defense attorney expenses.)

– – Although generally part of incurred indemnity losses rather than expenses, the amount paid in 2022 to applicant attorneys was derived from the WCIRB’s Annual Expense Call. In 2022, applicant attorneys were paid $395 million. (In 2021, applicant attorneys were paid $389 million)

– –  In total, incurred losses and expenses in calendar year 2022 were $15.0 billion, or 98% of earned premium. Based on insurer statutory Annual Statement information, the WCIRB estimates policyholder dividends incurred in 2022 to be 0.6% of 2022 earned premium, resulting in an underwriting profit of $0.2 billion.

Individuals from two Bay Area construction companies were arraigned on charges of conspiring to misclassify workers to avoid paying workers’ compensation insurance, payroll taxes, and insurance premiums. Complaints were filed in the Contra Costa County Superior Court.

The first complaint against 57-year-old Candido Silva, 42-year-old Itamar De Morais Junior, and 42-year-old Irma Ruiz-Alarcon of Atlas Pavers of Concord details how they unlawfully paid over $12 million to its unlicensed and misclassified construction crews from 2016 through 2019.

The complaint also alleges that the defendants discussed a desire to avoid insurance with the State Compensation Insurance Fund because they knew that SCIF would require an audit of the company’s books.

The second complaint charged 62-year-old Christopher Ray Vieira and 60-year-old Gilbert Roland Guiotti with operating Centrox Construction of San Bruno as a shell company to route unlawful payments to unlicensed subcontractors for Atlas Pavers and others.

Both men have been charged with the unlawful use of their CSLB license to aid and abet payments from companies advertising to consumers as licensed contractors to their unlicensed and misclassified subcontractor labor crews.

Moreover, the complaint alleges Centrox received a percentage for routing millions of dollars in payroll funds to unlicensed and misclassified subcontractor crews — while fraudulently underreporting the worker’s total compensation amounts to SCIF.

The investigation into Atlas Pavers and Centrox Construction was conducted by the Contra Costa District Attorney’s Office, Contractors’ State Licensing Board, and the California Department of Insurance.

District Attorney Diana Becton said that “Prosecuting insurance fraud is about protecting workers, holding those responsible accountable, and stopping unlawful business schemes.”

California law requires contractors to be licensed in their specialized field, obtain workers’ compensation insurance.

Career satisfaction, intention to leave jobs, and mental health and wellbeing issues among registered nurses have gotten significantly worse since the midst of the COVID-19 pandemic, according to the AMN Healthcare 2023 Survey of Registered Nurses.

The AMN Healthcare 2023 Survey of Registered Nurses, based on responses from more than 18,000 nurses in January 2023, found that career satisfaction dropped by 10 percentage points since the middle of the pandemic in 2021. In addition, the likelihood of encouraging others to become a nurse declined 14 points since 2021.

Workforce challenges are the number one problem faced by healthcare executives, replacing financial issues, which for decades were cited as the top problem.

Among the survey’s findings:

– – Only 15% of hospital nurses say they will continue in the same job in one year.
– – 30% of nurses are likely to leave career due to the pandemic, up 7 points since 2021.
– – Four of five nurses experience a great deal or a lot of stress, up 16 points since 2021.
– – More nurses worry that their job is affecting their health, up 19 points from 2021.
– – Nurses who said they often feel emotionally drained was up 15 points from 2021.
– – Career satisfaction dropped to 71% in 2023 after holding steady at 80-85% for a decade.

The survey shows how the Great Resignation has impacted the healthcare workforce, with only 15% of hospital nurses saying they will “continue working as I am” in one year. Among all nurses, only 40% said they will continue in the same job in one year — a 5-percentage-point drop since 2021. The remainder will seek a new staff nursing job; work as a travel nurse, part-time or per diem; take a job outside patient care; return to school; or leave nursing altogether.

Nurse satisfaction and quitting issues may be driven by rising mental health and wellbeing problems for nurses, which have dramatically increased since the middle of the pandemic in 2021. Mental health problems increased by double digits. Meanwhile, more than one-third of nurses (35%) never address mental health and wellbeing issues. One in five nurses (20%) address their mental health and wellbeing at least four times a week, a decrease of 4 points from 2021 (24%). Particularly concerning is that younger nurses’ responses were more negative than older nurses regarding satisfaction and mental health and wellbeing.

One cause of the post-pandemic rise in problems affecting nurses may be a shift in public attention. “During the pandemic, nurses were widely lauded as heroes in the media and public acclaim, which buoyed our spirits and pride during the worst national public health crisis in our lifetimes,” Edmonson said. “But as pandemic conditions waned, the accolades subsided and the focus on nurse wellbeing wavered.”

Data from the 2023 survey points the way toward solutions to the current situation. Comparisons show that positives are interrelated – reduction in stress and utilization of mental health and wellbeing services result in better career satisfaction and job retention.

Also needed is a systemic transformation in how organizations view and deploy the healthcare workforce and widespread adoption of technology and systems that can help ease the stress on nurses. Healthcare organizations need the flexibility for the most effective and efficient way to cover the work that needs to be done at the unit and enterprise levels.

Achieving these goals requires a collaborative national campaign of healthcare organizations; professional organizations; organizations representing patient groups; civil society such as the major health nonprofits; government agencies; elected officials; and nurses themselves.

“The survey data reveal the depth of the problems faced in nursing today and concludes with solutions that could help alleviate the strain posed by systemic staffing shortages and exacerbated by the pandemic,” said AMN Healthcare Chief Clinical Officer Dr. Cole Edmonson, DNP, RN, NEA-BC, FACHE, FAONL, FNAP, FAAN. “The health of our nation is tied directly to the health of the nursing workforce.”

The full report is available on AMNHealthcare.com.

Grace Nunes sustained two admitted industrial injuries while employed by the State of California, Department of Motor Vehicles. In Case No. ADJ8210063, she sustained injury to her neck, upper extremities, and left shoulder, on September 13, 2011. In Case No. ADJ8621818, she sustained injury to her bilateral upper extremities from September 13, 2010 to September 13, 2011.

The parties selected Melinda Brown, M.D., to act as the qualified medical evaluator (QME) in orthopedic medicine. Dr. Brown opined that “[functionally, I do not believe [applicant] would be employable in the open-labor market based on evaluation today … I do believe her inability to work is based on a pain basis and function.”

Applicant’s vocational expert Gene Gonzales evaluated her and issued a report addressing her feasibility for vocational retraining. He Mr. concluded that the “transferable skills analysis tool revealed that applicant sustained a 100 percent loss of access to her open labor market.” Gonzales also addressed apportionment by acknowledging Dr. Brown’s determination that applicant’s left shoulder injury was 100 percent industrial, while 40 percent of the cervical spine injury was attributed to nonindustrial factors. Mr. Gonzales said that “From a vocational standpoint, Ms. Nunes’ preexisting/non-industrial degenerative condition had zero impact to her earning capacity given applicant’s work history.”

Gonzalez went on to say that “the limitations that have rendered Ms. Nunes 100 percent permanently and totally disabled are a direct result of the left shoulder and cervical spine injury on September 13, 2011. It should be noted that standing alone, absent the right elbow/shoulder condition, carpal tunnel syndrome, and diabetic condition, Ms. Nunes’ functional limitations and chronic pain clearly render her 100 percent permanently and totally disabled. Without question, vocational apportionment in Ms. Nunes’ case is 100 percent industrial and attributable to the specific injury of September 13, 2011.“

Dr. Koobatian performed a VR assessment on behalf of the employer and concluded that “it is likely that Ms. Nunes is not employable in the competitive labor market resulting in a substantial loss of future earning capacity.” However, the report also detailed nonindustrial factors of apportionment to the cervical spine, right upper limb, and left carpal tunnel, as identified by Dr. Brown. He concluded that “while the majority of Ms. Nunes’ present medical barriers are industrial in origin …. at least 10% vocational apportionment from non-industrial medical factors is attributable to Ms. Nunes’ inability to compete in the open labor market and participate in vocational rehabilitation services.“

The parties proceeded to trial on the issue of permanent disability, apportionment, attorney’s fees, and whether “applicant rebutted the AMA Guides for permanent total disability.” The WCJ found that applicant is entitled to an unapportioned award of 100 percent industrial disability based on the analysis that “applicant has rebutted the AMA Guides. She’s found to be 100% disabled as there is no evidence of previous loss of earnings capacity.”

Reconsideration was granted and the F&A was rescinded in the En Bank decision of Grace Nunes v State of California, Department of Motor Vehicles -ADJ8210063- ADJ8621818 (June 2023).

Section 4663(c) does not provide for collateral sources of expert opinion as to apportionment, and further does not authorize the application of any other standard of apportionment. “Accordingly, ‘vocational apportionment’ offered by a non-physician is not a statutorily authorized form of apportionment. In addition, apportionment determinations that deviate from the mandatory standards described in section 4663(c) are not a valid basis upon which to determine permanent disability.”

“Pursuant to section 4663(c), evaluating physicians play an integral role in the determination of permanent disability. It is therefore appropriate and often necessary that evaluating physicians consider the vocational evidence as part of their determination of permanent disability, including factors such as whether applicant is feasible for vocational rehabilitation, and whether the reasons underlying applicant’s non-feasibility for vocational retraining arise solely out of the present industrial injury or are multifactorial.”

“The same considerations used to evaluate whether a medical expert’s opinion constitutes substantial evidence are equally applicable to vocational reporting. In order to constitute substantial evidence, a vocational expert’s opinion must detail the history and evidence in support of its conclusions, as well as “how and why” any specific condition or factor is causing permanent disability.”

“While vocational evidence may be utilized to assess factors of permanent disability, including whether an injured employee is feasible for vocational retraining, in order to constitute substantial evidence, vocational reporting must consider valid medical apportionment.” … “The apportionment analysis required under 4663(a) and Escobedo, supra, does not permit reliance on facts offered in support of a competing theory of apportionment.”

“Accordingly, a vocational report is not substantial evidence if it relies upon facts that are not germane, marshalled in the service of an incorrect legal theory. Examples of reliance on facts that are not germane often fall under the rubric of “vocational apportionment,” and include assertions that applicant’s disability is solely attributable to the current industrial injury because applicant had no prior work restrictions.”

Thus the WCAB En Banc concluded by saying:

1. Section 4663 requires a reporting physician to make an apportionment determination and prescribes the standard for apportionment. The Labor Code makes no statutory provision for “vocational apportionment.”
2. Vocational evidence may be used to address issues relevant to the determination of permanent disability.
3. Vocational evidence must address apportionment, and may not substitute impermissible “vocational apportionment” in place of otherwise valid medical apportionment.

“Applying these principles to the present matter, we conclude that the current medical and vocational record is analytically incomplete. Accordingly, we will rescind the F&A and return this matter to the trial level for further proceedings consistent with this opinion.”

The Food and Drug Administration Safety and Innovation Act (FDASIA) was enacted on July 9, 2012. Title X of FDASIA, which addresses drug shortages, took effect on the date of enactment and, among other things, amended the Federal Food, Drug, and Cosmetic Act by adding section 506C-1, which requires the Food and Drug Administration to file an annual report to Congress on drug shortages.

This Tenth Annual Report to Congress published by the FDA on June 7, 2023 summarizes the major actions taken by the U.S. Food and Drug Administration during calendar year 2022 to prevent or mitigate drug shortages in the United States. As a result of presidential, congressional, and Agency actions, manufacturers are notifying FDA earlier than in the past about certain manufacturing interruptions and discontinuances that can lead to shortages.

The FDA reports that at the height of the drug shortage crisis, the number of new drug shortages tracked by Center for Drug Evaluation and Research (CDER) quadrupled, from approximately 61 shortages in 2005 to more than 250 in 2011. “The number of new drug shortages per calendar year has declined from a high of 250 in 2011 to 49 in 2022”.

Although the number of new drug shortages has declined since 2011, the FDA in general terms cautions that “shortages continue to pose a real challenge to public health, particularly when the shortage has involved a critical drug to treat cancer, to provide parenteral nutrition, or to address another serious medical condition, such as a shortage of antibiotics.”

The FDA report is very general and does not specifically point out a supply crisis on the immediate horizon. But a new report just published by Kaiser Health News does not depict a good picture for shortages, especially in the generic drug marketplace.

KHN reports that Cisplatin and carboplatin are among scores of drugs in shortage, including 12 other cancer drugs, attention-deficit/hyperactivity disorder pills, blood thinners, and antibiotics.

It claims that “Covid-hangover supply chain issues and limited FDA oversight are part of the problem, but the main cause, experts agree, is the underlying weakness of the generic drug industry. Made mostly overseas, these old but crucial drugs are often sold at a loss or for little profit. Domestic manufacturers have little interest in making them, setting their sights instead on high-priced drugs with plump profit margins.”

“The 10 cancer clinicians KFF Health News interviewed for this story said that, given current shortages, they prioritize patients who can be cured over later-stage patients, in whom the drugs generally can only slow the disease, and for whom alternatives – though sometimes less effective and often with more side effects – are available. But some doctors are even rationing doses intended to cure.”

The causes of shortages are well established. The average net price of generic drugs fell by more than half between 2016 and 2022, according to research by Anthony Sardella, a business professor at Washington University in St. Louis.

And some generic manufacturers are going out of business. Akorn, which made 75 common generics, went bankrupt and closed in February. Israeli generics giant Teva, which has a portfolio of 3,600 medicines, announced May 18 it was shifting to brand-name drugs and “high-value generics.” Lannett Co., with about 120 generics, announced a Chapter 11 reorganization amid declining revenue. Other companies are in trouble too, said David Gaugh, interim CEO of the Association for Accessible Medicines, the leading generics trade group.

The generics industry used to lose money on about a third of the drugs it produced, but now it’s more like half, Gaugh said. So when a company stops making a drug, others do not necessarily step up, he said. Officials at Fresenius Kabi and Pfizer said they have increased their carboplatin production since March, but not enough to end the shortage.

On June 2, FDA Commissioner Robert Califf announced the agency had given emergency authorization for Chinese-made cisplatin to enter the U.S. market, but the impact of the move wasn’t immediately clear.

So KHN concludes by saying “Despite a drug shortage task force and numerous congressional hearings, progress has been slow at best. The 2020 CARES Act gave the FDA the power to require companies to have contingency plans enabling them to respond to shortages, but the agency has not yet implemented guidance to enforce the provisions.”