The Workers’ Compensation Insurance Rating Bureau of California has released a new report, Medical Characteristics of Cumulative Trauma Claims.
In the California workers’ compensation system, CT claims have always been a key cost driver mostly because of the complexity of having injury exposure spanning multiple years, litigation and frictional costs from liens and medical-legal services that are incurred on CT claims.
Prior WCIRB research has suggested that as much as 40% of all CT claims are filed on a post-employment or post-termination basis. Post-termination CT claims are filed after the termination of employment, and they tend to be more litigious and involve more frictional costs than regular CT claims.
This study analyzes both CT and post-termination CT claims, focusing on the characteristics of medical treatment, primary medical diagnoses and underlying drivers for frictional costs.
Some of the key findings include:
– – Indemnity claims are the key driver of CT claim costs. Average medical severity on CT indemnity claims starts off lower than non-CT indemnity claims, but eventually grows larger as the claims mature.
– – CT indemnity claims have a higher payment share for medical-legal and medical liens services than non-CT claims, mostly driven by significantly higher levels of utilization.
– – The share of medical payments for medical liens and medical-legal services on CT claims is on average three times the payment shares of these services on non-CT claims.
– – The average paid per medical-legal evaluation is more than 20% higher on CT claims than on non-CT claims. In addition, there areover60% more evaluations on CT claims, which leads to a significantly higher overall medical-legalpaid per claim.
– – CT claims are more likely to involve soft tissue injuries and mental/psychiatric conditions. About a third of closed CT claims had a medical diagnosis shift, mostly to soft tissue injuries, by the end of their claim life.
– – It takes significantly longer for CT indemnity claims to receive the first medical treatment, mostly due to late reporting and a relatively high share of CT claims starting with liens or medical-legal services as the initial service.
– – Post-termination CT claims filed following large layoffs tend to concentrate in the manufacturing and service sectors and in the LA region. Not surprisingly, these claims also are more likely to be reported late.
– – Compared to regular CT claims, post-termination CT claims incur lower medical severity through 66 months of development but have a higher share of payments for medical liens, medical-legal and interpreter services.
– – CT indemnity claims close consistently more slowly than non-CT indemnity claims, with the largest difference at the first report level (18 months from policy inception) when only 1 in 5 CT indemnity claims are closed compared to almost half of non-CT indemnity claims.
The claim population in the analysis is derived from linking WCIRB unit statistical data and WCIRB medical transaction data for accident years 2013 through 2019.