10 Highlights of 2014 in the Workers Compensation Insurance Industry

1.    California’s Workers Compensation System is 100!

In 1914 Boynton Act went into effect, also known as the Workers Compensation System.  The system is always changing and being reformed but it consistently provides crucial benefit to workers and the industries stakeholders.

2.    Number of Physician Payments Significantly Dropped

The WCIRB had predicted that the payments made to physicians would be increasing by 2.4% in 2014 when in fact they significantly dropped by 3.9%. This is a major drop for one of the largest stakeholders in the industry.

3.    Utilization and Independent Medical Reviews Faced Constitutional Challenges

These reviews have become and continue to be a very controversial issue in the Workers Compensation System.  Workers who have old medical awards as well as ones with new injuries have consistently been faced with getting vital treatments denied. Policy Makers as well as Insurance Companies are defending the review systems stating they believe the system is being taken advantage of. Some concerns include but are not limited to overuse of opioids, over treatment and not be able to transition into using evidence based systems rather than one where Physicians have free rein to treat as they see fit.

4.    Some critical bills were passed in legislation.

-AB 1035 Statute of limitations extended for families of Fireman and Police who have passed in the line of duty.
-AB 1746 Priority conference calendar mandatory for uninsured employer cases now required
-AB 2732 A cleanup bill for SB 863

The Governor Jerry Brown has also vetoed two bills. The first AB2052 a bill that would create the presumption that Hospital Workers infected with the MRSA Virus will be covered as “work related” under Workers Compensation policies. The Second AB 2616 a bill to give police officers 104 weeks of disability pay in addition to one year of full paid leave

5.    DWC Moved Forward with Rule Making That will Affect the Workers Comp System

These rules include; Workers Compensation Billing ICD 10-delay, Supplemental Job Displacement Benefit, Predestination/Chiropractor as Primary Treating Physician, Physician Fee Schedule, Hospital Outpatient Departments and Ambulatory Surgical Centers, Medical Provider Networks, Independent Medical Review and Independent Medical Review. There are several other bills that were not passed by the end of 2014 but are still in motion and pending approval.

6.    Stakeholders Still Watching for Long Term Effects Due to The Affordable Care Rollout

Amongst health practitioners it is widely believed that with the roll out of the Affordable Care Act it will bar insurance companies from being able to deny care on the basis of a preexisting condition. The problem with this is that the preexisting conditions may be work related. As for now we will all just have to wait and see though as it has not been in force long enough to have studies to back up those concerns.

7.    2014 Continued to Bring Allegations of Greed and Abuse Against So-Cal Providers

A large number of Southern California doctors have been accused of scheming to defraud the  Workers Comp System. Whistleblower allegations include but are not limited to fraudulent billing, in which Doctors claimed they were prescribing various creams which they were not. In another case a carrier was billed for spinal hardware that was not actually surgically administered on anyone. They are still pending court cases.

8.    Costs for Workers Comp Continue to Rise But are Still Lower Than a Decade Ago

Employers and Policy Makers are incredibly concerned that California is one of the most expensive states for Workers Comp. However it is still lower than it was ten years ago. In 2014 average rates for Workers Comp averaged $2.95 for each $100 dollars in payroll. In contrast ten years ago the rates were about $6 dollars per $100 in payroll. In 2015 the commissioner has adopted a rate of $2.74 which is below the recommended rate of the WCIRB but will be welcomed by business owners.

9.    This Was a Busy Year in The Court System for Workers Comp

Several court decisions were made this year pertaining to the  Workers Compensation System. A few notable ones were;

-Navarro vs. City of Montebello: Labor code does not require employee to appear in front of the same panel after a subsequent claim of injury for an evaluation.

-County of Nevada vs. WCAB: Insurer not required to pay the difference in the amount of wages when an employee is injured and has to take a job with less pay than the one they were injured at.

-White vs. County of Los Angeles: Employer can request 2nd evaluation of a worker once their FMLA expires

10.    Some Studies Were Launched and or Presented to Pave the Way for Future Reforms
    -The Impact of Physician Dispensing on Opioid use
- Distribution of the $120 million annual fund created by SB 863 for workers with disproportionately high earnings losses
- How reforms affected medical utilization, medical expenses and access and quality of care.

In conclusion 2014 was an exciting and busy year in the Insurance industry. Stay tuned with us here at JVRC to keep up with the latest news on these findings and much more!