INTRODUCTION

The California Commission on Health and Safety and Workers’ Compensation (CHSWC) is pleased to present the eighth annual report of its activities to improve vital programs affecting nearly all Californians.

Background

CHSWC, created by the 1993 workers' compensation reform legislation, is charged with overseeing the health and safety and workers' compensation systems in California and recommending administrative or legislative modifications to improve their operation. CHSWC was established to conduct a continuing examination of the workers' compensation system and of the state's activities to prevent industrial injuries and occupational diseases and to examine those programs in other states.

From its inception in 1994, CHSWC began the process of assessing the impact of the 1993 workers' compensation reform legislation -- a package of several bills that made widespread and significant changes to the California workers' compensation system.

Research Approach

CHSWC has engaged in several projects and studies to evaluate how certain areas of the California workers’ compensation system have been affected by the reform legislation and other influences, such as the economy. CHSWC has directed its efforts to identify and assess problems and to provide an empirical basis for recommendations and/or further investigations. CHSWC contracts with independent researchers to insure objectivity, incorporate a balance of viewpoints, and produce the highest quality analysis and evaluation.

CHSWC activities involve the whole community – employees and employers, labor organizations, insurers, attorneys, medical and rehabilitation providers, administrators, educators, government agencies and members of the public. These individuals and organizations have participated in CHSWC meetings, fact-finding hearings and have served on advisory committees to assist CHSWC and independent researchers on projects and studies. The common goal of all the parties in these efforts is to achieve a system that delivers the proper benefits to injured workers in a prompt and cost-effective manner.

These concerted efforts, combining rigorous analytical approaches with real world data and experience, have yielded insightful findings on important programs. CHSWC recommendations for system improvements are based upon the results of these activities.

In some instances, where recommended changes have widespread support and do not require legislative action, the Commission and the community have continued their work together by developing and implementing corrective actions. In addition, some project findings have formed the basis for community members to take action in the legislative arena.

Research Leads to Policy Changes

Assembly Bill 749, signed by Governor Gray Davis on February 15, 2002, is the first major workers' compensation legislation since the 1989 and 1993 reform acts.

Many of CHSWC recommendations for legislative changes were incorporated into AB 749 and become law effective January 1, 2003.

Workers’ Compensation Benefit Adequacy

CHSWC sponsored research to determine the extent to which the current workers’ compensation permanent disability system meets goals and objectives, to identify and evaluate changes that would help the PD system better achieve those goals, to provide quantitative and qualitative descriptions of the system and work with the workers’ compensation community to build consensus for reforms.

The first RAND study for CHSWC determined that there were significant and sustained earnings losses for workers injured at insured employers in 1991, with earnings 40% lower over 5 years after injury. The study found that on average only 40% of pretax losses were replaced by workers’ compensation benefits and for the lowest-rated claims only 10% of the loss was replaced. Follow-on studies addressed stakeholder concerns to include examining worker outcomes at self-insured employers and outcomes after the recession ended.

Findings from these studies suggest that benefits are inadequate and also emphasize poor return-to-work outcomes in California.

CHSWC findings and recommendations have led to legislative changes in the program. AB 749 provides increases in Total Temporary Disability (TTD) benefits, increases in Permanent Disability (PD) benefits, including increases for low-rated claims, and the adoption of innovative return-to-work programs.

Information for Injured Workers

CHSWC sponsored research to examine injured workers’ experiences in getting information and help with their workers’ compensation claims, design and test educational materials for injured workers, and explore methods for improving claim-specific benefit notices sent to injured workers. The research was conducted through focus groups and interviews.

These studies documented how injured workers experience significant difficulties in trying to understand and navigate the system, determined educational needs, developed fact sheets and a videotape in collaboration with many different organizations in California, and identified problematic laws and regulations that govern information for workers.

CHSWC findings and recommendations have led to legislative changes in the program. AB 749 requires that specific workers’ compensation information be made available for all workers through a poster in the workplace (Labor Code Section 3550) and that written information be provided for all new employees (Labor Code Section 3551). Information for injured workers is to be provided through a claim form and accompanying notice that describes potential eligibility for workers’ compensation benefits (Labor Code Sections 138.4 and 5401). In addition, CHSWC is mandated by AB 749 to conduct a study and make recommendations to improve and simplify benefit notices (Labor Code Sections 77 and 138.4)

Workers’ Compensation Medical Costs

CHSWC studies have found that workers’ compensation systems have high pharmaceutical reimbursement rates relative to other systems such as Medicaid and employer health benefits, and that within workers’ compensation systems California’s pharmaceutical reimbursement rates are near the highest among the various states reviewed.

AB 749 establishes new Labor Code Sections 4600.1 and 4600.2 that control the cost of pharmaceuticals. Effective January 1, 2003, pharmacies will dispense a generic drug equivalent unless the prescribing doctor states otherwise in writing while employers and insurers are authorized to contract with pharmacies or pharmacy benefit networks pursuant to standards adopted by the Administrative Director of the Division of Workers’ Compensation.

California currently does not have an outpatient surgery facility schedule. CHSWC studies have found that there was a lack of a stable method of paying for facility fees and that there was great variation of billed and paid amounts across the spectrum of services, resulting in an inability to predict costs. CHSWC projects recommended that an outpatient surgery facility fee schedule be established.

AB 749 directs the Administrative Director to establish an official pharmaceutical fee schedule establishing maximum fees for medicines and medical supplies provided to injured workers and an outpatient surgery facility fee schedule.

Other CHSWC research that shaped AB 749

AB 749 also dealt with issues and recommendations raised by CHSWC studies and projects on:

Next Steps

The following pages contain CHSWC’s recommendations for additional legislative or administrative changes and for new or continued studies and projects.

CHSWC looks forward to further cooperative endeavors with the community to improve the health, safety and workers’ compensation systems in California.


CHSWC RECOMMENDATIONS

In the previous annual reports, CHSWC has made specific recommendations to improve health, safety and workers’ compensation programs. Many of these recommendations were included in AB 749, as discussed in the "Special Report: 2002 Workers’ Compensation Reforms" section in this Annual Report.

This year CHSWC is making recommendations regarding

We look forward to continuing our work with the community in addressing these concerns and formulating approaches to solutions.

Workers’ Compensation Insurance Industry in California

CHSWC and the community have expressed concerns regarding the current and future solvency of the California insurance industry. The viability of the insurance industry is vital to maintaining the health of the workers’ compensation system, which benefits both workers and employers.

CHSWC recommends that efforts be expended to:

Workers’ Compensation Medical Benefit Delivery

California Research Colloquium

Currently, the information with regard to the medical care received by industrially injured workers in California is limited, particularly with regard to:

CHSWC, DIR, DWC and IMC are responding to these needs by preparing to host and coordinate a 2-day research colloquium focused on the medical benefit delivery system and return to work.

CHSWC invites the community to participate in the Colloquium, which will include a presentation of a series of papers and panel discussions addressing the delivery and policy issues raised and the need for and opportunities for future research.

Official Medical Fee Schedule

The Official Medical Fee Schedule, used for payment of medical services required to treat work-related injuries and illnesses, has been subject to criticism by various members of the workers’ compensation community. In response to those concerns, CHSWC conducted a study and recommends the following:

Return to Work

CHSWC research has demonstrated and the workers’ compensation community has expressed concern that significant numbers of injured workers in California do not return to work as early as feasible, nor do they return to work with appropriate work restrictions. In "OSHA Durations Report: Return to Work by State, Industry, Age", recently published by the Work Loss Data Institute, twenty-seven percent of 1999 days-away-from-work cases in California had 31 or more days-away-from-work, the third-worst record in the nation.

These workers experience unnecessary and often permanent losses in their functional capacity and their ability to work. Employers lose valuable employees and incur increased costs. CHSWC’s study comparing wage loss and return to work rates found that California has the lowest return to work rate of the five states studied.

CHSWC recommends


Timeliness of Workers’ Compensation Benefits

CHSWC and the community are concerned about the timeliness of workers’ compensation benefit delivery. The DWC audits for the last five years found violations of timeliness requirements regarding the issuance of:

CHSWC urges the community to focus efforts on the timely delivery of proper benefits to injured workers, taking into account the new audit provisions of AB 749.


Permanent Disability Rating Tool

The permanent disability rating system is critical to the distribution of workers’ compensation benefits. However, it is widely viewed throughout the community as inconsistent and unreliable. CHSWC’s research by RAND has confirmed this.

The ongoing CHSWC Permanent Disability project by RAND is working on a detailed evaluation of the disability rating schedule in order to provide empirical findings that can guide a revision that will be consistent with the economic losses experienced by permanently disabled workers.

CHSWC recommends that the permanent disability rating tool be improved to enhance consistency and outcomes for injured workers.

Occupational Health and Safety

California faces major challenges in occupational health and safety:

These changes present new challenges to protecting worker safety and health and reducing the impact of work injuries on workers, their families, and society. CHSWC is responding to the above challenges with projects that demonstrate its commitment to occupational health and safety. A very important component will be the Worker Occupational Safety and Health Training and Education Program mandated by AB 749.

CHSWC is pleased to participate with the community in several cooperative endeavors to enhance workplace health and safety and looks forward to developing the new training and education program in the same manner.

CHSWC recommends that the promotion of occupational health and safety be seen as an important goal and urges the workers’ compensation community to continue demonstrating a commitment to its furtherance.

Special Populations of Workers

The State of California has a very diverse population with 32% Hispanic, 48% White and 13% Asian. California also has a large immigrant population with one in four residents born abroad. Many immigrants work in dangerous occupations.

Previous CHSWC studies have demonstrated that workers often have trouble understanding, navigating, and obtaining prompt benefits from the complex health, safety and workers’ compensation systems. Special populations such as immigrant workers face particular impediments due to immigration status, lack of health insurance, cultural barriers and language difficulties.

Several upcoming and ongoing projects address this issue, including the analysis of barriers to low wage workers and the AB 749 mandates for a Workers’ Occupational Safety and Health Training Program and a study of the access to workers’ compensation funds by migrant and seasonal farmworkers.

CHSWC recommends that the workers’ compensation community support research and workplace efforts to enhance safety and health of special populations such as

California Occupational Research Agenda

Considerable progress has been made in improving workplace health and safety since the initiation of OSHA in 1970. This progress has largely been based on the science and knowledge generated by occupational safety and health research. However, resources for occupational safety and health research are extremely limited. There is thus a great need to focus and coordinate existing resources more systematically, and to seek expanded resources for occupational health research.

CHSWC recommends that a California Occupational Research Agenda be established to

CHSWC supports the implementation of CORA in the following manner:

Workers’ Compensation Judicial Function

The Division of Workers’ Compensation/Workers’ Compensation Appeals Board (DWC/WCAB) judicial function has been the focus of criticism by all parties in the system. Lack of uniform policies and an inadequate infrastructure have led to serious system problems.

DIR and CHSWC agreed that an independent study and evaluation of the DWC judicial process would be very helpful in addressing problems. The Commission approved a study proposal to identify possible statutory changes to make the system work more efficiently and look at rules and practices of other jurisdictions that have addressed problems such as calendaring, casefile movement, proper staffing ratios, and other issues of concern. The goal of this effort is to assist in meeting the Constitutional mandate to "accomplish substantial justice in all cases expeditiously, inexpensively, and without incumbrance of any character…"

CHSWC sponsored research by RAND into the judicial functions of the WCAB inquired into the sources of excessive delay and unnecessary costs in resolving matters before the WCAB, of the non-uniform application of the law by individual WCAB offices and judges, of dissatisfaction with the process by litigants, attorneys, and staff, and of issues related to upper-level management and administration.

CHSWC recommends that consideration be given to implementing recommendations derived from this study.

Implementation and Impact of AB 749

CHSWC is developing plans to monitor and evaluate the implementation of AB 749 and its impact on the system and encourages that the community continue its cooperative participation in these endeavors.

CHSWC recommends that the community work together to develop and implement tools and systems and establish baseline measurements to evaluate the impact of the provisions of AB 749. With baseline and updated data, policy makers and the community would have better information on which to evaluate the outcomes for workers and employers of the AB 749 changes.

Vigilance Against Fraud

CHSWC and the workers’ compensation community recognize that fraud can occur at every stage and in every sector of the workers’ compensation system and that there is currently a need for more balance, focus and coordination with respect to anti-fraud activities.

CHSWC recommends that anti-fraud efforts be directed at all types of fraud and that the community continue efforts to identify and reduce fraudulent activities perpetrated by anyone and everyone in the system, including but not limited to employers, employees, insurers, and providers.

CHSWC recommends that the Division of Workers’ Compensation provide an information pamphlet for injured workers that has, among other things, complete information about the general types of workers’ compensation fraud, including how to avoid it, how to recognize it, and how to report it.

CHSWC recommends that the primary targets of fraud program budgets and resources be medical provider fraud and employer premium fraud due to their economic impact. The fraud program should also continue to remain vigilant in investigating claimant fraud and be more responsive to allegations of employer and insurer fraud in connection with the reporting and handling of injury claims.

CHSWC recommends that the Fraud Division and district attorneys take steps to publicize the methods for filing reports of suspected employer and insurer fraud and should publicly document the number and outcome of the reports.

CHSWC recommends that the Fraud Division work with insurance company Special Investigation Units (SIU), as well as self-insured employers and third party administrators, to insure that all cases involving suspected fraud within the organization itself are referred to law enforcement authorities for investigation.

CHSWC recommends that further review be conducted on the role of insurer special investigation units in reporting suspected workers’ compensation fraud.

CHSWC recommends that full restitution to the victims of workers’ compensation fraud be made a more important aspect of the anti-fraud program.

CHSWC recommends that private and public employees be encouraged to report suspected fraudulent activities and to cooperate in the investigation of those activities.

CHSWC recommends that, to the extent permitted by law and regulation, private and public agencies share information that may assist in the detection and investigation of suspected fraud.

CHSWC recommends that a roundtable be convened to determine the feasibility in California of providing a publicly accessible database of insurance coverage and suggested legislative language. California could make proof of workers’ compensation insurance coverage available to the public on its website, as do other states such as Texas, Florida, and Mississippi. Overall, these databases have been widely supported by the workers’ compensation stakeholders and throughout the community in those states.


THE COMMISSION ON HEALTH AND SAFETY AND WORKER'S COMPENSATION

The Commission on Health and Safety and Workers’ Compensation (CHSWC) was created by the workers' compensation reform legislation of 1993. The Commission is charged with overseeing the health and safety and workers' compensation systems in California and recommending administrative or legislative modifications to improve their operation. CHSWC was established to conduct a continuing examination of the workers' compensation system and of the state's activities to prevent industrial injuries and occupational diseases and to examine those programs in other states.

The Commission is composed of eight members appointed by the Governor, Senate, and Assembly to represent employers and labor.

Since its inception in 1994, the Commission has directed its efforts towards projects and studies designed to identify and assess problems and to provide an empirical basis for recommendations and/or further investigations. The Commission strives to ensure objectivity, incorporate a balance of viewpoints, and produce the highest quality analyses and evaluation. To assist in these objectives, it utilizes independent researchers with broad experience and highly respected qualifications to carry out its research.

CHSWC activities involve the whole community – employees and employers, labor organizations, insurers, attorneys, medical and rehabilitation providers, administrators, educators, government agencies and members of the public. These individuals and organizations have participated in CHSWC meetings, fact-finding hearings and have served on advisory committees to assist CHSWC and independent researchers on projects and studies.

CHSWC projects have dealt with several major areas, including informational services to injured workers, alternative workers’ compensation systems, employers that are illegally uninsured for workers’ compensation, the health and safety of young workers, and the impact of the reform legislation on the medical-legal process and the vocational rehabilitation program.

The most extensive and potentially far-reaching project undertaken by the Commission is the ongoing study of workers’ compensation permanent disability in California. Incorporating public fact-finding hearings and discussions with studies by RAND, the CHSWC project is dealing with major policy issues regarding the way that California workers are compensated for permanent disability incurred on the job.

In its oversight capacity, CHSWC focuses on various aspects of the workers’ compensation system in response to concerns raised. These include multi-jurisdictional areas such as anti-fraud activities as well as certain operations of the Division of Workers’ Compensation such as the lien case workload in DWC’s district offices. At the joint request of the Senate Industrial Relations Committee and the Assembly Insurance Committee, the Commission has undertaken a study of the operations and effectiveness of the DWC audit program.

These concerted efforts, combining rigorous analytical approaches with real world data and experience, have yielded insightful findings on important programs. The Commission’s recommendations for system improvements are based upon the results of these activities.

The common goal of all the parties in these efforts is to achieve a system that delivers the proper benefits to injured workers in a prompt and cost-effective manner.

ABOUT CHSWC....

The California Commission on
Health and Safety and Workers’ Compensation

Serving all Californians…

  • Created by the 1993 workers’ compensation reform legislation.
  • Composed of eight members appointed by the Governor, Senate, and Assembly to represent employers and labor.
  • Charged with overseeing the health and safety and workers’ compensation systems in California and recommending administrative or legislative modifications to improve their operation.
  • Established to conduct a continuing examination of the workers’ compensation system and of the state’s activities to prevent industrial injuries and occupational diseases, and to examine those programs in other states.
  • Works with the entire health and safety and workers’ compensation community – employees, employers, labor organizations, injured worker groups, insurers, attorneys, medical and rehabilitation providers, administrators, educators, researchers, government agencies, and members of the public.
  • Brings together a wide variety of perspectives, knowledge, and concerns about various programs critical to all Californians.
  • Serves as a forum whereby the community may come together, raise issues, identify problems, and work together to develop solutions.
  • Contracts with independent research organizations for projects and studies designed to evaluate critical areas of key programs. This is done to insure objectivity, incorporate a balance of viewpoints, and to produce the highest quality analysis and evaluation.

CHSWC Members Representing Employers


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Jill A. Dulich
Appointed by: Governor

Jill Dulich is Regional Director responsible for management of workers' compensation and general liability for Marriott International, Inc., operations in California and Hawaii. She also serves in high-level positions with several organizations, including the California Self-Insurers Association, the Alliance of Workers' Comp Professionals, the Californians for Compensation Reform, the Self-Insurers Security Fund, and the Easter Seals Society of Southern California. Jill Dulich received her law degree from Western State University, College of Law in Fullerton, California. Ms. Dulich also received a Bachelor of Science Degree and Masters Degree in Education from California Polytechnic State University in San Luis Obispo, California.


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Kristen Schwenkmeyer
Appointed by: Senate Rules Committee

Kristen Schwenkmeyer is Secretary-Treasurer of Gordon & Schwenkmeyer, a telemarketing firm she started with Mike Gordon in March of 1985. Her primary responsibilities include overall administration of operations, budgeting and personnel for a staff of over 700. Prior to her current position, she was Political Director of the California Democratic Party from 1983-1985. Previously, she has served as staff aide to Supervisory Ralph Clark of the Orange County Board of Supervisors and Senator John Glenn in Washington DC. Kristen Schwenkmeyer received a Bachelor of Arts in Political Science from the University of California, Santa Barbara.


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Robert B. Steinberg
Appointed by: Speaker of the Assembly

Robert B. Steinberg is a partner in the law offices of Rose, Klein & Marias and specializes in employee injury, third Party Civil Damage Construction, Product Liability, Asbestos and Toxic Exposure litigation. He is a fellow of the American College of Trial Lawyers (ACTL), a member of the Board of Governors Association of Trial Lawyers of America (ATLA), an advocate of the American Board of Trial Advocates (ABOTA), and trustee of the Asbestos Litigation Group (ALG). He is a Past President of the California Trial Lawyers (CTLA) (1985) and Past Trustee of the Los Angeles County Bar Association (1987). He is a member of the Manville, UNR, 48 Insulation, Raymark and Eagle Picher Industries Chapter 11 Creditors' Committees and a member of the Trustee Advisory committee to the Manville, UNR and the National Gypsum Asbestos Disease Victims Trusts. Mr. Steinberg received his law degree and Bachelor of Science Degree from University of California, Los Angeles.


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John C. Wilson
2001 CHSWC Chair
Appointed by:  Governor

John C. Wilson is the Executive Director of the Schools Excess Liability Fund (SELF), a statewide Joint Powers Authority with over 1,100 California educational agencies as members. Mr. Wilson held positions with several organizations, including the California Chamber of Commerce, Californians for Compensation Reform, California Self-Insurers Security Fund, California Institute for Public Risk Analysis, Northern California Council of Self-Insurers, and gubernatorial appointment to the Fraud Assessment Commission.  Previously, Mr. Wilson was Assistant Treasurer and Risk Manager for DiGiorgio Corporation in San Francisco.  He was also an Industrial Hygiene, Safety Representative and Administrator for Rockwell International, Space Division of the self- funded Workers' Compensation Program covering 30,000 employees involved in the Apollo and Saturn ll space programs.  Mr. Wilson received his Bachelor of Science Degree in Personnel Management and Industrial Relations from UCLA.


CHSWC Members Representing Labor

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Allen Davenport

Appointed by:  Speaker of the Assembly

Allen Davenport is the Director of Government Relations for the Service Employees International Union California State Council.  A union member since 1971, Allen also was for seven years the chief consultant on employment security programs—unemployment insurance, disability insurance, and job training—on the staff of the state Senate Industrial Relations Committee. Allen serves on the Advisory Committee for the Workers’ Compensation Information System and was a member of the Governing Board of the Workers’ Compensation Insurance Rating Bureau.  He is a former Peace Corps volunteer and a graduate of San Francisco State University.


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Leonard McLeod
Appointed by: Governor

Leonard McLeod is a Lieutenant at the California Correctional Training Facility at Soledad and has worked for the Department of Corrections since 1981. He also serves as the Early Intervention State Coordinator/State Finance Chairman with the California Correctional Peace Officers Association. Previously, he was police officer with the Watsonville Police Department and a U.S. Army military police sergeant from 1974 to 1978. Mr. McLeod was a member of the Governor's Task force on Workers' Compensation in 1993. He also is a member of the  Correctional Peace Officer Foundation, and Corrections USA. He is currently a member of the governing board of the Workers' Compensation Insurance Rating Bureau. His community activities include serving as a member of the City of Salinas Police Community Advisory Committee, supporting Salinas Police Activities League, and raising funds for prenatal and health care related issues.


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Tom Rankin

2002 CHSWC Chair
Appointed by: Senate Rules Committee

Tom Rankin is the President of the California Labor Federation, the state AFL-CIO federation. For many years, Mr. Rankin also served as the labor member on the Governing Committee of the Workers' Compensation Insurance Rating Bureau, which recommends policy premium rates to the state insurance commissioner. Mr. Rankin's previous employment was as a union representative and organizer. Mr. Rankin received his law degree from Boalt Hall School of Law at the University of California, Berkeley.


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Darrel “Shorty” Thacker
Appointed by: Governor

Darrel “Shorty” Thacker is the Central District Manager for the Northern California Carpenters’ Regional Council. Mr. Thacker also served as the Director of field support operations for the Bay Counties District Council of Carpenters and as the Senior Business Representative of Local 22, Carpenters.

 


State of California
Health and Safety and Workers' Compensation Functions

The California Commission on Health and Safety and Workers’ Compensation (pdf 59kb)


For Information about CHSWC and its Activities

Write:

            California Commission on Health and Safety and Workers’ Compensation
            455 Golden Gate Avenue, 10th Floor
            San Francisco, California 94102

Phone: FAX:     E-mail
415-703-4220          415-703-4234       chswc@hq.dir.ca.gov

Internet:

           Check out www.dir.ca.gov/chswc for

CHSWC Publications

    CHSWC Annual Reports
            1994-95 through 2000-01

    Assembly Bill 749 Analysis
            "CHSWC and AB 749" (2002

    Audit Program
            "CHSWC Report on the Workers’ Compensation Audit Function" (1998)
            "Executive Summary-CHSWC Study of the Division of Workers’ Compensation Audit Function" (1998)

    Baseball Arbitration
            "Preliminary Evidence on the Implementation of 'Baseball Arbitration' in Workers' Compensation" (1999)

    Carve-Outs
         "Carve-outs" in Workers' Compensation: An Analysis of Experience in the California Construction Industry" (1999)

    Costs and Benefits
            "CHSWC Report on Costs and Benefits After the Implementation of Reform Legislation" (1999) (This is also in the CHSWC 1998-99 Annual Report)
            Workers’ Compensation Benefit Simulation Model (CHSWC Distribution CD, 2001)
            "Executive Summary Impact of the 1993 Reforms on Payments of Temporary and Permanent Disability" (1999)
            "Summary: Estimating the Workers’ Compensation Reform Impact on Employer Costs and Employee Benefits" (1999)

    Fraud
            "Workers’ Compensation Anti-Fraud Activities - Report on CHSWC Public Fact-Finding Hearing" (1997)
            "Report on the Campaign Against Workers’ Compensation Fraud" (2000)
            "Report on the Workers’ Compensation Anti-Fraud Program" (2001)

    Health and Safety
            "Report on the Proceedings of the California Forum for Workplace Health and Safety" (Publication pending)

    Illegally Uninsured Employers
            "Issue Paper-Employers Illegally Uninsured for Workers’ Compensation" (1997)
            "CHSWC Recommendations to Identify Illegally Uninsured Employers and Bring Them Into Compliance" (1998)
            "Illegally Uninsured Employers Project-Report of Legislative Roundtable Meeting" (1999)

    Injured Workers
            "Navigating the California Workers’ Compensation System: The Injured Workers’ Experience" (1996)
            "Recommendations: Information for Injured Workers" (2000)
            "Project to Improve Laws and Regulations Governing Information for Workers" (December 2000)
            "Project to Augment, Evaluate, and Encourage Distribution of the Prototype Educational Materials for Workers" (December 2000)

    Insurance Industry
            "State of the Workers’ Compensation Insurance Industry in California" (April 2002)

    Inpatient Hospital Fee Schedule and Outpatient Surgery Study
            "CHSWC Summary – Findings and Recommendations to the Inpatient Hospital Fee Schedule and Outpatient Surgery Study, Report Approved February 8, 2002"
            "Inpatient Hospital Fee Schedule and Outpatient Surgery Study, Report Released February 8, 2002"

    Judicial Study
            "Improving The Courts: Candidate Recommendations For The Adjudication of Claims Before The California Workers’ Compensation Appeals Board" (September 6, 2001)

    Labor Code Section 5814 Issue
            "Issue Paper on Labor Code Section 5814" (2000)
            "Background Paper on Labor Code Section 5814" (1999)

    Medical-Legal
            "Evaluating the Reforms of the Medical-Legal Process Using the WCIRB Permanent Disability Survey" (1997) and "Executive Summary" (1997)

    Permanent Disability Study Report (RAND)
            RAND Report: "Compensating Permanent Workplace Injuries – A Study of the California System" (1998)
            RAND Executive Summary: "Findings and Recommendations on California’s Permanent Partial Disability System" (1997)
            RAND Report: "Permanent Disability, Private Self-Insured – A Study of Earnings Loss, Replacement, and Return-to-Work for Workers’ Compensation Claimants" (2000)
            RAND Report: "Impact of Economic Conditions on Wage Loss for Disabling Workplace Injuries in California: The Role of Economic Conditions (2001)

    Pharmaceutical Costs Study
            "Study of the Cost of Pharmaceuticals in Workers’ Compensation" (2000)
            "Executive Summary of the Study of the Cost of Pharmaceuticals in Workers’ Compensation" (2000)

    Return to Work
            "Return-to-Work in California: Listening to Stakeholders’ Voices" (2001)
            "Does Modified Work Facilitate Return to Work for Temporarily or Permanently Disabled Workers? Review of the Literature and Annotated Bibliography" (1997)
            "Determinants of Return-to-Work and Duration of Disabling after Work Related Injury or Illness: Developing a Research Agenda"

    Treating Physician Report
            "Report on the Quality of Treating Physician Reports and Cost-Benefit of Presumption in Favor of the Treating Physician" (1999)

    Vocational Rehabilitation Interim Report
            "Interim Report - Vocational Rehabilitation Benefit: An Analysis of Costs, Characteristics, and the Impact of 1993 Reforms" (1997)
            "Vocational Rehabilitation Reform Evaluation" (2000)

    Young Worker Report
            "Protecting and Educating California's Young Workers: Report and Recommendations of the California Study Group on Young Workers' Health and Safety" (1998)

    Workers’ Compensation and the California Economy
            "Workers’ Compensation and the California Economy" (April 2000)
            "Update Workers’ Compensation and the California Economy" (December 2000)

CHSWC Informational Materials
       
    CHSWC Brochure (containing information about the CHSWC members and staff, mission, purpose, activities, projects, publications, web site)

        CHSWC Fact Sheets (English and Spanish) (1998)
           What Every Worker Should Know
            After You Get Hurt on the Job
            Temporary Disability Benefits
            Permanent Disability Benefits
            For More Information
            Working After a Job Injury
            Hurt on the Job? Information Alert for Teens
            Facts for Employer: Safer Jobs for Teens (English only)
  
          Are You a Working Teen?
            Are You a Teen Working in Agriculture?

CHSWC Video
      "Introduction to Workers' Compensation" (1998)

Workers’ Compensation Benefit Simulation Model
      A CD with the ‘Workers’ Compensation Benefit Simulation Model’ and instructions for its use is available for purchase from CHSWC.


SPECIAL REPORT:  2002 WORKERS' COMPENSATION REFORMS

BACKGROUND

Assembly Bill 749, signed by Governor Davis on February 15, 2002 and effective on January 1, 2003, is the first major workers' compensation legislation since the 1989 and 1993 reform acts. The bill's major focus is on increasing benefits for injured workers and simplifying and clarifying procedures for employers.

Many of the provisions of AB 749 are supported by research findings generated from CHSWC studies and projects.

Pursuant to its mandate, CHSWC studied and made recommendations on many facets of the system including the need for targeting benefit increases, the treating physician presumption, "baseball arbitration," pharmaceutical costs, adequacy of medical reports for permanent disability rating, lien claims, penalties, information for injured workers, audit procedures, and uninsured employers.

The CHSWC recommendations on all of these subjects were adopted, in whole or in part, in the new legislation, and CHSWC was ordered to conduct studies or advise the administration on several other subjects.

Assembly Bill 749

Introduced by
Assembly Member Thomas M. Calderon

Principal Coauthors
Assembly Member Manny Diaz
Senator Richard Alarcn
Senator John Burton

Coauthors
Assembly Member Robert M. Hertzberg
Assembly Member Paul Koretz
Assembly Member Kevin Shelley

PLEASE NOTE that the following provisions are in the February 19, 2002 chaptered version of AB 749, and may be further modified in a subsequent 'clean-up' bill.

BENEFITS – PRE 2002 REFORMS

Temporary Disability Benefits

Permanent Disability Benefits

Permanent Disability Rating

Pre-Reform Weekly Benefit

Below 15%

$140

15%-24.75%

$160

25%-69.5%

$170

70%-99.75%

$230

100%

$490

Also, CHSWC studies by RAND examined pre-2002 reform benefits at insured and self-insured firms in California. These studies showed that Injured workers were not compensated well for their losses. In particular:

BENEFITS – POST 2002 REFORMS

Overview of Benefit Increases

AB 749 provided increases in the temporary disability, permanent disability, and death benefits. The weekly payment was increased for temporary and permanent disability, and the lower-rated permanent disabilities received an increase in the number of weeks that the PD benefit is paid.

Summary of Phased-In Increases on Minimum Disability Payments

Disability Rating

Pre-reform

Injuries in 2003

Injuries in 2004

Injuries in 2005

Injuries in 2006 & beyond

Permanent Partial Rating Below 100%

$70

$100

$105

$105

$130

Permanent Total Rating =100%

$112

$126

$126

$126

$126*

Temporary Disability

The lesser of $126 or the employee’s average weekly earnings from all employers

$126

$126

$126

$126*

* Beginning in 2006, both the maximum and the minimum weekly payment will be increased annually by the percentage of increase in the state’s average weekly wage (SAWW).

Summary of Phased-In Increases on Maximum Disability Payments

Disability Rating

Pre-reform

Injuries in 2003

Injuries in 2004

Injuries in 2005**

Injuries in 2006 & beyond

Permanent Partial Below 15%

$140

$185

$200

$220

$230

15%-24.75%

$160

$185

$200

$220

$230

25%-69.5%

$170

$185

$200

$220

$230

70%-99.75%

$230

$230

$250

$270

$270

Permanent Total 100%

$490

$602

$728

$840

$840*

Temporary Disability

$490

$602

$728

$840

$840*

* Beginning in 2006, both the maximum and the minimum weekly payment will be increased annually by the percentage of increase in the state’s average weekly wage (SAWW).

** Weekly life pension payments for injuries after 2005 will be double the current amount.

These changes are illustrated in the following chart:

Changes to Weeks of PD Benefit Paid

PD Rating Percentage (%)

Weeks of PD Paid (Current through 2003)

Weeks of PD Paid

(For injuries on or after January 1, 2004)

01.00 - 09.75%

3

4

10.00 - 19.75%

4

5

20.00 - 24.75%

5

5

25.00 - 29.75%

6

6

30.00 - 49.75%

7

7

50.00 - 69.75%

8

8

70.00 - 99.75%

9

9


Death Benefits

Death benefits for injuries after 2005 will be:

The death benefit for partial dependents if there are no total dependents will be eight times the amount annually devoted to the support of the partial dependents but not more than $250,000. If there are no dependents, $250,000 will be paid to the estate of the deceased employee. Surviving parents will be conclusively presumed wholly dependent if there are no other dependents. Death benefits to dependent incapacitated children will continue for their lives.

Increases in Benefits for Lower Disability Ratings

CHSWC studies by RAND showed that:

This disparity was addressed by AB 749. As shown previously, workers with lower disability ratings will also see increases in the number of weeks that permanent disability is paid. Specifically:

Impact of Benefit Increases

Impact on Value of Permanent Disability Benefit

As discussed above, increases in the permanent disability benefit will phased in, with the final step increase effective for injuries on or after January 1, 2006.

The increases in benefit levels provided by AB 749 will significantly raise the value of the PD benefits to approximately 1984 levels. The greatest increase in value will be for the claims with the lower PD ratings.

Calculations by UC Berkeley

Impact of Benefit Increases on Wage Replacement Rates

CHSWC studies by RAND analyzed wage losses sustained by permanently disabled workers and the replacement rates -- the extent to which workers’ compensation benefits compensated for the wage loss. The studies have shown that many workers are not compensated well for their wage losses.

AB 749 mandates benefit increases that are to be fully phased in by 2006. RAND analyzed the impact of the benefit changes on replacement rates by comparing replacement rates for dates of injury in 1994 to replacement rates for injury dates in 2006. Preliminary findings for 10 years after injury indicate that:

Replacement Rates by Disability Rating Group for Dates of Injury in 1994 and 2006

Disability Rating 1994 Replacement Rates 2006 Replacement Rates
Less than 15%

23.5%

26.7%

15% to 24.75%

36.4%

41.9%

25% to 69.75%

45.4%

47.5%

70% and greater

68.2%

77.0%

A CHSWC study by RAND entitled "Earnings Losses and Compensation for Permanent Disability in California and Four Other States" examined the losses experienced by workers with permanent disability in New Mexico, Washington, Wisconsin, Oregon and California and compares the replacement rates before and after the benefit increases in California to the other four states.

As shown in the chart below, the study findings project that despite increases in benefits under AB 749, California’s replacement rate is lower than three of four comparison states studied. One of the reasons is that California has the lowest return to work rate compared to the other states in the study.

However, the AB 749 return to work program will focus on getting injured workers back to work and thus will potentially reduce their wage losses and give them better replacement rates at no additional premium cost to employers.

Source: CHSWC Study of Permanent Disability by RAND

COSTS – PRE AND POST 2002 REFORMS

Studies by CHSWC and other reports have shown that:

The following chart depicts the growth of indemnity and medical payments, major factors in workers’ compensation costs.

Source: Workers’ Compensation Insurance Rating Bureau
Adjustments to WCIRB’s estimates for 2001 – 2006 were calculated by UC Berkeley

Costs and the California Economy

During the 1990s, California experienced significant economic growth, as shown in the following chart depicting Gross State Product, total payroll and total personal income.

The following charts depict the ratio of workers’ compensation indemnity and medical payments to payroll, to Gross State Product and to personal income. The ratio dropped during the early 1990s then rose slightly thereafter.

Projections indicate that even with the phased-in benefit increases from 2003 through 2006, the ratio of workers’ compensation indemnity and medical payments will remain level with respect to key economic indicators. However, such increases could affect certain sectors more than they might others.

Indemnity and Medical Payments as Percent of Total Payroll


Indemnity and Medical Payments as Percent of Gross State Product


Source: WCIRB, Department of Finance and UC Berkeley

Indemnity and Medical Payments as Percent of Personal Income


Source: WCIRB, Department of Finance and UC Berkeley

PROCEDURAL CHANGES

Based on findings from its studies, CHSWC recommended procedural changes including a restriction or repeal of the 4062.9 presumption of correctness of the treating physician's determinations and elimination of "baseball arbitration."

Pursuant to AB 749:

Other procedural changes pursuant to AB 749:

ORGANIZATIONAL CHANGES

MEDICAL CARE

CHSWC studies of the quality of medical reports confirmed that many, particularly those of treating physicians, did not provide an adequate description of disability for rating purposes.

LIEN CLAIMS

After an extensive study of the lien claim backlog in some WCAB district offices and had several lien resolution roundtable sessions attended by interested members of the workers’ compensation community, CHSWC recommended that statutory limitations be placed on the filing of lien claims. 

PHARMACEUTICAL COSTS

Essentially following the recommendations of the CHSWC study, AB 749 made several changes affecting workers’ compensation pharmaceutical costs. New LC 4600.1 and 4600.2 control the cost of pharmaceuticals.

OUTPATIENT SURGICAL FACILITIES

CHSWC is currently conducting a study of facility charges for outpatient surgeries. It is expected that the results will be useful for the administrative director in complying with the new mandate in AB 749:

PENALTIES

CHSWC staff and contracted researchers did a study of Labor Code 5814 penalties and their application. CHSWC approved the report, but made no recommendations for legislative action.

AB 749 made the following changes:

RETURN-TO-WORK PROGRAMS

CHSWC studies have shown that:

In February 2001, CHSWC and DWC hosted a Forum for Workplace Safety at which the latest research on return to work was presented and discussed. Literature reviews on facilitating, and barriers to, return to work were completed and continue. In its 2000-2001 Annual Report CHSWC recommended that return to work as soon as feasible be promoted and suggested ways of accomplishing it.

Pursuant to AB 749:

OCCUPATIONAL SAFETY AND HEALTH TRAINING AND EDUCATIONAL PROGRAM

AB 749 provides that:

LOSS CONTROL SERVICES

Pursuant to AB 749

INFORMATION FOR WORKERS

AUDIT PROCEDURES

AB 749 adopted essentially all of the recommendations of CHSWC Report on the Division of Workers’ Compensation Audit Function (1998).

ILLEGALLY UNINSURED EMPLOYERS

Recommendations in the CHSWC report "Employers Illegally Uninsured for Workers’ Compensation – CHSWC Recommendations to Identify Them and Bring them Into Compliance" (1998) and several solutions developed in the course of meetings of the Uninsured Employers Task Force and Round Table, but not included in the report, were adopted in AB 749:

FRAUD

Pursuant to AB 749

VOCATIONAL REHABILITATION

CHSWC has and will continue to study the workers’ compensation vocational rehabilitation benefit. AB 749 provides that

STATE COMPENSATION INSURANCE FUND

Pursuant to AB 749, the following changes affect the State Compensation Insurance Fund:

INSURANCE RATES

Pursuant to AB 749

Impact of AB 749 on CHSWC

Several provisions of AB 749 directly impact the funding and the responsibilities of CHSWC:

New Mandates and Responsibilities for CHSWC

CHSWC is required to implement new programs:

CHSWC required to study/advise on other subjects:

CHSWC oversight and evaluation functions

With the passage of AB 749, CHSWC plans to conduct studies to carry out its responsibility to evaluate the impact of new reform legislation on the workers’ compensation system, particularly with respect to

It is important to lay the foundation to analyze the before and after effects of the legislation. These efforts will need to begin immediately to be able to determine the changes from the reforms. CHSWC will begin by designing a comprehensive evaluation plan for the recently enacted (AB-749) workers compensation reform legislation, incorporating the following activities:

Appropriate evaluation of the AB 749 reforms will require extensive analyses, including

New CHSWC Funding Sources

Workers’ Occupational Safety and Health Education Fund (WOSHEF).

Monies for the Worker Safety and Health Training and Education program are to be expended by CHSWC from the newly established Workers’ Occupational Safety and Health Education Fund (WOSHEF). Up to 20% of the WOSHEF may be expended by DIR for the Loss Control Services Coordinator position.

WOSHEF receives monies from fees assessed on insurers subject to Labor Code 6354.5. The fee assessed against any one insurer shall not exceed the greater of $100 or 0.0286 percent of paid workers’ compensation indemnity claims reported to the WCIRB by that insurer for the previous calendar year.

Workers’ Compensation Administration Revolving Fund (WCARF)

Ongoing CHSWC activities and the other new mandates will be funded from the Workers’ Compensation Administration Revolving Fund (WCARF) -- instead of the Workplace Health and Safety Revolving Fund -- upon appropriation from the Legislature. Civil penalties collected on physicians per Labor Code Section 4628(f) and audit penalties collected per Labor Code Section 129.5 are to be deposited into the WCARF.


SPECIAL REPORT: COURT MANAGEMENT STUDY

Background

There has been an ongoing debate in workers’ compensation over the operation of the judicial process. The Department of Industrial Relations (DIR), the Division of Workers’ Compensation (DWC) and the Commission believed that an independent study and evaluation of the DWC judicial process would be very helpful in addressing problems such as: delay in resolving cases and inconsistent policies and procedures.

At the urging of DWC and others in the workers’ compensation community, CHSWC voted to engage in a major study and evaluation of the DWC judicial function. The RAND Institute for Civil Justice was chosen to perform this research by a competitive proposal and bidding process and began the project in October 2000.

Goals

The specific objectives of the study included:

  • Evaluation of the worker’s compensation court system
  • Identification of the causes of delay, inconsistencies, wasted resources
  • Making specific recommendations including

      – Workflow improvement
      – Trial management
      – Continuance policies
      – Judicial resources and support staff levels
      – Technological innovations

Research approach

Phase 1

  • Worked on and performed analysis with the Claims Adjudication On Line System (CAOLS), DWC’s on-line transactional data
  • Obtained staffing and budgetary data
  • Associated with workers’ compensation experts
  • Became familiar with system via informal visits
  • Reviewed literature
Workers’ Compensation Court Management and Judicial Function Study
Project Team

Deborah Hensler
    RAND

Nicholas Pace
    RAND
Robert T. Reville
    RAND

Suzanne Marria
    DIR Directorate

Richard Gannon
    DWC

Christine Baker
    CHSWC

Frank Neuhauser
    SRC, UC Berkeley

Thomas J. McBirnie
    CHSWC

Merle Rabine
    WCAB

Charles Lawrence Swezey
    CHSWC Consultant

Phase 2

Conducted case studies of six representative courts (Los Angeles, Pomona, Sacramento, San Bernardino, Stockton, and Van Nuys). The case studies involved:

– Used DWC database for summary information
– Performed "eyes-on" abstraction of actual case files at court to understand what happened during the case and how it was resolved

Throughout the process stakeholder input was solicited through:

– Source of on-going information
– Avenue for anonymous comment

Research findings

The following is a summary of some of the key findings from the study:

Delays

–Judges serving many functions at trial.

    Additional responsibilities of the judges include acting as the "jury" and a "hearing reporter", creating complete written decisions and responding to allegations made in a Petition to appeal.

–Desire to avoid trial

    Judges have incentive to minimize the number of trials they conduct and may underschedule their own trial calendar as well as be overly permissive regarding trial continuances. Conference continuances are often granted without setting next date

– Months to a decision which could take more than 3 months.

    This problem is not systematic, but is concentrated in a few judges. In particular, some of the judges have poor time management skills in issuing decisions following trial.

Inconsistencies

Absence of clear criteria for judicial decisions outside trial is a key source of inconsistencies.

– Continuance and off-calendar requests
– Standards for settlement approval
– Attorney fee requests

Administrative Costs

Cost of litigation are increased by failure to prepare for a initial conference

Recommendations

Consider trial dates as fixed and immovable in all but the most extraordinary circumstances

A permanent committee should be established to unify standards, consisting of: Members of the bar and the bench to understand what will work, DWC and Appeals Board

Status of Implementation of Recommendations

In May 2002, DWC reported that the following actions have been taken pursuant to the DWC judicial system study recommendations.

A committee was formed and held about 15 meetings to discuss proposed changes to the Board’s Rules of Practice and Procedure. The committee is now in the process of getting everything ready to submit to the Office of Administrative Law (OAL) with the intention of having a public hearing in August 2002.

Proposed rule changes based upon RAND’s recommendations include:

Details of the proposed changes to the regulations and comments from the workers’ compensation community and the public may be viewed on the online DWC/WCAB Forum at www.dir.ca.gov/WCJudicial.htm.

The Division is also working on a Clerical Training Manual, a job audit for potential reclassifications, and an analysis to determine an appropriate judge to clerk ratio. DWC has commenced the development of training manuals for Office Services Supervisors and Senior Legal Typists.

 


SPECIAL REPORT:   THE CALIFORNIA
WORKERS' COMPENSATION INSURANCE INDUSTRY

Background

In California, approximately two-thirds of total payroll in the state has been covered for workers’ compensation through insurance policies, while the remainder is through self-insurance. There are more than 100 private for-profit insurers and one public nonprofit insurer – the State Compensation Insurance Fund (SCIF).

These insurers are overseen by the California Department of Insurance (CDI), whose mission is to

To accomplish its principal objective of protecting insurance policy holders in the state, the Department examines insurance companies to ensure that operations are consistent with the requirements of the Insurance Code.

CDI plays a significant role to conserve, rehabilitate or liquidate licensed California financially distressed and insolvent insurance companies under appointment by the courts in order to provide for a stable and consistent insurance market. The agency’s 2001 Strategic Plan specifies that one of its particular goal is to "Minimize financial insolvencies of insurers".

Minimum Rate Law

Until a few years ago, California’s workers’ compensation insurance rates were regulated by the Insurance Commissioner under the minimum rate law passed in 1915. Under this law, an insurer could not issue, renew or continue workers’ compensation insurance at premium rates that were less than the rates approved by the Insurance Commissioner. The Commissioner, through its statistical agent, the Workers’ Compensation Insurance Rating Bureau (WCIRB), gathered and analyzed premium and losses data, classified businesses, did actuarial projections, and determined final, fully developed, premium rates that included all the costs of benefits and administrative overhead. The final premium could be lower depending on the dividends paid by insurers at the end of the policy period.

In 1993, the workers’ compensation reform legislation repealed California’s 80-year-old minimum rate law and replaced it beginning in 1995 with an open-competition system of rate regulation in which insurers set their own rates based on "pure premium advisory rates" developed by the WCIRB. These rates, approved by the Insurance Commissioner and subject to annual adjustment, are based on historical loss data for more than 500 job categories.

Under this ‘open rating’ system, these recommended, non-mandatory pure premium rates are intended to cover the average costs of benefits and loss adjustment expenses for all employers in an occupational class, and thus provide insurers with benchmarks for pricing their policies. Insurers typically file rates that are intended to cover other costs and expenses, including unallocated loss adjustment expenses.

Insurance Market Before Reform

California workers’ compensation direct written premium peaked at nearly $9 billion in 1993, the same year the legislature enacted a major overhaul of the system. Adoption of open rating, which took effect in January 1995, was a key provision of that reform.

However, beginning in mid-1993, prior to the conversion to open rating, the Legislature and the Insurance Commissioner approved a series of rate decreases. The first, mandated by the Legislature, called for a reduction of 7% in workers’ compensation rates. Then, with the state experiencing a major economic recession and workers’ compensation claim frequency and claim costs declining for the first time in years, the Insurance Commissioner followed the legislated rate reduction with a 12.7% reduction in January 1994 and a 16% reduction in October 1994, just before the minimum rate law was eliminated and open rating took effect. As a result, by 1994, statewide premium was down to $7.7 billion, and by 1995 – the year open rating took effect – written premium was already down to $5.7 billion – a decline of over 35 percent in 2 years.

Insurance Market After Reform

Subsequent to the repeal of the minimum rate law effective January 1995, changes were noted in the actions of insurers and employers.

Price Competition

While declining claim costs and the mandated premium rate reductions initiated the decline in the total California workers’ compensation premium, open rating apparently spurred competition among insurers seeking to retain or add to their market share. Some insurers attempted to increase their market share by writing coverage at low prices that eventually proved to be below loss costs. This deregulated market kept premium rates near their historic lows throughout the latter half of the 1990s, even though losses were no longer declining.

In addition, the commercial market was able to solicit and quote public agencies for the first time. Prior to open rating, a public agency could either insure with State Fund, or self insure. Since so few public agencies were insured previously, the WCIRB data on them was very scant and probably not representative, especially in urban areas. This caused some significant under pricing, which led public agencies especially schools to go back to full insurance.

Total premium volume did begin to edge up after 1995, as California’s booming economy added many new jobs, driving up covered payroll. By 1997, however, industry wide losses exceeded premiums, and the situation for many insurers was deteriorating. As the link between the price of insurance and loss costs became more and more tenuous, some insurers left the state, others ceased writing workers’ compensation or were merged or acquired by other carriers, and still others, including several of the largest insurers in the state, became insolvent and had to be taken over or supervised by the state. As a result, the workers’ compensation market became much more concentrated than in the past, with only a few insurers - aside from State Fund, mostly large, national carriers - accounting for the lion’s share of statewide premium.

Changing Insurers

WCIRB identified some trends in employers changing insurers pre and post open rating. WCIRB estimates that before open rating, about 25% of California employers with experience-modifications (x-mods) changed insurance carriers each year. Post open rating, about 35% of the employers did so, and the first quarter of 2001 shows that half of the employers changed carriers. It should be noted, however, that in many post open rating cases employers had no choice but to change insurers as the market had deteriorated to the point that many carriers – including several of the largest workers’ compensation insurers in the state -- ceased to exist or stopped writing workers’ compensation in California.

Reinsurance

After open rating, many carriers shifted the risk of their workers’ compensation claims to other insurance companies, some of whom were inexperienced with the California workers’ compensation insurance market. According to Professor Aigner of the University of California at Santa Barbara, and the Workers’ Compensation Executive many carriers used reinsurance aggressively in order to mitigate the risk of having to make large future payoffs. Backed by reinsurance treaties that lowered the reinsurance level to $50,000 or less from the more typical $500,000 to $1 million, some primary workers’ compensation carriers offered extremely low rates that proved to be inadequate in the face of soaring losses. Some reinsurance companies also sold off their risk to other reinsurers in a process called "retrocession." During 1999, several major reinsurance pools experienced financial difficulty and ceased operations.

Profitability of Insurance Companies

Profitability of insurance companies as measured by the National Association of Insurance Commissioners decreased with deregulation. In the late 1980s, workers’ compensation insurers in California had profit levels of nearly three times the national average. With open rating, California insurers have lower than average profit margins, and during the late 1990s had the lowest return in the nation. Several indicators including those discussed below pointed to a decrease in the profitability of the insurance industry.

Premiums

Immediately after the reform and the elimination of the minimum rate law, in part from reasons discussed above, workers’ compensation insurance premiums continued to decline. The total written premium declined from a high of $8.9 billion in 1993 to a low of $5.7 billion ($5.1 billion net of deductible) in 1995. The written premium grew slightly from 1996 to 1999 due to growth of insured payroll, an increase in economic growth, movement from self-insurance to insurance and other factors, rather than increased rates. But even with well over a million new workers covered by the system, the total premium paid by employers remained below the level seen at the beginning of the decade.

At the end of 1999, the insurance commissioner approved an 18.4% pure premium rate increase for 2000 and the market began to harden after 5 years of open rating, though rates remained less than two-thirds of the 1993 level. Since then, the market has continued to firm, with the Insurance Commissioner approving a 10.1% increase in the advisory rates for 2001, and a 10.2% increase for 2002. Rates continue to move up, and with the expansion of covered payroll, the WCIRB estimates total written premium will end up at or near its all-time high in 2001.

A chart showing the California workers’ compensation written premium and a history of the workers’ compensation pure premium advisory rates since the 1993 reforms follows. Please note that these amounts are exclusive of dividends.

 

California Workers' Compensation Written Premium

 


Advisory Workers' Compensation Pure Premium Rates

Advisory Workers’ Compensation Pure Premium Rates
A History since the 1993 Reform Legislation

1993
Insurance Commissioner approved:
Pure premium rates reduction of 7% effective July 16, 1993 due to a statutory mandate.

1994
WCIRB recommendation: No change in pure premium rates.
Insurance Commissioner approved: Two pure premium rate decreases: a decrease of 12.7% effective January 1, 1994 and a second decrease of 16% effective October 1, 1994.

1995
WCIRB recommendation:
7.4% decrease from the pure premium rates that were in effect on January 1, 1994.
Insurance Commissioner approved:
A total 18% decrease to the pure premium rates in effect on 1/1/94 was approved effective January 1, 1995 (including the already approved 16% decrease effective October 1, 1994).

1996
WCIRB recommendation: 18.7% increase in pure premium rates.
Insurance Commissioner approved: An 11.3% increase effective January 1, 1996.

1997
WCIRB recommendation: 2.6% decrease in pure premium rates.
Insurance Commissioner approved: A 6.2% decrease effective January 1, 1997.

1998
WCIRB recommendation: The initial recommendation for a 1.4% decrease was later amended to a 0.5% increase.
Insurance Commissioner approved: A 2.5% decrease effective January 1, 1998.

1999
WCIRB recommendation: The WCIRB initial recommendation of a 3.6% pure premium rate increase for 1999 was later amended to a recommendation for a 5.8% increase.
Insurance Commissioner approved: No change in pure premium rates for 1999.

2000
WCIRB recommendation: An 18.4% increase in the pure premium rate for 2000.
Insurance Commissioner approved:
An 18.4% increase effective January 1, 2000.

2001
WCIRB recommendation: The WCIRB initial recommendation of a 5.5% increase in the pure premium rate was later amended to a recommendation for a 10.1% increase.
Insurance Commissioner approved: A 10.1% increase effective January 1, 2001.

2002
WCIRB recommendation:
The WCIRB initial recommendation of a 9% increase in the pure premium rate was later amended to a recommendation for a 10.2% increase. WCIRB filed a mid-term recommendation that pure premium rates be increased by 10.1% effective July 1, 2002 for new and renewal policies with anniversary rating dates on or after July 1, 2002.
Insurance Commissioner approved: A 10.2% increase effective January 1, 2002. On May 20, 2002, the Commissioner approved a mid-term increase of 10.1% effective July 1, 2002.

2003
WCIRB recommendation: On July 24, 2002, the WCIRB Governing Committee approved the filing of a proposed 11.9% increase in pure premium rates with respect to new and renewal policies with anniversary rating dates on or after January 1, 2003. The Governing Committee also approved the filing of a proposed 5.9% increase in the pure premium rates applicable to the unexpired portion of 2002 policies as of January 1, 2003.
Insurance Commissioner approved: A hearing on the rate proposals is anticipated in September 2002.

 

Combined Loss and Expense Ratios

The accident year combined loss and expense ratio, which measures workers’ compensation claims payments and administrative expenses against earned premium has been increasing greatly since 1993. In accident year 2001, insurers’ claim costs and expenses amounted to $1.32 for every dollar of premium they collected – and that was an improvement over the record high of $1.74 noted in 1999. However, the ratios seen in the past several years (as shown in the graph below) are the highest ever recorded by the industry since WCIRB began collecting data.

The loss ratio for 2001 represents the lowest accident-year loss ratio since 1995, the first year since the repeal of the minimum rate law went into effect in California. According to WCIRB, this improvement in the loss ratio since the previous year is a function of higher insurance premium rates, rather than an improvement in loss experience.

Under-Reserving

Furthermore, a serious under-reserving of claims was noted. As of December 31, 2000, the WCIRB estimated that the amount of statewide reported reserves were $7.1 billion below the estimated ultimate cost of incurred claims.

According to many, these unprecedented results are explained, at least in part, by inadequate pricing due to an extremely competitive insurance market. According to WCIRB, for most of the second-half of the 1990’s insurers were, on average, pricing their policies well below the pure premium rate level. (Pure premium rates provide only for losses and loss adjustment expenses and include no provision for other insurer expenses.)

Average Claim Costs

At the same time that premiums and claim frequency were declining, the total amount insurers paid on indemnity claims jumped sharply due to increases in the average cost of an indemnity claim, which rose dramatically during the late 1990s. According to the WCIRB, both average indemnity and medical claim costs have shown increases over the last several years, as shown on the following graph.


The WCIRB predicts that the average cost of a 2001 indemnity claim will be $43,317, which is up 11% since 2000 and 101% since 1995.

Please note that the WCIRB’s estimates of average indemnity claim costs have not been indexed to take into account wage increase and medical inflation.

Current State of the Insurance Industry

Market Share

A number of California insurers left the market or reduced their writings as a result of the decrease in profitability, contributing to a major redistribution of market share among insurers since 1993, as shown in the following chart.

According to the Workers’ Compensation Insurance Rating Bureau, California companies (excluding the State Compensation Insurance Fund) insured just two percent of the California workers’ compensation market in 2001, compared with 36% of the market in 1994.

Source: Workers’ Compensation Insurance Rating Bureau of California


’September 11’ Impact on Insurance Industry

The industry recent problems in the reinsurance market caused by the events of September 11 have significantly affected the cost and availability of catastrophe reinsurance and, correspondingly, have a significant effect on the cost of workers' compensation insurance. This extends to more than acts of terrorism and is a critical component of any evaluation of the California workers’ compensation insurance marketplace.

INSURANCE MARKET INSOLVENCY

Currently, several insurance companies are experiencing problems with payment of claims. According to WCIRB, fifteen independent insurer/insurer groups, which collectively wrote over one-quarter of the total California market in 1994, are under regulatory action by the Department of Insurance.

As indicated in the following listing, Superior National and other insurance companies have been liquidated while some insurance companies have been placed under regulatory supervision by the Department of Insurance:

1. Superior National Group (in California liquidation), including

2. HIH Insurance Ltd. (under California liquidation)

3. Fremont Compensation Insurance Group (under California regulatory supervision)

4. Credit General Group (under Ohio liquidation)

5. Reliance National Indemnity Company group (under Pennsylvania liquidation), including

6. Sable Insurance Company (under California liquidation)
   Sable is a wholly owned subsidiary of Sable Insurance Holding Company, which in turn is owned by Reliance National Indemnity Company

7. Frontier Pacific Insurance Company (under California liquidation)
   Frontier Pacific Insurance Company is part of the Frontier Pacific Group whose stock ceased trading due to big losses.

8. PHICO Insurance Company (under Pennsylvania liquidation)

9. Legion and Villanova Insurance Companies (under Pennsylvania rehabilitation)
   The companies are part of the Legion Insurance Group

10. PAULA Insurance Company (under California conservation)
     The company is part of the PAULA Insurance Group

11. Highlands Insurance Group (under Texas regulatory supervision)
      Some companies doing business in California are part of the Highlands Insurance Group

Prevention of Financial Insolvency

The American Insurance Association cited several mechanisms already in place (listed below) that give the Insurance Commissioner some tools to protect the solvency of the insurance system. However, there are differing opinions as to the applicability and effectiveness of these statutory and regulatory provisions relating to the Department of Insurance:

  1. Authority over the adequacy of the aggregate reserves of an insurer (Insurance Code 923.5 and 11558) and regulations that provide, in part, "The minimum reserve requirements prescribed in Section 11558 shall be increased whenever the Commissioner determines that the computations set forth in Section 11558 are inadequate as provided by Section 11557."
  2. Authority to require insurers to increase reserves whenever reserves "seem inadequate." (Insurance Code 11557)
  3. Authority to require insurers to provide additional accounting or actuarial information regarding its financial condition whenever the insurer appears to require immediate regulatory attention. The additional accounting or actuarial supplementary information may be at such intervals as the Commissioner may require and must come from such accountants or actuaries as are satisfactory to the Commissioner. (Insurance Code 925)
  4. Authority to require an insurer to stop any conduct that would render the company insolvent. (Insurance Code 1065.1)
  5. Insurance Code 739 et seq. provides an oversight mechanism, Risk-Based Capital (RBC). RBC is a tool that allows the Department to review a number of critical components of an insurers operations to determine whether its financial condition warrants regulatory intervention.
  6. Insurance Code 11732 provides that: "(r)ates shall not, if continued in use, tend to impair or threaten the solvency of an insurer or tend to create a monopoly in the market." Some conclude that this only allows intervention in the rates of an insurer when the insurer is faced with impending (if not actual) insolvency. Others believe that the CDI does have significant authority within the overall solvency regulation scheme in the Insurance Code to allow early intervention in an insurer's rate making when its other financial indicators, such as loss ratios, reserve adequacy, and loss development, are adequately reviewed and analyzed.

Solutions to Financial Insolvency

After a company is determined to be financially distressed, the California Department of Insurance conserves, rehabilitates or liquidates those licensed California insurance companies under appointment by the courts. If the company is experiencing financial difficulties, the California Department of Insurance can place the company under:

When the Commissioner becomes the conservator of a company, an investigation by the Conservation and Liquidation Office (CLO) of CDI is initiated to determine if the company can be rehabilitated. Every effort is made to enable the company to regain a strong financial footing.

California Insurance Guarantee Association

Background

The California Insurance Guarantee Association (CIGA) was established in 1969, in part, to meet the obligations of insolvent workers’ compensation insurers by administering and disbursing covered claims. Each insurer, in order to conduct business in the state, is required to participate in CIGA, a fund from which insureds and claimants could obtain financial and legal assistance in the event insurers became insolvent.

When an insurer is declared insolvent, CIGA assures payments of claim liabilities. Unlike other claims covered by CIGA, the insurance guarantee association pays 100 percent of benefits on workers’ compensation claims. The valuation of each proof of claim is determined in accordance with policy provisions and statutory requirements.

CIGA derives the funds to pay claim liabilities through assessments levied against member companies, through distributions from the estates of the insolvent insurers and investment income. The insurers are then permitted to recoup their CIGA assessments by surcharging their policyholders.

Between 1969 and 2000, CIGA reports that it paid out an average of $51 million per year. Prior to September 2000, CIGA had a surplus of $290 million in its workers’ compensation account.

Current Insolvencies

In its "Current Situation Report" issued June 4, 2002, CIGA reports that it has been in "precarious financial condition" since the Superior National Companies were liquidated in September 2000. Since that time CIGA has paid out almost $741 million on claims for those companies alone, and since October 2001, CIGA has paid out $72 million to cover the insolvency of the Reliance Insurance Company. This "has nearly exhausted CIGA’s available cash to pay workers’ compensation claims."

According to CIGA, there are currently over 10 workers’ compensation insurance companies have been liquidated since September 2000. CIGA's total cash drain from all current insolvencies has grown to about $76.4 million per month, of which over $54 million is for workers’ compensation.

Assessments and Surcharges

In September 2001,California Governor Gray Davis signed into law Assembly Bill 1183, which allowed CIGA to raise the assessment on workers’ compensation insurers through September 12, 2002 from not more than 1 percent to not more than 2 percent of net direct premiums written.

However, according to CIGA, the short-term 2% assessment may not be enough to cover all claim liabilities. At the current pay out rate, CIGA estimates that it will run out of funds for workers’ compensation payments in April 2002.

In February 2002, Assembly Bill 2007 (Calderon) was introduced which would establish the assessment permanently at not more than 2% of net direct premiums written. AB 2007 passed the Assembly and a hearing was scheduled for June 19, 2002 before the Senate Insurance Committee.

Until additional funding can be obtained, as of May 31, 2002 CIGA has negotiated a line of credit and has begun borrowing $33.5 million in order to continue paying workers’ compensation benefits.

CHSWC Informal Hearing on the State of the Workers’ Compensation Insurance Industry in California

The situations described above and at the urging of the community, CHSWC held an informal hearing on the state of the workers’ compensation insurance industry as part of its February 8, 2002 meeting in San Francisco. Several representatives from throughout the workers’ compensation community participated and shared their views, including

Michael Nolan - California Workers’ Compensation Institute
Mark Webb - American Insurance Association
Larry Mulryan - California Insurance Guarantee Association
David Bellusci - Workers’ Compensation Insurance Rating Bureau of California
Norris Clark and Larry White - California Department of Insurance
Pat Quintana and James Neary - State Compensation Insurance Fund
Mark Johnson - DWC Audit Unit
Glenn Shor - DWC Policy, Program Evaluation and Training Unit
Richard P. Gannon - Administrative Director, Division of Workers’ Compensation
Gilbert Stein and Rick Wooley - California Applicants’ Attorneys Association

Summaries of their testimony are included in the CHSWC background paper entitled "State of the California Workers’ Compensation Insurance Industry" available at http://www.dir.ca.gov/CHSWC/allreports.html.

Recommendations

CHSWC and the community have expressed concerns regarding the current and future solvency of the California insurance industry. The viability of the insurance industry is vital to maintaining the health of the workers’ compensation system, which benefits both workers and employers.

CHSWC recommends that efforts be expended to:

Further areas of study may include, but are limited to, the following:

Possible Research Areas

  1. Review and assess the effectiveness of current regulations regarding the prevention of and recovery from insurer insolvencies so that injured workers are assured timely and proper benefits.
  2. Explore whether the California Department of Insurance (CDI) should move towards a "rate adequacy" standard and whether this standard would be effective in preventing insurance companies’ insolvencies.
  3. Assess the problems that the insurance industry is currently faced with and their impact on timeliness of payments to injured workers.
  4. Analyze other states' approaches to improving competition through other methods such as dispersal of information or verifying insurance coverage, and their applicability to California.
  5. Review the recommendations of the Workers' Compensation Rate Study Commission and determine their relevancy today.
  6. Review the literature on open rating and exclusive state funds.
  7. Identify key indicators to be utilized to conduct an ongoing evaluation of the insurance industry to prevent future insolvencies and sustain the viability of a healthy insurance market.

WORKERS' COMPENSATION MEDICAL ISSUES

Introduction

CHSWC is beginning to establish the framework for understanding the workers’ compensation medical benefit delivery system.

Current State of California’s Workers’ Compensation System

During the early and mid-1990s, the average medical cost per indemnity claim showed low rates of growth. The rapid decline in medical-legal cost was an important contributor to dampening cost increases. At the same time, the growth rate of medical costs on the health benefit side also was moderate. A major revision of the Official Medical Fee Schedule including provisions for a pharmacy fee schedule was introduced in 1994.

During the later half of the 1990s, medical cost became the fastest rising component of workers’ compensation benefits. The WCIRB reported 15% annual year-to-year growth rates in the average medical benefits paid per indemnity claim. These increases occurred despite the introduction of a new hospital fee schedule in 1999.

Recent estimates indicate that the system wide medical payments are approximately $4.4 billion [1] which are broken down in the chart below.

[1] $4.4 billion figure was calculated by using the WCIRB 2001 calendar data for total medical payments of insureds ($3.2 billion) and multiplying by 1.39 to factor in the self-insureds (assuming that self insureds are 28% of the total costs of insured and self-insured)

 

 

Evidence of Higher Cost for Workers’ Compensation Medical Treatment in California

Estimates are that medical treatment costs are 50% to 100% higher in workers’ compensation than treatment within the employment-based, health benefit arena. This impacts labor in the form of lower wages and reduced employment and employers in the form of lower revenue and reduced profits.

CHSWC studies of the California system have found that

Medical Cost Containment Strategies

California and other states have adopted various strategies to contain medical costs in their workers’ compensation system, including mandated bill review, institution of fee schedules, and establishment of managed care. Some states have adopted more stringent requirements for use of these strategies (e.g.,’ mandating’ as opposed to ‘regulating’ managed care).

Some of the cost-containment strategies in California are managed care, fee schedules, utilization review, and treatment guidelines.

Managed Care

Fee Schedules

Utilization Review

According to the Division of Workers’ Compensation’s study of utilization review,

Treatment Guidelines

California Research Colloquium on Workers’ Compensation Medical Benefit Delivery and Return to Work

Currently, the information with regard to the medical care received by industrially injured workers in California is limited, particularly with regard to:

    1. Quality and appropriateness of care
    2. Access to services
    3. Understanding costs
    4. Comparability of the prices charged by providers to other states or to nonoccupational services
    5. Baseline data on these and other indicators
    6. Policy tools and effective models for medical benefit delivery

CHSWC, DIR, DWC and IMC are responding to these needs by proposing to host and coordinate a research colloquium focused on the medical benefit delivery system and return to work. The Colloquium will include a presentation of a series of papers that would inform the public and the workers’ compensation community. In addition, it is envisioned that there will be panel discussions addressing issues raised.

Process

In the Spring of 2002, Colloquium planning meetings will be held to determine topics and identify speakers.

Possible topics to be presented at the Colloquium may include, but are not necessarily limited to:

In 2003, CHSWC, DIR, DWC and IMC plan to host a 2-day Colloquium of researchers and other key policy stakeholders to discuss the papers developed for this purpose and methods for improving the workers’ compensation medical delivery and return to work in California. CHSWC and DIR will disseminate research findings, indicators and recommendations from the Colloquium.

CHSWC Medical Projects Mandated by AB 749

AB 749 directed CHSWC to provide ongoing advice on workers’ compensation medical care. The DWC administrative director, in consultation with CHSWC and others, must conduct a study of medical treatment provided to injured workers covering the rising costs and utilization of medical treatment, case management, ways to attain early and sustained return to work, physician utilization, quality of care, outcome measurement, and patient satisfaction.

The 24-Hour Care Pilot Project

Labor Code Section 4612 established three-year pilot programs of 24-hour health care in California to test the administrative efficiencies, cost control potential, and service capabilities of having a single system provide health care for occupational and non-occupational injuries and illnesses. Implemented in 1994 with the participation of five employers in San Diego County, the pilot once included over 65 employers in four counties.

The 24-hour health care pilot project was terminated as of December 31, 1997. DWC issued an interim report in March 1997, which stated that a final report would include analyses of claims filings and costs, patient outcomes and satisfaction, and employer satisfaction. In December 2000, DWC issued a report entitled "Injured Worker Satisfaction with Care in a 24-Hour Program". This study demonstrated no significant differences in patient satisfaction with care or emotional or functional outcomes in injured workers receiving usual care versus 24 hour care.

For further information...
     
DWC’s reports may be viewed at www.dir.ca.gov. Select ‘workers’ compensation’, then ‘Division of Workers’ Compensation’, then ‘Medical/HCO’ (under ‘DWC/WCAB Organization and Offices’).

Health Care Organization Program

The Health Care Organization (HCO) program, established by the 1993 Workers’ Compensation reform package, expanded the use of managed care techniques in the workers’ compensation system. This was viewed as a means of reducing medical costs and facilitating better management of workers’ compensation cases.

HCOs provide medical care to employees with job-related injuries or illnesses in a managed care setting. Insurance carriers and self-insured employers may contract with a certified HCO as a way of reducing workers’ compensation costs while at the same time helping to ensure that injured workers receive quality medical care for their injuries.

Under the initial program, an employer in an HCO gains additional medical control over the care of the injured employee, ranging between 90 days (if no group health insurance coverage is offered) to 365 days (if the employee’s provider of non-occupational healthcare is also in the HCO network).

AB 749 made changes to the HCO program effective January 1, 2003:

  • Employers are no longer required to offer at least two HCOs to employees; employers may contract with only one HCO.
  • Employees must give written affirmative choice annually to select HCO or predesignate personal physician, personal chiropractor or personal acupuncturist Employees who do not designate a personal physician, personal chiropractor or personal acupuncturist shall be treated by the HCO.
  • Employer control of medical treatment has been changed to 90 days (if no non-occupational health care coverage from employer) or 180 days (if employer provides non-occupational health care coverage as well).
  • HCO certification has been simplified. Healthcare Management Organizations (HMOs) certified by Department of Managed Health Care (DMHC) are ‘deemed’ to be HCOs if they are in good standing with DMHC and meet requirements for occupational treatment and case management required of other HCOs.

DWC reports that there are about 340,000 employees currently enrolled in the HCO program and twelve certified HCOs. Anticipation of the AB 749 changes and market conditions seem to be pushing the growth of HCO enrollment and applications for certification. Organizations are contacting DWC to get applications in to make sure they are certified and ready to operate on January 1, 2003.

Current HCOs and Year Certified
(As of May 6, 2002)

2001 Health Net/Comp, America Primary
Health Net/Comp, America Select
2000  MedEx2 Health Care
Sierra Health and Life
Sierra at Work Select
Sierra Health and Life
Sierra at Work Spectrum
1999    CorVel Select HCO
CorVel Corporation
1998 CompPartners Access
CompPartners Direct
Medical Group at City Center
1997   Kaiser Foundation Health Plan,
Northern California
MedEx Health Care

Source: Division of Workers’ Compensation

For further information…
      The latest information on Health Care Organizations may be obtained at www.dir.ca.gov. Select ‘workers’ compensation’, then ‘Division of Workers’ Compensation’, then ‘Medical/HCO’.

Fee Schedules

The Official Medical Fee Schedule in use in 1993 was criticized as outdated because it did not cover many common procedures and did not apply to pharmaceutical or hospital charges. The reform legislation directed DWC to update the schedule to address those concerns. Labor Code 5307.1 requires the Administrative Director to adopt and revise a medical fee schedule every two years.

The Division of Workers’ Compensation last updated the Official Medical Fee Schedule (OMFS) by adopting changes to the schedule effective April 1, 1999. The In-Patient Fee Schedule and changes to the Medical Legal Fee Schedule were adopted and implemented as part of the overall package of medical regulations. These fee schedules are for services provided on or after April 1, 1999.

Official Medical Fee Schedule

DWC is planning to propose an RBRVS-based Official Medical Fee Schedule. DWC believes that adoption of an RBRVS-based OMFS will achieve two very important goals. First, it will create a fee schedule that is more grounded in the work that medical providers actually do, using relative values that are determined in a process which allows considerable input from the provider community. Second, it will allow DWC to utilize the work of others in revisions of the OMFS, thus increasing the efficiency and timeliness of the revision process.

While the RBRVS-based changes are being developed, DWC recommended an interim revision of the OMFS. This ‘clean-up’, technical revision of the OMFS was submitted to the Office of Administrative Law in April 2002.

The Industrial Medical Council continues its support of the restructuring of the OMFS. Building on a study conducted with the UCLA Center for Health Policy Research, the IMC sponsored a series of studies with the Lewin Group to evaluate issues surrounding adoption of the federal Resource-Based Relative Value Scale (RBRVS).

The first study undertaken by the Lewin Group provides an analysis of the impact of a budget neutral conversion to the RBRVS on medical specialties and medical service categories. It examines options for implementing the RBRVS and for adopting geographic adjustment factors and indexing the conversion factor to an appropriate economic indicator. Two related but separate studies will provide the data to determine whether to modify the RBRVS for use in the workers’ compensation setting. The first study will examine the difference between physician work for Evaluation and Management codes in the workers’ compensation and non-workers’ compensation settings. A second study would examine the difference in practice expenses for these codes. In addition, the IMC is working with the DWC to update the OMFS ground rules for this major biennial revision of the fee schedule.

Hospital Fee Schedule

The Official Medical Fee Schedule was updated effective April 1, 1999 and included an Inpatient Hospital Fee Schedule, or IHFS.

The IHFS takes into account cost and service differentials for various types of facilities based on the federal Medicare Fee Schedule. As in Medicare, reimbursement for each hospital differs depending on a number of factors that have an impact on the hospital’s costs and services. Since the implementation of the IHFS, the Division of Workers’ Compensation has received several letters from hospitals and physicians expressing their dissatisfaction with the current IHFS.

Two changes made to the hospital fee schedule, both of which were adopted on June 29, 2001 and were to sunset on December 31, 2001, have been extended until a new fee schedule is adopted. The first allows for the costs of surgical implantables for DRGs 496-500 to be paid for separately from the DRG overall rate. DWC adopted a "Rule 100" change that extended the sunset date for the implantable hardware payment supplement. The second change revises payments for outlier cases in certain high cost procedures in which the hospital's true costs are significantly above the norm for that specific procedure at that hospital.

For further information…
     
See the CHSWC Project Section of this Annual Report:  ‘Inpatient Hospital Fee Schedule and Outpatient Surgery Study’
        The latest information on fee schedules may be obtained at www.dir.ca.gov. Select ‘workers’ compensation’, then ‘Division of Workers’ Compensation’, then ‘Medical/HCO’
        Check out www.dir.ca.gov/chswc for CHSWC reports and the latest information.

 

Inpatient Hospital Fee Schedule and Outpatient Surgery Study

With the cooperation and assistance of the Division of Workers’ Compensation, CHSWC contracted with independent researchers for a study to evaluate the adequacy of the Inpatient Hospital Fee Schedule and a need for an outpatient surgical fee schedule, including comparisons by Diagnostic Related Groups (DRG) to payments for Medicare, Group Health and workers’ compensation.

CHSWC prepared a Staff Summary report incorporating some of the findings from the contracted study of the Hospital Fee Schedule system and making staff recommendations.

Inpatient Hospital Fee Schedule

The CHSWC staff report recommendations include:

CHSWC and DWC held an Inpatient Hospital Fee Schedule Project Advisory Committee meeting in July 2002.


Outpatient Surgery Facility Fee Schedule

The CHSWC staff report recommendations include:

AB 749, which amends Labor Code Section 5307.21, enables the administrative director of DWC to develop an outpatient surgery facility fee schedule that will include all facility charges for outpatient surgeries performed but not the fees of the doctors providing services in connection with the surgery. The fees allowed must be sufficient to cover the costs of each surgical procedure, minimize administrative costs, and ensure access to outpatient surgery services by injured workers.

For further information…
   
See the CHSWC Project Section of this Annual Report: ‘Inpatient Hospital Fee Schedule and Outpatient Surgery Study’
     The latest information on fee schedules may be obtained at www.dir.ca.gov. Select ‘workers’ compensation’, then ‘Division of Workers’ Compensation’, then ‘Medical/HCO’.Check out www.dir.ca.gov/chswc for CHSWC reports and the latest information.

Utilization Review Regulations

Legislative changes in 1993 required the DWC Administrative Director to ‘adopt model utilization protocols in order to provide utilization review standards’ [Labor Code Section 139(e)(8)]. Pursuant to that statutory mandate, utilization review standards – CCR 9792.6 – were adopted as regulations effective July 1995. DWC reports that requests for summaries of utilization review programs have been mailed to claims administrators, to allow DWC to assess implementation of the utilization review standards.

The Division of Workers’ Compensation conducted a study of utilization review in California and published a report in July 2001 entitled "Utilization Review in California’s Workers’ Compensation System: A Preliminary Assessment".

The report includes the following recommendations to improve the current utilization review in California:

For further information…
     
The latest information on the utilization review standards may be obtained at www.dir.ca.gov. Select ‘workers’ compensation’, then ‘Division of Workers’ Compensation’, then ‘Medical/HCO’ (under the heading ‘DWC/WCAB Organization and Offices’).
        DWC Report: ‘Utilization Review in California’s Workers’ Compensation System: A Preliminary Assessment’ (2001) [Available at www.dir.ca.gov/DWC]

Medical-Legal Evaluations

‘Baseball Arbitration’

Final offer arbitration – also known as ‘baseball arbitration’ – was introduced into the workers' compensation decision process as a result of the 1993 reforms.

Labor Code Section 4065 provides that where either the employer or the employee have obtained evaluations of the employee's permanent impairment and limitations from a qualified medical evaluator under Section 4061 and either party contests the comprehensive medical evaluation of the other party, the workers' compensation judge or the appeals board shall be limited to choosing between either party's proposed permanent disability rating. The employee's permanent disability award shall be adjusted based on the disability rating selected by the appeals board.

In April 1999, the Commission requested a report on the effectiveness and experience of baseball arbitration. The Commission was informed that Workers’ Compensation judges are having problems with the application of Section 4065 and that many are reluctant to use it. This is confirmed by the reported cases in the CHSWC study. The parties are equally adept at avoiding baseball arbitration. The literature review, the preliminary data analysis, and legal and anecdotal evidence all indicate that there are problems with the implementation of final offer arbitration in workers' compensation. At its meeting on December 16, 1999 in Los Angeles, CHSWC voted unanimously to recommend the repeal of Labor Code Section 4065.

Impact of AB 749

AB 749 repeals Labor Code Section 4065 and "baseball arbitration" effective January 1, 2003.

For further information…
     
CHSWC Report: ‘Preliminary Evidence on the Implementation of Baseball Arbitration’ (1999) [Available at www.dir.ca.gov/chswc]


Treating Physician Presumption

Background

The 1993 reforms increased the role of the primary treating physician (PTP). They require the PTP to render opinions on all medical issues necessary to determine eligibility for compensation, and when additional medical-legal reports are obtained, the findings of the treating physician are presumed to be correct. These legislative changes had the effect of reintroducing the importance of the PTP that had been curtailed by the 1989 reforms and adding the additional authority of rebuttable presumption.

In 1996, the WCAB issued an en banc decision, Minniear v. Mt. San Antonio Community College District 61CCC 1055 CWCR 261, which the effect of extending the treating physician presumption to disputes over medical treatment as well as medical-legal issues.

CHSWC undertook an evaluation of the quality of treating physician reports and the cost-benefit of the PTP presumption under Labor Code Section 4062.9. The study concluded that changes to the status of the PTP made during the 1993 reforms have resulted in medical-legal decisions based on poorer quality reports without any apparent cost savings. In addition, there is consensus within the WCAB that the presumption has increased litigation and curtailed the discretion of Workers’ Compensation Judges to craft reasonable decisions within the range of evidence.

CHSWC recommended that the Legislature consider setting the standard at a different level which gives great weight to the treating physician but allows the judges to use judicial discretion and to award based on the range of evidence.

In May 2000, the Legislature requested that the Commission update its study report on the presumption of correction for treating physician reports. An updated report is expected in 2002, which includes the impact on medical costs of the Minniear decision. Preliminary findings from the update study indicate that Minniear had an important impact on the cost of medical treatment and the utilization of medical services. In summary:

Impact of AB 749

AB 749 provides that for injuries after 2002 the Labor Code Section 4062.9 presumption will only apply to the findings of personal physicians or personal chiropractors predesignated before the injury.

For further information…
 
   See the project synopsis in this section of this Annual Report.  Update on Treating Physician Study
       CHSWC Report: "Report on the Quality of the Treating Physician Reports and the Cost-Benefit of Presumption in Favor of the Treating Physician" (1999) [Available at www.dir.ca.gov/chswc]

 

Medical-Legal Expenses

Reform legislation changes to medical-legal process were intended to reduce both the cost and the frequency of litigation. Starting in 1989, legislative reforms restricted the number and lowered the cost of medical-legal evaluations needed to determine the extent of permanent disability. The reform legislation also limited the WC judge to approving the PD rating proposed by one side or the other (‘baseball arbitration’). In addition, the Legislature created the Qualified Medical Examiner (QME) designation and increased the importance of the treating physician’s reports in the PD determination process.

In 1995, CHSWC contracted with the Survey Research Center at UC Berkeley to assess the impact of the workers’ compensation reform legislation on the workers’ compensation medical-legal evaluation process.

This ongoing study has determined that during the 1990’s the cost of medical-legal exams has seen dramatic improvement. As shown in the following discussions, this is due to reductions in the all the factors that contribute to the total cost.

Permanent Disability Claims

The following chart displays the number of PPD claims during each calendar year since 1989. Up through 1993, the WCIRB created this data series from Individual Case Report Records submit as part of the Unit Statistical Report. Since that time the series has been discontinued and estimates for 1994 through 1998 are based on policy year data adjusted to the calendar year and information on the frequency of all claims, including medical only, that are still available on a calendar year basis.

Source: Workers’ Compensation Insurance Rating Bureau of California

Medical-Legal Exams per Claim

The following chart illustrates the decline in the average number of medical-legal exams per claim. The 66% decline reflects a series of reforms since 1989 and the impact of efforts against medical mills.

Reforms instituted in 1993 that advanced the role of the treating physician in the medical-legal process and granted the opinions of the treating physician a presumption of correctness were expected to reduce the average number of reports even more. Earlier CHSWC reports evaluating the treating physician did not find that these reforms had significant affect on the average number of reports per claim.


Source: Workers’ Compensation Insurance Rating Bureau of California, PD Survey

The change in the average number of reports between 1993 and 1994 was entirely the result of improvements that occurred during the course 1993 calendar year claims. These results were based on smaller surveys done by the WCIRB when the claims were less mature. These later data, involving a larger sample of surveyed claims, do suggest that the decline in the number of exams per claim has continued to decline after leveling off between 1993 and 1995. This may suggest that increased role of the treating physician in the medical legal process has reduced the cost of medical-legal exams. The number of reports seems to have stabilized at just slightly more than an average of one report per PPD claim.

It is interesting to note that different regions of California are often thought to have very different patterns of medical-legal reporting. Typically, Southern California is thought to have much more litigation with much great use of the medical-legal process. The revisions to the WCIRB PD Survey undertaken at the recommendation of the Commission and instituted for the 1997 accident year survey allow us to explore new issues. A zip code field was added allowing us to observe patterns in different regions.

The following chart demonstrates that the frequency with which medical-legal reports are used is not, in fact, different across the state’s major regions. The average number of medical-legal reports per claim is statistically similar. It should be noted that to compare across all three available years, 1997-1999, we use the first wave of the survey, which values claims at shorter maturity than the 40 months used in the above chart. So the frequency is somewhat less.

Source: Workers’ Compensation Insurance Rating Bureau of California

Average Cost per Medical-Legal Exam

There are two reasons why the average cost per exam has declined by 27% since its peak in 1990. First, substantial changes were made to the structure of the Medical-Legal Fee Schedule that reduced the rates at which exams are reimbursed. These restrictions were introduced in early 1993 and enforced after the start of August 1993.

Second, during this period, the average cost of exams was also being affected by the frequency of psychiatric exams. On average, psychiatric exams are the most expensive exam by specialty of provider. The relative portion of all exams that are psychiatric exams has declined since hitting a high in 1990-91, leading to a substantial improvement in the overall average cost/exam.

 


Source: Workers’ Compensation Insurance Rating Bureau of California

Since the mid-1990s, the cost of the average medical legal report has increased by 20% even though the reimbursement under the Official Medical-Legal Fee Schedule has remained unchanged since 1993. The revised WCIRB PD Survey includes additional questions that allow us to explore some of the potential causes of this increase in costs. The changes allow us to examine various types of Fee Schedule classifications as well as geography. However, we cannot examine these issues for injury years before 1997.

The survey data show that, on average, reports done in Southern California have always been substantially more expensive. In addition, the average cost has been rising in the south while the cost in the other regions has been flat. Cost increases in the average cost are being driven by claims in Southern California.

Further analysis indicates that it is not that the cost driver for the Southern California trend is not the price paid for specific types of exams. Rather, the mix of codes under which the reports are billed has changed to include a higher percentage of the most complex and expensive exams and fewer of the least expensive type. The following table shows the cost and description from the Medical-Legal Fee Schedule.

Evaluation Type

Amount Presumed Reasonable

ML-101 Follow-up/ Supplemental

$250

ML-102 Basic

$500

ML-103 Complex

$750

ML-104 Extraordinary

$200/hour

The following chart indicates that the distribution of exams in Southern California has shifted away from ML-101 to include a higher percentage of ML-104, examines with "Extraordinary" complexity. At the same time, the average cost within each exam type did not exhibit a trend.

Another possible explanation for the differing trends in average cost per report and the increasing frequency of the most complex exams in Southern California is that psychiatric evaluations are more common in Southern California. In addition, while percent of PPD claims with psychiatric evaluations has declined in the other two regions between 1997 and 1999, this was not true in the south. Psychiatric exams are nearly always billed under the ML-104 code which is the most expensive.

Source: Workers’ Compensation Insurance Rating Bureau

Medical-Legal Cost Calculation

Total medical-legal costs are calculated by multiplying the ‘Number of Partial Permanent Disability Claims’ by the ‘Average number of medical-legal exams per claim’ and by the ‘Average Cost per Medical-Legal Exam’:

Total Medical-Legal Cost = Number of PPD Claims * Average Number of Exams/Claim * Average Cost/Exam

Medical-Legal Costs 

During the 1990’s the cost of medical legal exams has seen dramatic improvement. For the insured community, the total cost of medical-legal exams performed on PPD claims by 40 months after the beginning of the accident year has declined from a high of $418 million in 1990 to an estimated $42 million for injuries occurring in 1998. This is an 89% decline since the beginning of the decade.

 

Sources of Improvement in Medical-Legal Costs

The decline in total medical-legal costs for insurers reflects improvements in all components of the cost structure during the 1990s.

As discussed in the previous sections, this substantial decline in total medical-legal costs for insurers results from significant decreases in all of the components of the cost structure.

The following chart shows how the cost savings break down by component since the beginning of the decade.

Source: Workers’ Compensation Insurance Rating Bureau of California


WORKPLACE SAFETY AND HEALTH

The 1993 reforms of the California workers compensation system required Cal/OSHA to focus its consultative and compliance resources on "employers in high hazardous industries with the highest incidence of preventable occupational injuries and illnesses and workers compensation losses".

The High Hazard Employer Program (HHEP) is designed to:

In 1999, the passage of AB 1655 gave DIR the statutory authority to levy and collect assessments from employers to support the Targeted Inspection and Consultation Programs on an annual basis without "sunset".

High Hazard Consultation Program

DOSH reports that in 2001, 663 employers were provided on-site high hazard consultative assistance. During consultation with these employers, 4,336 Title 8 violations were observed and corrected as a result of the provision of consultative assistance. Since 1994, 5,100 employers have been provided direct on-site consultative assistance, and 24,401 Title 8 violations have been observed and corrected.

Beginning in 2000, the efficacy of high hazard consultative assistance is assessed through measurement of a high hazard employer's Lost Work Day Case Incidence Rate (LWDI) and an employer's Experience Modification Rating (ExMOD).

For employers who were provided high hazard consultative assistance in 1999 and surveyed in 2001 (n=393), 114 employers responded with detailed information from their Log 200 Record of Occupational Injuries and Illnesses to calculate their Lost Work Day Incidence Rate (LWDI) for the three years prior to the consultative assistance intervention and for the year following the intervention. The average LWDI for this 1999 cohort, the average LWDI decreased by 22% (from 6.82 to 5.33). For the same cohort, the 2001 experience modification rating (ExMOD) of 114 employers was obtained from the Workers' Compensation Rating Bureau (WCIRB) and compared to the ExMOD for the year prior to the consultative assistance intervention. The average ExMOD for this 1998 cohort decreased from decreased by 25% (from 216 to 162).


High Hazard Enforcement Program

DOSH reports that in 2001, 401 employers underwent a high hazard enforcement inspection. During these inspections, 1,650 violations were observed and cited. Since 1994, 3,296 employers have undergone a high hazard enforcement inspection, and 16,002 violations have been observed and cited. Of these violations, 41.12% were classified as "serious."

The Division of Occupational Safety and Health reports that for a series of six cohorts of employers who underwent high hazard enforcement inspections during the years 1994 through 1999, detailed information from their Log 200 Record of Occupational Injuries and Illnesses was used to calculate their Lost Work Day Incidence Rate (LWDI) for the year in which the enforcement inspection took place (baseline), and for each subsequent year up to and including 2000 (except for the 1994 cohort). The cumulative percent change in the LWDI for each of the six cohorts (except the 1995 cohort) indicates that inspected employers' LWDI decreased by anywhere from 20% (for 1999 cohort) to 68% (for 1996 cohort) and by a total of 32% for all cohorts.

For further information…
      
The latest information may be obtained at http://www.dir.ca.gov/DOSH/EnforcementPage.htmselect ‘Targeted Inspection/Consultation Programs - 2002 Report’ under "Enforcement Reports".

Loss Control Certification Unit

Background

The 1993 reform legislation required insurers to provide certified loss control consultation services to help high-hazard employers reduce their incidence of industrial injury. The Loss Control Certification Unit (LCCU) was established in the Division of Occupational Safety and Health (DOSH) to certify the loss control capabilities of insurers.

Impact of AB 749

AB 749 repeals the statutory basis for the Loss Control Certification Unit and mandates the establishment of a "Loss Control Coordinator" position. Changes to Labor Code Section 6354.5 specify that "the coordinator shall provide information to employers about the availability of loss control consultation services and respond to employers' questions and complaints about loss control consultation services provided by their insurer." Insurers would no longer be required to submit an annual plan to the Department, or to undergo an audit of their plan.

AB 749 will go into effect on January 1, 2003 and the Loss Control Certification Unit will cease operations.


Workers Occupational Safety and Health Training and Education Program

The recently enacted workers’ compensation reform bill, AB 749, establishes a Workers’ Occupational Safety and Health Education Fund for the purpose of establishing and maintaining a worker training program. CHSWC is instructed to develop a program that raises awareness and promotes injury and illness prevention, and to deliver this training through a statewide network of providers.

For further information…
     
See the CHSWC Projects section in this Annual Report:   Workers Occupational Safety and Health Training and Education Program

Ergonomics Standard

A provision of the 1993 reform legislation required the Occupational Safety and Health Standards Board (OSHSB) to adopt workplace ergonomics standards by January 1, 1995, in order to minimize repetitive motion injuries (RMI).

As shown in the timeline, DOSH and the Cal-OSHA Standards Board have worked for years on modifications to Title 8, General Industry Safety Orders, Section 5110 of the California Code of Regulations to establish those "ergonomic standards."

Section 5110 initially was adopted by the Cal/OSHA Standards Board, approved by the Office of Administrative Law and became effective on July 3, 1997. The standard was then subject to legal challenges brought in Sacramento Superior Court. Judge James T. Ford heard the case and issued a judgment and peremptory writ of mandate on October 16, 1997, in which he invalidated various sections of the regulation.

The Standards Board appealed those orders to the Third District Court of Appeal. On September 27, 1999, the Court of Appeal heard the case and on October 29, 1999 issued an opinion reversing the superior court’s judgment. The Court of Appeal directed the superior court to issue a new judgment in accordance with the instructions contained in its final opinion.

On March 15, 2000 the superior court issued the new judgment and a modified peremptory writ of mandate. In response to the court’s instructions, the Standards Board filed a revision to Section 5110 with the OAL that removes the exemption for ‘employers with 9 or fewer employees’ from the current scope of and application of the standard.

On April 28, 2000 the OAL reviewed and approved the court ordered revision to Section 5110 and it was filed with the Secretary of State to be effective immediately.

For further information…
      The latest information may be obtained at www.dir.ca.gov. Select ‘Occupational Safety & Health, then ‘Occupational Safety & Health Standards Board’.

Ergonomics Standard in California: A Brief History

January 18 and 23, 1996          

OSHSB holds public hearings on proposed ergonomics standards and receives over 900 comments from 203 commentors.  The proposed standards are revised.

July 15, 1996          
California Labor Federation, AFL-CIO, and the American and California Trucking Associations file legal briefs with the Sacramento Superior Court in opposition to the ergonomics standard.

September 19, 1996                
OSHSB discusses proposal at its business meeting and makes further revisions.

October 2, 1996   
        OSHSB provides a 15-day public comment period on the further revisions.

October 2, 1996    
California Labor Federation, AFL-CIO, and the American and California Trucking Associations file legal briefs with the Sacramento Superior Court in opposition to the ergonomics standard.

November 14, 1996                
OSHSB adopts proposal at its business meeting and submits it to the state Office of Administrative Law (OAL) for review and approval.

January 2, 1997    
       OAL disapproves proposed regulations based on clarity issues.

February 25, 1997
         OSHSB provides 15-day public comment period on new revisions addressing OAL concerns. 

April 17, 1997
        OSHSB adopts new revisions and resubmits proposal to OAL.

June 3, 1997
        Proposed ergonomics standard approved by OAL.

July 3, 1997
         Ergonomics standard becomes effective.

September 5, 1997
        Sacramento Superior Court hearing to resolve the legal disputes filed by labor and business industries

October 15, 1997
        Judge James T. Ford of the Sacramento Superior Court issued a Peremptory Writ of Mandate, Judgement, and Minute Order relative to
        challenges brought before the Court.  The Order invalidated the four parts of the standard.  

December 12, 1997
         OSHSB appealed Judge Ford’s Order with their legal position that the Judge’s Order would be stayed pending a decision by the

         Court of Appeal.

January 30, 1998
        Judge Ford further ruled that his Order will remain in effect and not be stayed until the Court of Appeal hears the case.

March 13, 1998
         The Third District Court of Appeal ruled that Judge Ford's Order to eliminate parts of Section
         5110 would be stayed until the Court of
         Appeal issues a decision on the appeal filed in December 1997.  The Standard is currently in effect
         and will remain in effect until the case is decided by the Court of Appeal.  No date has been set by the
         Court of Appeal to issue its decision.

October 29, 1999
         After hearing the case in September, the Court of Appeal issued an opinion reversing the superior
         court’s judgement.  The Court of Appeal directed the superior court to issue a new judgement in
         accordance with the instructions contained in its final opinion.

March 15, 2000
         The Superior Court issued the new judgement and a modified writ of mandate.  In response to the
         court’s instructions, the OSHA Standards Board filed a revision to Title 8, General Industry Safety
         Orders, Section 5110 of the California Code of Regulations with the Office of Administrative Law
         (OAL).

April 28, 2000
         The court-ordered revision of CCR 5110 was approved by OAL and was filed with the Secretary
         of State to be effective immediately.

 Source:  Occupational Safety and Health Standards Board

 


SYSTEM PERFORMANCE

 

Introduction

CHSWC wishes to monitor the overall performance of the entire system to determine whether it meets the Constitutional objective to "accomplish substantial justice in all cases expeditiously, inexpensively, and without incumbrance of any character ... ".

In this section, CHSWC has been attempting to provide performance measures to assist in evaluating the system impact on everyone, particularly on workers and employers.

Through its studies and from the community, CHSWC has compiled the following information pertaining to the performance of California’s systems for health, safety and workers’ compensation. Brief interpretations are provided with the graphical representations.

The first subsection deals with how well the system is operating, in terms of the volumes of workload and the timeliness of actions. This affects both employers and employees. The second subsection discusses the costs, of particular interest to employers. The impact on workers in terms of benefits and outcomes is the focus of the third subsection.

Administrative Operations

DWC Opening Documents
DWC Hearings
DWC Decisions
DWC Lien decisions
Vocational rehabilitation plan approvals and disapprovals
Vocational rehabilitation decisions and orders after conference
DWC Audits

Costs

Premium costs
Insurer expenditures

Indemnity
Medical costs
Average cost per claim

Self-Insured Employer expenditures
Vocational rehabilitation costs

Outcomes

Injury and Illness Rates
Vocational Rehabilitation


Administrative Operations

DWC Opening Documents

Three types of documents open a WCAB case. The chart below shows the numbers of Applications for Adjudication of Claim (Applications), Original Compromise and Releases (C&Rs), and Original Stipulations (Stips) received by the Division of Workers’ Compensation.

The number of documents filed with the DWC to open a WCAB case on a workers’ compensation claim has fluctuated during the early and mid-1990’s, and leveling off during the late 1990’s and into the new millennium.

 

Imagepage92.gif (8346 bytes)

 

The chart above shows that although the number of applications for adjudication of claim dropped significantly, the substantial increases in original C&Rs and Stips made the total numbers filings relatively unaffected from 1990 to 1991.

The period from 1991 to 1992 shows growth in all categories of case opening documents. This was followed by a year of leveling off between 1992 and 1993. The period from 1993 to 1995 is one of substantial increases in applications, slight increases in Stips and significant decreases in C&Rs.

The numbers of opening documents in all categories declined from 1995 to 1998, and then have remained fairly stable.

 

Mix of Opening Documents

As shown in the graphic below, the proportion or "mix" of the types of case-opening documents received by DWC varied during the 1990’s.

 

Imagepage93.gif (10726 bytes)

Source: Division of Workers' Compensation

 

Applications for Adjudication of Claim initially dropped from about 80% of the total in 1990 to less than 60% in 1991, reflecting increases in both original Stips and C&Rs, The numbers of applications were steady from 1991 to 1993, then rose again through 2001.

The proportion of "original" (case-opening) Stipulations rose slightly from 1991 to 1992 then remained fairly constant.

The proportion of original C&Rs filed rose sharply from 1990 to 1991, increased slightly from 1991 to 1993, and then declined during the period from 1993 to 2001.

 

DWC Hearings

Numbers of Hearings

The chart below indicates the numbers of the different types of hearings held in DWC between 1997 through 2001. "Expedited hearings" for certain cases such as determination of medical necessity may be requested pursuant to Labor Code Section 5502(b). Per Labor Code Section 5502(d), "Initial 5502 Conferences" are to be conducted in all other cases within 30 days of the receipt of a Declaration of Readiness (DR), and "Initial 5502 Trials" are to be held within 75 days of the receipt of DR if the issues were not settled at the Initial 5502 Conference.

While the total number of hearings held increased slightly (5.3%) from 1997 to 2001, the number of ‘expedited’ hearings held grew by 90.9% during the same period.

 

Source: Division of Workers’ Compensation

 

 

Timeliness of Hearings

California Labor Code Section 5502 specifies the time limits for various types of hearing conducted by DWC on WCAB cases.

In general,

Source: Division of Workers’ Compensation

 

As the above chart shows, the average elapsed time from request to DWC hearing has decreased significantly in the mid 1990’s and then remaining fairly constant thereafter.

Even so, as of 2001, all of average times have increased from the previous year and none are within the statutory requirements.

 

DWC Decisions

These data indicate that the number of decisions made by DWC that are considered to be case closing have declined overall during the 1990s, with a slight increase from 2000 to 2001.

 

Imagepage96.gif (8094 bytes)

 

 

Mix of DWC Decisions

As shown on the charts on the previous page and below, the vast majority of the case-closing decisions rendered during the 1990s were in the form of WCAB judge approval of Stipulations and Compromise and Releases which were originally formulated by the case parties.

Only a small percentage of case-closing decisions evolve from a Finding and Award or Finding and Order, issued by a WCAB judge after a hearing.

Imagepage97.gif (9109 bytes)

The relative proportion of the types of decisions rendered by the DWC remained fairly constant from 1990 to 1993.

Then during the period from 1993 through the beginning of the new millennium, the proportion of Stipulations rose while the proportion of C&Rs declined. This reflects the large decrease in the issuance of C&Rs through the 1990s.

 

DWC Lien Decisions

The DWC has been dealing with a large backlog of liens filed on WCAB cases. Many of the liens have been for medical treatment and medical/’legal reports.

However, liens are also filed to obtain reimbursement for other expenses:

These data indicate a large growth in decisions regarding liens filed on WCAB cases and a concomitant expenditure of DWC staff resources on the resolution of those liens.

 

Imagepage98.gif (4924 bytes)

 

Vocational Rehabilitation

The numbers of vocational rehabilitation plans approved by the DWC rose from 1991 to 1993, then have declined steadily from 1993 to 2000, and then increased in 2001.

Vocational Rehabilitation Plan Approvals

Source: Division of Workers’ Compensation


Vocational Rehabilitation Plan Disapprovals

 

Vocational Rehabilitation Plan Disapprovals

Source: Division of Workers’ Compensation

 

Vocational Rehabilitation Decisions

Source: Division of Workers’ Compensation

 

 

DWC Audits

The 1989 California workers’ compensation reform legislation established an audit function within the Division of Workers’ Compensation (DWC).

The duties and responsibilities of the DWC administrative director with respect to audits of workers’ compensation insurers, self-insured employers, and third-party administrators are specified in Sections 129 and 129.5 of the California Labor Code.

The purpose of the audit function is to provide incentives for the prompt and accurate delivery of workers’ compensation benefits to industrially-injured workers and to identify and bring into compliance those insurers, third-party administrators, and self-insured employers who do not deliver benefits in a timely and accurate manner.

DWC’s Workers' Compensation Audit Report, published April 1, 2002, summarizes the accomplishments of the Audit Unit during calendar year 2001.

DWC reports that in 2001, the Audit Unit conducted 49 audits and audited 8,749 claims, a decrease from the 54 audits and 8,921 claims audited in 1999. In addition, the Audit Unit conduced 11 investigations based on complaints received by DWC alleging claims administrators’ failure to comply with workers’ compensation obligations. In 2001, the Audit Unit issued 1,380 administrative penalty assessments totaling $1,793,065.

Of the 8,749 claims audited in 2001, the Audit Unit found that in 731 claims, injured workers’ were owed unpaid compensation totaling $778,037 and averaging $1,064 per file.

The average number of penalty citations per audit subject was 232, the average amount per penalty assessment was $158, and the average total penalty assessment per audit was $36,593. Most penalty assessments were in indemnity, complaint, and denied claims. Of those audits demonstrating poor performance in 2001, three resulted in assessments of more than $100,000 each in administrative penalties.

Analyses of the audit results for 2000 and 2001 indicate that

Impact of AB 749

In concurrence with CHSWC recommendations, AB 749 mandates major changes to the audit program effective January 1, 2003. AB 749 provides that

For further information…
        
DWC Report: "2001 Audits – A Report to the California Legislature on Claims Handling Practices of Workers’ Compensation Administrators" (2002)
  
      CHSWC Report on the Division of Workers’ Compensation Audit Function (1998) - available at www.dir.ca.gov/chswc

Adjudication Simplification Efforts

DWC Information System

DWC reports that the Workers' Compensation Information System (WCIS) regulations became effective during 2000, with required reporting of First Reports of Injury beginning March 1, and required reporting of Subsequent Reports of Injury (the electronic equivalent of Benefit Notices) beginning July 1.

The WCIS database has grown to include data on over one million six hundred thousand workers' compensation claims, with dates of injury in the year 2000 and beyond.

DWC reports that the WCIS is fully operational, and that the system is processing all data being submitted by claims administrators on a timely basis. Since the summer of 2001, the DIR Information Systems' EDI and Programming staff have been working on various aspects of the system, so that it has been relatively stable

At its May 2002 WCIS advisory committee meeting, proposed changes to WCIS regulations were presented and reviewed. The proposed changes include enabling specific access by CHSWC to individually identifiable data, pursuant to AB 1681, which amended Labor Code Section 138.7. Submitting medical data and catching up on missing subsequent report of injury data (SROI) were also discussed at the meeting, and DWC recognized a need to establish a technical committee to deal with related technical issues.

CHSWC has been made aware of stakeholder concerns regarding the design and implementation of the WCIS. CHSWC will continue to monitor and report on its progress.

 

‘Carve-Outs’ - Alternative Workers’ Compensation systems

A provision of the workers’ compensation reform legislation, implemented through Labor Code Section 3201.5, allows construction contractors and unions, via the collective bargaining process, to establish alternative workers’ compensation programs, also known as ‘Carve Outs’.

The Commission is monitoring the "carve-out" program, which is administered by the Division of Workers’ Compensation.

As shown in the following table, participation in the carve out program has grown, with significant increases in the number of employees, work-hours and in the amount of payroll.

Carve Out Participation

1995

1996

1997

1998

1999

Employers

242

277

550

683

442

Work Hours

(millions)

6.9 million

11.6 million

10.4 million

18.5 million

24.8 million

Employees (Full-time equivalent)

3,450

5,822

5,186

9,250

12,395

Payroll

(millions $)

$157.6 million

$272.4 million

$242.6 million

$414.5 million

$585.1 million

                                                            Source: Division of Workers’ Compensation


A listing of employers and unions in carve-out agreements follows.

The Commission engaged in a study to identify the various methods of alternative dispute resolution that are being employed in California carve-outs, and to begin the process of assessing their efficiency, effectiveness and compliance with legal requirements.

Since carve-out programs have operated only since the mid-1990s, data collected is very preliminary and not statistically significant. The study team found indications that neither the most optimistic predictions about carve-outs’ effects on increased safety, lower dispute rates, far lower dispute costs, and significantly more rapid return to work, nor the most pessimistic predictions about carve-outs’ effect on reduced benefits and access to representation, have occurred.

Impact of AB 749

AB 749 established new Labor Code 3201.7, which permits carve outs in the aerospace or timber industries. The provisions are essentially the same as those in 3201.5 (construction industry carve outs), but there is an added requirement that an employer include with its original application an agreed framework for implementation of their alternative system.

For further information…
        
The latest information on carve outs may be obtained at www.dir.ca.gov. Select ‘workers’ compensation’, then ‘Division of Workers’ Compensation’, then ‘Construction Industry Carve-Out Programs’ (under ‘DWC/WCAB Organization and Offices’).
       
CHSWC Report: "Carve-Outs" in Workers’ Compensation: An Analysis of Experience in the California Construction Industry (1999) [Available at www.dir.ca.gov/CHSWC/chswc.html]

 

Employers and Unions in Carve-Out Agreements

 (As of August 21, 2001)

 

1.  An agreement between the California Building & Construction Trades Council and the Metropolitan Water District of Southern California.  [Expires November 7, 2003]

2.  An agreement between the District Council of the International Brotherhood of Electrical Workers and its 20 local unions and a multi-employer group called the National Electrical Contractors Association.  [Expires August 14, 2004]

 3.  An agreement between the Southern California District of Carpenters and its 19 local unions and six different multi-employer groups consisting of about 1000 contractors.  [Expires August 14, 2004]

4.  An agreement between the Southern California Pipe Trades District Council No. 16 and a multi-employer group called the Plumbing & Piping Industry Council, Inc.  [Expires August 24, 2004]

5.  Two agreements between the Cherne Contracting Corporation and Steamfitters Local 250 covering two projects at different oil refineries.  [Completed in 1996]

6.  An agreement between TIMEC Co., Inc., and TIMEC Southern California, Inc., and the International Union of Petroleum and Industrial Workers.  [Expires June 30, 2003]

7.  An agreement between the Contra Costa Building & Construction Trades Council and the Contra Costa Water District for the Los Vaqueros Project.  [Completed in 1998]

8.  An agreement between the Southern California District Council of Laborers and four different multi-employer groups: the Associated General Contractors of California, Inc., the Building Industry Association of Southern California, Inc., the Southern California Contractors' Association and the Engineering Contractors' Association.  Each individual contractor chooses whether to sign the master carve-out agreement.  [Expires July 31, 2002]

9.  An agreement between the California Building & Construction Trades Council and the Metropolitan Water District of Southern California for the Inland Feeder Project - Parsons.  [Expires March 11, 2003]

10. An agreement between the Building & Construction Trades Council of Alameda County and Parsons Constructors, Inc. for the National Ignition Facility at Lawrence Livermore National Laboratory.  [Expires September 23, 2003]

11. An agreement between the District Council of Painters No. 36 and the Los Angeles County Painting and Decorating Contractors Association.  Each individual contract chooses whether to sign the master carve-out agreement.  [Expires October 28, 2003]

12. An agreement between the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry, Local Union No. 342 and Cherne Contracting Corporation for the construction of an oil refinery.  [Completed in 2000]

13. An agreement between the Los Angeles Building and Construction Trades Council, AFL-CIO, and Cherne-ARCO.  [Completed December 2000]

14. An agreement between the Operating Engineers Local 12 and the Southern California Contractors Association.  [Expires April 1, 2002]

15. An agreement between the Sheet Metal Workers International Association and the Sheet Metal and Air Conditioning Contractors National Association (SMACNA).  [Expires April 1, 2002]

16. An agreement between the Building and Construction Trades Council of San Diego and Parsons Constructors, Inc. for the San Diego County Water Authority Emergency Storage Project.  [Expires February 23, 2003]

17. An agreement between the Los Angeles Building and Construction Trades Council and Cherne Contracting for the Equilon refinery in Wilmington.  [Expires March 1, 2004]

                                                      Source:   Division of Workers' Compensation

 


Costs

Workers’ Compensation Premium

The total amount of earned workers’ compensation premium decreased during the first half of the 1990s, increased slightly in the latter part of the decade, then increased sharply in 2000 and 2001.

This increase in total premium appears to be reflective of

 

Workers' Covered by Workers' Compensation Insurance

Although the total earned premium has increased from 1995, the number of workers covered by workers’ compensation insurance has also increased.

 

 

Average Earned Premium per Covered Worker

As shown in the graph below, the average earned premium per covered worker dropped during the early to mid 1990s, leveled off for a few years, then started to rise in the new millennium.

 

Workers’ Compensation Expenditures – Insured Employers

Indemnity Benefits

According to the Workers’ Compensation Insurance Rating Bureau of California (WCIRB), total of $3.54 billion in workers’ compensation indemnity benefits were paid during 2001 to workers of   insured employers, a slight increase from the $3.48 billion paid in 2000:

Indemnity Benefit 2000 2001
Temporary Disability $1,380,151 $1,418,599
Permanent Total Disability $59,561 $60,501
Permanent Partial Disability $1,500,412 $1,523,680
Death $44,007 $46,172
Funeral Expenses $1,775 $1,615
Life Pensions $28,404 $27,615
Vocational Rehabilitation $462,074 $464,109
$3,476,384 $3,542,291
Note: Figures are in thousands of dollars

 

 

 

Medical Benefits

As reported by the WCIRB, workers’ compensation medical benefits paid during 2001 to workers of  insured employers totaled $3.2 billion, an increase from the $2.9 billion paid in 2000.

 

Medical Benefit (Insured employers) 2000 2001
Physicians $1,704,319 $1,839,186
Capitated Medical $5,519 $4,529
Hospital $752,475 $777,361
Pharmacy $206,233 $224,298
Payments Made Directly to Patient $168,887 $230,639
Medical - Legal Evaluation $109,754 $96,855
$2,947,187 $3,172,868
Note: Figures are in thousands of dollars

 

 

 

 

Average Cost per Claim by Type of Injury

As shown in the following chart, there have been significant increases in average cost per claim for several types of injury. Carpal tunnel/repetitive motion injuries increased 34% from 1997 to 2001, followed by back injuries increasing by 31% and slips and falls by 29%. On the other hand, average costs of psychiatric and mental stress claims appear to be leveling off.

 

 

Workers’ Compensation Expenditures - Private Sector Self-Insured Employers

Number of Employees

 

Number of Indemnity Claims

 

Incurred Cost per Indemnity Claim

 

Incurred Cost per Claim – Indemnity and Medical

 

 

Vocational Rehabilitation Costs Compared with Total Incurred Losses

Total workers’ compensation vocational rehabilitation costs rose from policy year 1983 to 1990, then declined thereafter, slightly increasing in 1998. Total incurred losses peaked in 1990, declined to 1995, then increased again through 1998.

Vocational rehabilitation costs as a percentage of total costs rose from 1983 to 1992, and have declined thereafter. In 1998, vocation rehabilitation costs as a percentage of total costs were at their lowest rate since 1983.

 

 

Outcomes

Injury and Illness Rates in California

During the 1990’s, the injury and illness rates in California have declined from a high of 9.9 cases per 100 employees in 1990 and 1991 to 6.3 cases per 100 employees in 1999, then increased slightly to 6.5 cases per 100 employees in 2000.

This improvement has been ascribed to a number of factors including shifts in the workforce, greater emphasis on work-place safety, continued efforts to combat workers’ compensation fraud, and changes in employer reporting patterns.

 

 

Injury and Illness Rates by Sector

As shown on the following page, the injury and illness rates and the lost time injury rates for the public and private sectors are also declining.

 

Source: Division of Labor Statistics and Research

 

 

Source: Division of Labor Statistics and Research

 

 

Occupational Injury and Illness Days Away from Work Rates by Industry

Injury and illness days away from work rates in all industries have declined in total by 50% between 1990 and 2000. The largest decreases in rates over the decade were seen in the manufacturing, wholesale and retail trade, agriculture, and construction industries with rates of decline of 58%, 56%, 53% and 47% respectively.

Source: Division of Labor Statistics and Research

 

 

PROFILE OF INJURY AND ILLNESS STATISTICS

Data for the following analyses except where noted were derived from DIR’s Division of Labor Statistics and Research, from the United States Department of Labor, Bureau of Labor Statistics, and from the California Workers’ Compensation Institute.

California and the Nation

Incidence Rates

California’s most recent work injury and illness statistics (2000) indicate an injury and illness rate of 6.1 cases per 100 full-time employees in the private sector in 2000. This is a 35% decline from the 1990 peak level of 9.4 and a 3.4% increase from previous year’s figures.

The above trend in California mirrors a national trend: US Department of Labor figures for private employers show that from 1990 to 2000, the work injury and illness rate across the US fell from 8.8 to 6.1 cases per 100 employees in the private sector although the national decline of 31% was less than that of California. The reduction in the number of incidence of job injuries is likely due to various factors including: greater emphasis on job safety, the improving economy since the early 1990s, the shift from manufacturing toward less strenuous service jobs.

From the Western region states (Alaska, Arizona, California, Hawaii, Nevada, Oregon and Washington), California’s private industry rate of 6.1 is the third lowest after Arizona (5.8) and Hawaii (6.0).[2]

[2] The comparisons of industry rates have not been adjusted for industry mix within each State.


Duration

Days away from work cases (cases involving days away from work with or without restricted activity) dropped from 2.4 to 1.9 cases per 100 full-time employees from 1995 to 2000 in the private sector. This also mirrors the national trend with the number of days away from work cases falling from 2.5 to 1.8 in the national private sector with a similar decline as that of California.

In "OSHA Durations Report: Return to Work by State, Industry, Age", recently published by the Work Loss Data Institute, twenty-seven percent of the 1999 days-away-from-work cases in California had 31 or more days-away-from-work, the third-worst record in the nation.

The Institute also report that median days-away-from-work in California and Texas is 9 days, the second-highest level in the nation (after Puerto Rico with 16).

Industry Data

  • In 2000, injury and illness rates incidence rates varied greatly between private industries ranging from 3.1 in Finance, Insurance and Real Estate to 9.4 in Construction. California’s rates for total cases were higher than the national rates in every major industry division, except for manufacturing and agriculture, forestry and fishing.
  • The public sector’s (state and local government) incidence rate of 9.0 was 1.5 times as high as the private industry rate of 6.1.
  • Most of the industries either experienced a slight increase from previous year’s rates or remained the same. The only industry to experience a decline from 1999 was manufacturing. It should be noted that even though the wholesale and retail trade industry category saw a slight increase in its industry rate, wholesale trade by itself increased by 20%.
  • In the past five years (1995-2000) incidence rates have declined for all private sector industries with the biggest decline in agriculture, forestry and fishing and manufacturing industries. The ‘construction’ industry continues to have the highest incidence rates from all other industries, followed by ‘transportation and public utilities’, and ‘agriculture, forestry, and fishing’. (2000).
  • The highest number of fatal injures in 2000 was in services followed closely by construction and transportation and public utilities.
  • In the private industry, the top six occupations with the most non-fatal injuries and illnesses in descending order are: truck drivers, laborers (non-construction), construction laborers, farm workers, carpenters, and nursing aides, orderlies, and attendant.
  • Truck driving was the occupation with the most number of fatal injuries in 2000 and transportation accidents were the number one cause of fatal injuries. Assaults and violent acts and falls followed transportation accidents as top causes of these injuries.
  • California agriculture has the fourth highest incidence rate for fatal injuries. The major cause for fatalities in agriculture are motor vehicles, accounting for 47% of the total, while the major causes for nonfatal injuries in this industry are "struck by" and "overexertion", which together account for over 50%.

Incidence Rates by Establishment Size

  • The lowest rate for total recordable nonfatal cases was experienced by the smallest employers. Employers with 1 to 10 employees and 11 to 49 had incidence rates of 2.7 and 5.0 cases respectively per 100 full time employees.
  • Establishments with 50 to 249 employees reported the highest rate of 7.4 cases per 100 full time employees
  • Establishments with 1,000 or more employees reported a rate of 5.8 per 100 full time employees.

Types of Injuries

  • The drop in work injuries since 1995 has been largely broad-based. The number of sprains and strains continued to decline over the past five-year period but remain by far the most common type of work injury accounting for about 40% of days away from work cases. Certain types of injuries have increased since 1995; for example, according to the US Department of Labor Bureau of Labor Statistics, carpal tunnel syndrome days-away-from-work cases increased 13.2% from 1995 to 2000.
  • The most disabling injuries in the private sector were amputations, fractures and carpal tunnel syndrome with 39, 32, and 30 median days away from work respectively. In state government, factures, carpal tunnel syndrome and tendonitis were the most disabling injuries, each accounting for 11 median days away from work. In the local government, carpal tunnel syndrome was the most disabling, with 44 median days away from work.
  • Although back injuries have decreased by 18% since 1995, the back is the most frequently injured body part, accounting for over 20% of days away from work cases in 2000.
  • In the private sector, contacts with objects and equipment was the leading cause of days away from work injuries, cited in about one-quarter of days away from work cases. Overexertion was the second common cause of injury accounting for about 1 out of 5 injuries.
  • In the public sector (state and local government) the number one cause of injury is overexertion accounting for 19% of public sector’s days away from work cases in 2000.

Demographics

  • Over a five-year period from 1995 to 2000, the number of days away from work cases for women declined by 9%. For men this decline was 13%.
  • Almost all of the age categories experienced a decline between 1995 and 2000 in non-fatal injuries. The biggest decline (32%) occurred among 25 to 34 year old workers. Workers between the ages of 55 to 64 had a slight increase, while workers aged 65 and over experienced a decline of less than 2%. This could reflect the aging of the workforce and the growth in the number of older workers in the labor market.
  • There were decreases in fatal occupational injuries from 1999 to 2000 in all but two age categories. The number of fatal injuries increased by 60% (from 10 to 16) for persons over 75 years of age and by 18% (from 129 to 152) for those between 35 to 44 years old.
  • There were decreases in fatal occupational injuries from 1999 to 2000 for all racial groups expect for American Indian.
  • On the national level, the Bureau of Labor Statistics reports that between 1995 and 2000, the Hispanic worker fatality rate was consistently above the overall national worker fatality rate. The reason for the higher incidence rates is that Hispanics are found working disproportionately in high-risk occupations. For example, in 2000, eight percent of Hispanic male workers worked in farming, compared to three percent of non-Hispanic white male workers. The highest number of Hispanic worker fatalities were in the 25-34 age group and in the construction and agriculture industries.

 

Vocational Rehabilitation

Work Status at Plan Closure

This graph depicts the numbers of Vocational Rehabilitation (VR) plans that were closed during the 1990s by the injured workers’ employment status at the time of plan closure.

The numbers of persons working at time of plan closure were static from 1991 to 1992, rose and maintained at that level from 1993 to 1994, then decreased steadily.

The numbers of injured workers who were not working at the time of VR plan closure rose dramatically from 1991 to 1994, then declined to 1998. Data beyond that time is unavailable.

The numbers of plan terminations remained fairly constant before declining from 1996-2001.

 

Vocational Rehabilitation Plan Outcomes

The chart below depicts the relative status of injured workers at the time of the completion of their vocational rehabilitation plan.

Clearly, the vocational rehabilitation outcomes for injured workers have worsened during the 1990s.

 

 

The proportion of rehabilitated employees working at the time of plan completion has declined during the 1990’s. So has the proportion of those workers whose vocational rehabilitation services were terminated before plan completion.

Consequently, the proportion of workers not working at the time of plan completion has increased steadily during that time.


PROJECTS AND STUDIES

INTRODUCTION

In response to its Labor Code mandate, CHSWC has engaged in many studies to examine health, safety and workers’ compensation systems in California. CHSWC has concentrated these efforts on areas that are most critical and of concern to the community.

CHSWC studies are conducted by independent researchers, under contract with the State of California. Advisory Committees, composed of interested members of the workers’ compensation community and the public, provide comments, suggestions, data and feedback.

Studies were initially formed to evaluate changes to the system after the implementation of workers’ compensation legislative reforms in the early 1990’s and to assess the impact on workers and employers. While that focus continues, the scope of CHSWC projects has also evolved in response to findings in the initial studies, and to concerns and interests expressed by the Legislature and the workers’ compensation community.

California Labor Code Section 77(a)

“The commission shall conduct a continuing examination of the workers’ compensation system … and of the state’s activities to prevent industrial injuries and occupational diseases.  The commission may contract for studies it deems necessary to carry out its responsibilities.”

This report contains an overview of all CHSWC projects and studies followed by synopses of current and recently completed projects and studies. These are categorized as follows:

  • Permanent Disability
  • Return to Work
  • Workers’ Compensation Reforms
  • Occupational Health and Safety
  • Workers’ Compensation Administration
  • Information Services
  • Community Concerns
  • CHSWC Issue Papers

 

OVERVIEW OF ALL CHSWC PROJECTS AND STUDIES

Permanent Disability

    Initial Wage Loss Analysis
  
     Status: Completed
          For further information…

    Enhancement of Wage Loss Analysis – Private Self-Insured Employers
  
     Status: Completed
          For further information…

    Enhancement of Wage Loss Analysis – Public Self-Insured Employers
   
   Status: In process
          For further information…

    Impact of Local Economic Conditions on Wage Loss
   
  
  Status: Completed
           For further information…

    Permanent Disability Rating Tool
   
  
  Status: In process
           For further information…

 

Return to Work

    Analysis of Wage Loss and Return to Work in Other States
        
Status: In process
  
      For further information…

  • See the project synopsis following.

    ‘Best Practices’ Encouraging Return to Work
       
Status: In process
  
      For further information…

  • See the project synopsis following.

   Review of Literature on ‘Modified Work’
       
Status: Completed
         For further information…

  • CHSWC Report: ‘Does Modified Work Facilitate Return to Work for Temporarily or Permanently Disabled Workers?’ (1997)

    Predictors and Measures of Return to Work
  
    
Status: Completed
          For further information…

  • CHSWC Report: ‘Determinants of Return to Work and Duration of Disability After Work-Related Injury or Illness: Developing a Research Agenda’ (Publication Pending)

    Policies and Strategies to Help Injured Workers Return to Sustained Employment
  
  
  Status: Completed
          For further information…

  • See the project synopsis following.
  • CHSWC Report: "Return-to-Work in California: Listening to Stakeholders’ Voices" (2001)

    Primary Treating Physician Effectiveness in RTW After Low Back Injuries
  
    
Status: First phase: Completed
           Second phase: In process

         For further information…

  • See the project synopsis following.
  • ‘Physical Workplace Factors and Return to Work After Compensated Low Back Injury: A Disability Phase-Specific Analysis’ (JOEM, 2000)

 

Workers’ Compensation Reforms

    Evaluation of the DWC Audit Function
    (Special Study at the Request of the Legislature)
          
Status: Completed
  
         For further information…

  • ‘CHSWC Report on the Division of Workers’ Compensation Audit Function’ (1998)

    Medical-Legal Study
  
  
    Status: Ongoing
             For further information…

  • See the project synopsis following.
  • CHSWC Report: ‘Evaluating the Reforms of the Medical Legal Process’

    Vocational Rehabilitation Study
  
    
   Status: In process
               For further information…

  • See "Best Practices" Encouraging Return to Work in project synopsis section
  • CHSWC Report: ‘Vocational Rehabilitation Reform Evaluation’ (2000)
  • CHSWC Report: ‘Vocational Rehabilitation Benefit: An Analysis of Costs, Characteristics, and the Impact of the 1993 Reforms’ (1997)

    ‘Carve-Outs’ – Alternative Workers’ Compensation Systems
  
    
   Status: Completed
               For further information…

  • CHSWC Report: ‘Carve-Outs’ in Workers’ Compensation: An Analysis of Experience in the California Construction Industry (1999)

      Evaluation of Treating Physician Reports and Presumption
     
         Status: Completed
                For further information…

  • CHSWC Report: ‘Report on the Quality of the Treating Physician Reports and the Cost-Benefit of Presumption in Favor of the Treating Physician’ (1999)

   Update of Treating Physician Reports and Presumption Study
            Status: In process
              For further information…

  • See the project synopsis following.
  • CHSWC Report: ‘Report on the Quality of the Treating Physician Reports and the Cost-Benefit of Presumption in Favor of the Treating Physician’ (1999)

    Evaluation of Labor Code Section 5814 Penalty Provisions
  
      
Status: Completed
            For further information…

  • CHSWC Report: ‘Issue Paper on Labor Code Section 5814’ (2000)
  • CHSWC Report: ‘Background Paper on Labor Code Section 5814’ (1999)

    ‘Baseball Arbitration’ Provisions of Labor Code Section 4065
  
    
Status: Completed
            For further information…

  • CHSWC Report: ‘Preliminary Evidence on the Implementation of Baseball Arbitration’ (1999)

    CHSWC Response to Questions from the Assembly Committee on Insurance
  
  
  Status: Completed
          For further information…

  • CHSWC Report: ‘CHSWC Response to Questions from the Assembly Committee on Insurance (2001)


Occupational Health and Safety

    Project: California Occupational Research Agenda
  
  
  Status: In process
          For further information…

 
   

  • See the project synopsis following.

    California Partnership for Young Worker Health and Safety
  
  
  Status: Ongoing
          For further information…

  • See the project synopsis following.
  • CHSWC Report: Protecting and Educating Young Workers: Report of the California Study Group on Young Worker Health and Safety (1999)
  • Check out www.youngworkers.org for the California Young Worker Resource Network, providing information for teens, teen workers in agriculture, employers, and educators

    Evaluation of Targeting Methods – High Hazard and Loss Control
  
  
  Status: In process
           For further information…

  • See the project synopsis following.

    California Forum for Workplace Health and Safety - February 2001
      
Status: Completed
          For further information…

  • See the project synopsis following
  • Check out www.dir.ca.gov/chswc/Forum2001.html for Forum agenda, speakers and presentations.

 

Workers’ Compensation Administration

    Workers’ Compensation Court Management and Judicial Function Study
  
  
Status: In process
          For further information…

  • See the "Special Report: Court Management Study" section in this Annual Report

    Local Forms and Procedures – Labor Code Section 5500.3<
  
  
Status: Completed
          For further information…

  • CHSWC 1998-99 Annual Report: Projects and Studies Section

    Profile of DWC District Office Operations
  
  
Status: Completed
          For further information…

  • CHSWC 1997-98 Annual Report: Program Oversight Section

   CHSWC Roundtable on DWC Lien Workload
      Status: Completed
         For further information…

  • CHSWC 1998-99 Annual Report: Projects and Studies Section


Information Needs

   Benefit Notices Simplification Project
     
Status: Completed
          For further information…

  • CHSWC Report: ‘Project to Improve Laws and Regulations Governing Information for Workers’ (2000)
  • CHSWC Report: ‘Navigating the California Workers’ Compensation System: The Injured Workers’ Experience’ (1996)

    Workers’ Compensation Information Prototype Materials
     
Status: Completed
  
     For further information…

  • CHSWC Report: ‘Project to Augment, Evaluate, and Encourage Distribution of the Prototype Educational Materials for Workers’ (2000)
  • Workers’ Compensation Factsheets and a video entitled "Introduction to Workers’ Compensation" are available at www.dir.ca.gov/chswc

    Addressing Legal Services Needs of Injured Workers
  
  
Status: In process
          For further information…

  • See the project synopsis following.

    Consolidating and Coordinating Information for Injured Workers
       
Status: In process
        For further information…

  • See the project synopsis following.

 

Medical Care

    Workers’ Compensation Pharmaceutical Costs Study
      
Status: Completed
          For further information…

  • CHSWC Report: Study of the Cost of Pharmaceuticals in Workers’ Compensation (2000)

    Inpatient Hospital Fee Schedule and Outpatient Surgery Study
       
Status: Completed
          For further information…

  • ‘Inpatient Hospital Fee Schedule and Outpatient Surgery Study’ (Gardner and Kominski, 2002)
  • CHSWC Staff Report "Summary of Findings of the Inpatient Hospital Fee Schedule and Outpatient Surgery Study" (2002)

    Worker Injury National Survey (WINS) Project
       
Status: In process
          For further information…

  • See the project synopsis following.

    California Research Colloquium on Workers’ Compensation Medical Benefit Delivery and Return-to-Work
       
Status: In process
          For further information…

  • See the project synopsis following.

    Barriers to Occupational Injury and Illness Treatment and Prevention Services For Low Wage Workers in California
       
Status: In process
          For further information…

  • See the project synopsis following.


Community Concerns

    Benefit Simulation Model
       
Status: Completed
  
        For further information…

  • A CD with the ‘Workers’ Compensation Benefit Simulation Model’ and instructions for its use is available for purchase from CHSWC.

    Workers’ Compensation and the California Economy
  
  
  Status: Completed
          For further information…

  • CHSWC Report: Update-Workers’ Compensation and the California Economy (2000)
  • CHSWC Report: Workers’ Compensation and the California Economy (2000)

   Evaluation of Workers’ Compensation Cost and Benefit Changes since the Beginning of the 1989 and 1993 Reforms
  (Special Study at the Request of the Legislature)
     
   Status: Completed
              For further information…

  • CHSWC Report: WC Cost and Benefit Changes since beginning of Reform (1999)
  • CHSWC 1998-99 Annual Report incorporates this report.

    Workers’ Compensation Anti-Fraud Activities
       
Status: Completed
            For further information…

  • CHSWC Report: Workers' Compensation Anti-Fraud Activities-Report on the CHSWC Public Fact-Finding Hearing (1997)
  • CHSWC Report: ‘Employers Illegally Uninsured for Workers’ Compensation – CHSWC Recommendations to Identify Them and Bring them Into Compliance’ (1998)
  • CHSWC Report: ‘Report on the Campaign Against Workers’ Compensation Fraud’ (2000)
  • CHSWC Report: ‘Report on the Workers’ Compensation Anti-Fraud’ Program (2001)

    Illegally Uninsured Employers Study
       
Status: Completed
           For further information…

  • CHSWC Report: ‘Employers Illegally Uninsured for Workers’ Compensation – CHSWC Recommendations to Identify Them and Bring them Into Compliance’ (1998)

    State of the California Workers’ Compensation Insurance Industry
       
Status: Ongoing
          For further information…

  • CHSWC Background Paper: ‘State of the California Workers’ Compensation Insurance Industry (2002)
  • See ‘Special Report – The California Workers’ Compensation Insurance Industry’ in this annual report.

    Study of Workers’ Compensation Benefit Utilization
       
Status: In process
          For further information…

  • See the project synopsis following.

    Workers’ Compensation Premium Calculations – Evaluations of Alternative Factors
       
Status: In process
          For further information…

  • See the project synopsis following.


CHSWC Issue Papers

    Study of Labor Code Section 132a
  
  
Status: In process
  
  
For further information…

  • See the project synopsis following.

    Information on IMC Disciplinary Actions Taken on QMEs
       
Status: In process
          For further information…

  • See the project synopsis following.

    School District Workers’ Compensation Liability - Labor Code 3368
       
Status: In process
          For further information…

  • See the project synopsis following.

 

Continuing and Upcoming Efforts

AB 749 Mandates

The AB 749 requirements listed below are also discussed in the section "Special Report: 2002 Workers’ Compensation Reforms".

CHSWC is required to implement new programs:

  • CHSWC is now mandated to establish and maintain a Worker Safety and Health Training and Education program and a worker and employer advisory board for the program. The Advisory Board shall prepare an annual report evaluating the use and impact of the programs developed.
  • CHSWC is mandated to establish and maintain coordination of insurance loss control services.

CHSWC required to study/advise on other subjects:

  • CHSWC is to issue a periodic report and recommendations on the improvement and simplification of the workers’ compensation benefit notices provided by insurers and self-insured employers to injured workers. A study of this is already under way.
  • CHSWC is to provide consultation to the Administrative Director of the Division of Workers’ Compensation (DWC) on a study of medical treatment provided to industrially injured workers.
  • CHSWC is to provide consultation to the DWC Administrative Director in the preparation of a Workers’ Compensation Information Notice to be posted in the workplace.
  • CHSWC is to provide consultation to the DWC Administrative Director in the preparation of a Workers’ Compensation Information Notice to be given to new employees.
  • CHSWC and the Employment Development Department (EDD) are to assist DWC in preparing a report with recommendations on how to provide better access to funds paid to injured workers, specifically to migratory and seasonal farm workers.
  • CHSWC is to provide consultation to the DWC Administrative Director on the form and content of the notice and claim form which are to be provided to the worker after injury.

CHSWC has ongoing oversight and evaluation functions, including

  • Impact of new legislation on
    • Vocational Rehabilitation
    • Elimination of the Presumption of Correctness for Treating Physician Reports
    • Benefits and Costs
  • Implementation of provisions of AB 749

New and Continuing Research Focus

  • Consistency of disability ratings
  • Occupational health and safety
  • Return to work
  • Medical benefit delivery system
  • Comprehensive Guide – information for workers

This section starts with a discussion of the Commission’s comprehensive evaluation of permanent disability and continues with descriptions of CHSWC’s other ongoing studies.

Permanent Disability

Background

The most extensive and potentially far-reaching efforts undertaken by the Commission is the ongoing study of workers’ compensation permanent disability in California. Incorporating public fact-finding hearings and discussions with studies by RAND and other independent research organizations, the CHSWC project is dealing with major policy issues regarding the way that California workers are compensated for permanent disability incurred on the job.

The Commission realizes that the rating of permanent disability is one of the most difficult tasks of the workers’ compensation system, often leading to disputes and litigation.

The manner in which California rates and compensates injured workers for total and partial permanent disability has enormous impact on the adequacy of their benefits, their ability to return to gainful employment, the smooth operation of DWC’s adjudication system and the cost of the workers’ compensation system to employers.

The project consists of two phases. The focus of the first phase of the evaluation is on measuring the long-term earnings losses and other outcomes for workers with PD claims. The second phase is intended to refine these measures, and at the same time provide policymakers with suggestions for reforms intended to improve outcomes for injured workers at reasonable cost to employers.

Permanent Disability – Phase 1

The initial report from the CHSWC study of permanent disability, "Compensating Permanent Workplace Injuries: A Study of the California System", examines earnings losses and the replacement of earnings losses for workers with PPD claims at insured firms in California in 1991-92. The main findings of this report include:

  • PPD claimants experienced large and sustained earnings losses over the five years following injury. These losses amounted to approximately 40 percent of the earnings these workers would have made if injury were avoided.
  • Workers’ compensation benefits replaced only 40 percent of pre-tax earnings losses (and only half of after-tax earnings losses).
  • Losses are largely driven by lower employment rates among PPD claimants over the years following injury.
  • Earnings losses and disability ratings are not closely related, particularly for low-rated claims. Replacement rates and the fraction of losses that remain uncompensated after benefits are paid were lowest for the lowest-rated claims.

For further information…

      CHSWC Report: Compensating Permanent Workplace Injuries: A Study of the California System (RAND, 1998)

      CHSWC Report: Findings and Recommendations on California’s Permanent Partial Disability System-Executive Summary (RAND, 1997)

CHSWC Blue-Ribbon Permanent Disability Policy Advisory Committee 

Co-Chairs:
Tom Rankin, CHSWC and
     California Labor Federation, AFL-CIO

John C. Wilson, CHSWC and
     Schools Excess Liability Fund

Members:
Charles Bocci
     California Chamber of Commerce

Richard P. Gannon
     Division of Workers’ Compensation

Brian Hatch
     California Professional Firefighters

Susan McKenzie, MD
     DIR Industrial Medical Council

Suzanne P. Marria
     DIR Directorate

Theresa Muir
     Southern California Edison

John Michael Nolan
     California Workers’ Compensation Institute

Dianne Oki
     State Compensation Insurance Fund

Merle Rabine
     Workers’ Compensation Appeals Board

Larry Silver, Esq
     California Applicants’ Attorneys Association

 

Policy Advisory Committee

A CHSWC Permanent Disability Policy Advisory Committee was established to review the RAND report and the community’s responses, and recommend further action. The committee began meeting in November 1997 and continues to date.

The CHSWC Policy Advisory Committee raised additional questions about the wage loss study and other areas of the RAND report.

The workers’ compensation community wanted additional information regarding how other factors such as demographics and local economic conditions affected the outcomes of the wage loss study. Observations were also made about the initial study parameters – the study lacked data about the employees of self-insured employers and data beyond the 1991-1993 period.

Goals Established by the
CHSWC Permanent Disability
Policy Advisory Committee

       Efficiently decrease uncompensated wage loss for disabled workers in California.

       Increase the number of injured workers promptly returning to sustained work.

      Reduce transaction and friction costs, including “costs” to injured workers.


The PD Policy Advisory Committee urged the Commission to study those issues further. The Commission voted to continue the comprehensive evaluation of workers’ compensation permanent disability. Continuation of the evaluation of permanent disability includes the following projects:

Enhancement of the Wage Loss Study to include Self-Insureds

Stakeholders objected to the first report "Compensating Permanent Workplace Injuries: A Study of the California System" because they believed that self-insured employers, which account for one-third of claims in California, would have better outcomes for PPD claimants. Since self-insured employers are larger and higher-paying firms and since they directly bear the full cost of their workers’ compensation claims, they should have more programs to encourage return to work, and a more motivated workforce.

Private Self-Insureds

The report entitled "Permanent Disability at Private, Self-Insured Firms" report was released in April 2001. This report includes an unprecedented data collection effort on permanent disability claims at self-insured firms in California. The findings of this report are:

  • Better return to work at self-insured firms led to a lower proportion of earnings lost by PPD claimants. During the five years after injury, self-insured claimants lost a total of 23% of both pre and post tax earnings, compared to the insured claimants’ proportional losses of about 32%
  • Since workers at self-insured firms have higher wages, they are more likely to have weekly wages that exceed the maximum temporary disability payment. Therefore, workers’ compensation benefits replaced a smaller fraction of losses at self-insured firms. Workers at these self-insured firms experienced lower five-year wage replacement rates (48%) than workers at insured firms (53%).
  • At both insured and self-insured firms, replacement rates were very low for workers with the lowest indemnity claims. At the self-insured and insured firms, claimants with total indemnity falling below the 20th percentile had 14% and 11% of their lost earnings replaced by benefits, respectively.
  • PPD claimants with high pre-injury earnings and high indemnity claims experienced large dollar losses that were not compensated by benefits.

For further information…

    CHSWC Report: Permanent Disability, Private Self-Insured Firms (RAND, 2001)

CHSWC PD Project Self-Insured Advisory Subcommittee

Jill Dulich
      Marriott International

Mary Garry
      Hewlett Packard

Luisa Gomes
      California Assn. of Service Organizations

Theresa Muir
      Southern California Edison

CHSWC PD Project Self-Insured Project Team

Christine Baker
      CHSWC

Frank Neuhauser
      SRC, UC Berkeley

Robert T. Reville
      RAND


Public Self-Insureds

While not envisioned in the original proposal, due to methodological and data difficulties associated with measuring replacement rates at public self-insured employers, a second report on earnings losses in this sector is planned, and this study component is ongoing. The report is expected in 2002 and will include findings about the following topics:

  • Earnings losses and replacement rates for public school teachers
  • Earnings losses and replacement rates for police officers and firefighters
  • Earnings losses and replacement rates for other public employees
  • An examination of LC4850: Is full wage replacement during temporary disability a good policy for workers in occupations that involve risk-taking. Does this policy improve public safety? Is this the approach used in other states?

Status

A draft report is expected in June 2002.

Impact of Local Economic Conditions on Wage Loss

In addition, stakeholders argued that 1991-92 was the beginning of California’s recession, and that during this period workers would have been injured and returned to work in a declining economy. In response to their objections an additional report was prepared.

The report, Trends in Earnings Loss from Disabling Workplace Injuries in California: The Role of Economic Conditions, by Robert T. Reville, Robert F. Schoeni, and Craig W. Martin confirms earlier findings that, despite some improvements in the mid-1990s, benefits in the state are lagging behind wages lost due to work injuries. For those injured workers who suffer from permanent partial disabilities, the replacement of lost wages over a 10-year period remains below one-half of earnings lost, which is well below the standard of two-thirds replacement invoked in evaluations of adequacy.

Key findings from the study include:

  • The situation of disabled workers in California improved between 1991 and 1997. Their average benefits over five years after their injury increased as a percentage of their lost wages from 52 percent in 1991 to 58 percent by 1997. Although the improving economy had a slight effect on this increase, two other factors were more significant: the 1993 reforms to the state's workers' compensation system that raised benefits and the fact that employers recognized they could control the costs of workers' compensation by increasing their use of "return to work" policies and rehiring more disabled workers.
  • Workers whose injuries were less severe showed the greatest gains in the replacement of lost wages during this period. They are also the easiest for employers to accommodate through return-to-work programs. In contrast, the most disabled claimants experienced no change in outcomes-and may have even lost ground-from 1991 to 1997.
  • Although injured workers in the aggregate fared better in the mid-1990s, the study predicts that workers injured today are likely to be worse off than workers injured in the mid-1990s. Benefits have remained fixed in nominal terms since 1996, and have actually declined in real terms due to inflation.

For further information…

 CHSWC Report: "Trends in Earnings Loss from Disabling Workplace Injuries in California: The Role of Economic Conditions" (RAND, 2002)

Permanent Disability – Phase 2

The second phase of the project is intended to result in policy suggestions to improve permanent disability compensation in California.

First, since the permanent disability rating system is so critical to the distribution of benefits, and since many regard it as inconsistent and unreliable, how can the rating system be improved to both improve confidence in the system and outcomes for injured workers?

CHSWC Permanent Disability
Project Team

Christine Baker
     CHSWC

Leslie I. Boden, PhD
    
Boston University – Public Health

Ellen Charles

     RAND

Frank Neuhauser
     SRC, UC Berkeley

Sue Polich
     RAND

Robert T. Reville, PhD
     RAND

David Studdert
     RAND

Charles Lawrence Swezey
     CHSWC Consultant

Lauren Sager Weinstein
     RAND

Edward M. Welch
     Michigan State University –         
   Labor and Industrial Relations

Second, are the problems we have identified with permanent disability common in other states, and if not, what do other states do to improve outcomes?

Third, given that reduced employment is such a significant part of the losses of injured workers, how can we improve post-injury employment for PPD claimants?

The following project and others described in the upcoming "Return To Work" section of this report address these important questions.

Permanent Disability Rating Tool

This project will consist of a detailed evaluation of the disability rating schedule in order to provide empirical findings that can guide a revision that will be consistent with the economic losses experienced by permanently disabled workers.

As part of its research, the study will empirically identify the components of the schedule that contribute to inconsistency and make recommendations to reduce it. It will also analyze the usefulness of increased reliance on objective medical findings in disability ratings, including the extent to which such an approach can improve consistency and whether it can also improve the targeting of benefits.

A draft report on improving disability ratings in California is expected in 2002, which will provide the following:

  • Detailed information on earnings losses for workers with precisely defined particular injuries. This information will be used to construct a ranking of injuries by severity where severity is defined by five-year earnings losses.
  • A comparison of a ranking of injuries by earnings losses with a ranking by California disability ratings.
  • With input from occupational medicine experts, we will suggest ways to enhance the information used to construct disability ratings in order to improve the consistency of ratings.
  • An evaluation of the use of work restrictions, and of subjective reports of pain in the current disability rating system.
  • A review of and comparison to other approaches used to compensate permanent disability including ranking by non-economic losses or the AMA Guides.

 


Return to Work

Analysis of wage loss and RTW in other states

The study entitled "Earnings Losses and Compensation for Permanent Disability in California and Four Other States" is part of an ongoing evaluation of workers' compensation permanent partial disability system in California that the Commission began in 1996. The study examines the losses experienced by workers with permanent disability and return to work rates in New Mexico, Washington, Wisconsin, Oregon and California and compares the adequacy of compensation received from the states' workers' compensation systems.

Findings

Some of the key findings of the study include:

  • California’s Permanent Partial Disability System when compared to the other states mentioned above had the highest losses, highest average benefits paid, and lowest return to work rates;
  • Despite increases in benefits under the recent workers’ compensation legislation AB 749, the study projects that California’s replacement rate is lower than three of four comparison states studied;
  • In looking at the replacement rates, after AB 749 California has regained ground lost to inflation (benefits were not indexed to the state average weekly wage in California as in other states), but did not gain relative to other states;
  • The researchers concluded that California is heading in the right direction through its AB749 mandate which directs the administrative director to implement a return to work program focused on subsidies to employers for modified work or ergonomic changes;
  • The researchers recommended that California could consider moving to a two-tier benefit system which pays higher benefits for people who haven’t been offered jobs at all or suitable jobs with the pre-injury employer.
  • The researchers noted that no states in the study had ‘adequate’ benefits to replace 2/3 of lost wages.

Status

The final report is expected to be issued in late 2002.

RTW in Other States Project Team

Christine Baker
    
CHSWC

Jeff Biddle
     RAND

Leslie I. Boden, PhD
     Boston University – Public Health

Chris Mardesich
     RAND 

Robert T. Reville, PhD
     RAND 


Return to Work

‘Best Practices’ Encouraging Return to Work

Background

Many firms in California have adopted practices to improve return to work of injured employees. Policymakers may wish to encourage increased emphasis on return to work as a means to reduce uncompensated wage loss.

Description

This project collected data on the return-to-work practices of California firms and examined their effectiveness. Since there is significant overlap between this study and the Vocational Rehabilitation study, RAND requested that the two studies be combined.

The report, expected in 2002, will cover the following topics:

  • Valuing return to work: How much better are replacement rates for workers who return to the at-injury employer? How often do workers who return to the at-injury employer continue to work at that employer? How severe are wage losses for workers who return to work at other employers?
  • Description of return to work practices of self-insured employers: What works?
  • Return-to-work policies and regulations in other states.
  • Vocational rehabilitation in California: Does it improve outcomes? Is it worth the cost?

Goals and Objectives

The goals of this project are to:

RTW Best Practices Project Team

Christine Baker
     CHSWC

Tricia Johnson
     RAND

Niklas Krause, MD, PhD
     UC San Francisco

Irina Nemirovsky
     CHSWC

Frank Neuhauser
     SRC, UC Berkeley

Robert T. Reville, PhD
     RAND

David Studdert
     RAND

Lauren Sager Weinstein
     RAND

Edward M. Welch
     Michigan State University –
    Labor
and Industrial Relations

Provide information on the most effective return-to-work practices of California employers. This information is intended to assist employers and employees to determine which return to work practices may be applicable to their needs.

Measure the impact of the reform changes on the vocational rehabilitation program and make available comparative data in future years regarding the number of workers undergoing vocational rehabilitation, the duration and costs of rehabilitation programs and services and the results produced by those programs and services.

Findings

Preliminary findings indicate that the cost of the vocational rehabilitation benefit declined by $274 million (49%) between 1993 and 1994.

The decline in average cost per VR claim appears to be equally dramatic, dropping 40% from about $14,200 in 1993 to $8,600 in 1994. This downward trend appears to be continuing with 1995 costs declining an additional 10%.

Recent results indicate that the reform efforts apparently achieved one major goal, to encourage more employers to offer modified or alternate (M/A) work and to pay these workers at or near their pre-injury wage. Offers of M/A work increased by 50% to include nearly one third of qualified injured workers. At the same time, nearly 80% of these workers received wages that were at least 85% of the pre-injury level and nearly 60% received wages equal to or greater than the pre-injury level.

The costs of the rehabilitation benefit declined dramatically as a result of reform. At the same time, outcomes for qualified injured workers, as measured by work status and several income measures are virtually identical despite this decrease in overall benefit costs.

Status

The CHSWC Vocational Rehabilitation Study outcomes have been merged into the CHSWC study of Return to Work, being conducted by RAND.



Workers’ Compensation Reforms

Medical-Legal Study

Background

Reform legislation changes to medical-legal evaluations were intended to reduce both the cost and the frequency of litigation, which drive up the price of workers’ compensation insurance to employers and lead to long delays in case resolution and the delivery of benefits to injured workers.

In 1995, the Commission initiated a project to determine the impact of the workers’ compensation reform legislation on the workers’ compensation medical-legal evaluations. CHSWC contracted with the Survey Research Center at UC Berkeley to carry out this study.

Description

The study analyses are based upon the Permanent Disability Claim Survey, a set of data created each year by the Workers’ Compensation Insurance Rating Bureau (WCIRB) at the request of the Legislature to evaluate the 1989 reforms. The WCIRB data summarizes accident claim activity, including such measures as degree of impairment, the type and cost of specialty exams, whether the case was settled and, if so, the method of settlement employed.

Status

The Medical-Legal study was initiated in 1995 and is ongoing.

Findings

The study has determined that there has been a substantial decline in total medical-legal costs during the 1990s. This decline can be attributed to several factors:

  • Over half (54%) of the cost savings is due to improvements in the medical-legal process that reduced the number of exams performed per claim.
  • One quarter (16%) of the improvement is due to changes to the medical-legal fee schedule and treatment of psychiatric claims that reduced the average cost of exams per claim.
  • Thirty percent of the improvement is a result of the overall decline in the frequency of reported PPD claims.

Medical-Legal Project Advisory Committee

David Bellusci
    Workers’ Compensation Insurance Rating Bureau

Larry Law
    Workers’ Compensation Insurance Rating Bureau

Karen Yifru
    Workers’ Compensation Insurance Rating Bureau

Medical-Legal Project Team

Frank Neuhauser
      Survey Research Center, UC Berkeley


Workers’ Compensation Reforms

Update of Treating Physician Presumption Study

Before 1993, whenever a medical issue arose in a workers’ compensation case, many medical reports were involved in the resolution. In addition to the reports of the treating physician, the applicant and the defendant were each entitled to procure a medical-legal evaluation and report, in each appropriate medical specialty.

The 1993 legislative reforms of the workers’ compensation system made a number of significant changes to the medical-legal reporting process. The primary treating physician is required to render opinions on all medical issues to determine the injured worker’s eligibility for compensation. When additional medical reports are obtained on a worker’s industrial injury, the findings of the treating physician are presumed to be correct.

In 1996, the WCAB issued an en banc decision, Minniear v. Mt. San Antonio Community College District 61CCC 1055 CWCR 261, which had the effect of extending the treating physician presumption to disputes over medical treatment as well as medical-legal issues.

Description

This project evaluates the quality of treating physician reports and the cost-benefit of the presumption of correctness of treating physician reports.

Status

The initial study was completed in 1999. In 2001, at the request of Senator Patrick Johnston’s office, the Commission began the process of updating the information regarding the impact of the presumption of correctness of the treating physician.

In order to accomplish this study in a timely and cost effective manner, the Commission contracted with the University of California at Berkeley and utilized the California Workers’ Compensation Institute’s (CWCI’s) ICIS data for this evaluation.

A presentation to CHSWC is expected in Summer 2002.

Findings

Results of the initial study include the following:

  • Changes to the status of the treating physician made during the 1993 reforms have resulted in medical-legal decisions based on poorer quality reports without apparent cost savings.
  • There seems to be consensus within the WCAB that the presumption has increased litigation and curtailed the discretion of the Workers’ Compensation Judges to craft reasonable decisions within the range of evidence.

Preliminary findings from the update study indicate that Minniear had an important impact on the cost of medical treatment and the utilization of medical services. In summary:

  • Before the Minniear decision, when the worker controlled medical treatment, the cost in any quarter was 7.8% higher than when the insurer/employer controlled the choice of physician.
  • The Minniear decision had the effect of increasing this difference in average quarterly treatment costs when the worker controls the physician by an additional 11.3%.
  • Service utilization was 10.4% higher in any quarter when the worker controlled the physician. Minniear increased this difference by an additional 7.7%

Treating Physician Presumption Review Committee

Henry E. Brady
    UC Berkeley

Dave Bellusci
    WCIRB

James Gebhard
    Farmers Insurance

Steve Raphael
    UC Berkeley

Robert Reville
    RAND

Jason Seligman
    UC Berkeley

Alex Swedlow
    CWCI

Rick Victor
    WCRI

WCIRB Special Committee on AB-749

For further information…

    CHSWC Report: ‘Report on the Quality of the Treating Physician Reports and the Cost-Benefit of Presumption in Favor of the Treating Physician’ (1999)

    CHSWC Report: ‘Doctors and Courts: Do Legal Decisions Affect Medical Treatment Practice?’ (Publication expected in 2002)


The recently enacted workers’ compensation reform bill, AB 749, establishes a Workers’ Occupational Safety and Health Education Fund for the purpose of establishing and maintaining a worker training program. CHSWC is instructed to develop a program that raises awareness and promotes injury and illness prevention, and to deliver this training through a statewide network of providers.

Description

In order to effectively design and launch this program, CHSWC is initially taking the following steps:

  1. Conduct a needs assessment with all stakeholders (including workers and their representatives, employers, insurers, community-based organizations serving hard-to-reach workers, and potential training providers). Work to reach a consensus on defining a "core curriculum addressing competencies for effective participation in workplace injury and illness prevention programs and on joint labor-management health and safety committees." Additional training needs are to be identified for high-hazard industries, significant hazards, and/or occupational groups with special needs.
  2. Design a core curriculum and supplemental training materials based on the results of the needs assessment. The curriculum is to be aimed primarily at "workers who are able to train other workers and workers who have significant health and safety responsibilities, such as those serving on a health and safety committee or serving as a designated safety representative." Explore the feasibility of creating a certification system for those who successfully complete the core curriculum.
  3. Design two to five pilot programs in specific industries and/or regions to demonstrate the effectiveness of the training program. These pilots will be carried out and evaluated in the second funding period, utilizing the curriculum that is developed. They will cover a range of industries and regions (for example, garment workers in southern California, home care workers in northern California, and agricultural workers in the central valley.)
  4. Establish an evaluation plan to measure the effectiveness of the pilot programs and subsequent training efforts.
  5. Establish one or more resource libraries that will house and distribute training materials.
  6. Establish a labor-management advisory committee to oversee all of these activities. Prepare an annual report of the advisory committee.

Status

CHSWC staff has begun to work with these programs to assess the training needs of key stakeholders. The official start-up for the project is scheduled for January 2003.

The regulatory process to allow CHSWC to assess fees pursuant to Labor Code Section 6354.7 is in process. Regulations should be in place by the end of 2002, in time for January 1, 2003 implementation.


Occupational Health and Safety

California Occupational Research Agenda

Background

The California workplace is changing rapidly: the economy is shifting from manufacturing to services; new materials, processes, and equipment are introduced every day; work weeks are longer; job security and temporary work patterns have changed. The California workforce is also changing, becoming older and more diverse. These changes present new challenges to protecting worker safety and health and reducing the impact of work injuries on workers, their families, and society.

The current toll of occupational injury and illness for California workers, their families, and our society in general is too high. We are faced with new challenges in protecting worker safety and health, as the workplace and the workforce are rapidly changing. Considerable progress has been made in improving workplace health and safety since the initiation of OSHA in 1970. This progress has largely been based on the science and knowledge generated by occupational safety and health research. However, resources for occupational safety and health research are extremely limited. There is thus a great need to focus and coordinate existing resources more systematically, and to seek expanded resources for occupational health research.

Description

DIR, CHSWC, the Occupational Health Branch of the Department of Health Services, the Division of Workers’ Compensation, Cal-OSHA, and the Division of Labor Statistics and Research initiated a process to develop a California Occupational Research Agenda (CORA). This project is patterned after the development of a National Occupational Research Agenda by the National Institute for Occupational Safety and Health.

This project will, through a collaborative effort between California's government agencies, researchers, and affected public constituencies, develop a framework to guide occupational safety and health research in California for the next decade. This will be accomplished through a systematic process involving a diverse group of organizations.

CORA Project Advisory Committee

Suzanne P. Marria
    DIR Assistant Director

Christine Baker
    CHSWC

Jim Cone, MD, MPH
    California Department of Health Services

David Harrington
    California Department of Health Services

Robert Harrison, MD
    California Department of Health Services

John Howard, MD
    Division of Occupational Safety & Health

Zagros Madjid-Sadjadi, PhD
    Division of Labor Statistics & Research

Barbara Materna
    California Department of Health Services

Irina Nemirovsky
    CHSWC

Julia Quint
    California Department of Health Services

Linda Rudolph, MD
    Formerly with DWC

Glenn Shor, PhD
    Division of Workers' Compensation

Status

So far, the CORA consortium has

  • Conducted research to better estimate the occurrence and total costs of occupational injuries and illnesses in California.
  • Conducted a telephone survey of California occupational health researchers from February to May 2000 to profile current research in California
  • Held focus groups of union, small employers, large private and public employers in February and April 2001 to obtain stakeholder input.

Preliminary Findings

  • Research is being conducted in the following key areas of Occupational Health: Asthma and Chronic Obstructive Pulmonary Disorders, Agricultural Studies, and Health Services Research.
  • A few very large projects receive large proportions of total funding in many categories. For example, in agricultural studies and in asthma, single projects received over half of the funding for those categories.
  • An estimated 25% of the yearly funding for occupational health goes towards basic research.
  • The main source of funding for projects were state and federal money which comprised over 70% of the sources of funding for projects. NIOSH was the primary single source for funding of projects with approximately 27 percent of all projects being funded by this agency.
  • Lack of funding was the major barrier impeding more research in occupational health
  • Researchers identified a wide range of areas in which they wished to do further research, but for which they have been unable to find funding. Intervention effectiveness and prevention methods were among the most commonly cited of these areas.
  • There does not seem to be a systematic process for identifying or addressing priority areas of concern that require occupational health research in California. In fact, some researchers stated that a primary barrier to research was a lack of a clear research agenda in California.

 

Occupational Health and Safety

California Partnership for Young Workers’ Health and Safety

Background

Every year about 70 adolescents die from work injuries in the United States and approximately 70,000 are injured severely enough to require treatment in hospital emergency rooms. Most of these injuries are preventable.

Description

CHSWC has put California on the map as a national leader in protecting and educating teen workers. Over the past several years, CHSWC has sponsored and convened both the California Partnership for Young Worker Health and Safety and the new California Resource Network for Young Worker Health and Safety, established by AB 1599 in September 2000. These efforts, in addition to serving California, have also inspired similar activity throughout the U.S.

The California Partnership for Young Workers’ Health and Safety is composed of groups and individuals dealing with youth employment and education issues, as well as others who can play a role in educating and protecting young workers. Members represent educators, parents, employers, youth training programs, governmental agencies and others.

The purpose of the Partnership is to identify potential strategies to:

  • Reduce work-related injures and illnesses among youth in the California workforce;
  • Foster awareness and skills in safety and health that will remain with youths throughout their working lives, and allow them to take an active role in shaping safe work environments;
  • Promote positive, healthy employment for youth.

Status

During the past year, the Partnership has continued to meet quarterly to develop and begin working on implementation plans in various key areas:

  • Identifying ways for agencies to work together in order to more effectively educate and/or protect young workers.
  • Successful "Safe Jobs for Youth Months," which was established by Governor Davis' proclamations in 1999 through 2002 and a broad array of public awareness and education activities. May 2002 was the 4th Safe Jobs for Youth Month and included a poster contest, articles on youth safety for newsletters, information on work permits. In 2002, a second poster contest was added focused on youth working in agriculture and a new journalism contest was started.
  • Making presentations at several prominent national meetings highlighting the cutting edge approaches to protecting Young Workers being taken in California.
  • Developing a pilot project focused on prevention of injuries of young workers in the restaurant industry.
  • Disseminating the CHSWC-funded video "Your Work: Keepin' It Safe" and discussion guide to schools in California and around the US. The University of Washington state utilizes the video in its 5-session health and safety curriculum designed for working teens and has distributed over 400 copies of the video and curriculum to vocational education teachers. Miami-Dade County uses the video in its migrant education after school program.

Young Worker Resource Network

The California Resource Network has been a major effort during the past year. The Resource Network for Young Workers' Health and Safety provides services to and on behalf of existing programs that they could not provide efficiently due to fiscal constraints and economies of scale.

The Resource Network members, made up of nine organizations with direct access to teachers, employers, and youth, jointly reached and served hundreds of thousands of organizations and individuals throughout California with important health and safety information over the past year and a half. . Information and training is offered in both English and Spanish.

Resource Network accomplishments include:

  • More than 2400 teachers, employers and youth received direct training;
  • 40,000 teachers, employers and youth received written information such as LOHP’s fact sheets for teens and for employers, or the Safe Jobs for Youth Month Resource kit;
  • 60 teachers, employers and youth received direct technical assistance via phone or via the www.youngworkers.org website;
  • There were about 400,000 "hits" on the Network’s www.youngworkers.org website since November 2001;
  • At least 60 newsletter and newspaper articles were published, and
  • TV and radio spots reached potentially hundreds of thousands

More importantly, health and safety information has begun to be integrated into on-going statewide activities of many of the Network partners, including regular in-service training for work experience and WorkAbility educators, widespread use of our curricula in job training and work experience programs, and extensive organizational links to the new www.youngworkers.org website.

In the coming year, priorities are to:

1. Expand and strengthen the new resource network, including strengthening its outreach to the employer community.
2. Work with the California Partnership to review policy recommendations (originally released in 1998), to update and select priority recommendations to promote.
3. Continue to share the California model and assist other states to replicate this model.

For further information…

CHSWC Report: ‘Protecting and Educating California’s Young Workers – Report of the California Study Group on Young Worker Health and Safety’ (1999)
Check out www.youngworkers.org for the California Young Worker Resource Network, providing information for teens, teen workers in agriculture, employers, parents, and educators.

California Partnership for Young Workers’ Health and Safety

Susan Abate
   
CA Assoc. of Work Experience Educators*

V. Toni Adams
    Alameda County Office of Education

Gordon Allman
    California Teachers Association*

Robert Bates MD MPH
    CA Department of Health Services

Ginny Baty
    DIR DLSE

Carrie Beckstein
    DIR Office of the Director

Joseph Bowden
    ABC Unified School District

Yvette Brittain
    State Compensation Insurance Fund

Marianne Brown
    UCLA LOSH*

Peggy Bullock
    CA Assoc. of Work Experience Educators*

Lula Caulkins
    CA Assoc. of Work Experience Educator*

William Callahan
    California Department of Education

Rupali Das
    California Dept of Health Services

Andrew Diaz
    US Dept of Labor

Mario Felletto
    DIR Cal-OSHA

Carol Frischman
    LOSH, UCLA*

Fred Glass
    California Federation of Teacher*

Walter Graze
    DIR Cal-OSHA

Greg Heguiagaray
    Elk Grove Unified School District

* Indicates a Resource Network Member

California Partnership for Young Workers’ Health and Safety (continued)

 John Howard
    DIR Cal-OSHA

Jonathan Hughes
    UFCW Local 428

Ann Katten
    California Rural Legal Assistance Inc*

Laurie Kominski
    UCLA LOSH*

Robert Lanter
    California Workforce Association*

David Lawrence
    California Center for Childhood

Aldon Manard
    Workability Program*

Suzanne P. Marria
    Department of Industrial Relations

Charlene Mouille
    New Ways to Work*

Henry Nunn
    DIR DAS

John Pierson
    Vacaville Unified School District

Jeff Ponting
    California Rural Legal Assistance Inc*

Diane Reese
    US Department of Labor

C. Diane Silva
    US Department of Labor

Steve Trippe
    New Ways to Work*

Kay Trotter
    California State PTA

Linda Tubach
    California Federation of Teachers*

Mike Wilbur
    California Workforce Association

Bonnie Morse West
    California Conservation Corps

 * Indicates a Resource Network Member

Young Workers’ Health & Safety Project Team

Christine Baker
    CHSWC

Robin Baker
    LOHP, UC Berkeley*

Carrie R. Beckstein
    DIR Office of the Director

Leilani Buddenhagen
    LOHP, UC Berkeley*

Diane Bush
    LOHP, UC Berkeley*

Cyndi Dunn
    LOHP, UC Berkeley*

Irina Nemirovsky
    CHSWC

Janice R. Yapdiangco
    CHSWC

* Indicates a Resource Network Member


Occupational Health and Safety

Evaluation of Targeting Methods–High Hazard and Loss Control

Background

The High Hazard and Loss Control programs in the California Division of Occupational Safety and Health were established by the 1993 workers’ compensation reform legislation. In response to concerns about their effectiveness, the Commission decided to engage in an evaluation of statutorily required safety efforts in California and a survey of such programs in other states. In addition, this would form the basis for developing methodologies to evaluate such programs nationwide.

Evaluation of Targeting Methods-High Hazard and Loss Control Project Team

Frank Neuhauser
    SRC, UC Berkeley

Marie W. Wardell
    Consultant

Description

The project is being conducted in three phases:

Phase 1

The first phase is a survey of the targeted safety efforts in the fifty US states and the Canadian provinces, in cooperation with the International Association of Industrial Accident Boards and Commissions (IAIABC). The focus of the survey will be the implementation of the OSHA mandate for implementation of targeting and intervention directed at the most hazardous employers. The results of the survey will be assembled into a report identifying the various types of targeting and intervention undertaken by each state and province. A typology of approaches will be described and the estimated success, as evaluated by the states and provinces, will be identified, where possible, for each type of approach. Finally, states and provinces with approaches and data that allow reliable evaluation will be identified for possible inclusion in the third phase.

Phase 2

The second phase is an evaluation of the California program’s impact on safety and health. The proposed methodology would compare the pre and post intervention experience of employers identified through the high hazard targeting or insurers regulated loss control efforts with similar employers who had nearly as poor safety records but were not targeted. This methodology is designed to assess both the efficiency of the targeting and the effectiveness of the intervention.

Phase 3

The third phase applies the methodology used in the second phase to evaluate programs in other states and provinces. The first phase survey will have identified each state’s or province’s program characteristics which may prove more or less efficient at identifying the most hazardous employers and intervening to improve their safety experience. The survey will also have identified which of these states/provinces have the data available to meet the requirements of the methodology in the second phase. Through the IAIABC and the Occupational Safety and Health State Plan Association (OSHSPA), states will be recruited to participate in a comparative evaluation of various approaches.

Status

This project is in process.


Occupational Health and Safety

California Forum for Workplace Health and Safety

Background

California continues to be on the forefront of developing recommendations for improving workplace health and safety, maintaining a robust economy, and reducing uncompensated wage loss due to industrial injury. As a partial fulfillment of its legislative mandate to provide a continuing examination of the California Workers' Compensation System, the Commission on Health and Safety and Workers' Compensation voted in November 1999 to host a Forum for Workplace Health and Safety.

Description

The Commission on Health and Safety and Workers’ Compensation and the Department of Industrial Relations planned a public educational program devoted to workplace injury prevention, safety and return-to-work.

This ‘California Forum on Workplace Health and Safety’, took place on February 8 and 9, 2001. It brought together over 500 people including workers, employers, the community and the public together to participate in presentations, discussions and various workshops to:

  • Discuss and share ideas for workplace injury prevention.
  • Develop ideas for a California workplace health and safety agenda for the new millennium.
  • Provide information regarding successful techniques in facilitating return to work after workplace injury.
  • Present the latest research in workplace safety, health and return-to-work.
  • Examine the role of the physician in return-to-work.
  • Identify what employers and employees can do ‘before’ and ‘after’ to minimize the impact of work injury or illness.
  • Consider areas where improvements need to be made.
  • Review models of "best practices" facilitating recovery and return-to-work.

Status

A draft report of the Findings and Recommendations from the Forum will be available in 2001.

General Recommendations from the Forum

  • Increased emphasis on prevention and safety will benefit both workers and employers by reducing workplace injuries and related costs.
  • The prevention strategies for the millennium must take into account demands of the new economy, the changing workforce within California and the nation, and the various sizes of businesses and industries.
  • More information and education are needed on health and safety, easily accessible to all parties, including young and immigrant workers.
  • Labor and management are most effective by working together to further their common goal of improving workplace health and safety.
  • Health and safety research needs to be linked to real-world applications.
  • Enhanced communication among employers, workers, and providers will improve return-to-work outcomes for injured workers and their employers.
  • Tax incentives for employers to promote health, safety and return-to-work programs will improve outcomes for workers and employers.

In addition to general discussions, input from stakeholders at the Forum was solicited through two working group sessions. Working Group Session 1addressed "Best Practices from the Field: Developing New Strategies". Working Group Session 2 addressed "Developing Policy Proposals".

Working Group - Session 1:

Best Practices from the Field: Developing New Strategies

Composition:

For the working groups the attendees were broken up into 6 working groups each led by a facilitator above. Each of the groups had between 40 to 100 people, depending on the group.

California Forum for Workplace Health and Safety Advisors

Michael Alvarez
    DIR - DOSH

Christine Baker
    CHSWC

Otis Byrd
    DIR - DWC

John Cheffer
    Travelers Insurance

James Cone, MD, MPH
    Department of Health Services

Jill Dulich
    Marriott International

Mary Garry
    Hewlett-Packard

Robert Harrison
    UC San Francisco

Barry Hoschek
    Liberty Mutual

Lori Kammerer
    CA Coalition on Workers’ Compensation

D. Allan MacKenzie, MD
    Industrial Medical Council

Geri Madden
    State Compensation Insurance Fund

Suzanne P. Marria
    DIR Director’s Office

Chuck Mitchell
    HIH America

Teresa Muir
    Southern California Edison

Representative
    DMEC

Maggie Robbins
    AFL-CIO

Fran Schreiberg
    WorkSafe

Willie Washington
    California Manufacturers Association

Len Welsh
    DIR - DOSH

Edward C. Woodward
    CWCI

California Forum for Workplace Health and Safety – Speakers, Panelists, Others

Stephen J. Smith, Director

    Department of Industrial Relations

Suzanne Marria, Assistant Director

    Department of Industrial Relations

Christine Baker, Executive Officer
    CHSWC

Michael Alvarez

    Cal OSHA Consultation Services

Robin Baker, MPH

    Labor Occupational Health Program

Robert Balgenorth, President

    State Building & Construction Trades Council

Chris Benner, PhD

    Pennsylvania State University

Leslie I. Boden

    School of Public Health Boston University

Marianne Brown, Director

    Labor Occupational Safety Program

    University of California, Los Angeles

Julianne Broyles

    California Chamber of Commerce

John F. Burton, Jr., PhD

    School of Management and Labor Relations

    Rutgers University

Diane Bush, MPH

    Labor Occupational Health Program

    UC Berkeley

James Cone, MD, MPH

    Dept. of Health Services

Richard DaRosa

    Division of Occupational Safety and Health

Jill A. Dulich

    Marriott International

Elaine El-Askari, MPH

    LOHP, UC Berkeley

Richard Gannon

    Division of Workers' Compensation

Mary Garry

    Hewlett Packard

Linda Rudolph, MD

    Formerly with DWC

Glenn Shor, PhD

    Division of Workers’ Compensation

Laura Stock, MPH

    Labor Occupational Health Program

Linda Stutzman

    Disability Management Insights

Juliann Sum, JD, MPH

    Labor Occupational Health Program

    UC Berkeley

Betty Szudy

    Labor Occupational Health Program

    UC Berkeley

Suzanne P. Teran, MPH

    Labor Occupational Health Program

John C. Wilson

    Schools Excess Liability Fund

Purpose:

1. Share successful approaches to building effective injury and illness prevention programs in the workplace.

2. Explore strategies for overcoming barriers to building and maintaining effective programs.

Approach:

Participants were asked first to brainstorm on "What gets in the way of implementing effective injury and illness prevention programs; what are the key barriers?" Then, in buzz groups of 6 to 10, participants were asked to discuss and share: "What are strategies for addressing these barriers and implementing effective programs. What are examples of successful programs/activities."

Listed below are some of the barriers (shown in bold) and strategies for overcoming barriers for implementing effective injury and illness prevention programs that were identified by the Working Groups during Session 1:

Lack of Funding

  • Educating executives regarding fines of non- compliant and other costs to the employer
  • Demonstrate current losses to CEO/management and articulate direct and indirect costs/benefits of safety (i.e. develop cost/benefit model)
  • Financial incentives for those facilities which meet Injury and Illness Prevention Program criteria for safety
  • Obtain senior management buy-in which could help resources to become available more quickly
  • Particularly small businesses that lack resources to hire health and safety professionals-can hire interns, certify people in-house, use outside resources to develop training of trainers program.

Lack of Information/Training

  • Train managers and department heads on loss control and early prevention and obtain their support for education
  • Keep electronic database of job analysis/physical demands-proactively before injury
  • Follow up after training to see if people understood
  • Publicize losses through the company to create awareness
  • Peers mentoring/training
  • Interactive training using employee language and demonstration
  • Need to promote better and more effective communication between management and labor (CAL/OSHA could develop an educational model for bringing together labor/management
  • Train employees about their rights as well as their responsibilities
  • Doctors-train doctors on filling out reports of injury, invite doctors to see what workers do, video jobs and send to doctors

Lack of Management Commitment to Health and Safety

  • Incorporate health and safety training in college curricula
  • Educate managers on unit costs
  • Demonstrate the true cost of an injury (i.e. including prevention)
  • Need to make the high -level administrator aware of health and safety priorities
  • Tie supervisors performance rating and bonuses to health and safety conditions in their department and make this company policy. However, one should be careful not to reward under reporting.
  • Management commitment has to go from the top all the way down.

Lack of Management Accountability for Health and Safety

  • Financial incentives for effective Injury and illness Prevention Programs with validation by safety and health professionals (i.e. offer discounts on premiums for good safety programs)
  • Joint labor/management accident investigations
  • Supervisors should also be penalized for infractions with safety regulations like everyone else
  • Develop management tools/mechanisms to help management be accountable (for some managers SB 198 is a vehicle they can use)
  • Make sure that authority and control for health and safety are tied to accountability
  • Make managers financially responsible for cost of injury. However, some cautioned against placing penalties on managers which can serve as a disincentive.
  • Managers need to follow up on employee input
Inconsistent Implementation and Lack of Clarity of Rules
  • There should be a charter specifying manager and labor responsibilities with regard to safety at the workplace; specify agenda and frequency of labor/management committee meetings as well as membership of committees
  • Establish goals and objectives so labor/management have clear expectations
  • Plain language from CAL/OSHA would be helpful in clarifying regulations

Lack of Active Worker Involvement/Buy-In

  • Include employee representatives to manage safety committees; employee rotation to help facilitate those serving on committees
  • Anonymous reporting of safety hazards, violations, suggestions
  • Encourage hazard identification and reporting
  • Rewards for workers who fix the safety problem
  • Employer carries out the trainer of training programs and follows-up with understanding of training concepts presented

Other General Recommendations/Comments:

  • Obtain buy-in from whole organization at every level on importance of safety
  • Make safety a company goal and manage by objectives

Working Group – Session 2:

Developing Policy Proposals

Composition:

For the working groups the attendees were broken up into 6 working groups each led by a facilitator. The size of the groups varied between 40 to 65.

Purpose:

Identify participants’ priorities for building a stronger California program for preventing injuries and illnesses in the workplace.

Approach:

Participants were asked to look at what they thought were the main priorities of the state of California should be for promoting injury and illness prevention in the 21st century.

At the beginning of the Forum, the attendees were asked to record their priorities on the worksheet provided. At the workshops, they were then instructed to review their lists choosing generally one or two ideas, and brainstorm on the same topic: "My priorities for promoting injury and illness prevention for the 21st century - what does the state of California need to do:" The priorities were classified in categories so it would be easy to identify which category held the majority opinion. Each group was then asked to present the majority opinion priorities to the panel of State of California representatives following the workshops.

The following is a summary of presentations to the panel of each group’s key priorities:

Group A's Priorities for the State of California

  • Improve Access to Care
    • Fund medical providers to address prevention role
  • Research
    • Fund prevention research
    • Create California Research Fund
  • Education
    • Promote Occupational Safety and health education in schools at all levels
    • Support worker training programs -- make these available in employees’ ‘native languages
    • Educate employers about IIPPs and provide easy to use tools/models
    • Provide clarification of standards
  • Enforcement (''the stick")
    • More enforcement of IIPP standards
    • Better coordination among enforcement agencies
    • Require proof of effective IIPP for business licenses
    • Fine workers for violating safety standards if they are fully trained
  • Incentives (''the carrot")
    • Tax credit for certified effective IIPP
    • Tax credit for control technologies/safety innovation
    • Premium discount for labor - management committee/effective programs

Group B's Priorities for the State of California

  • Joint Labor/Management Safety Committees
    • In this group there was controversy about whether the committees should be mandated and how to encourage them
  • Increased Funding for:
    • Education and Research (targeting at an early age; focus on prevention)
    • Empower employees to take responsibility for themselves as well as their workplace

Group C's Priorities for the State of California

  • Mandated Workers Compensation Training For Physicians
    • Training should include: mandatory guidelines for treating physicians, return to work needs
  • Require all California Workers (including self-employed) to be covered by workers compensation
  • Mandate Joint Labor Health and Safety committees. Include:
    • Ability to address hazards
    • And Enforce Training
    • Resources to implement changes

Group D's Priorities for the State of California

  • Resources and Information
    • The best practices
    • Resources Center
    • "peer coaches"
  • Health and Safety Staffing
    • Mandated Health and Safety Committees
    • Requirements for health and safety staff (i.e. Require employers to have a health and safety staff person per # of employees)
    • Need to require funding for the above
  • Incentives
    • Low interest loans for safety improvements
    • Tax incentives (i.e. for providing Prevention and RTW Programs)
  • Training
    • In high schools
    • State funded programs (i.e.-multilingual safety training programs, educational programs for ergonomics)
  • Workers' Compensation System Recommendations
    • Less Litigious (i.e. don't scare workers into getting a lawyer)
    • Require Job Analysis (for Return to Work, Prevention of Injuries)
    • Compensation Coach (education for workers and employers around safety and workers' compensation issues. Web-based, regional centers, etc)

Group E's Priorities for the State of California

  • Require that a mandatory RTW policy be a part of the IIPP
    • Create credit/incentive systems for RTW and safety programs
  • Expand Applied Research for occupational health, including better tracking of occupational injuries/illnesses and RTW issues
  • Require yearly Certification and Education of Treating Physicians
    • Provide a list of State-approved w. c. treating physicians
  • Make Cal/OSHA more consultative and less punitive
    • Investigate formal non-serious complaints in the same way as non-formal (phone)
  • Lift confidentiality restrictions of AB 435
  • Teach Health and Safety in Schools

Group F's Priorities for the State of California

  • Funded Occupational Training and Research Program that would include:
    • Research Agenda
    • Mandated Physician Training in Occupational Health
    • Results Dissemination to Employers, Employees, Labor and Community Organizations
    • Sharing Best Practices between and within industries and labor
  • Employees' Required Involvement in Industrial Injury and Illness Prevention Programs (IIPPs)
  • Workers' Compensation and Tax Incentives for Employer Health and Safety Programs and Implementation of the Programs
  • Simplify Language (OSHA standards, notices, literature)

For further information…

    Check out www.dir.ca.gov/chswc/Forum2001.html for Forum agenda, speakers and presentations.


Information Needs

Addressing Legal Services Needs of Injured Workers

Background

Previous research conducted by UC Berkeley for CHSWC uncovered and documented significant problems faced by injured workers in learning about their rights and seeking workers’ compensation benefits. Injured workers often need help to navigate the California workers’ compensation system and other systems designed to protect injured or disabled workers. Some need help in getting appropriate medical care, particularly right after injury while waiting for a claim to be accepted. Some also need help in protecting their jobs, obtaining indemnity payments and other financial assistance to help cover lost wages, and requesting vocational rehabilitation services.

Many of the losses experiences by workers with so-called "minor" injuries appear to be caused by problems in returning to work and staying employed. It therefore appears that these workers still need help. It is widely recognized, however, that many injured workers cannot get legal advice or individualized assistance with their claims. This is particularly true for those with "minor" injuries.

Description

In December 2001, CHSWC contracted with the Institute of Industrial Relations (IIR) at UC Berkeley to conduct the project. IIR will provide technical services to assist CHSWC in planning, organizing, convening, and synthesizing a series of individual, small-group, and large-group task force meetings with members of the California workers’ compensation community, for the purpose of exploring policy solutions to address the legal-services needs of injured workers. Focus groups included representatives from the California Applicants’ Attorneys Association (CAAA), Information and Assistance (I&A) Officers, Workers’ Compensation judges, employers, and injured workers.

Status

In process.

Legal Service Needs of Injured Workers Project Team

Christine Baker
    CHSWC

Juliann Sum
    LOHP, UC Berkeley

Irina Nemirovsky
    CHSWC

Charles Lawrence Swezey
    CHSWC Consultant

Legal Service Needs of Injured Workers
Input received from:

Richard Gannon
    DWC

Joan Lichterman
    East Bay RSI Support Group
    CTD Resource Network

Legal Service Needs of Injured Workers

Focus Group Participants

California Applicants’ Attorneys Association

Gilbert Stein

Art Azevedo

Donald Lucien

Lloyd Rowe

Frank Russo

Marvin Shapiro

Peggy Sugarman

Richard Wooley

 

California Coalition on Workers’ Compensation

CCWC Policy Committee; Lori Kammerer, Lead

 

California Workers’ Compensation Institute

Michael Nolan

Rhonda Cooper

Rea Crane

Nancy Heredia

Michael McClain

Lisa Middleton

Bob Young

 

DWC Information and Assistance Unit

Trevor Anderson

Michelle Huntington

Tristan Juan

Elda Llamas

Andrea Lovette

Bob Madrid

Ed Tanner

 

Injured Workers

    (Focus group to be organized)

WCAB Commissioners

Merle Rabine

Frank Brass

Colleen Casey

James Cuneo

William O’Brien

 

Workers’ Compensation Judges

Steve Siemers

David Bjelland

Frederick Bray

Sallie Doyle

Joel Harter

Sue Hoerchner

Timothy Nelson

Rick Rosa



Information Needs

Consolidating and Coordinating Information for Injured Workers

Background

The CHSWC-sponsored study on "Information Services to Injured Workers" showed that workers need to know what the workers’compensation program is, what steps they need to take if an injury occurs,

Consolidating and CoordinatingInformation Advisory Committee

(To be determined)

what they can expect in the process, and how they can receive information and assistance.

The Commission undertook a project to develop prototype informational materials on the workers’ compensation program, benefits, and procedures. These materials, consisting of seven fact sheets and a video, are available to the public and are designed to be utilized by employers, employee organizations, and any others in the California workers’ compensation community.

In 2000, the project team conducted an evaluation of the usefulness of the factsheets through a review of oral and written comments from members of the workers’ compensation community. The most common recommendation made by the Project Advisory Committee and others in the community was to consolidate the fact sheets into a Comprehensive Guide.

Description

At its April 2002 meeting, CHSWC voted to undertake a new project "Consolidating and Coordinating Information for Injured Workers". This project builds on CHSWC’s previous work regarding improvement of information for injured workers and communications among the parties in the worker's compensation system.

In meetings with stakeholders, CHSWC determined there was consensus on a need for information for workers and employers in one place that is easy to read and accessible.

The project will include the workers’ compensation fact sheets that were completed in 1998 and 2000 in a ‘Comprehensive Guide for Time-Loss Injured Employees’.

The project will incorporate ongoing discussions in the workers’ compensation community regarding how to improve and streamline the benefit notice program and will be undertaken with collaboration of the Labor Occupational Health Program at UC Berkeley.

Status

In process.


Medical Care

California Research Colloquium on Workers’ Compensation Medical Benefit Delivery and Return to Work

Background

CHSWC has found that increasing workers’ compensation medical costs and the need for improved return to work are issues that are ever more critical.

Currently, the state of knowledge with regard to the quality of medical care received by injured workers in California is virtually nonexistent. Knowledge on the appropriateness of care, access to services, and the comparability of the prices charged by providers to other states or to nonoccupational services are all limited. Without even baseline information on these items, the legislature will not be able to evaluate the consequences for injured workers or employers of any reforms that are adopted.

This is an opportune time to re-examine these areas and create a forum for ideas for improvements on outcomes for both workers and employers and a periodic evaluation to assess the impact of changes.

Description

CHSWC, DIR, DWC and the IMC are planning to host a research colloquium focused on medical benefit delivery and return-to-work in the workers’ compensation system.

The research colloquium will include presentations of a series of papers to inform the public and the health, safety and workers’ compensation community of what can be done to improve the workers’ compensation medical benefit delivery system and outcomes.

Colloquium planning meetings will be held in the Spring of 2002 to determine the specific topics to be addressed and identify academic and community presenters. Presenters will be invited to present their own research, requested research on the California system and recommendations for policy changes as needed. In addition, the presenters will be asked to participate on various panel discussions following presentations.

DIR and CHSWC will coordinate the 2-day Colloquium at the University of California Los Angeles in May 2003, which will include 150 - 225 participants, including the invited researchers and policy experts, stakeholders and the public. Following the Colloquium, an independent research organization will coordinate a peer-review by research scientists expert in their fields and CHSWC will issue a report with research findings from the Colloquium and recommendations.

Status

Ongoing

Colloquium Planning Committee

Christine Baker, Chair
    CHSWC

Suzanne P. Marria
    Department of Industrial Relations

Richard P. Gannon
    Division of Workers’ Compensation

Susan McKenzie, MD
    Industrial Medical Council

Colloquium Research Committee

Robert T. Reville, Co-Chair
    RAND

Glenn Shor, Co-Chair
    Division of Workers’ Compensation

Christine Baker
    CHSWC

Douglas Benner, MD
    Kaiser

Les Boden
    School of Public Health, Boston University

Cheryl Damberg
    RAND

Allard Dembe, Sc.D.
    University of Massachusetts Medical School

Kathy Dervin
    Division of Workers’ Compensation

Gideon Letz, MD, MPH
    SCIF

Irina Nemirovsky
    CHSWC

Frank Neuhauser
    Survey Research Center, UC Berkeley

Anne Searcy, MD
    Industrial Medical Council

Patsi Sinnott
    Industrial Medical Council

Richard A. Victor
    Workers’ Compensation Research Institute



Medical Care

Inpatient Hospital Fee Schedule and Outpatient Surgery Study

Background

The California workers' compensation system includes an Official Medical Fee Schedule, mandated by Labor Code Section 5307.1, used for payment of medical services required to treat work-related injuries and illnesses. Many employers and insurers criticized the medical fee schedule in use in 1993 as outdated because it did not cover many common procedures and did not apply to inpatient hospital charges. The Official Medical Fee Schedule was updated effective April 1, 1999 and included an Inpatient Hospital Fee Schedule, or IHFS.

The IHFS takes into account cost and service differentials for various types of facilities based on the federal Medicare Fee Schedule. As in Medicare, reimbursement for each hospital differs depending on a number of factors that have an impact on the hospital’s costs and services. Since the implementation of the IHFS, the Division of Workers’ Compensation has received several letters from hospitals and physicians expressing their dissatisfaction with the current IHFS.

Description

With the cooperation and assistance of the Division of Workers’ Compensation, CHSWC contracted with independent researchers for a study to evaluate the adequacy of the Inpatient Hospital Fee Schedule and a need for an outpatient surgical fee schedule, including comparisons by Diagnostic Related Groups (DRG) to payments for Medicare, Group Health and workers’ compensation.

CHSWC subsequently prepared a Staff Summary report incorporating some of the findings from the contracted study of the Hospital Fee Schedule system and including staff recommendations.

Findings

  • Workers' Compensation charges were higher than Group Health. The IHFS reimbursement for several DRGs was determined to be less than equitable. These DRGs were determined to be candidates for a potential adjustment in reimbursement amount due to a difference between workers’ compensation and Group Health payments.
  • Workers’ compensation charges were not significantly different compared with Medicare charges. However, the resource intensity of the Medicare admissions was significantly higher than that of workers’ compensation admissions. In spite of the equivalent charges and lower resource intensity, reimbursement for workers’ compensation admissions was significantly higher than for Medicare admissions.
  • Charges and payment for outpatient surgery facility fees were highly variable across the facilities in the study sample.

 

Recommendations

Inpatient Fee Schedule

The CHSWC staff report recommendations include:

  • For an Inpatient Fee Schedule, a joint task force consisting of CHSWC, DWC, the California Healthcare Association, other hospital representatives and a California Office of Statewide Health Planning and Development (OSHPD) representative should be established to recommend a reimbursement methodology for high-technology hardware and/or instrumentation for spine surgery DRGs that will provide predictability, stability, efficiency, and access to care.

Outpatient Surgery Facility Fee Schedule

The CHSWC staff report recommendations include:

  • A fee schedule which covers outpatient surgery facility fees should be implemented in the California workers’ compensation system and a fee schedule which covers emergency room facility fees should also be considered.
  • A special task force be established to research other data sources and propose a methodology for an outpatient surgery fee schedule (not necessarily excluding application of Medicare’s ASC and APC with a phased-in multiplier) to be considered by the DWC Administrative Director.

AB 749, which amends Labor Code Section 5307.21, enables DWC to develop an outpatient surgery facility fee schedule that will include all facility charges for outpatient surgeries performed but not the fees of the doctors providing services in connection with the surgery. The fees allowed must be sufficient to cover the costs of each surgical procedure, minimize administrative costs, and ensure access to outpatient surgery services by injured workers.

Status

The Inpatient Hospital Fee Schedule and Outpatient Surgery Study report prepared by Drs. Kominski and Gardner was released in February 2002.

The staff summary report of the study was approved in February 2002.

An Advisory Committee meeting on the inpatient hospital fee schedule was held in July 2002.

Hospital Fee Schedule
Project Team

Christine Baker
    CHSWC

Richard Gannon
    Division of Workers’ Compensation

Bruce Bowen, PhD
    Independent Consultant

Laura Gardner, MD, PhD
    Axiomedics Research, Inc.

Dr. Gerald Kominski
    University of California, Los Angeles

Irina Nemirovsky
   CHSWC

Jackie Schauer
    Division of Workers’ Compensation

Glenn Shor, PhD
    Division of Workers’ Compensation

 

Hospital Fee Schedule Review Team

Jay Bhattacharya
    RAND

Hospital Fee Schedule
Advisory Committee

Julie Andrade
    California Medical Association

Aynah Askanas
    Rheinisch Medical Management

Elizabeth Bales
    CNET

Alan Barkan<

Casmir Carapkiewecz
    State Compensation Insurance Fund

Arthur Casey
    Healthsouth San Diego Regional Office

Jeffrey Coe, MD

David Corum
    American Insurance Association

Rea Crane
    California Workers’ Compensation Institute

Daniel P. Doore
    Community Hospital of Los Gatos

Michael Drobot
    Pacific Hospital of Long Beach

Ron Field
    Golden Eagle Insurance

Stephen Foerster
    Washington Township Healthcare District

Sue Galanti<
    Orthopaedic Hospital, Inc.

Paula Gisler
    California Health Care Association

Dan Henley
    Golden Eagle Insurance

Tim Hoops
    Blue Cross of California

Corey Ingber
    Zenith Insurance Company

Doug Kim
    CAAA/Green & Azevedo

Thomas Kula, MD
    Professional Corporation

Sherreta Lane
    California Health Care Association

D. Allan MacKenzie, MD
    Industrial Medical Council

Marc Marcus
    CAAA/Marcus & Regalado

(continued on next page)

Hospital Fee Schedule
Advisory Committee

Marlin Markham
    National Surgical Hospitals

Scott Marshall
    Golden Eagle Insurance

Tom McCauley

Susan McKenzie
    Industrial Medical Council

Ron Nassif
    Fremont Corporation

Frank Neuhauser
    SRC, UC Berkeley

Diane Przepiorski
    California Orthopaedic Association

Merritt Quarum

Brenda Ramirez
    State Compensation Insurance Fund

James Randlett
    Randlett/Nelson Associates

James Robbins
    Division of Workers’ Compensation

John Robeson
     State Compensation Insurance Fund

Patty Rodgers
    California Medical Association

John L. Ross
    Medtronic Sofamor Danek USA

Jose Ruiz
    State Compensation Insurance Fund

Guy Schuelke
    CCCSIG

Jackie Schauer
    Division of Workers’ Compensation

Mary Severine
    Golden Eagle Insurance Corporation

Glenn Shor
    Division of Workers’ Compensation

Peggy Sugarman
    California Applicants’ Attorneys Association

Alex Swedlow
    California Workers’ Compensation Institute



Medical Care

Worker Injury National Survey Project (WINS)

Background

As part of a project sponsored by the Robert Wood Johnson Foundation’s Workers’ Compensation Research Initiative, the Worker Injury National Survey (WINS) Project explored the feasibility of a national information resource on issues of access to workers’ compensation medical care, the process of medical care and the outcomes of care.

WINS has now developed an alpha version of a national survey that will document the performance of the workers’ compensation medical care system from the perspective of the injured worker. The project includes more than twenty researchers from universities and state workers’ compensation agencies. The WINS survey has been done in Minnesota and Florida.

Description

CHSWC voted in December 2001 to conduct the survey in California. The data from the survey will potentially enable California to:

  • Monitor the quality of the medical care provided to ensure that citizens of the state could actively participate in the labor market;
  • Estimate the economic burden of work-related injuries on the state, injured workers and their families and how that burden is shaped by the medical care experience;
  • Examine the impact of legislative and regulatory changes on workers’ compensation medical care and in reducing the human and economic burden of work-related illnesses and injuries;
  • Compare one state to another on a variety of performance indicators;
  • Answer state specific questions.

CHSWC has organized a Research Advisory Committee to:

  • Finalize the survey for California and pilot test the survey
  • Prepare a report summarizing the results of the pilots
  • Develop a sampling plan and conduct survey of approximately 1200 claimants
  • Analyze the data and prepare a report
  • Link survey data to administrative data for further analysis

Status: Ongoing

WINS Project Advisory Committee

Ben Amick, PhD
    University of Texas at Houston

Christine Baker
    CHSWC

Les Boden, PhD
    Boston University

Barbara Burgel, RN, MS
    University of California San Francisco

Kathy Dervin, MPH
    Division of Workers’ Compensation

Marion Gillen, RN, MPH, PhD
    UC San Francisco

Marla Haims, PhD
    RAND

Robert Harrison, MD MPH
    University of California San Francisco

Laural Hill
    RAND

Bill Kahley
    Division of Workers’ Compensation

Niklas Krause, PhD, MD
    UC San Francisco

Suzanne P. Marria
    DIR Directorate

Irina Nemirovsky
    CHSWC

Frank Neuhauser

    Survey Research Center UC Berkeley

Robert T. Reville, PhD
   RAND

Anne Searcy, MD
    Industrial Medical Council

Glenn Shor, PhD
     DWC



Medical Care

Barriers to Occupational Injury and Illness Treatment and Prevention Services For Low Wage Workers in California

Background

In California, over 5 million workers are employed in occupations whose median wage is less than $10 an hours. Of these, nearly two-thirds – 3.4 million – are in occupations in which the mean annual income is less that $20,000 a year. This latter group will be considered "low-wage" workers for the purposes of this study. These workers among others are disproportionately immigrant, minority and non-union workers. They are also the workers least likely to have health insurance or sick leave benefits from their jobs.

Though frequently at high risk of occupational injury and illness, low-wage workers often do not complain or seek treatment. Some fear retaliation by employers. Others are apprehensive about being deported or denied citizenship. Most do not have access to health care providers with expertise in recognizing and treating occupational injuries and illnesses. The complexity of the workers compensation system, the lack of information and assistance in using the system, language barriers and prohibitive out-of-pocket expenses while waiting for claims to be processed are a few of the other obstacles low wage workers confront when they seek medical care for work-related injuries and illnesses. Equally critical is the lack of prevention programs. To compound the problem, surveillance data on injuries and illnesses for these workers are lacking. As a result, correctible problems go uncorrected and this highly vulnerable population of workers experience needless suffering and disability.

Description

CHSWC contracted with the University of California, San Francisco to conduct this project with the partnership of the Occupational Health Surveillance and Evaluation Program of the California Department of Health Services to study the occupational health prevention and workers’ compensation issues of low-wage workers in California.

The goal of this two-year project is to document barriers and identify strategies for providing effective occupational health treatment and workplace injury and illness prevention efforts for low-wage workers. The project will produce a series of reports and recommendations for improving treatment services for low wage workers and enhancing workplace prevention efforts in the small businesses that employ them. A plan will also be developed for estimating levels of underreporting of occupational injuries and illnesses among these workers. Specifically, the researchers intend to use interviews, case studies, focus groups, analyses of existing data and worksite surveys in selected industries to:

  • Identify barriers and assess strategies for improving initial access to the workers compensation system for low wage workers;
  • Identify barriers and assess strategies for implementing effective, low cost prevention measures in the small business that employ low wage workers;
  • Identify barriers and assess strategies for improving occupational health services in the public and community health care systems;
  • Develop recommendations for estimating underreporting of occupational injuries and illness among low wage workers (which, among other uses, will provide baseline data for evaluating the effectiveness of future prevention and treatment efforts.)

The outcome of this project will be a series of reports and recommendations for effective treatment, prevention and tracking systems to reduce occupational injuries and illnesses among California’s low-wage workers.

Status
In process

Barriers Experienced by Low Wage Workers Project Team

Christine Baker
    CHSWC

Robert Harrison, MD MPH
    University of California San Francisco

Nanette Lashuay, MA
    University of California San Francisco

Barbara Burgel, RN, MS
    University of California San Francisco

Leslie Israel, DO MPH
    University of California San Francisco

Jacqueline Chan, MPH
    University of California San Francisco

Barriers Experienced by Low Wage Workers Project Advisory Committee

Douglas Benner, MD
    Kaiser Permanente

Patricia Breslin
    Golden Gate Restaurant Association

Helen Chen, Esq.
    Asian Law Caucus

Andrea Dehlendorf
    SEIU Local 1877

Jim DuPont
    Hotel Employees and Restaurant Employee International Union

Lilia Garcia
    Maintenance Cooperation Trust Fund

Paul Gill, former Executive Director
    Made by the Bay and San Francisco Fashion Association

Marion Gillen, RN, MPH, PhD
    UC San Francisco

Martha Guzman
    United Farm Workers

Kimi Lee
    Garment Worker Center

Gideon Letz, MD, MPH
    SCIF

Dennise K. Martin
    California Association of Public Hospitals and Health Systems

Irina Nemirovsky
    CHSWC

Jack L. Neureuter
    Alliance Medical Center

Scott Robinson
    ABM Industries, Inc.

Ray Selle
    Monterey Mushroom

Glenn Shor, PhD
    Division of Workers’ Compensation

Peggy Sugarman
    CAAA

Leland Swenson
    Community Alliance with Family Farmers



Community Concerns

Study of Benefit Utilization

Background

Over the past decade, legislative efforts to reform workers’ compensation and improve benefits for injured workers’ have stalemated over the net cost of the legislative package. A major component of disagreements over cost has been estimating the impact, if any, of benefit increases on claim frequency and claim duration. These questions raise important issues about the impact of benefit increases on employers’ costs and injured workers’ outcomes.

Description

CHSWC and the WCIRB are engaging in a joint study to evaluate whether benefit increases lead to changes in claim frequency, claim duration and overall system cost.

Status

This project is currently under peer-review.

Findings

CHSWC preliminary evaluation of whether workers’ compensation benefit increases lead to changes in the claim frequency, claim duration and overall claim costs has pointed out that:

  • Actual cost impact of increased claim frequency of claims stemming from an increase in benefits may be small for certain benefits.
  • There is some increase in mean claim duration (number of weeks on average that someone receives benefits) to increase in benefits, but it was not large.

Benefit Utilization Project Team

Frank Neuhauser
    SRC, UC Berkeley

Steve Raphael, PhD
    Goldman School of Public Policy,UC Berkeley

Benefit Utilization Advisory Committee

David Bellusci
    WCIRB

Ward Brooks
    WCIRB

Actuarial Committee
    WCIRB



CHSWC Issue Papers

Study of Labor Code Section 132a

Background

Commissioner John C. Wilson raised the question whether Labor Code Section 132a and related court decisions regarding medical benefits are in a possible conflict with the Education Code.

Description

At its meeting in February 2002, CHSWC decided to explore whether stopping medical benefits according to statute, union contract, or company policy violates California Labor Code Section 132a.

CHSWC issued a "call for information" to obtain more background information from the workers’ compensation community. In the future after a Supreme Court decision pertinent to this issue is published, CHSWC will convene a round table to discuss the Labor Code Section 132a issue.

Status

This project was initiated in February 2002 and is currently in process.

Information on IMC Disciplinary Actions Taken on QMEs

Background

Labor Code 139.2 empowers the Industrial Medical Council (IMC) to appoint qualified medical evaluators for the evaluation of medical-legal issues. The IMC has the authority to discipline QME’s for various infractions and makes available on its website a listing of those QMEs with a final disciplinary action. Commissioner Davenport raised the question of whether unrepresented injured workers were getting adequate information to make an informed choice of QMEs from panels nominated by the Industrial Medical Council.

In response, CHSWC staff completed preliminary staff work regarding disciplinary procedures of the Industrial Medical Council.

Description

At CHSWC’s invitation, representatives from the Industrial Medical Council gave a presentation on its disciplinary procedures at the April 2002 CHSWC meeting. The IMC disciplinary program instituted disciplinary procedures based on complaints from many different sources such as injured workers, insurers, employers, attorney, the licensing board and also on cases that the IMC finds themselves. The IMC publicizes disciplinary actions on their web page, in their quarterly newsletter and, their monthly meetings. At CHSWC’s suggestion, the IMC has also started to annotate the list of Qualified Medical Examiners (QMEs) given to unrepresented workers by adding a footnote indicating whether or not the particular QME is on probationary status.

The disciplinary program is carried out by the IMC Complaint Tracking Unit. David Kizer, IMC Counsel, explained that the Complaint Tracking Unit of the IMC has a small staff composed of an attorney, a part-time physician, an advisor, an investigator, a retired annuitant and two assistants. The Unit intervenes on injured workers’ issues in two ways. First, the Unit attempts to informally resolve the issues by speaking with both parties, and writing education letters advising the QME what they need to do to take corrective behavior. On the serious cases, the Unit will open a formal confidential investigation, interview witnesses and begin gathering evidence and present the case to the executive medical director and to the IMC disciplinary committee for review which is separate from the actions of the licensing board. However, since the investigators of the Unit don’t have peace officer status, the Unit cannot obtain information on criminal or licensing board investigations prior to a formal action being filed.

Preliminary Findings

The preliminary review suggests that there is room for improvement in how quickly and adequately information about unprofessional conduct by QME's is made available to injured workers. Information gathered from IMC indicates that its complaint processing could be more efficient and timely if it had more personnel available for that purpose.

Status

In process

 

Study of Workers’ Compensation Coverage Liability for Persons in Training Programs - Labor Code Section 3368

Background

Many industrially injured workers participate in vocational rehabilitation services and programs provided by public schools or junior colleges. Not infrequently they sustain new injuries or exacerbations of their prior injuries while participating in the vocational rehabilitation program.

Pursuant to Labor Code Section 3368, the school district is liable for the subsequent injury (unless the worker is being paid a case wage or salary by a private employer while engaged in the program or the entity for which services are being performed has secured the payment of workers’ compensation). Because the initial injury case has often been settled, the employer in that case has no further liability, and the school district will be required to provide benefits that might otherwise have been the liability of the initial employer.

Description

This project developed an Issue Paper regarding the responsibility for workers’ compensation coverage for participants in public school vocational training programs.

Status

This project was initiated in October 2000 and a draft report was prepared in December 2000. The Commission voted to circulate the draft and obtain input from the community on the extent of the problem and what remedies might be useful.

Findings

The study’s analysis indicated that when an injured worker, who has released the initial employer from all liability except for vocational rehabilitation services, is provided retraining at the public educational facility and sustains new injury, the school will be liable for workers compensation benefits for which the initial employer would have been liable in absence of a compromise and release.


CHSWC & THE COMMUNITY

 

Acknowledgements

The Commission on Health and Safety and Workers' Compensation is pleased to acknowledge and thank the following individuals and organizations from the California workers' compensation community.

Their willingness to share their insight and knowledge derived from years of experience has assisted the Commission immeasurably in its mission to oversee and recommend improvements in the workers' compensation and health and safety programs in California.

AFL-CIO Department of Occupational Safety & Health
      James N. Ellenberger

Alliance of American Insurers (AAI)
      Peter Gorman

American Insurance Association (AIA)
      Mark Webb

Applied Risk Management
      Carolyn Bradford

Association of California Insurance Companies (ACIC)
      Jeff Fuller, President

Association of Injured Workers
      Charles Bruscino

Axiomedics Research, Inc
      Laura Gardner, MD, PhD

Boston University
      Leslie I. Boden, PhD, Professor, School of Public Health

California Applicants' Attorneys Association (CAAA)
      Gilbert Stein, President-Elect
      Richard Wooley, Treasurer
      Mark Gerlach, Esq
      Doug Kim, Esq
      Marc Marcus, Esq
      Frank D. Russo, Esq
      Peggy Sugarman, Consultant
      Robert Vines, Esq
     
California Association of Rehabilitation and Reemployment Professionals (CARRP)
      Barbara Shogren-Lies, President

California Association of Work Experience Educators (CAWEE)
      Lula Calkins

California Casualty Management Company
      Brenda Holmes

California Chamber of Commerce (CCC)
      Julianne A. Broyles, Director, Insurance and Employee Relations
      Dominic Dimare

California Coalition on Workers’ Compensation (CCWC)
      Lori Kammerer, Managing Director

California Department of Finance (DOF)
      Cecilia Palada, Research Analyst

California Department of Industrial Relations (DIR)
      Stephen J. Smith, Director
      Chuck Cake, Chief Deputy Director
      Suzanne P. Marria, Assistant Director
      Janet Coffman, Deputy Director, Communications
      Dean Fryer, Public Information Officer
      Jim Culbeaux, Chief Information Technology Officer
      Carrie R. Beckstein, Communications Specialist
      Jack Chu, Information Systems
      Arthur Tunik, Information Systems
      Office of the Director staff

    Division of Administration (DOA)
      Marisa Duek, Chief
      DOA staff

    Division of Apprenticeship Standards (DAS)
      Henry P Nunn III, Chief
      Linda Olvera
      DAS staff

    Division of Labor Standards Enforcement (DLSE)
      Art Lujan, State Labor Commissioner and Chief
      DLSE Staff

    Division of Labor Statistics and Research (DLSR)
      David Aroner, Acting Chief
      Maria Robbins, Deputy Chief
      Zagros Madjid-Sadjadi, PhD
      Ramon Cruz
      Charlie Yparraguirre
      DLSR Staff

    Division of Occupational Safety and Health (DOSH)
      John Howard, MD, Chief
      Walter Graze, Cal OSHA
      Robert McDowell, Manager, Loss Control Certification Unit
      Carol Kemski, Analyst, Loss Control Certification Unit
      DOSH Staff

    Division of Workers' Compensation (DWC)
       Richard W. Gannon, Administrative Director
       George Mason, Acting Chief Deputy Administrative Director
       Richard W. Younkin, Assistant Chief
       Susan Hamilton, Presiding Judge
       Mark Kahn, Regional Manager
       Robert Kutz, Regional Manager
      William Whiteley, Regional Manager
      Otis Byrd, Manager, Vocational Rehabilitation
      Mark Johnson, Manager, Audit Unit
      Blair Megowan, Manager, Disability Evaluation Unit
      Kathy Dervin, MPH, Managed Care Unit
      Bob Wong, Manager, Information & Assistance
      John Hopper, Manager, Claims Unit
      Jackie Schauer, Counsel
      James Robbins, Counsel
      Glenn Shor, PhD, Research and Evaluation Unit
      Rich Stephens
      DWC Staff

    Industrial Medical Council (IMC)
      D. Allan Mackenzie, MD, F.A.A.O.S., Executive Medical Director (until March 2002)
      Susan McKenzie, Executive Medical Director (beginning April 2002)
      Anne Searcy, MD, Associate Medical Director
      Barry A. Halote, PhD., Council Member
      Robert C. Larsen, MD, Council Member
      Maria Mayoral, MD, Council Member
      Ira H. Monosson, MD, Council Member
      Steven Nagelberg, MD, Co-Chair
      Jonathan T. Ng, MD, Council Member
      Glenn A. Ocker, DPM, MS, Council Member
      Richard Pitts, D.O., Co-Chair
      Michael D. Roback, MD, Council Member
      Patricia Sinnott, PT, MPH, Council Member
      Richard F. Sommer, Esq., Vice-Chair
      Lawrence Tain, D.C., Council Member
      Paul E. Wakim, D.O., Council Member
      Gayle A. Walsh, D.C., Council Member
      Benjamin Yang, CA, OMD, Council Member
      Larry Williams, Manager
      IMC Staff

    Occupational Safety and Health Standards Board (OSHSB)
      Jere W. Ingram, Chairman
      John D. MacLeod, Executive Officer

    Office of Self-Insurance Plans (SIP)
      Mark Ashcraft, Manager
      Tina Freese
      SIP staff

    Workers’ Compensation Appeals Board (WCAB)
      Merle Rabine, Chairman
      Frank M. Brass, Commissioner
      Colleen S. Casey, Commissioner
      James C. Cuneo, Commissioner
      Janice Murray, Commissioner
      William K. O’Brien, Commissioner
      Dennis J. Hannigan, Secretary
      Rick Dietrich, Assistant Secretary
      Neil P. Sullivan, Assistant Secretary
      WCAB staff

California Department of Health Services (DHS)
      James Cone, MD, MPH, Chief of Occupational Health Branch
      Robert Harrison, MD, Public Health Medical Officer

California Department of General Services (DGS)
      John Brakke, Asst. Chief Counsel
      Donald Bill Cady, Staff Counsel

California Department of Insurance (DOI and/or CDI)
      Harry W. Low, Insurance Commissioner
      Elaine Bush, Chief Deputy Commissioner
      Sean Tracy, Deputy Insurance Commissioner
      Dick Ross, Assistant Deputy Commissioner
      Norris Clark, Chief, Financial Surveillance Branch
      Larry White, Senior Staff Counsel

California Department of Rehabilitation (DOR)
      John Doyle, Chief of Budgets and Contracts
     
California Department of Water and Power
      Hal D. Lindsey, JD, Corporate Health and Safety

California Employment Development Department (EDD)
      Michael Bernick, Director

California Legislative Analyst Office (LAO)
      Brad Williams, Senior Economist

California Legislature
      The Honorable Richard Alarcn, Chair, Senate Labor & Industrial Relations Comm.
      The Honorable John Burton, Speaker Pro Tem, California Senate
      The Honorable Thomas M. Calderon, Chair, Assembly Committee on Insurance
      The Honorable Joseph Canciamilla, Assembly Member
      The Honorable Kevin Shelley, Assembly Member
      Marc Engstrom, Legislative Director for Assembly Member Canciamilla
      Michael S. Mattoch, Chief Consultant, Assembly Committee on Insurance
      Don Moulds, Consultant, Senate Office of Policy
      Liberty Reiter Sanchez, Consultant, Assembly Committee on Insurance

California Manufacturers and Technology Association (CMTA)
      Willie Washington, Legislative Advocate and Director of Human Resources, Safety and Health and Workers’ Compensation

California Medical Association (CMA)
      Philip Lippe, MD

California Self-Insurers Association (CSIA)
      Susan M. Wright, Executive Director
      Nona Grancell, Executive Director-Emeritus

California Society of Industrial Medicine and Surgery (CSIMS)
      Carlyle R. Brakensiek, Executive Vice President

California Orthopaedic Association
      Diane Przepiorski, Executive Director

California Workers’ Compensation Defense Attorneys Association (CWCDAA)
      Clifford Sweet, President

California Workers' Compensation Institute (CWCI)
      John Michael Nolan, President
      Ron F. Markson, Executive Vice President
      Rea B. Crane, Medical/Rehabilitation Director
      Michael J. McClain, General Counsel
      Mark Miller, Research Associate
      Alex Swedlow, Executive Vice President of Research and Development
      Robert Young, Communications Director
      Perla Madrano, Executive Administrative Assistant

Canadian Institute of Health Research-Institute for Population and Public Health
      John W. Frank, MD, CCP, MSc, FRCP, Scientific Director

Catholic Healthcare West
      Robin Nagel

CTD Resource Network, Inc
      Joan Lichterman, Injured Worker and Vice President

Disability Management Insights
      Linda Stutzman, RN, Consultant, Ombudsperson

East Bay Repetitive Stress Injuries (RSI) Support Group
      Joan Lichterman
      Bruce Wolfe

East San Jose Community Law Center
      Alissa Garni
      Mary Novak

Employment Law Center
      Marielena Hincapie

Fraud Assessment Commission (FAC)
      Ken Bollier
      Michael Carona
      Donna Gallagher
      Lloyd Loomis
      William Zachary

Grancell, Lebovitz, Stander, Marx and Barnes
      Nona Grancell
      Norin Grancell

HERE Local 2
      Kim Wirshing

Hewlett Packard Corporation
      Mary E. Garry

International Association of Industrial Accident Boards and Commissions (IAIABC)
      Gregory Krohm, Executive Director
      IAIABC Staff

Law Office of David Leonard
      David Leonard, Attorney

Law Office of Ellen K. Farmer
      Ellen Farmer, Esq.

Liberty Mutual Insurance
      Barry Hoschek, Division Manager

Marin Association of Public Employees, SEIU 949
      Josie Jenkins

Tom McCauley, Consultant

Members of the Public
      Members of the public, especially injured workers who share their views
      Participants in CHSWC meetings, fact-finding hearings and public forums
      Participants in CHSWC project advisory committees

National Academy of Social Insurance
      Cecili Thompson, Data Specialist

National Institute of Occupational Safety and Health (NIOSH)
      Susan Board, MS, Director, Office of Extramural Programs
      James W Stephens, PhD, Senior Scientist

NIBBI Brothers
      Larry Nibbi
      Lisa Roberts

Pacific Gas & Electric
      Linda Lasagna
      Al Thomas

RAND Institute of Civil Justice
      Robert T. Reville, PhD, Director of Research
      Nicholas M. Pace
      Laural Hill

Republic Indemnity Co. of America
      Saul Allweiss
      Rhonda Cooper
      Donna Salas

Rutgers University
      John F. Burton, Jr., PhD, Professor, School of Management & Labor Relations

Southern California Edison
       Theresa Muir, Manager, Workers’ Compensation Division

State Building & Construction Trades Council of California
      Robert Balgenorth, President

State Compensation Insurance Fund (SCIF)
      Kenneth C. Bollier, President
      Dianne C. Oki, Executive Vice-President
      James F. Neary, Vice President
      Donna Gallagher, Manager, Anti-Fraud Program
      Gideon Letz, Medical Director
      Lisa Middleton, Manager, Claims Rehabilitation
      John Robeson, Unit Manager, Claims Rehabilitation
      Brenda Ramirez, Claims Operations Consultant
      Pat Quintana, Government Relations Officer

United Auto Workers Local 2244
      Joe Enos

United States Department of Labor
      Scott Richardson, Program Manager, Census of Fatal Occupational Injuries (CFOI), Bureau of Labor Statistics (BLS)

University of California Office of the President
      Michael Barnes, Senior Science Writer

University of California Berkeley (UCB)
      Robin Baker, Director, Labor Occupational Health Program (LOHP)
      Chris Benner, PhD, Institute of Industrial Relations (IIR)
      Diane Bush, Program Coordinator, LOHP
      Leilani Buddenhagen, Young Worker Project, LOHP
      Elaine El-Askari, Program Coordinator, LOHP
      James Meyers, Agricultural Health Specialist, COEH
      Frank Neuhauser, Project Director, UC Data/Survey Research Center (SRC)
      Barbara Plog, Center for Occupational & Environmental Health (COEH)
      Robert C. Spear, PhD, Director, COEH
      Laura Stock, Associate Director, LOHP
      Juliann Sum, Esq., LOHP
      Betty Szudy, Program Coordinator, LOHP
      Suzanne Teran, MPH, Program Coordinator, LOHP
      Support Staff

University of California Davis (UCD)
      J. Paul Leigh, PhD, Professor, School of Medicine

University of California Irvine (UCI)
      Dean Baker, PhD, Director, Center for Occupational and Environmental Health

University of California Los Angeles (UCLA)
      Linda Rosenstock, MD, MPH, Dean of the School of Public Health
      Marianne Brown, Director, Labor Occupational & Safety Program (LOSH)
      John Froines, PhD, Director, Center for Occupational and Environmental Health
      Gerald Kominski, PhD, Associate Director, Center for Health Policy Research
      Laurie Kominski, Project Director, IRR LOSH
      Quintin Robinson, Program Coordinator

University of California San Francisco (UCSF)
      John R. Balmes, MD, Chief, Div. of Occupational Environmental and Medicine
      Julia Faucett, R.N., PhD., Associate Professor & Director (OEHNP)
      Niklas Krause, MD, PhD, MPH

University of Massachusetts Medical School
      Jay S. Himmelstein, MD, MPH, Program Director
      Allard E. Dembe, Sc.D., Associate Professor and Senior Research Scientist

Washington Department of Labor and Industries
      Gary Franklin, MD, Medical Director
      Anaya Balter, Medical Program Specialist

Workers' Compensation Insurance Rating Bureau of California (WCIRB)
      Robert G. Mike, President
      David Bellusci, Senior Vice President and Chief Actuary
      Brenda Keys, Vice-President, Legal
      Michelle Sheng, Vice President of Actuarial Services

Workers' Compensation Research Institute (WCRI)
      Richard A. Victor, JD, PhD, Executive Director
      Ann Clayton, Deputy Director
      Sharon Fox, PhD, Policy Analyst
      WCRI staff

WorkSafe
      Fran Schreiberg

 

Special thanks to the following organizations for their support and endorsement of the "California Forum for Workplace Health and Safety" held February 8-9, 2001

    American Society of Engineers
    California Applicants’ Attorneys Association
    California Association of Joint Powers Authorities
    California Chamber of Commerce
    California Coalition on Workers’ Compensation
    California Correctional Peace Officers Association
    California Department of Industrial Relations, Div. of Apprenticeship Standards
    California Department of Industrial Relations, Div. of Labor Standards & Enforcement
    California Department of Industrial Relations, Industrial Medical Council
    California Department of Health Services, Occupational Health Branch
    California Labor Federation, AFL-CIO
    California Medical Association
    California Manufacturers and Technology Association
    California Society of Industrial Medicine and Surgery
    California Workers’ Compensation Institute
    International Association of Industrial Accident Boards and Commissions
    International Workers’ Compensation Foundation, Inc
    Osteopathic Physicians and Surgeons of California
    Schools Excess Liability Fund
    State Construction and Building Trades Council of California
    State Compensation Insurance Fund
    University of California Berkeley, Center for Occupational & Environmental Health
    University of California Berkeley, Labor Occupational Health Program
    Workers’ Compensation Health Initiative of the Robert Wood Johnson Foundation
    WorkSafe

 

Finally, the Commission would like to acknowledge and thank its staff

    Christine Baker, Executive Officer
    *Charles Lawrence Swezey, Lawyer and Consultant
    Joel Gomberg, Staff Judge
    Kirsten Strmberg, Research Program Specialist
    Irina Nemirovsky, Research Program Specialist
    Janice R. Yapdiangco, Staff Services Analyst
    Oliva A. Vela, Office Technician
    Chellah A. Yanga, Office Assistant

*CHSWC would like to give special recognition to consultant Larry Swezey for his contributions to and analyses of the new workers’ compensation reform legislation AB 749.


Community Activities

CHSWC is pleased to report that its members and staff have had the privilege of participating in several activities of the health and safety and workers’ compensation community.

California Association of Joint Powers Authorities
      Executive Officer presentation

California Chamber of Commerce
      Executive Officer presentation

California Coalition on Workers’ Compensation
      Executive Officer presentation

California Department of Industrial Relations
      Division of Workers' Compensation Annual Educational Conference
      Executive Officer and Research Program Specialist presentation

California Industrial Medical Council
      Executive Officer and Research Program Specialist presentations

California Manufacturers and Technology Association
      43rd Annual Fall Conference and Expo
      Executive Officer presentation

California Legislature
      Senate Office of Policy
      Executive Officer and CHSWC staff briefing

California Workers’ Compensation Institute
      37th Annual Conference

Enloe Occupational Health Center
      4th Annual Seminar
      Executive Officer presentation

International Association of Industrial Accident Boards and Commissions
      87th Annual Convention
      All Committee Conference
      Executive Officer presentations
      Executive Officer serves as Chair of the IAIABC Prevention, Benefit Adequacy and Cost Containment Prevention and Safety Committee

National Academy of Social Insurance
      CHSWC Executive Officer was selected to be a member

San Diego Chamber of Commerce
      Executive Officer presentation

Safety Conference Interactive 2001
      Executive Officer presentation

Worker Immigrant Health and Safety (WISH) Project Policy Committee
      Executive Officer and Research Program Specialist

Workers’ Compensation Insurance Rating Bureau of California
      Cost-Containment Committee
      Special Committee on Medical Cost-Containment Programs
      Executive Officer and Research Program Specialist

Workers’ Compensation Research Institute
      Executive Officer serves on the National Advisory Board for the Injured Worker Survey

SYNOPSES OF CURRENT CHSWC PROJECTS AND STUDIES