Minutes of Strategic Planning Meeting
July 15-16th, 2002
Hyatt Regency Conference Center
Monterey, California


In Attendance

Chair Tom Rankin
Commissioners Allen L. Davenport, Jill Dulich, Leonard C. McLeod, Kristen Schwenkmeyer, Robert B. Steinberg, Darryl "Shorty" Thacker", John C. Wilson

Christine Baker, Executive Officer

Business Meeting

Call to Order/Minutes from the April 18, 2002 meeting

Chairman Rankin called the meeting to order at 9 am on July 15th and asked for a motion on the minutes of the April 18, 2002 meeting. Commissioner Thacker moved to adopt the minutes, Commissioner Wilson seconded and the motion passed unanimously.


CHSWC 2001-02 Annual Report

Christine Baker, Executive Officer

Ms. Baker commented that CHSWC staff has incorporated the Commissioners’ suggested changes in the Annual Report. Ms. Baker noted that there are still several charts in the report that need to be updated once the data is made available to us. Tom Rankin noted that he had some minor suggestions.


Commissioner Dulich moved to adopt the report, Commissioner Thacker and Commissioner Wilson seconded and the motion passed unanimously.


Report on the Division of Workers’ Compensation

Richard P. Gannon, DWC Administrative Director

Mr. Gannon first thanked CHSWC for its support of the Judicial Study prepared by RAND. He remarked that DWC is working on implementing the recommendations from the study, but some of these recommendations have been made more difficult to implement by the current reductions in the budget. He further emphasized that in order to have an efficient court management system, a feasibility study needs to be initiated shortly to obtain an improved technological system in about 5 years such as the one that exists in New York. Mr. Gannon added that New York would be willing to share information regarding their system with California.

Mr. Gannon also stated that the Division of Workers’ Compensation is jointly working with CHSWC on potential revisions to the Inpatient Hospital Fee Schedule. An Inpatient Hospital Fee Schedule Advisory Committee meeting was held in July on this schedule and a small working committee would be formed to work on the details of the reimbursement methodology for spinal surgery diagnostic related groups (DRGs).

Mr. Gannon proceeded to report on the status of the budget situation in the Division of Workers’ Compensation. He explained that the DWC is facing a difficult time due to resource reductions. DWC has had to keep a high vacancy rate in order to pay for the senior staff level positions, which have a low turnover rate. However, if the positions are now kept vacant, they must be eliminated as a matter of policy.

Currently, the Division of Workers’ Compensation is facing a $5 million shortfall and has been asked to decrease its budget by about $7 million. Some of the reductions have included decreases in 13 judge teams, elimination of 12 audit unit positions and a $1 million cut in the Uninsured Employer Fund. Mr. Gannon specified that reductions of 10% of judicial staff and 9% of clerical would have a significant impact on time limits in courts. He specified that if these reductions take place without any budgetary augmentation, the following would occur:

Mr. Gannon specified that DWC is awaiting a decision on the augmentation of its budget, which will allow additional staffing to augment provisions of AB749. If the augmentation does go through, it will provide DWC with some program relief.

Mr. Gannon announced that the IAIABC convention will be held in San Francisco in September 2003. This conference will provide also an opportunity for the Commission to present its studies.

Commissioner Wilson asked where the money comes from for the UEF. Mr. Gannon replied that collections on uninsured employers yield $3-4 million per year.

Commissioner Steinberg asked what was the cost for New York to move to make technological changes and move to a paperless court management system. Mr. Gannon replied that the total expenditures for New York workers’ compensation changes, which included technology and other expenses, was approximately $40 million. Funding for the workers’ compensation changes was obtained through an employer assessment. According to Mr. Gannon, there is a need to look at the type of funding mechanism for workers’ compensation administration that California should have. California is one of 10 jurisdictions, which funds its system solely through General Fund monies.

Proposal: Study of the California Workers’ Compensation Insurance Market

Christine Baker, Executive Officer

Ms. Baker commented that at the last Commission meeting, CHSWC staff was asked to explore a possible study of the insurance industry. Following this suggestion, CHSWC staff had meetings with experts and Insurance Commissioner Low and his staff. Ms. Baker advised that although at the present time the Insurance Commissioner could not contribute resources to the study, he would like to partner with CHSWC in this project. Ms. Baker also noted that the California Workers’ Compensation Insurance Rating Bureau (WCIRB) could potentially be interested in taking part in an insurance industry study. Ms. Baker suggested that a Request for Proposals (RFP) for the study could be developed by CHSWC staff as well as an exploration of funding mechanisms.


Commissioner Dulich moved that the CHSWC staff proceed with a request for proposal (RFP) to study the California Workers’ Compensation Insurance Market and to explore possible funding sources. Commissioner Wilson seconded and the motion passed unanimously. The developed RFP would be presented during a conference call to be scheduled.


Proposal: Request Data from WCIRB

Christine Baker, Executive Officer

Ms. Baker commented that as a result of some of the changes in AB749, it would be helpful for CHSWC to work with the Workers’ Compensation Insurance Rating Bureau to determine if data on pharmaceutical networks and predesignation of treating physician can be collected. This would assist the Commission to evaluate impacts of the AB749 requirements relating to networks and the predesignation of the treating physician.


Commissioner Wilson moved that CHSWC work with the Workers’ Compensation Insurance Rating Bureau to explore the feasibility of incorporating the pharmaceutical network and the predesignation of the treating physician data into WCIRB’s call for data. Commissioner Dulich seconded and the motion passed unanimously.


Proposal: Publicly Accessible Database of Insurance Coverage

Christine Baker, Executive Officer

At the February Commission meeting, some presenters spoke about the availability of insurance coverage provided by other states to the public. CHSWC staff put together a background paper examining what other states, such as Texas and Florida, have done on coverage issues. Ms. Baker commented that CHSWC receives many calls from injured workers and employers who would like to know their coverage. Ms. Baker also noted that such a database could potentially help to mitigate the problems that the Uninsured Employer Fund is facing.

Commissioner Wilson noted that contractors already have the ability to check who their carrier is through a database system. CHSWC Staff Judge Joel Gomberg commented that Missouri has a website database which enables the public to compare the workers’ compensation premium rates offered by various carriers.


Commissioner McLeod moved that a roundtable be convened to work out the feasibility in California of providing a publicly accessible database of insurance coverage either through the state or the designated rating organization (WCIRB). Commissioner Davenport seconded and the motion passed unanimously.


Proposal: Labor Code Section 132A

Christine Baker, Executive Officer
Joel Gomberg, CHSWC staff judge

At the request of Commissioner John C. Wilson, CHSWC decided to explore whether stopping medical benefits according to statute, union contract, or company policy violates California Labor Code Section 132a. Ms. Baker stated that CHSWC issued a "call for information" on this topic and a background memo was prepared by Joel Gomberg upon her request to examine whether or not a roundtable should be convened.

Mr. Gomberg gave a brief background on the Labor Code Section 132a issue to the Commissioners summarizing court cases pertinent to the issue. He stated that since a Supreme Court decision important to the case has not yet been published, the roundtable should be deferred until such time.

After some discussion, the Commissioners reached a consensus that the roundtable on the Labor Code 132A issue should be deferred until the court decision is published.

Public Comments

Chairman Rankin asked if there are any public comments. There were no public comments.

CHSWC Strategic Planning

Opening Remarks

Chairman Rankin opened the Strategic Planning meeting at 1pm on July 15th and remarked that this was a pertinent time for CHSWC to review its accomplishments and where it will be heading in the next years.

CHSWC Current Projects and Studies

Ms. Baker gave a presentation of the current Commission accomplishments, projects in progress and research that had led to policy changes pursuant to AB749. Some of the Commission projects include: Permanent Disability Evaluation Tool, California Research Colloquium on Medical Benefit Delivery and Return to Work and Best Practices Encouraging Return to Work.

Discussion and Planning

Michael Adams, Facilitator

CHSWC Members

CHSWC Executive Officer and Staff


A "Background Issues" document was distributed to the CHSWC members as a starting point to outline the research areas, which would potentially have labor and employer consensus. The 2-day CHSWC meeting was devoted to prioritizing identified areas and developing a preliminary research agenda. The Commission prioritized the research areas as follows: (1) Efficiency of Administration, (2) Return to Work, (3) Prevention, (4) Dispute Resolution, (5) Healthy Workers, and (6) Targeting Benefits.

At the conclusion of the meeting, CHSWC members requested that staff develop a draft strategic plan, action items, and a communications plan based on priorities discussed at this meeting.

The next CHSWC meeting will take place in November 2002, but the Commission decided to have a public conference call prior to the November meeting.


Chairman Rankin adjourned the meeting on Tuesday, July 16th at 11:30 am.

Approved: Respectfully submitted,


_____SIGNATURE ON FILE_____________                             _____SIGNATURE ON FILE________________

Tom Rankin, Chair Date                                                                     Christine Baker, Executive Officer             Date