The California Commission on Health and Safety and Workers’ Compensation

 

CHSWC 2000-2001 Annual Report

Commission Members

John C. Wilson (2001 Chair)
Allen Davenport
Jill A. Dulich
Leonard C. McLeod
Tom Rankin
Kristen Schwenkmeyer
Robert B. Steinberg
Darrel "Shorty" Thacker

Executive Officer
Christine Baker

State of California
Department of Industrial Relations

 


Executive Summary and Recommendations
Introduction
Issues and Recommendations

     
        Reduce the Uncompensated Wage Loss Sustained by Industrially-Injured Workers
                Consider Workers’ Compensation Benefit Increases

                         Increases in benefits should be targeted
                         Utilize Workers’ Compensation Benefit Simulation Model

                Promote Return to Work
                         Focus on returning the injured worker to the same or an alternate job with the same employer

                         Consider increasing incentives for returning permanently disabled workers to jobs with the same employer
                         Consider increasing options for injured workers entitled to the vocational rehabilitation benefit

        Simplify and Cost-Contain the Workers’ Compensation System
                Improve the Workers’ Compensation Medical Delivery System
                         Reconsider the Treating Physician Presumption
                         Revise the Inpatient Hospital Fee Schedule and Establish an Outpatient Surgery Fee Schedule Based on Reliable Data

                        
Revise the workers’ compensation pharmaceutical cost structure for potential savings
                Improve Workers’ Compensation Information
                         Establish requirements for the provision of information to injured workers
                         Improve the Workers’ Compensation Benefit Notice Program
                Eliminate the ‘baseball arbitration’ provisions of Labor Code Section 4065

                Clarify Labor Code Section 5814 regarding penalties for ‘unreasonable’ delays
                Clarify workers’ compensation coverage liability for persons in training programs

      
  Maintain the Integrity of the Workers’ Compensation System
                Ensure the Solvency of the California Workers’ Compensation System
                Ensure Ongoing and Objective System Evaluations
                         Monitor Workers’ Compensation Benefit Levels
                         Revise the DWC Workers’ Compensation Audit Function
                         Amend Labor Code Section 138.7 to allow CHSWC access to data
                         Revise Labor Code Section 78(b) to change the funding mechanism for the Commission on Health and Safety and Workers’ Compensation
                Continue anti-fraud activities in the workers’ compensation system
                Coordinate and focus anti-fraud efforts

               
Establish requirements to identify illegally uninsured employers and bring them into compliance
                Require workers’ compensation anti-fraud notices or warnings be given to employers and insurers, similar to those given to workers

        Improve Workers’ Compensation Program Administration
                Continue improving the DWC-WCAB judicial function / CHSWC to Monitor Results
                Consider utilizing technology to support and manage office operations
                Improve DWC information systems
                Consider Statutory Time Limitations on Lien Filings

        Emphasize Occupational Health and Safety
                Establish a California Occupational Research Agenda
                Protect and educate young workers
                Consider Recommendations from the California Forum for Workplace Health and Safety

The Commission on Health and Safety and Workers’ Compensation

About CHSWC…

CHSWC Members Representing Employers

CHSWC Members Representing Labor

California Health and Safety and Workers’ Compensation Functions (pdf 12.2KB)

For Information about CHSWC and its Activities

CHSWC Publications
CHSWC Informational Materials

Reform Outcomes

Workers’ Compensation Insurance

Background
Insurance Market after Reform
Indemnity Claims
Workers’ Compensation Premiums
Workers’ Compensation Premiums Compared with Insurer Loss and Expenses

Medical Care

The 24-Hour Care Pilot Project
Health Care Organization Program
Fee Schedules
Official Medical Fee Schedule
Hospital Fee Schedule
Utilization Review Regulations

Medical-Legal Evaluations

Permanent Disability Claims
Medical-Legal Exams per Claim
Average Cost per Medical-Legal Exam
Medical-Legal Cost Calculation
Medical-Legal Costs
Sources of Improvement in Medical-Legal Costs
‘Baseball Arbitration’
Treating Physician Presumption

Workplace Safety and Health

Targeted Consultation Program
Targeted Enforcement Program
Loss Control Certification Unit
Ergonomics Standard

Vocational Rehabilitation

Adjudication Simplification

DWC Information System
‘Carve-Outs’ - Alternative Workers’ Compensation systems

Psychiatric and Post-Termination Claims

Psychiatric Claims
Total Costs of Psychiatric Exams

Workers’ Compensation Disability Benefits

Impact of Changes to the Permanent Disability Benefit
PD Changes by Rating Level

Workers’ Compensation and the California Economy

Introduction

Scope

Economic Outlook for California

California’s Workers’ Compensation Costs

Workers’ Compensation Costs Compared to Total Payroll
Workers’ Compensation Costs vs. Payroll among Industry Groups
Workers’ Compensation Costs compared with Other Economic Indicators

Conclusions

System Performance

Introduction

Administrative Operations

DWC Opening Documents
Mix of Opening Documents
DWC Hearings
DWC Decisions
Mix of DWC Decisions
DWC Lien Decisions
Vocational Rehabilitation
Vocational Rehabilitation Plan Approvals
Vocational Rehabilitation Plan Disapprovals
Vocational Rehabilitation Decisions
DWC Audits

Costs

Workers’ Compensation Premium
Advisory Workers’ Compensation Pure Premium Rates
Workers’ Compensation Expenditures
Insured Employers
Private Sector Self-Insured Employers

Outcomes

Injury and Illness Rates in California
Occupational Injury and Illness Rates by Sector
Lost Time Injury and Illness Rates by Sector
Occupational Injuries and Illness Days Away from Work Rates by Industry
Profile of Injury and Illness Statistics
California and the Nation
Industry Data
Types of Injuries
Demographics
Vocational Rehabilitation
Work Status at Plan Closure
Vocational Rehabilitation Plan Outcomes

Projects and Studies

Introduction

Overview of All CHSWC Projects and Studies

Permanent Disability
Return to Work

Workers’ Compensation Reforms
Occupational Health and Safety
Workers’ Compensation Administration
Information Needs
Community Concerns

Synopses of Current CHSWC Projects and Studies

Permanent Disability
Permanent Disability – Phase 1

Enhancement of the Wage Loss Study to include Self-Insureds
        Private Self-Insureds

        Public Self-Insureds

Impact of Local Economic Conditions on Wage Loss

Permanent Disability – Phase 2
          Permanent Disability Rating Tool
          Return to Work
                    Analysis of wage loss and RTW in other states

                    ‘Best Practices’ Encouraging Return to Work
                    Policies and Strategies to Help Injured Workers Return to Sustained Employment
                    Primary Treating Physician Effectiveness in RTW After Low Back Injuries

Workers’ Compensation Reforms
Medical-Legal Study
Update of Treating Physician Presumption Study
CHSWC Response to Questions from the Assembly Committee on Insurance
Occupational Health and Safety
California Occupational Research Agenda
California Partnership for Young Workers’ Health and Safety
Evaluation of Targeting Methods–High Hazard and Loss Control
California Forum for Workplace Health and Safety
Workers’ Compensation Administration
Workers’ Compensation Court Management and Judicial Function Study
Information Needs
Benefit Notice Simplification
Workers’ Compensation Information Prototype Project
Community Concerns
Pharmaceutical Costs Study
CHSWC Roundtable on Anti-Fraud Activities
Workers’ Compensation Benefit Simulation Model
Study of Benefit Utilization
Workers’ Compensation Premium Calculations – Evaluation of Alternative Factors
Study of Workers’ Compensation Coverage Liability for Persons in Training Programs- Labor Code §3368

Inpatient Hospital Fee Schedule and Outpatient Surgery Study

CHSWC & the Community

Acknowledgements

Community Activities


Executive Summary and Recommendations

INTRODUCTION

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

CHSWC, created by the 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.

The Commission 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. This past year, CHSWC has also emphasized occupational health and safety, especially the prevention of industrial injuries. The Commission hosted the California Forum for Workplace Health and Safety, a public educational program devoted to workplace injury prevention, safety and return-to-work.

The Commission has directed its efforts to identify and assess problems and to provide an empirical basis for recommendations and/or further investigations. The Commission 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. The Commission’s recommendations for system improvements are based upon the results of these activities.

The following pages contain the Commission’s recommendations for legislative or administrative changes and/or for further study. 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.

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


ISSUES AND RECOMMENDATIONS

The Commission is recommending that the Legislature and the community consider the following actions to enhance and sustain the health, safety and workers’ compensation systems in California.

Reduce the Uncompensated Wage Loss Sustained by Industrially Injured Workers

Consider Workers’ Compensation Benefit Increases

        Increases in benefits should be targeted
        Utilize Workers’ Compensation Benefit Simulation Model

          Promote Return to Work

        Focus on returning the injured worker to the same or an alternate job with the same employer
        Consider increasing incentives for returning permanently disabled workers to jobs with the same employer
        Consider increasing options for injured workers entitled to the vocational rehabilitation benefit

Simplify and Cost-Contain the Workers’ Compensation System

Improve the Workers’ Compensation Medical Delivery System

Reconsider the Treating Physician Presumption
Revise the Inpatient Hospital Fee Schedule and establish an Outpatient Surgery Fee Schedule
Revise the workers’ compensation pharmaceutical cost structure for potential savings

Improve Workers’ Compensation Information

Establish requirements for the provision of information to injured workers
Improve the Workers’ Compensation Benefit Notice program

Eliminate the ‘baseball arbitration’ provisions of Labor Code Section 4065
Clarify Labor Code Section 5814 regarding penalties for ‘unreasonable’ delays
Clarify workers’ compensation coverage liability for persons in training programs

Maintain the Integrity of the Workers’ Compensation System

Ensure the Solvency of the California Workers’ Compensation System
Ensure Ongoing and Objective System Evaluations

Monitor Workers’ Compensation Benefit Levels
Revise the DWC Workers’ Compensation Audit Function
Amend Labor Code Section 138.7 to allow CHSWC access to data
Revise Labor Code Section 78(b) to change the funding mechanism for the Commission on Health and Safety and Workers’ Compensation

Continue anti-fraud activities in the workers’ compensation system

Coordinate and focus anti-fraud efforts
Establish requirements to identify illegally uninsured employers and bring them into compliance
Require workers’ compensation anti-fraud notices or warnings be given to employers and insurers, similar to those given to workers

Improve Workers’ Compensation Program Administration

Continue improving the DWC/WCAB judicial function
Consider utilizing technology to support and manage office operations
Improve DWC information systems
Consider statutory time limitations on lien filings

Emphasize Occupational Health and Safety

Establish a California Occupational Research Agenda
Protect and educate young workers
Consider recommendations from the ‘California Forum for Workplace Health and Safety’

These recommendations are discussed in detail on the following pages.


REDUCE THE UNCOMPENSATED WAGE LOSS SUSTAINED BY INDUSTRIALLY-INJURED WORKERS

The Commission wishes to ensure that workers sustaining industrial injuries and illnesses and their dependents, if the injury is fatal, receive adequate workers’ compensation benefits in a timely manner.

The Commission’s ongoing study of workers’ compensation permanent disability has been evaluating how well the PD benefit compensates for wage losses sustained by injured workers. The study has found that on average, even with the 1994 reform increases, permanently disabled injured workers sustain significant uncompensated wage loss. This remains true even when their PD rating is small.

Through this study of permanent disability and other aspects of the system, the Commission and the community realize that the levels of workers’ compensation benefits over the years have not kept pace with the economic consequences incurred by industrially injured workers.

CHSWC recommends that the stakeholders and the workers’ compensation community work together to address this issue. The Commission recommends a dual approach to reducing uncompensated wage loss:



Consider Workers’ Compensation Benefit Increases

Permanent Disability

Permanent disability benefit payment levels have been adjusted several times since 1984. These adjustments have included changing both the weekly maximum and the number of weekly payments. In addition, greater distinction was drawn between disability levels by adding higher maximum benefit levels for more severe claims. The very highest disability levels received the greatest increase in the maximum weekly benefit level.

However, the impact of the increases since 1991 for the majority of PD recipients have been more than offset by the effect of inflation on the value of the benefit.

The permanent partial disability benefit has lost more than a quarter of its value in the last 17 years. After adjustment for inflation, the average permanent disability benefit in 2001 was only about 73% of its value in 1984.

Temporary Disability

The temporary disability benefits are adjusted systematically and periodically in most states to address the effects of inflation. This approach also minimizes the negative impacts on employees and employers.

CHSWC recommends that PD benefit increases be targeted and that the "Workers’ Compensation Benefit Simulation Model" be utilized in this process. In addition, consideration should also to given to making ongoing adjustments to mitigate against temporary disability benefit value erosion.


Increases in benefits should be targeted

Background

Permanent disability benefits both compensate workers for their losses and provide income to those in need. CHSWC studies have shown that many workers are not compensated well (low-rated claims, whose replacement rates are too low) while other workers have real unmet need (high-rated claims, whose uncompensated losses are high).

The erosion of the value of the permanent partial disability benefit has been most seriously felt by the more than 40% of all permanent disability recipients with ratings under 15%. For this group of lower rated claims, no benefit increase has been enacted since 1984 and the inflation-adjusted value of the benefit is 57% of what it was in 1984.

The value of the permanent disability benefit in 2001 is equivalent to the 1984 value only for those proportionately few claims with PD ratings over 70%. The value of the 2001 benefit for the very severely disabled is 106% of its value in 1984.

Recommendation

CHSWC recommends that permanent disability benefits take account of the low fraction of losses replaced for low-rated claims and the eroded value of their benefit, while not ignoring the real needs of workers with high-rated claims. Therefore, benefit increases should be carefully targeted and based upon data to ensure adequate and fair compensation.

For further information…

Ä   See the CHSWC Project Section of this Annual Report: 'Benefit Simulation Model'
& CHSWC Report: Update: Workers' Compensation and the California Economy (December 2000)
& CHSWC Report: ‘Permanent Disability at Private, Self–Insured Firms’ (RAND, 2000)
& 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)
:Check out www.dir.ca.gov/chswc for CHSWC reports and the latest information.


Utilize Workers’ Compensation Benefit Simulation Model

Background

Concerns have been expressed that proposed increases in workers’ compensation benefits would have a negative impact on the California economy and on California employers and employees.

The Commission engaged in a project to analyze workers’ compensation benefit costs in relation to the larger California economic picture. Data utilized in these analyses were derived from a variety of sources, including the Legislative Analyst’s Office, the Office of Economic Research, the Department of Finance, the Division of Labor Statistics and Research, the Workers’ Compensation Insurance Rating Bureau of California, the California Workers’ Compensation Institute and other organizations. The Survey Research Center at the University of California at Berkeley contributed expertise and technical models.

A Commission-DIR-UC Berkeley project team developed a PC-based Benefit Micro-Simulation Model to assist in the analyses of potential legislative changes to the workers’ compensation benefit levels. The model can prove to be very useful to policymakers and the workers’ compensation community by serving as a tool:

Recommendations

CHSWC recommends, whenever a benefit increase is contemplated, that its potential impact be evaluated with respect to wage loss of workers, time-out of work, the benefit adequacy and equity, costs and utilization of benefits.

CHSWC recommends that the Workers’ Compensation Benefit Simulation Model be utilized to evaluate the impact of proposed adjustments on the adequacy and equity of benefits and their distribution.

For further information…

Ä See the CHSWC Project Section of this Annual Report: ‘Workers’ Compensation Benefit Simulation Model’
Ä See the ‘Workers’ Compensation and the California Economy’ Section of this Annual Report.
       A CD with the ‘Workers’ Compensation Benefit Simulation Model’ and instructions for its use is available for purchase from CHSWC.
: Check out www.dir.ca.gov/chswc for CHSWC reports and the latest information.


Promote Return to Work

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. 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.

In promoting return to work, CHSWC emphasizes


Focus on returning the injured worker to the same or an alternate job with the same employer.

Background

Serious physical, financial and personal problems confront workers with permanent disability. Return-to-work at the same employer serves to lessen such difficulties. CHSWC studies have found that

The Commission’s study of the vocational rehabilitation program also found that injured workers have greater success at rehabilitation when they return to alternate or modified work with the same employer.

These studies have demonstrated that return to work at the same employer has resulted in improved outcomes for workers and employers.

Improved Outcomes for Workers

Improved Outcomes for Employers

Recommendations

CHSWC recommends that the workers’ compensation community focus on returning injured workers to sustained employment at the same employer as soon as medically feasible.

If the injured worker is unable to immediately engage in his/her usual occupation, CHSWC recommends that the injured worker be returned to modified or alternate work, provided that such work can be practically accommodated by the employer. The treating or evaluating physician should recommend appropriate and specific work restrictions.

For further information…

Ä See the CHSWC Project Section of this Annual Report: ‘Identify and Develop Practical Strategies for Return-To-Work to Sustained Employment’
& CHSWC Report: "Return-to-Work in California: Listening to Stakeholders’ Voices" (2001)
& 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)
& CHSWC Report: ‘Permanent Disability at Private, Self –Insured Firms’ (RAND, 2000)
& CHSWC Report: ‘Determinants of Return to Work and Duration of Disability After Work-Related Injury or Illness: Developing a Research Agenda’ (publication pending)
& CHSWC Report: ‘Does Modified Work Facilitate Return to Work for Temporarily or Permanently Disabled Workers?’ (1997)
& CHSWC Report: "Proceedings of the California Forum for Workplace Health and Safety’’ (publication pending)
: Check out www.dir.ca.gov/chswc for CHSWC reports and the latest information.


Consider increasing incentives for returning permanently disabled workers to jobs with the same employer

The Commission study of permanent disability, conducted by RAND, has found that permanently disabled workers who return to work at the same employer have reduced levels of uncompensated wage loss over a five-year period.

The Commission’s study of the vocational rehabilitation program also found that injured workers have greater success at rehabilitation when they return to alternate or modified work with the same employer.

The Commission is also looking into creative possibilities in alternate or modified work for the construction industry. Often injured workers in the construction industry are released by the doctor for modified work, but they cannot go back to the construction site.

For further information…

Ä See the CHSWC Project Section of this Annual Report: ‘Policies and Strategies to Help Injured Workers Return to Sustained Employment"
& 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)
& CHSWC Report: ‘Permanent Disability at Private, Self–Insured Firms’ (RAND, 2000)
& 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)
: Check out www.dir.ca.gov/chswc for CHSWC reports and the latest information.


Consider increasing options for injured workers entitled to the vocational rehabilitation benefit

Background

Vocational Rehabilitation (VR), a mandatory workers’ compensation benefit established in 1975, is intended to return qualified workers to "suitable gainful employment". VR provides for vocational counseling, training, and "return to work" services.

The legislature enacted a series of reforms in 1993 meant to improve the workers’ compensation system. A major component of the legislative package was a set of reforms to the Vocational Rehabilitation benefit, aimed at reducing the cost of VR while maintaining or improving the outcomes for these seriously injured workers. The reform legislation made major changes affecting the level and delivery of the vocational rehabilitation benefit:

The Commission contracted for a study to help evaluate the impact of the workers’ compensation reform legislation on the vocational rehabilitation system. The study found that as a result of reforms, the cost of the Vocational Rehabilitation benefit was cut in half. Nearly three-quarters of the saving was a result of the cap placed on total cost, the cap placed on QRR services and the limitation placed on the number of plans. Over one-quarter (28%) of the savings resulted from shifting workers from use of vocational rehabilitation services into modified and alternate work with the at-injury employer.

However outcomes for seriously injured workers remain poor. Much remains to be done to improve post-injury employment outcomes for all seriously injured workers, especially for particularly hard-hit segments of this group. The preliminary results from the Commission’s study highlight substantial problems for older workers, seriously injured workers, and workers who suffer injuries that result in substantial levels of chronic pain.

Recommendation

CHSWC recommends that consideration be given to increasing options for injured workers entitled to the Vocational Rehabilitation benefit. Such options could include, but are not necessarily limited to, increasing opportunities and incentives for return to work, alternate and/or modified work, or providing cash settlements in lieu of vocational rehabilitation.

For further information…

& 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)
: Check out www.dir.ca.gov/chswc for CHSWC reports and the latest information.


SIMPLIFY AND COST-SONTAIN THE WORKERS' COMPENSATION SYSTEM

California’s workers’ compensation (WC) system, since its inception during the early 1900s, has been the subject of ongoing discussions and negotiations between California employers and employees. Perceptions of rising costs, stagnant benefits and of rampant fraud emerged in the late 1980s resulting in significant reforms in 1989, and then again in 1993.

Some of the 1993 changes sought to reduce judicial discretion and increase the consistency of case outcomes. While many of the measures were successful in reducing costs, the perception remains that the system is still too complicated and inefficient.

Improve the Workers’ Compensation Medical Delivery System

During the 1990s, medical care under workers’ compensation was modified in a number of ways.

Legislation enacted as part of the 1993 workers’ compensation reforms was intended to expand the use of managed care in workers’ compensation as a means of reducing medical costs and facilitating better management of workers’ compensation cases. Other reform innovations include a pilot project to test the feasibility of merging occupational and nonoccupational medical care into one insurance product offering ‘24 hour’ coverage. The reforms also mandated revisions to the Official Medical Fee Schedule and the development of a hospital fee schedule.

Reconsider the Treating Physician Presumption

Background

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.

In the 1993 reforms, the treating physicians were required to report on all medical issues necessary to determine eligibility for compensation. In addition, whenever another medical evaluation is obtained, the findings of the treating physician are presumed to be correct. The intention was that this would reduce the cost of medical-legal reports and give less biased opinions.

The Commission contracted with the University of California for a project to evaluate the role of the treating physician, the quality of treating physician reports, and the cost-benefit of the presumption of correctness of treating physician reports. At the request of Senator Patrick Johnston’s office, the Commission has continued the study to update the initial findings.

The CHSWC studies of Treating Physician Presumption by UC Berkeley:

Recommendation

CHSWC recommends that the standard of presumption of correctness of treating physician reports be set at a different level which gives great weight to the treating physician but allows the workers’ compensation judges to use judicial discretion as to award based on the range of evidence.

For further information…

Ä See the CHSWC Project Section in this Annual Report. ‘Update of Treating Physician Report and Presumption Study’
& CHSWC Report: ‘Update - Report on the Quality of the Treating Physician Reports and the Cost-Benefit of Presumption in Favor of the Treating Physician’ (Publication Pending)
& CHSWC Report: ‘Report on the Quality of the Treating Physician Reports and the Cost-Benefit of Presumption in Favor of the Treating Physician’ (1999)
: Check out www.dir.ca.gov/chswc for CHSWC reports and the latest information.


Revise the Inpatient Hospital Fee Schedule and Establish an Outpatient Surgery Fee Schedule Based on Reliable Data

Background

Until the current Inpatient Hospital Fee Schedule (IHFS) became effective in April of 1999, the California workers' compensation system included an Official Medical Fee Schedule that covered physician services, but did not cover hospital facility fees. The schedule, mandated by Labor Code Section 5307.1, is used for payment of medical services required to treat work-related injuries and illnesses. According to the Labor Code, the Administrative Director is required to adopt and revise the medical fee schedule every two years.

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. Diagnostic Related Groups specify global fees for certain procedures and are designated by numbers. DRG weights are assigned by the Health Care Financing Administration (HCFA) for the purpose of determining reimbursement under Medicare. The maximum reimbursement rate for inpatient medical services is obtained by "multiplying 1.20 by the product of the health facility’s composite factor and the applicable Diagnostic Related Group (DRG) weight".

Since the implementation of the IHFS, the Division of Workers’ Compensation has received several letters from hospital and physician expressing their dissatisfaction with the Schedule. Some of the problems reported are:

With the cooperation and assistance of the Division of Workers’ Compensation, the Commission on Health and Safety and Workers’ Compensation is conducting a study that is evaluating the adequacy of the Inpatient Hospital Fee Schedule and a need for an outpatient surgical fee schedule.

The study is being conducted in two phases. The first phase is an analysis of the adequacy of the current Fee Schedule methodology, including comparisons by Diagnostic Related Groups (DRG) to payments for Medicare, Group Health and workers’ compensation. The second phase of the study will develop recommendations regarding instituting an outpatient or ambulatory surgery fee schedule.

In the meantime, DWC has adopted amendments to the fee schedule regulations regarding reimbursement for the costs of implantable instrumentation and hardware for spinal related surgeries under DRGs 496-500. Hospitals will also be reimbursed a supplemental outlier fee when charges exceed an allowed amount plus a predetermined hospital-specific outlier factor. These changes were filed with the Secretary of State on March 14, 2001 and will be effective for admissions that occur on or after April 13, 2001.

Preliminary findings of the Commission’s study have shown that:

Recommendations

CHSWC recommends that the Division of Workers’ Compensation begin the process of a comprehensive revision of the Inpatient Hospital Fee Schedule taking into consideration the recommendations from CHSWC’s empirical analysis study.

CHSWC recommends that data be collected in support of establishing a schedule for outpatient surgical facility fees.

CHSWC recommends establishing reimbursement amounts for spine surgery DRGS which will take into account both the costs related to instrumentation hardware as well as the clinical effectiveness and related cost savings.

For further information…

Ä    See the CHSWC Project Section of this Annual Report: ‘Inpatient Hospital Fee Schedule and Outpatient Surgery Study’
: Check out www.dir.ca.gov/chswc for CHSWC reports and the latest information.


Revise the workers’ compensation pharmaceutical cost structure for potential savings.

Background

The 1993 reform legislation amended Labor Code Section 5307.1 to require that the Administrative Director of the Division of Workers’ Compensation include ‘drugs and pharmacy services’ in the Official Medical Fee Schedule (OMFS).

In response to that mandate, the 1993 Official Medical Fee Schedule included a "Pharmaceuticals" section which provides that reimbursement for the dispensing of all pharmaceuticals shall be the lesser of

  1. The provider’s usual charge, or
  2. The fees established by the formulas in the OMFS for brand-name and generic pharmaceuticals.

The formulas for establishing fair and reasonable fees and charges for brand-name and generic pharmaceuticals are specified in the Official Medical Fee Schedule:

Brand Name Pharmaceutical Formula:
   
Average Wholesale Price (AWP) times 1.10 plus a $4.00 dispensing fee.

Generic Pharmaceutical Formula:
   
Average Wholesale Price (AWP) times 1.40 plus a $7.50 dispensing fee.

When a generic pharmaceutical costs more than a brand name pharmaceutical, according to these formulas, the fair and reasonable price will be the brand name equivalent, as calculated by the formula.

At the request of the Commission, staff performed initial research, which indicated that California’s workers’ compensation system has high reimbursement rates for pharmaceutical bills relative to Medicaid, employer health benefits, and other states’ workers’ compensation systems reviewed. The Workers’ Compensation Insurance Rating Bureau (WCIRB) reports that medical benefits paid to pharmacies increased 37% between 1999 and 2000.

The Commission then engaged in a project to assess workers’ compensation pharmaceutical costs and identify potential savings. The key question of the study was to determine changes in pharmaceutical costs within workers’ compensation under different fee schedule structures. The research team has made recommendations to the Commission on which fee schedule structures are most consistent with reasonable reimbursement to pharmacists and reasonable costs to employers.

Recommendations

CHSWC recommends that consideration be given to resetting the fee schedule.

In considering reducing the fee schedule reimbursements, CHSWC recommends that thought be given to improving the efficiency of the process. This could be accomplished by increasing employers’ ability to negotiate network agreements with pharmacies.

In addition, CHSWC recommends that insurers and employers consider guaranteeing payment for at least the initial prescription when the doctor indicates that the injury arose out of work, even if the claim has not been processed or accepted.

CHSWC recommends that generic drugs be issued when available, except when the medical provider specifies "dispense as written". CHSWC found that there was consensus on this issue since generics are already dispensed in 90% of the situations.

For further information…

Ä    See the CHSWC Projects section in this Annual Report: 'Pharmaceutical Costs Study'
&  CHSWC Report: Study of the Cost of Pharmaceuticals in Workers’ Compensation (2000)
: Check out www.dir.ca.gov/chswc for CHSWC reports and the latest information.


Improve Workers’ Compensation Information

To optimize outcomes following industrial injury or illness, everyone under the jurisdiction of the California workers’ compensation system needs to understand each party’s rights and responsibilities in that system.

The Commission recommends that efforts continue to improve workers’ compensation information and informational services about workers’ compensation.

While the following recommended informational materials may be directed primarily at workers or employers, they are intended to be useful for and accessible by everyone.

The Commission urges the community to continue to enhance these cooperative efforts. CHSWC appreciates the assistance from the community in distributing and publicizing the availability of workers’ compensation information.

 

Establish requirements for the provision of information to injured workers.

Background

The Commission noted that various laws and regulations had been identified as problematic with respect to workers’ compensation benefit notices and directed that staff draft proposed statutory changes to the Labor Code to address those problems. A report entitled "Recommendations: Information for Injured Workers" detailing the proposed legislative changes was approved by the Commission at its April 2000 meeting.

The primary purpose of the proposed legislative changes is to make uniform the Labor Code provisions regarding notices to injured workers. The objectives of the proposed changes are to improve the information given to employees by employers prior to and soon after injury, information available at state Information and Assistance offices, information from claims administrators, the content and clarity of benefit notices, and the timing of some of the most problematic benefit notices.

Recommendations

The proposed legislation would specify the following:

A. Information from Employer Prior to Injury

Prior to injury, all workers will have basic, introductory information about workers' compensation. This will include, for example: the right to designate one's personal physician prior to injury; how to get emergency medical treatment if needed; and how to report a job injury. The information will be posted in the workplace and given to new employees in writing.

B. Information from Employer Soon After Injury

Soon after injury, injured workers who are entitled to receive a claim form will be given practical, instructional information. This will include, for example: how to request workers' compensation benefits; what happens with the claim form after it is filed; from whom the employee can obtain medical care for the injury; the role and function of the primary treating physician; and sources of information and help. The information will be contained on the reverse side of the claim form, and the claim form will instruct the injured worker to read the reverse side.

C. Information Available from State Information & Assistance Offices

A comprehensive guide advising employees about the California workers' compensation system will be available from state Information & Assistance offices.

D. Information from Claims Administrator

If the employer did not give an injured worker who is entitled to receive a claim form the instructional information described in B, above, the claims administrator will provide it to the worker.

For injured workers who are sent benefit-notice letters, the claims administrator will include, with the first letter, a comprehensive guide about the workers' compensation system.

E. Format of Benefit Notices

The basic information and concepts given in the comprehensive guide described in D, above, will not be repeated within the main body of benefit-notice letters. Instead, the letters will refer the injured worker to relevant portions of the comprehensive guide.

Information regarding the claimant's remedies and the right to consult with a state Information & Assistance officer or an applicants' attorney (which will be given in the comprehensive guide described in D, above) will not be repeated within the main body of benefit-notice letters. Instead, each benefit notice will be accompanied, outside the main body of the letter, by brief statements describing the right to disagree with a decision and how to contact an I&A officer or the State Bar of California.

For further information…

Ä See the CHSWC Projects section in this Annual Report:
            Benefit Notice Simplification
            Workers’ Compensation Information Prototype Project

&   CHSWC Report: ‘Recommendations: Information for Injured Workers’ (2000)
&   CHSWC Report: ‘Navigating the California Workers’ Compensation System: The Injured Workers’ Experience’ (1996)
: Check out www.dir.ca.gov/chswc for CHSWC reports and the latest information.


Improve the Workers’ Compensation Benefit Notice Program

Background

When an employee files a claim for worker’s compensation, the employer or insurer is responsible for communicating the status of the claim to the employee by means of a series of benefit notices. The benefit notice program is intended to be a key communication tool between the claims administrator and the injured worker, keeping the worker informed about important changes in the status of his or her workers’ compensation claim.

The workers’ compensation community has long criticized the benefit notice system as confusing and ineffective. Through its various studies and analyses, the Commission has confirmed that:

Recommendation

CHSWC recommends that consideration be given to an automated, simplified benefit notice system with initial key indicators to be submitted electronically to the State of California.

For further information…

Ä See the CHSWC Projects section in this Annual Report:
        Benefit Notice Simplification
        Workers’ Compensation Information Prototype Project

& CHSWC Report: ‘Recommendations: Information for Injured Workers’ (2000)
& CHSWC Report: ‘Project to Improve Laws and Regulations Governing Information for Injured Workers and Project to Augment, Evaluate and Encourage Distribution of the Prototype Educational Materials for Workers’ (2000)
& CHSWC Report: ‘Navigating the California Workers’ Compensation System: The Injured Workers’ Experience’ (1996)
: Check out www.dir.ca.gov/chswc for CHSWC reports and the latest information.


Eliminate the ‘baseball arbitration’ provisions of Labor Code Section 4065.

Background

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.

However, the result of the use of such ‘baseball arbitration’ is often perceived as unfair. Experienced triers of fact in the workers' compensation field believe that more often than not an applicant's true disability lies somewhere between the description of permanent disability obtained by the applicant and that procured by the defendant. Concern has been expressed that under Labor Code §4065 the workers’ compensation judge may be "forced" to award too much or too little in permanent disability benefits to the injured worker.

In April 1999 the Commission requested a report on the effectiveness and experience of baseball arbitration in the WCAB. CHSWC staff collected data and information in the WCAB district offices. 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.

A report entitled "Preliminary Evidence on the Implementation of ‘Baseball Arbitration’ in Workers' Compensation" was issued in November 1999.

Recommendation

At its meeting on December 16, 1999 in Los Angeles, CHSWC voted unanimously to recommend the repeal of Labor Code Section 4065.

For further information...

& CHSWC Report: ‘Preliminary Evidence on the Implementation of Baseball Arbitration’ (1999)
: Check out www.dir.ca.gov/chswc for CHSWC reports and the latest information.


Clarify Labor Code Section 5814 regarding penalties for ‘unreasonable delays’

Background

Labor Code Section 5814 provides when payment of compensation has been unreasonably delayed or refused, either prior to or subsequent to the issuance of an award, the full amount of the ordered decision and award shall be increased by ten percent. The question of delay and reasonableness of the cause thereof shall be determined by the Appeals Board in accordance with the facts.

The purpose of the statute, adopted as part of the 1945 reforms, was first to provide incentive to claims administrators to pay benefits promptly by making delays costly, and secondly to some extent, to compensate the injured worker for the hardships resulting from the delay. Except for a minor amendment as part of the 1965 reforms transferring the jurisdiction of the Industrial Accident Commission to the WCAB, Section 5814 has not been modified by the Legislature.

As early as 1959, however, the appellate courts began a continuing series of decisions interpreting and reinterpreting the section. Some of the results of the judicial interpretation can find no direct support in the language of the statute. The problems that the workers’ compensation community continually encounters with Section 5814 have been discussed over the years but no serious legislative efforts have been made to resolve them.

In October 1998 the Commission issued a ‘call for information’, requesting input from the workers’ compensation community and the public for an issue paper on the Section 5814 penalty provisions. Responses were received from throughout the community. There were general criticisms of the statute that it was confusing, difficult to interpret and complicated to apply. Specific criticisms from the insurer and employer community indicated there was no clear standard of what constituted unreasonable conduct and that penalties imposed were disproportionate and unfair. Concern was also expressed regarding the possible effects of the Stuart and Moore decisions by the California Supreme Court. Applicants and the applicants’ attorneys view Section 5814 as ineffective as indicated by the number of penalty claims filed and imposed, and also that whenever an unreasonable delay occurs and continues, there is no further sanction.

These various responses indicated a need to study Labor Code Section 5814 with an aim for providing an adequate deterrent against unreasonable delay or refusal, but at the same time providing penalties that bear some relationship to the claims administrators' culpability.

At the Commission’s direction, the project staff reviewed workers’ compensation proceedings at the district office, reconsideration and appellate levels to determine the frequency that delay issues were raised and penalties assessed. A draft report was prepared containing proposed findings and recommendations. The most significant finding was that penalty petitions are raised in one out of four cases – indicating the possibility of substantial delays to injured workers, unnecessary expenses to employers and carriers, and a litigation cost to injured workers, to employers and to the system itself. It was also apparent that there is a higher number and frequency of penalty claims in Southern California than in Northern California.

In December 1999, the Commission released the draft report for public comments. The Commission also offered to serve as a clearinghouse for any suggestions for legislative language to revise Section 5814. The Commission convened an Advisory Committee to review the public comments and submit recommendations.

Recommendation

At its April 2000 meeting, CHSWC decided to approve the findings of the Issue Paper but to defer to the Legislature and the workers’ compensation community with respect to recommendations on the Labor Code 5814 penalty provisions.

For further information…

& CHSWC Report: ‘Issue Paper on Labor Code Section 5814’ (2000)
: Check out www.dir.ca.gov/chswc for CHSWC reports and the latest information.


Clarify workers’ compensation coverage liability for persons in training programs

Background

Many injured workers compromise industrial injury cases, either with or without a waiver of claims for injuries incurred while participating in vocational rehabilitation, and subsequently obtain vocational rehabilitation services 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 §3368, the school district is liable for the subsequent injury unless the worker is being paid a cash 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 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.

Thus, when an injured worker that has released the initial employer from all liability except for vocational rehabilitation services (liability for which can not be released) is provided retraining at a public educational facility (which is encouraged by Labor Code §4635.1) and sustains a new injury, the school will be liable for workers' compensation benefits for which the initial employer would have been liable in the absence of the compromise and release.

In view of the current policy to use the maximum amount available funds for educational purposes for classroom training, Labor Code §3368, Education Code §51769, and Education Code §78249 appear to have an unintended, or at least uncontemplated consequence, i.e., the shifting the liability to provide compensation for an industrial injury from the employer to public funds designated for educational purposes.

Recommendation

CHSWC recommends that Education Code §51769 be amended by adding the following subdivision:

(c) No school district, county superintendent of schools, or school administered by the State Department of Education shall incur any liability to any person under subdivision (a) of this section for payment of any compensation as defined in Section 3207 of the Labor Code for which that person has released a former employer or insurance carrier from liability pursuant to Sections 5000 through 5004 of the Labor Code.

CHSWC further recommends that Labor Code §3368 and Education Code §52317 be similarly amended.


For further information…

& CHSWC Issue Paper on "School District Liability for Injuries to Persons Engaged in Work Experience Education, Cooperative Vocational Education, or Community Classrooms" (2000)
: Check out www.dir.ca.gov/chswc for CHSWC reports and the latest information.


MAINTAIN THE INTEGRITY OF THE WORKERS' COMPENSATION SYSTEM

The Commission recommends that focus be placed on maintaining the integrity of the workers’ compensation system, to the benefit of California workers, employers and taxpayers.

Maintaining system integrity includes

 

Ensure the Solvency of the California Workers’ Compensation System

The Commission wants to ensure that the California workers’ compensation system will have the ability to provide benefits to injured workers, irrespective of factors such as the current volatility of the insurance market.

Background

Until a few years ago, California’s workers’ compensation insurance rates were regulated by the Insurance Commissioner under the minimum rate law. 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, gathered and analyzed premium and losses data, classified businesses, did actuarial projections, assessed market conditions and competitive forces and determined final, fully developed, premium rates that included all the costs of benefits and administrative overhead.

The California Reform legislation of 1993 repealed the minimum rate law as of January 1, 1995 and replaced it with an open-rating system of rate regulation in which insurers set their own rates based on advisory loss costs developed by the Workers’ Compensation Insurance Rating Bureau. Under open rating, the Commissioner sets recommended, non-mandatory pure premium rates that are expected to cover the costs of benefits and loss adjustment expenses.

After the elimination of the minimum rate law, many carriers shifted the risk of their claims to other insurance companies many of whom were inexperienced with California workers’ compensation insurance market.

Currently, several insurance companies are experiencing problems with payment of claims. For example, Superior National Insurance Companies have been liquidated and several other insurance companies have been placed either under regulatory supervision or conservatorship by the Department of Insurance. At least fourteen 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.

Created by the California Legislature, the California Insurance Guarantee Association (CIGA) settles unpaid claims of injured individuals when an insurance carrier is unable to make payments because of an insolvency. The Executive Director of CIGA has proposed to increase the regular 1% surcharge on workers’ compensation carriers to 2% to be able to repay claims of Superior National companies.

Recommendations

CHSWC supports efforts/initiatives by the California Insurance Commissioner and the California Insurance Guarantee Association (CIGA) to

  1. Maintain the fiscal soundness of workers’ compensation insurers,
  2. Maintain CIGA’s ability to promptly and fully respond to workers’ compensation claims against liquidated insurers, and
  3. Provide for the uninterrupted delivery of statutory benefits to injured workers.

For further information…

Ä    See the Reform Outcomes section in this Annual Report: 'Workers’ Compensation Insurance'
: Check out www.dir.ca.gov/chswc for CHSWC reports and the latest information.


Ensure Ongoing and Objective System Evaluations

The cooperative studies of the Commission and the community have proved the value of objective and ongoing evaluations of the California workers’ compensation system.

The Commission recommends that the following actions be taken to ensure the continuation of these evaluations.

 

Monitor Workers’ Compensation Benefit Levels

In the past few years, increases in workers’ compensation benefits have been more than offset by the effect of inflation on the value of the benefit. For example, the permanent partial disability benefit has lost more than a quarter of its value in the last 17 years -- the average permanent disability benefit in 2001 was only about 73% of its value in 1984.

Recommendations

CHSWC recommends that an ongoing evaluation of the adequacy of workers’ compensation benefit levels be conducted and recommendations for adjustments be made as needed.

CHSWC recommends that the community consider utilizing the Workers’ Compensation Benefit Simulation Model in these analyses.

For further information…

Ä   See the CHSWC Project Section of this Annual Report: ‘Benefit Simulation Model’
A CD with the ‘Workers’ Compensation Benefit Simulation Model’ and instructions for its use is available for purchase from CHSWC.

: Check out www.dir.ca.gov/chswc for CHSWC reports and the latest information.


Revise the DWC Workers’ Compensation Audit Function

Background

The 1989 California workers’ compensation reform legislation established an audit function within the Division of Workers’ Compensation (DWC) to monitor the performance of insurers, self-insured employers, and third-party administrators to ensure that industrially-injured workers were receiving proper benefits in a timely manner. 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.

In April 1998, the Senate Industrial Relations Committee and the Assembly Insurance Committee jointly requested that the Commission undertake an evaluation of the effectiveness of the audit function of the Division of Workers’ Compensation.

This legislative initiative was in part a response to considerable concern raised by some members of the workers compensation community. These concerns focused on the results of recent annual audits that showed substantial numbers of violations and found what many felt were excessive levels of unpaid compensation. Some observers also interpreted these data, when extrapolated to the entire population of claims locations, to indicate a trend toward poor performance in the delivery of benefits to injured workers.

The Commission project team researched the issue and conducted thoughtful discussions with DWC Audit Unit management and staff, the Audit Advisory Committee and other community members. The study determined that the current audit procedure did not include all insurers within a reasonable period of time, did not focus on the worst performers and concentrated penalties on relatively inconsequential violations.

The study participants concluded that although much time and effort was being expended by the DWC Audit Unit in performing audits of workers’ compensation insurers, a redirection of these activities would produce more effective outcomes.

The Commission is recommending revisions to the audit function, in order to:

Recommendations

Under current DWC audit procedures, locations are rarely subject to random audits and almost never subject to targeted audits. CHSWC recommends the replacement of current audit procedures with the following:

  • Simplified audit, focusing on key violations.
  • Auditing of all locations on a five-year cycle.
  • Electronic monitoring of key performance indicators where possible.
  • Increased use of targeted audits to identify poor performers.

The results of the routine audits should be used to:

  • Identify poor performers for an in-depth review.
  • Verify data integrity.
  • Benchmark performance on key indicators.
  • Rank performance of adjusting locations.

For further information…

& CHSWC Report on the Division of Workers’ Compensation Audit Function’ (1998)
: Check out www.dir.ca.gov/chswc for CHSWC reports and the latest information.


Amend Labor Code Section 138.7 to allow CHSWC access to data

Background

CHSWC’s scope and responsibilities are set forth clearly in 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." In fulfilling its statutory mandates, the Commission may require the use of individually identifiable information.

Labor Code Section 77(a) also provides: "All state departments and agencies … shall cooperate with the commission and upon reasonable request provide information and data in their possession that the commission deems necessary for the purpose of carrying out its responsibilities."

Labor Code Section 138.7(a) states that "Except as expressly permitted in subdivision (b), a person or public or private entity not a party to a claim for workers' compensation benefits may not obtain individually identifiable information obtained or maintained by the division on that claim." The Commission must be specifically included in subdivision (b)(3) to obtain such data.

Limited access to data under Labor Code Section 137.8(b)(4) is not adequate for the Commission’s needs and may also prohibit the Commission from conducting its business in a timely manner. Section 137.8(b)(4) provides that the DWC "Administrative Director shall adopt regulations allowing reasonable access to individually identifiable information by other persons or public or private entities for the purposes of bona fide statistical research." However, the regulations adopted -- Title 8 California Code of Regulations (CCR) Section 9703(d) – include limitations that would make it very difficult for CHSWC to conduct necessary and timely research.

Recommendation

CHSWC recommends that Labor Code Section 138.7 be amended to allow CHSWC researchers access to individually identifiable data from the Division of Workers’ Compensation (DWC) and its Workers’ Compensation Information System (WCIS). As defined in LC Section 138.7, ‘individually identifiable information’ means "any data concerning an injury or claim that is linked to a uniquely identifiable employee, employer, claims administrator, or any other person or entity."

Status

This recommendation is contained in AB 1681 (Canciamilla), currently active in the 2001-2002 session of the California Assembly.


Revise Labor Code Section 78(b) to change the funding mechanism for the Commission on Health and Safety and Workers’ Compensation.

Background

In order to avoid the appearance of a conflict of interest, funding for CHSWC should not be totally dependent on the amount of the audit penalties collected by the DWC Audit Unit. Currently, audit collections are deposited into the Workplace Health and Safety Revolving Fund and the Commission’s budget is appropriated out of that fund. If audit collections are not sufficient to meet the needs of the Commission, there is currently no recourse.

Recommendation

CHSWC proposes that audit collections be deposited into the state’s Workers' Compensation Administration Revolving Fund (see Labor Code Section 62.5) or into the State General Fund. An adequate amount for CHSWC’s budget could then be appropriated from the state’s Workers' Compensation Administration Revolving Fund or from the State General Fund. If allocated from the state’s Workers' Compensation Administration Revolving Fund, CHSWC’s budget would be included in the 80/20 funding ratio for workers’ compensation programs.


Continue anti-fraud activities in the workers’ compensation system

CHSWC and the workers’ compensation community recognize that fraud can occur at every stage and in every sector of the workers’ compensation system.

Recommendations

CHSWC recommends that anti-fraud efforts be directed at all types of fraud and that the community continue 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 Department of Insurance change the form generally used for reporting suspected fraud to make it more "user friendly" to injured employees.

CHSWC should continue to study issues raised by the community with respect to the anti-fraud program.

For further information…

& CHSWC Report: ‘Report on the Workers’ Compensation Anti-Fraud’ Program (2001)
& CHSWC Report: ‘Report on the Campaign Against Workers’ Compensation Fraud’ (2000)
& CHSWC Report: ‘Employers Illegally Uninsured for Workers’ Compensation – CHSWC Recommendations to Identify Them and Bring them Into Compliance’ (1998)
& CHSWC Report: ‘Report on CHSWC Fact-Finding Hearing on Workers’ Compensation Anti-Fraud Activities’ (1997)
: Check out www.dir.ca.gov/chswc for CHSWC reports and the latest information.


Coordinate and focus anti-fraud efforts

Background

The Commission and the community have determined that there is currently a need for more balance, focus and coordination with respect to anti-fraud activities in the workers’ compensation system.

Recommendations

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 SIUs, as well as self-insured employers and third party administrators, to insure that all cases involving suspected "insider fraud" are referred to law enforcement authorities for investigation.

CHSWC recommends that the Legislature consider amending Insurance Code section 1872.83 to include employee representation on the Fraud Assessment Commission.

CHSWC recommends that further review be conducted of 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.

For further information…

& CHSWC Report: ‘Report on the Workers’ Compensation Anti-Fraud’ Program (2001)
& CHSWC Report: ‘Report on the Campaign Against Workers’ Compensation Fraud’ (2000)


Establish requirements to identify illegally uninsured employers and bring them into compliance

Background

Employers that are not covered for workers’ compensation impose a burden on injured workers, on employers that comply with the workers’ compensation insurance requirements, and on the state’s taxpayers.

DIR and DWC have implemented ongoing procedures to identify illegally uninsured employers and bring them into compliance, based on CHSWC’s successful pilot projects. These activities involve data matching and coordination among DIR, the Employment Development Department (EDD) and the Workers’ Compensation Rating Bureau of California (WCIRB). EDD is providing DIR with quarterly address files that are used to identify employers who appear to be illegally uninsured for workers’ compensation. Results from these data matching efforts thus far include the following:

Recommendations

CHSWC recommends that these activities be mandated in the Labor Code to ensure their continuation:

Require the Division of Labor Standards Enforcement to establish a program for targeting industries with a high incidence of failure to secure the payment of compensation, to identify employers with payroll but no record of insurance coverage, to follow up with contacts and inspections, and to report annually to the Legislature on the effectiveness of the program.

Require the Labor Commissioner to include enforcement of the statute requiring employers to secure the payment of compensation as one of the priorities of the field enforcement.

CHSWC recommends that the Legislature consider the following:

1. Raising the criminal penalty for knowing failure to secure the payment of compensation.
2. Making statutory changes to increase the identification and pursuit of illegally uninsured employers, including possible changes to the existing anti-fraud laws.

For further information…

& CHSWC Report: ‘Report on the Workers’ Compensation Anti-Fraud’ Program (2001)
& CHSWC Report: ‘Employers Illegally Uninsured for Workers’ Compensation – CHSWC Recommendations to Identify Them and Bring them Into Compliance’ (1998)


Require workers’ compensation anti-fraud notices or warnings be given to employers and insurers, similar to those given to workers.

Background

Various laws are on the books prohibiting workers’ compensation fraud by all parties and requiring that anti-fraud warning notices be given to employees. However, there are no statutory provisions that anti-fraud notices or warnings be given to other parties, such as employers or insurers.

In order to broaden the campaign against all types of workers compensation fraud and to promote a more evenhanded approach to the problem, the Commission is making the following recommendations.

Recommendations

CHSWC recommends that legislation requiring notices or warnings be given to employers and insurers, similar to those given to workers. Such notices or warnings could either be specifically targeted toward employers and insurers or could be combined with the existing notices and warnings and disseminated to all parties and the public.

Employers would be notified of the requirement to

  • Provide workers’ compensation coverage,
  • Report accurately on their workforce when procuring coverage,
  • Report work injuries to claims administrators in a timely manner,
  • Not make false statements in opposition to a workers’ compensation claim or for the purpose of denying benefits to an injured worker, and
  • Not make false statements regarding entitlement to benefits that would discourage an injured worker from claiming benefits or pursuing a claim.

For further information…

& CHSWC Report: ‘Report on the Campaign Against Workers’ Compensation Fraud’ (2000)
: Check out www.dir.ca.gov/chswc for CHSWC reports and the latest information.


IMPROVE WORKERS' COMPENSATION PROGRAM ADMINISTRATION

California’s workers’ compensation (WC) system, since its inception during the early 1900s, has been the subject of ongoing discussions and negotiations between California employers and employees. Legislation is periodically enacted to address system difficulties, including agency performance.

Some of the 1993 reform changes sought to reduce judicial discretion and increase the consistency of case outcomes. While many of the measures were successful in reducing costs, some changes may have had unintended consequences that have made the system increasingly complicated to administer.

 

Continue improving the DWC-WCAB judicial function/Commission will continue to monitor results

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.

At the November 1999 CHSWC meeting, DWC Administrative Director Richard Gannon proposed that a study be conducted of the DWC judicial function by an independent group with the credibility and expertise, such as the Commission.

DIR and the Commission 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…"

Since the beginning of the project in October 2000, the study team has familiarized itself with the WCAB on-line system, has made on-site visits to WCAB district offices and established a resource group comprised of representatives involved in California’s workers’ compensation court system. In May 2001 the project team began the second phase of the project, which includes a review of actual case files and six intensive site studies of representative WCAB courts (Sacramento, Stockton, Los Angeles, Van Nuys, Pomona, and San Bernardino).

For further information…

Ä    See the CHSWC Project Section of this Annual Report: ‘Study of the Workers’ Compensation Court Management and Judicial Function’
&  See the Workers’ Compensation Court Management and Judicial Project website at www.rand.org/centers/icj/projects/wccm


Consider utilizing technology to support and manage office operations

Recent advances in office support technology would assist DWC and other various work groups in the Department of Industrial Relations.

Recommendations

CHSWC recommends that consideration be given to innovations that may include, but are not limited to, the following:

Implement electronic filing of documents

The state’s health, safety and workers’ compensation systems in California necessarily require the transmission of a lot of information among various entities in the public and private sectors. The evolution of technology now enables the electronic transmission of such data, with savings in time and resources and with increased speed and accuracy.

CHSWC supports efforts by the DWC and the WCAB to implement procedures and methods for the electronic filing of documents among all parties. The capability for electronic filing would assist in the prompt delivery of proper benefits in a cost-beneficial manner.

CHSWC also recommends that consideration be given to an automated, simplified benefit notice system with initial key indicators to be submitted electronically to the State of California.

Consider concept of ‘paperless office’

The Sacramento office of the State Compensation Insurance Fund utilizes a ‘state of the art paperless claim file system’. The Commission suggests that DIR and DWC may find that this approach may be helpful in the management of their many case files.

CHSWC recommends that the DWC continue its efforts to develop and implement the electronic storage of paper files. This could result in significant savings in State Records Center charges and DWC storage space. The Commission recommends that the Workers’ Compensation Appeals Board review the applicable statutes and regulations and recommend changes to eliminate unnecessary retention of paper documents while retaining full legal protections for all case parties.

Consider using ‘bar coding’ and scanners to track WCAB files

CHSWC recommends that DIR consider the use of ‘bar coding’ and scanners to track casefiles and other documents.

Other recommendations

Other specific recommendations may be forthcoming. The Commission has contracted with RAND to conduct a comprehensive study of the workers’ compensation court management and judicial system. A draft report will be presented in August 2001 and the final report is expected before the end of the year. Stakeholder input will occur throughout the development of the report.


Improve DWC information systems

Background

Labor Code Section 138.6 directs the Division of Workers' Compensation to develop a cost-effective workers' compensation information system (WCIS) compatible with the IAIABC’s Electronic Data Interchange (EDI) system to assist:

Recommendations

CHSWC recommends that DWC continue its efforts to develop this information system, contingent upon appropriate and effective security and confidentiality measures.

CHSWC encourages the Division of Labor Statistics and Research to revise its regulations to enable data from Form 5020 (Employer’s Report of Injury) and Form 5021 (Doctor’s Report of Injury) to become part of the DWC Information System. This would eliminate duplicate filings with the State of California and eliminate duplicate data entry.

CHSWC urges DWC to improve its current computer systems to provide basic data needed for ongoing program administration.

CHSWC also urges DWC to prioritize its needs regarding its requirements for data from stakeholders and output reports.


Consider Statutory Time Limitations on Lien Filings

Background

One of the most persistent administrative problems facing the Division of Workers’ Compensation in recent years has been a large increase in filings and a resultant development of a backlog of lien claims at some DWC district offices.

Commission staff found that in many instances, liens for payments made over 10 years ago were being filed on workers’ compensation cases. In other instances, liens on the same case are not being heard at the same time, leading to costly notification and scheduling, churning of cases and delays in resolution.

There appears to be an ongoing lien problem in the Division of Workers’ Compensation and a potential for continuing backlogs despite DWC’s accomplishments at resolving the influx of lien claims. DWC’s efforts included setting up special units to handle medical lien disputes and establishing a Uniform Lien Policy mandating that a good faith effort be made at the mandatory settlement conference to resolve all lien issues. Separate proceedings are not allowed unless a bona fide dispute remains after a good faith effort to resolve it.

Recommendations

CHSWC recommends that the Legislature consider adding a section to the Labor Code to establish specific statutory limitations on lien filings.

CHSWC recommends that the Legislature consider adding a section to the Labor Code that would require a workers’ compensation administrative law judge to act promptly to resolve medical and medical-legal liens. In particular the Section would require the workers’ compensation administrative law judge to reset a lien issue before him or herself within 60 days if it is not resolved with the normal issues.


EMPHASIZE 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. The Commission is pleased to participate with the community in several cooperative endeavors to enhance workplace health and safety.

Recommendation

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


Establish a California Occupational Research Agenda

Background

The current toll of occupational injury and illness for California workers, their families, and our society in general is too high.

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.

The Commission, the Occupational Health Branch of the Department of Health Services, and the Department of Industrial Relations formed the "CORA Working Group" and 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 develop, through a collaborative effort between California's government agencies, researchers, and affected public constituencies, 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.

Recommendations

CHSWC recommends that a new program – California Occupational Research Agenda – be established with the following goals and objectives:

Ø Identify and fund priority research areas in which new information is needed to guide interventions to prevent occupational injuries and related disability;
Ø Enhance tracking of occupational injury, illness, and hazards in order to help prioritize research and intervention efforts, and to evaluate the effectiveness of interventions;
Ø Ensure that research findings are disseminated and implemented.

CHSWC joins with the CORA Working Group in supporting the implementation of CORA in the following manner:

Ø Stakeholders need to participate in CORA, through ongoing involvement in developing a research agenda that addresses the needs of both workers and employers.
Ø Research must be peer-reviewed to ensure its integrity and credibility.
Ø Research results need to be provided in an understandable way.

Ø Ongoing evaluation of research findings and project implementation is essential.

For further information…

Ä See the CHSWC Project Section of this Annual Report: ‘California Occupational Research Agenda


Protect and educate young workers

Background

The California Partnership for Young Workers’ Health and Safety (previously: California Study Group on Young Workers’ Health and Safety) puts California on the forefront of young worker health issues.

The Commission has sponsored the Labor Occupational Health Program (LOHP) to convene a task force of representatives from statewide business, labor, government and educational organizations dealing with youth employment and education issues.

The purpose of the Partnership is to:

Recommendations:

CHSWC recommends continuing efforts to promote a positive safe employment for youth.

CHSWC recommends ongoing funding of the activities of the California Partnership for Young Workers’ Health and Safety.

For further information…

Ä See the CHSWC Project Section of this Annual Report: ‘California Partnership for Young Worker Health and Safety’

& 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.
: Check out www.dir.ca.gov/chswc for CHSWC reports and the latest information.


Consider Recommendations from the California Forum for Workplace Health and Safety

Background

The Commission on Health and Safety and Workers’ Compensation and the Department of Industrial Relations hosted a public educational program devoted to workplace injury prevention, safety and return-to-work. This ‘California Forum on Workplace Health and Safety’, held in February 2001, brought together over 500 people including workers, employers, the community and the public together to participate in presentations, discussions and various workshops to:

Recommendations:

CHSWC recommends that the following recommendations from the California Forum for Workplace Health and Safety be considered:

For further information…

Ä   See the CHSWC Project Section of this Annual Report: ‘California Forum for Workplace Health and Safety’
&  CHSWC Report: "Proceedings of the California Forum for Workplace Health and Safety’’ (publication pending)
:  Check out www.dir.ca.gov/chswc/Forum2001.html for Forum agenda, speakers and presentations.


The Commission on
Health and Safety and Workers’ 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.


 

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

Jill A. Dulich

Jill A. Dulich
Appointed by:  Governor
Term Expires:  December 31, 2002

Jill Dulich is Regional Director responsible for manament of workers' compensation and general liability for Marrott International, Inc. operations in California and Hawaii.  She also serves in high-level positions with several organizations, including the California Coalition for Workers' Compensation, the Self-Insurers Security Fund, and the Easted 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.


Kristen Schwenkmeyer

Kristen Schwenkmeyer
Appointed by:  Senate Rules Committee
Term Expires:  December 31, 2004

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.


Robert B. Steinberg, Esq.

Robert B. Steinberg, Esq.
Appointed by:  Speaker of the Assembly
Term Expires:  December 31, 2001

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 Chaper 11 Creditors Committees and a member of the Trustee Advisory Committee to the Manville, UNR and the National Gypsum Asbestos Disease Victim Trusts.  Mr. Steinberg received his law degree and Bachelor of Science Degree from University of California, Los Angeles.


John C. Wilson

John C. Wilson
Appointed by: Governor
Term Expires:  December 31, 1999

John C. Wilson is the Executive Director of the Schools Excess Liability Fund (SELF), a stateweide 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, Calfornia Coalition on Workers' Compensation, 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 the Field of Personnel Management and Industrial Relations from the University of California, Los Angeles.


CHSWC Members Representing Labor

Allen L. Davenport

Allen L. Davenport
Appointed by:  Speaker of the Assembly
Term Expires:  December 31, 2001

Allen L. 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 of 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.


Leonard C. McLeod

Leonard C. McLeod
Appointed by:  Governor
Term Expires:  December 31, 2002

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. 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 Office 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 Activities League, and raising funds for prenatal and health care related issues.


Tom Rankin

Tom Rankin
Appointed by:  Senate Rules Committee
Term Expires:  December 31, 2004

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 a union representative and organizer. Mr. Rankin received his law degree from Boalt Hall School of Law at the University of California, Berkeley.


Darrel Thacker (Shorty)

Darrel "Shorty" Thacker
Appointed by:  Governor
Term Expires:  December 31, 1999

Darrel "Shorty" Thacker is the Senior Business Representative of Local 22, Carpenters. Mr. Thacker also served as the Director of field support operations for the Bay Counties District Council of Carpenters. Thacker joined the Millrights in 1973, where he worked in construction as a journeyman, foreman, general foreman and superintendent from 1973 to 1978. He also worked as a Millright business agent from 1978 to 1983. Following his service as a United States Marine in the Vietnam War, Thacker earned an associate's degree in mathematics from Fresno City College in 1970.

 


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

Audit Report
       
"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-Out Report
        
"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 Report
       
"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 Report
      
"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 Worker Reports
       
"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)

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

Medical-Legal Report
      
"Evaluating the Reforms of the Medical-Legal Process Using the WCIRB Permanent Disability Survey" (1997)
        "Evaluating the Reforms of the Medical-Legal Process Using the WCIRB Permanent Disability Survey-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" (2000)

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)

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.


REFORM OUTCOMES

During its first year of operation, the Commission 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.

The reform legislation was enacted because, during the late 1980s and early 1990s, California employers had one of the highest workers’ compensation premium costs in the nation, while the maximum indemnity benefits to California injured workers for temporary and permanent disability were among the lowest in the nation. Moreover, California had one of the highest rates of workers’ compensation claims filing, which also increased costs to employers.

This legislation, which produced a sweeping reform of the system, was designed to rein in the cost of a workers’ compensation system that many believed to be out of control, causing too much to be spent on litigation, medical and medical-legal costs and causing too little to reach the pockets of injured workers.

The primary purposes of the law were to

This section of the CHSWC Annual Report will review these issues by assessing the differences in various measures before and after the implementation of the workers’ compensation reform legislation. These analyses incorporate information derived from CHSWC studies and observations and other sources.


Workers’ Compensation Insurance

Background

In California, about two-thirds of businesses purchase workers’ compensation coverage from the more than 100 private for-profit insurers and one public nonprofit insurer - State Compensation Insurance Fund. (The other businesses are permissively self-insured.)

Until a few years ago, California’s workers’ compensation insurance rates were regulated by the Insurance Commissioner under the minimum rate 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 workers’ compensation reform legislation repealed California’s 80-year-old minimum rate law and replaced it with an open-competition system of rate regulation in which insurers set their own rates based on advisory rates developed by the Workers’ Compensation Insurance Rating Bureau (WCIRB). Under this ‘open rating’ system, these recommended, non-mandatory pure premium rates are expected to cover the costs of benefits and loss adjustment expenses.


Insurance Market after Reform

Subsequent to the repeal of the minimum rate law, changes were noted in the actions of insurers and employers. 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 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 are changing carriers.

Also, with the repeal of the minimum rate law, significant price competition began among workers’ compensation insurers seeking to gain and maintain market share.

Furthermore, a serious under-reserving of claims was noted. In March 2001, WCIRB estimated that approximately $7 billion of claims were under-reserved.

Profitability of insurance companies as measured by the National Association of Insurance Commissioners also 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 in 1997 had the lowest return in the nation.

After open rating, many carriers shifted the risk of their workers’ compensation claims to other insurance companies, many of whom were inexperienced with the California workers’ compensation insurance market. Also, several California insurers left the market as a result of the decrease in profitability, contributing to a decrease in their share of the California workers’ compensation insurance market.

As shown in the following chart, the percentage of market share has changed dramatically since deregulation. According to the Workers’ Compensation Insurance Rating Bureau, California companies (excluding the State Compensation Insurance Fund) insured seven percent of the California workers’ compensation market in 2000, compared with 33% of the market in 1993.

California Workers' Compensation Insurance Market Share by Type of Insurer


Source: Workers’ Compensation Insurance Rating Bureau of California

At the same time, as discussed in the following section, insurance companies began to experience an increase in their indemnity payments due to the rising costs per claim in the late 1990s.

Currently, several insurance companies are experiencing problems with payment of claims. For example, Superior National Insurance Companies have been liquidated and several other insurance companies have been placed either under regulatory supervision or conservatorship by the Department of Insurance. At least fourteen 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.

In the case of Superior National undergoing liquidation, the California Insurance Guarantee Association (CIGA) is currently paying its claims at a rate of $40 million per month. However, it is possible that CIGA's liabilities of Superior National companies would exceed the immediate assets of CIGA, which are estimated to be close to $300 million.

The Executive Director of CIGA has proposed to increase the regular 1% surcharge on workers’ compensation carriers to 2% to be able to repay claims of Superior National companies. However, the 1% proposed surcharge increase does not take into account the possibility that any other companies currently experiencing problems will reach the liquidation stage.


Indemnity Claims

Indemnity Claim Frequency

Although the number of claims has been declining at both the national and the state level, insurance companies began to experience an increase in their indemnity payments after open rating.

The following chart shows how the indemnity claim frequency has changed from accident year to accident year. Decreases have been noted since 1991-92.

The decline in frequency has continued despite the robust growth in the number of persons employed in the California economy. Possible explanations offered for the decline in frequency include an increase in the employers’ focus on safety and more restrictive legislative changes reducing workers’ benefit eligibility.

 

California Workers' Compensation Estimated Percent Change in Indemnity Claim Frequency By Accident Year, as of December 31, 2000

 


Estimated Ultimate Total Loss Per Indemnity Claim

The Workers’ Compensation Insurance Rating Bureau of California (WCIRB) has published the following estimates of the ultimate total loss per indemnity claim by accident year, as of June 30, 2000.

The WCIRB predicts that the average cost of a 2000 indemnity claim will be $36,643, which is an 11.0% increase since 1999 and 89% greater than in 1994. Please note that the ‘mix’ of injuries may have changed during this time, which could have led to higher average costs. Certain types of injuries, such as stress injuries, may have decreased substantially.

According to the WCIRB, both average indemnity and medical claim costs have shown significant increases over the last several years, as shown on the following graph.

Estimated Ultimate Total Loss per Idemnity Claim by Year of Accident

 

Please note that the above cost estimates have not been indexed to take into account wage increase and medical inflation.

For purposes of illustration, the following chart depicts total losses indexed for inflation -- indemnity costs are indexed by the California Consumer Price Index (CPI), and medical costs are indexed by the Consumer Price Index for Western Urban Medical Care (CPI Medical). However, please note that the Consumer Price Index for Medical Care (CPI Medical) compiled by the US Department of Labor’s Bureau of Labor Statistics (BLS), is not directly applicable to medical costs in workers’ compensation. The BLS CPI Medical reflects increases in the costs of medical procedures for all patients nationwide, not just for workers’ compensation in California. Also, workers’ compensation costs operate within fee schedules, which are likely to have an effect on price increases, which again may not be reflective of price changes in the general health arena.

 

Estimated Total Loss per Idemnity Claim, Indexed for Inflation (Indemnity by CPI, Medical by CPI Medical, in 1989 dollars)

 

Source: WCIRB, BLS and DLSR

 

Data for the chart above was adjusted for inflation using the following indices:

Consumer Price Index and CPI Medical, by year

Index

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

CPI

128.0

135.0

140.6

145.6

149.4

151.5

154.0

157.1

160.5

163.7

168.5

174.8

CPI Med

149.8

163.7

178.3

191.7

203.8

212.0

219.7

227.6

234.7

240.3

248.2

258.6


Workers’ Compensation Premiums

Workers’ Compensation insurance premiums declined dramatically immediately after the reform and the elimination of the minimum rate law. The total written premium declined from a high of $8.9 billion in 1993 to a low of $5.7 billion in 1995. The written premium grew slightly from 1996 to 1999, but remained far below its level in the first part of the decade.

However, from 1999 to 2001, total written premium in California increased 56% to a record high of $11.1 billion. According to the WCIRB, premium is up sharply due primarily to rate increases in the market. For example, the average rates on 2000 policies were about 25% higher than on 1999 policies.

California Workers’ Compensation Written Premiums (in Billions)

 


Workers’ Compensation Premiums Compared with Insurer Loss and Expenses

According to the Workers’ Compensation Insurance Rating Bureau of California, the following table shows the total workers’ compensation premium amounts paid by employers compared with the estimated ultimate losses and expenses borne by insurers.

Accident Year

WC Premiums
(million$)

Estimated Ultimate Losses
(million$)

Expenses
(million$)

1989

$7,520

$5,114

$1,955

1990

$8,044

$6,210

$2,172

1991

$8,306

$6,794

$2,331

1992

$8,353

$5,480

$2,673

1993

$8,773

$4,571

$2,720

1994

$7,658

$4,373

$2,604

1995

$5,826

$4,643

$2,039

1996

$5,754

$5,121

$2,187

1997

$6,187

$5,847

$2,351

1998

$6,459

$6,440

$2,648

1999

$6,956

$8,090

$3,130

2000

$8,443

$8,527

$3,630

Source: Workers’ Compensation Rating Bureau of California


Medical Care

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".

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.

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).

DWC reports that as of December 2000, the number of enrollees in the HCO program is at an all time high of about 120,000. Currently, there are twelve certified HCOs and two additional applications are anticipated shortly. HCOs report a growing interest on the part of employers. However, the HCOs also report continued problems related to various requirements associated with using HCOs, most notably the enrollment process.

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.

DWC staff have proposed certain principals to guide the development of the RBRVS-based proposed OMFS. These include:

Because the RBRVS-based proposal will take some time to develop, DWC reports that it intends to propose an interim revision of the OMFS in 2001. The interim revision will be limited to a very short list of changes.


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 have been proposed to the hospital fee schedule, both of which will sunset on December 31, 2001. The first allows for the costs of surgical implantables for DRGs 496-500 to be paid for separately from the DRG overall rate. 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. The amendments to the fee schedule regulations that concern reimbursement for the costs of implantable instrumentation and hardware for spinal related surgeries under DRGs 496-500 have been adopted and were filed with the Secretary of State on March 14, 2001. These amendments will be effective for admissions that occur on or after April 13, 2001. Rulemaking proceedings on the remainder of the proposed amendments to the fee schedule - concerning the proposed cost outlier methodology and other issues - will continue.

For further information…

Ä    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.

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').


Medical-Legal Evaluations

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.

 

PPD Claims (In Thousands, by Year Injury)

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.

 

Medical Legal Exams/Claims at 40 months from beginning of accident year

Source: Workers’ Compensation Insurance Rating Bureau of California

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.


Average Cost per Medical-Legal Exam

There are two reasons why the average cost per exam has declined by 34% 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.

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.

Small increases in the average cost of exams since 1995 may be the result of changes in the mix of billing codes.

 

Average Cost per Mdical-Legal Exams

Source: Workers’ Compensation Insurance Rating Bureau of California


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.

 

Medical Legal Cost (In Millions) on PPD Claims Insured Employers, at 40 months after beginning of accident year

Source: Workers’ Compensation Insurance Rating Bureau of California (WCIRB PD Surveys, 1992-2000)


Sources of Improvement in Medical-Legal Costs

The 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.

 

Sources of Savings Medical-Legal Costs of PPD Claims: 1990 to 1998

Source: Workers’ Compensation Insurance Rating Bureau of California


‘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.

For further information…

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


Treating Physician Presumption

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.

Numerous parties have challenged the value of the change in the treating physician role and particularly the presumption given to the reports. These complaints generally involve a perception of the low quality of the treating physicians’ reports and the problem of poor quality reports given special authority. Many observers feel that the presumption has led to problems with ‘doctor shopping’ by the party with medical control and to increased litigation.

The Commission 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 found that

Treating physician reports are of substantially poorer quality that reports by Agreed Medical Examiners (AME) and Qualified Medical Examiners (QME).

The application of presumption to the PTP reports has not reduced the number of reports requested by the parties on permanent disability claims at insured employers.

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.

The Commission recommends 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 in progress.

For further information…

Ä    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]


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".


Targeted Consultation Program

DOSH reports that the targeted consultation program is concentrating its efforts on employers with the most significantly elevated experience modification (ExMOD), i.e., those assessed employers with an ExMOD of 200% or greater. In 1999, a total of 329 of these employers were provided with and completed targeted consultation. A total of 1,330 serious and 2,969 other-than-serious violations of Title 8 regulations were observed and corrected in 1999. In addition, a number of other loss-related deficiencies were observed which are not necessarily violations of Title 8.

These included: Injury and Illness Prevention Program deficiencies; slips, trips and falls; the absence of safe work practices; ergonomics and musculoskeletal injuries from materials handling problems; poor work-related injury and illness record keeping and loss trend analysis; deficiencies in chemical hazard communication programs; absence of machine and tool guarding and electrical hazards.

Employers who received targeted consultation assistance saw their establishments' workplace injury and illness incidence rates, and their workers' compensation loss indicators, improve more than other California employers as a result of the consultation. For example, targeted consultation employers saw their lost workday case incidence rate (LWDI) decrease by 56%. During the same period of time, the average percentage decrease in the LWDI for California employers in general was only 7%. In addition, targeted consultation employers saw reductions in various other workplace injury and illness rates and workers' compensation loss indicators from 1% to 45%.


Targeted Enforcement Program

The 2001 Report describes the status of the Targeted Enforcement Program (see Labor Code Section 6314.1). In 2000, 560 employers underwent a targeted enforcement inspection. During these inspections, 2,603 violations were observed and cited. Since 1994, 2,895 employers have undergone a targeted enforcement inspection, and 14,350 violations have been observed and cited. Of these violations, 40.4% were classified as "serious."

The Division of Occupational Safety and Health reports that for a series of five cohorts of employers who underwent enforcement inspections during the years 1994 through 1998, 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 and for each subsequent year up to and including 1999. The percentage yearly change in the LWDI for each cohort indicates that employers' LWDI decreased in four out of five cohorts by 19% to 47%.

For further information…

: The latest information may be obtained at http://www.dir.ca.gov/DOSH/EnforcementPage.htm Select ‘Targeted Inspection/Consultation Programs - 2001 Report’ under "Enforcement Reports".


Loss Control Certification Unit

The 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.

As of December 2000, a total of 109 insurer group plans – representing 289 individual insurers had been certified or recertified. This reduction in the number of insurer groups annually certified reflects the consolidation of insurers in the California marketplace. To become certified an insurer must submit to the Division an annual plan, which outlines the insurer’s methodology for selecting insured employers with the greatest workers’ compensation losses and the most significant preventable health and safety hazards. The LCCU has conducted 120 evaluations of compliance representing coverage for 99.9% of the workers’ compensation market.

From the inception of the program the Division has met regularly with an advisory "Working Group" made up of insurance, employer and labor representatives and interested stakeholders. The Working Group has emphasized the importance of quantitative assessment of the loss control certification experience. In order to provide an assessment of the effectiveness of the program, the LCCU prepared a report titled "ANALYSIS OF EMPLOYER EXPERIENCE WITH THE LOSS CONTROL CERTIFICATION PROGRAM, AND FINANCIAL IMPACT ON INSURERS, AS REPORTED BY INSURERS FOR PREMIUM YEARS 1998 AND 1999". The "ANALYSIS" examined data from all certified plans for the period covered.

The study determined that:

  1. Despite the turmoil in the California workers’ compensation industry, 289 certified insurers made loss control service available to their insured employers and provided service to their employers qualified under this program
  2. Loss control services provided to target employers have had a significant impact in the reduction of worker claims and in the reduction of dollar losses for insured employers;
  3. Costs to insurers for the Loss Control Certification Program do not present an undue burden on insurers. Costs have stabilized at 0.07% to 0.08% of direct written premium;
  4. Competition under open rating continues to cause high turnover in the coverage for target employers, which has lead to the exclusion of service to a number of employers eligible under this program;
  5. Adoption of a uniform selection methodology will assure a more consistent population of employers across all insurer groups who would most benefit from loss control services under this program; and
  6. The Loss Control certification Unit is meeting its mandate contained in Labor Code Section 6354.5.

The LCCU is proposing:

CHSWC is currently conducting an evaluation of the value of regulating loss control services.

For further information…

Ä    See the CHSWC Projects section in this Annual Report: Evaluation of Targeting Methods – High Hazard and Loss Control
: The latest information may be obtained at www.dir.ca.gov/DOSH/EnforcementPage.htm Select ‘Targeted Inspection/Consultation Programs - 2001 Report’ under "Enforcement Reports".


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          
OSHSB provides 15-day public comment period on revisions to proposed standards.

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


Vocational Rehabilitation

The Vocational Rehabilitation Benefit is meant to assist injured workers who suffer occupational injuries resulting in permanent impairments that preclude the injured workers from returning to their usual occupation. A major component of the 1993 legislative package was a set of reforms aimed at reducing the cost of the Vocational Rehabilitation Benefit while maintaining or improving the outcomes for these seriously injured workers.

Research performed for the Commission looked before and after reform at both the cost of rehabilitation and the outcomes for injured workers qualifying for the benefit.

The study finds that as a result of reforms, the cost of the Vocational Rehabilitation Benefit was cut in half. Nearly three-quarters (72%) of the saving was a result of the cap placed on total cost, the cap placed on QRR services and the limitation placed on the number of plans. Over one-quarter (28%) of the savings resulted from shifting workers from use of vocational rehabilitation services into modified and alternate work with the at-injury employer.

Average Vocational Rehabilitation Cost per Claim

Source: CHSWC Study of Vocational Rehabilitation

However outcomes for seriously injured workers remain poor. Much remains to be done to improve post-injury employment outcomes for all seriously injured workers, especially for particularly hard-hit segments of this group. The preliminary results from the Commission’s study highlight serious problems for older workers and workers who suffer injuries that result in substantial levels of chronic pain.

The Commission has incorporated further analyses of vocational rehabilitation outcomes into its return-to-work studies by RAND.

For further information…

& CHSWC Report: ‘Vocational Rehabilitation Reform Evaluation’ (2000)
Available at www.dir.ca.gov/chswc]
& CHSWC Report: ‘Interim Report - Vocational Rehabilitation Benefit: An Analysis of Costs, Characteristics, and the Impact of the 1993 Reforms’ (1997) [Available at www.dir.ca.gov/chswc]


Adjudication Simplification

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. One hundred fifty-six claims administrators requested and received variances to delay their reporting through the end of 2000.

The WCIS database has grown to include data on over 400,000 workers' compensation claims, reported by 248 distinct claims administrators. The vast majority of these claims had dates of injury in the year 2000. These reported claims comprise -- very roughly -- about one-half of all California claims for the required reporting period of March through December. Because of the nature of the start-up process, Subsequent Reports are being transmitted by fewer claims administrators.

The claims currently in the WCIS database are immature: only a fraction of ultimate losses have yet developed, few have yet been presented for adjudication by the Workers' Compensation Appeals Board, and the first cycle of Annual Reports has not yet occurred. An Annual report is filed for each claim, and includes a list of all benefit types (both indemnity benefit types and "other benefit" types including total medical, voc rehab, etc.) paid on the claim through the end of the year, and the total paid by benefit type through the end of the year. Data most relevant to many policy issues will not be available until these claims have matured sufficiently.

DWC reports that the WCIS fulfills a mandate in Labor Code §138.6, for the Administrative Director to develop a cost-efficient information system. The data reported to DWC electronically by claims administrators is the first and most visible component of WCIS. DWC plans that over time WCIS will grow to include linkages to DWC’s internal data on adjudicated cases and a series of supplemental surveys on topics that are not well addressed by any administrative data.

The Commission 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.

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 atwww.dir.ca.gov/CHSWC/chswc.html]


Employers and Unions in Carve-Out Agreements

 (As of March 22, 2000)

1.   An agreement between the California Building & Construction Trades Council and the Metropolitan Water District of Southern California for the Eastside Reservoir Project.  [Expires November 7, 2000]

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, consisting of about 300 contractors.  Each individual employer chooses whether to sign the master carve-out agreement.  [Expires August 14, 2001]

 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.  Each individual contractor chooses whether to sign the master carve-out agreement.  [Expires August 14, 2001]

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.  Each individual contractor chooses whether to sign the master carve-out agreement.  [Expires August 24, 2001]

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, 2000]

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.  [Expires March 11, 2000]

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 2000 - date uncertain]

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, 2000]

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.  [Expires October 18, 2000]

13. An agreement between the Los Angeles Building and Construction Trades Council, AFL-CIO, and Cherne-ARCO.  [Expires July 31, 2001]

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]

Source:  Division of Workers’ Compensation


Psychiatric and Post-Termination Claims

The reform legislation limited the compensability of workers’ compensation psychiatric "stress" claims and post-termination claims. The psychiatric claim must be predominantly caused by work in order to be compensable, unless the claim results from a violent act. The reform precluded compensation for a psychiatric injury if substantially caused by a lawful, nondiscriminatory, good faith personnel action.

The reforms disallowed claims filed after notice of termination unless the employee demonstrated existence of the injury prior to termination. Psychiatric claims so filed would be compensable only if existence of the injury prior to termination was demonstrated, the injury was caused by a sudden and extraordinary event, or the injury resulted from sexual or racial harassment.


Psychiatric Claims

To a large extent, the costs and frequencies of psychiatric exams during the early 1990s was not associated with equivalent levels of indemnification to workers for psychiatric disabilities. Only a fraction of claims with a psychiatric medical-legal exam receive a rating that includes a finding of psychiatric disability.

The chart below shows the portion of PPD claims that received a rating that included a psychiatric disability. It compares this to the percent of PPD claims that had one or more psychiatric medical-legal exams.

Percentage PD claims with Psychiatric Exam and Psyachiatric Rating

Source: Workers’ Compensation Rating Bureau of California


Total Costs of Psychiatric Exams

Much of the overall improvement in medical-legal costs can be attributed to the substantial decline in the frequency of PPD claims that involve a psychiatric evaluation. As the following chart demonstrates, the cost of psychiatric exams on PPD claims for insured employers has declined by 91% since its high in 1990.

Total Cost of Psychiatric Exams 40 months after the beginning of Accident Year, Insured Employers, Millions

Source: Workers’ Compensation Rating Bureau of California

 

For further information…

& CHSWC Report: Evaluating the Reforms of the Medical-Legal Process (1997)
[Available at www.dir.ca.gov/chswc]


Workers’ Compensation Disability Benefits

The reform legislation provided workers’ compensation benefit increases for temporary (TD) and permanent disability (PD).

As shown on the following chart, maximum weekly payment amounts were increased in 1994, 1995 and 1996 for PD and TD ratings, except PD ratings under 15%.

Maximum Weekly Disability Payments

Disability Rating

Pre Reform

July 1, 1994

July 1, 1995

July 1, 1996

Permanent Below 15%

$140

$140

$140

$140

Permanent 15%-24.75%

$140

$148

$154

$160

Permanent 25%-69.5%

$148

$158

$164

$170

Permanent 70%-99.75%

$148

$168

$198

$230

Permanent 100%

$336

$406

$448

$490

Temporary

$336

$406

$448

$490


Impact of Changes to the Permanent Disability Benefit

The CHSWC Study of Permanent Disability by the RAND organization has looked at the temporary and permanent disability benefit and the increases provided by the reform legislation.

The maximum weekly benefit level was increased most for the very highest disability levels. Because the highest disability categories include a small fraction of PD claims, the impact of the increases since 1991 for the majority of PD recipients have been more than offset by the effect of inflation on the value of the benefit.

The following chart depicts the value of the permanent disability benefit for those rating categories as expressed in 1984 dollars.

 

Value of Permanent Disability Benefit by PD Rating Level Adjusted for Inflation (1984=100)


The Commission’s ongoing study has also been evaluating how well the workers’ compensation PD benefit compensates for wage losses sustained by injured workers.

The study has found that, even with the 1994 reform increases, all permanently disabled injured workers sustain significant uncompensated wage loss, irrespective of the size of the PD rating.

Moreover, injured workers with the lowest-rated claims (about 90% of all claims) have proportionately larger uncompensated wage losses than those with high disability ratings.

The following chart shows the average weighted permanent disability benefit for each year from 1984 to 2001. The average weighted PD benefit was calculated at the midpoint of the various permanent disability rating intervals (.25-9.75, 10-14.75, 15-19.75, 20-24.75, 25-29.75, 30-49.75, 50-69.75, and 70-99.75) and at the weekly benefit maximum for each interval, which applies to over 90% of the recipients. Finally each PD interval was weighted according to the percent of all disability ratings that fell in that interval to compute the PD benefit level.

The PD benefit levels were then adjusted for inflation each year using the Consumer Price Index for California. These adjusted levels depict the value of the PD benefit, expressed in 1984 dollars. The following chart shows how the level of the weighted-average PD benefit has increased over time, while the value of the benefit has declined.

Permanent Disability Benefit Level Compared with Benefit Value

 

By 2001 the overall value of the average permanent disability benefit after adjustment for inflation will have declined to about 73% of its value in 1984, as illustrated in the following chart.

Weighted Average Permanent Disability Benefit (Paid at Maximun, 1984=100%)

 

PD Changes by Rating Level

The benefit increases that went into effect from 1992 to 1996 applied mainly to the higher permanent disability ratings. For the highest PD interval 70-99.75%, benefit levels were increased substantially, enough that even after the effects of inflation, the level of benefit exceeded that in 1984.

However, for the lowest PD ratings, those under 15%, no benefit increase has been enacted since 1984 and the inflation adjusted value of the benefit is 57% of what it was in 1984. The following chart shows the inflation-adjusted value of the PD benefit for each interval relative to 1984.

In summary, the value of the permanent partial disability benefit has lost over a quarter of its value in the last 15 years. This has been most seriously felt by the over 40% of permanent disability participants who receive ratings under 15%. For this group of lower rated claims, the inflation-adjusted value of the benefit is 57% of what was paid in 1984.

For further information…

& Report: RAND’s Findings and Recommendations on California's Permanent Partial Disability System: Executive Summary (1997) [Available at www.dir.ca.gov/chswc]
& CHSWC 1998-1999 Annual Report: "Special Report on Workers’ Compensation Costs and Benefits After the Implementation of Reform Legislation" (1999)
[Available at www.dir.ca.gov/chswc]


WORKERS' COMPENSATION AND THE CALIFORNIA ECONOMY

Introduction

Various proposals to increase workers’ compensation benefits have been submitted to the Legislature. Concerns have been expressed that increases in benefits would have a negative impact on the California economy and on California employers and employees.

CHSWC has been analyzing workers’ compensation benefit costs in relation to the larger California economic picture. This analysis is intended to provide information and analyses of workers’ compensation costs in relation to the California economy.


Scope

Workers’ compensation costs and benefits are presented in relation to various economic indicators, such as total payroll, California’s Gross State Product, and personal income. Information regarding workers’ compensation cost as a percent of payroll by industry group is also included. These analyses take into account the growth of costs that has led WCIRB to recommend increases in the premium rate.

Data utilized in these analyses are derived from a variety of sources, including the Legislative Analyst’s Office, the Office of Economic Research, the Department of Finance, the Division of Labor Statistics and Research, the Workers’ Compensation Insurance Rating Bureau of California, the California Workers’ Compensation Institute and other organizations. Frank Neuhauser of the Survey Research Center at the University of California at Berkeley contributed his expertise and technical models.


Economic Outlook for California

As shown in the Department of Finance’s December 2000 report "Cal Facts- California’s Economy and Budget in Perspective", California is the world’s sixth-largest economy. California accounts for 13% of the nation’s output, which is the largest in the world. California’s economy trails only Japan, Germany, England and France.

The "May Revision to Governor’s Budget for 2001-2002" reports that U.S. economic growth has been slower than expected in recent months, and the national slowdown has begun to affect California, even though California still continues to outpace the nation.

Additionally, while the energy crisis has not yet directly affected the national or California economy, rising wholesale energy costs are expected to have a ripple effect throughout the western United States.

Reflecting these developments, the forecasts of most economic indicators have been revised down.

Reflecting a similar perspective, the Legislative Analyst’s Office (LAO) publication "2001-02 Budget: Perspectives and Issues", issued in February 2001, predicted that:

California’s Workers’ Compensation Costs

California’s workers’ compensation costs for all California employers for the past decade and projected into the future are shown in the following chart.

The CHSWC reports on the California economy discusses the methodology and assumptions used here to derive past costs and future projections. Please note the "Workers’ Compensation Benefit Simulation Model", described elsewhere in this report, may be used to determine the impact of potential benefit adjustments on the estimated total costs.

 

California’s workers’ compensation costs 1990-2006 (Billions)

Note that workers’ compensation costs decreased from 1992 through 1995 due in large part to declining claim frequency and the elimination of the minimum rate law governing workers’ compensation premiums. As "open rating" took effect, insurers competed for business by lowering the premium rates.

Increases in the costs from 1995 to 1998 are due in part to the growth of the California workforce. Projected increases in costs from 1999 to 2006 also take into account projected workforce growth. These estimates reflect underlying cost increases calculated by the Workers’ Compensation Insurance Rating Bureau of California (WCIRB) that led WCIRB to recommend increases in the premium rate. Please note that these estimates would be lower if they were indexed for inflation.


Workers’ Compensation Costs Compared to Total Payroll

What do these workers’ compensation costs mean in relation to the economy?

Payroll is probably the best measure against which to compare the cost to employers and labor of workers' compensation. Payroll is the most significant variable cost faced by employers. Employment and wage decisions are made after considering the full cost of an employee, including wage, benefits (health insurance, pension, workers compensation, etc.) and comparing that to a worker's expected productivity.

Using payroll also keeps in perspective that benefit costs tend to rise with wages, and comparing workers' compensation costs to payroll will tend to remove overall wage and employment trends from the evaluation of whether benefits are rising or falling. For example, if benefits remain fixed, but wages rise, cost as a percent of payroll will decline (as will workers' replacement rates). On the other hand, if benefits are indexed to wages (e.g., the state average weekly wage) then benefits as a percent of payroll (and workers' wage replacement after injury) will tend to remain steady over time.

The following chart shows total payroll in California from 1990 through 2006, as reported by the Department of Finance and the Legislative Analyst’s Office.

California Total Payroll 1990 through 2006 (In Billions)

As can be seen, the rate of increase of workers’ compensation costs is significantly lower than the rate of increase of total payroll.

Consequently, workers’ compensation costs as a percentage of payroll have declined substantially, as shown in the following graph.

California Workers’ Compensation Costs as a Percentage 
of Total Payroll 1990-2006


After peaking in the early 1990s at slightly over 3% of payroll, workers’ compensation costs have declined to under 2%. The decline was driven primarily by declining claim frequency. In the absence of a change in benefits, costs are projected to continue declining, driven mainly by increasing wage rates subject to fixed benefit maximums.


Workers’ Compensation Costs vs. Payroll among Industry Groups

These overall average costs mask substantial variation across broad industry groups. For the construction industry, workers compensation costs peaked at over 10% of payroll in 1991 while for professional and clerical professions, costs, even at their peak, were less than 1% of payroll.

However, for all industries, the significant downward trend of workers’ compensation costs as a percentage of payroll can clearly be seen in the following graph.

 

Workers' Compensation Costs by Industry as a percentage of payroll (wages and salaries, without benefits)

Data Source: Workers’ Compensation Insurance Rating Bureau of California


Workers’ Compensation Costs compared with Other Economic Indicators

Although ‘total payroll’ is the preferred indicator against which to compare workers’ compensation costs, comparisons of workers’ compensation costs against other economic measurements result in similar findings.

For example, when comparing workers’ compensation costs against the Gross State Product, we find that costs have dropped from 1.39% of GSP in 1990 to 0.9% of GSP in 2003.

 

Workers’ compensation costs as a Percentage of Gross State Product

 

Similarly, when comparing workers’ compensation costs against the Total Personal Income, we find that costs have dropped from 1.69% of Total Personal Income in 1990 to 1.03% of Total Personal Income in 2006.

 

cost of workers’ compensation as a percentage of personal income

 

Conclusions

For further information…

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


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

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 1990’s. This variability in pattern is coincident with the implementation of the workers’ compensation reform legislation of 1989 and 1993.

 

DWC Opening Documents

 

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.

From 1998 to 2000, the total number of filings rose slightly, reflecting an increase in the number of applications, a decrease in C&Rs, and a slight decrease in Stips.


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.

DWC Opening Documents Percentage of each Type by Year

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 2000.

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 2000.


DWC Hearings

Numbers of Hearings

As shown in the chart below, the numbers of both types of DWC hearings -- trials and conferences – declined sharply from 1996 to 1997, then have remained fairly constant from 1997 through 2000.

 

DWC Hearing Held

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,


 

 

Elapse Time in Days from Request to DWC Hearing

Source: Division of Workers’ Compensation

As the above chart shows, the average elapsed time from request to DWC hearing has decreased significantly over the past few years.

Even so, only average time to an expedited hearing is 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.

DWC Case-Closing Decisions

 


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.

DWC Decisions Percentage Distribution by Type of Decision

 

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 2000, 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.

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.

 

DWC Decisions on liens

 


Vocational Rehabilitation

Vocational Rehabilitation Plan Approvals

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

 

Vocational Rehabilitation Plan Disapprovals

Source: Division of Workers’ Compensation

 

Vocational Rehabilitation Plan Disapprovals

 

Vocational Rehabilitation Plan Disapprovals

Source: Division of Workers’ Compensation

Vocational Rehabilitation Decisions

 

Vocational Rehabilitation Decisions and Orders

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, 2001, summarizes the accomplishments of the Audit Unit during calendar year 2000.

DWC reports that in 2000, the Audit Unit conducted 54 audits and audited 8,921 claims, an increase over the 30 audits and 5,743 claims audited in 1999. However, the totals for administrative penalties assessed for specific violations in 2000 (10,354 totaling $1,524,470) were not substantially different from the 10,232 penalties totaling $1,532,540 assessed in 1999. DWC explains that the reason for the proportionate decrease in penalties assessed for those 54 audits seems to be a reflection of overall better performance for the 54 audit subjects audited in 2000 than the 30 audit subjects audited in 1999. When the $140,000 in civil penalties assessed is included in the year 2000 audit penalties, however, the total is $1,664,470.

Several factors indicate that overall claims performance improved slightly in 2000:

A large percentage -- 44.5% -- of the unpaid compensation found in audits in 2000 was in permanent disability. DWC reports that the main reasons for this relatively high percentage of unpaid permanent disability indemnity continue to be the failure of claims administrators to pay reasonable estimates of permanent disability before permanent disability ratings are received, and the failure to recognize that permanent disability benefits begin accruing immediately after the last period of temporary disability.

DWC also notes that there continues to be a high number of penalty assessments involving violations for the failure to issue benefit notices, the late issuance of benefit notices, and the issuance of materially inaccurate or incomplete benefit notices. Excluding specified vocational rehabilitation notice penalties, 4,274 penalty citations totaling $456,560 (41.3% of the total of 10,354 penalties assessed, and 29.9% of the total dollar amount of $1,524,470) involved the provision of benefit notices.

For further information…

DWC Report: 2000 Audits of Workers' Compensation Insurers, Self-Insured Employers, and Third-Party Administrators (2001) - available at www.dir.ca.gov/dwc/dwcrep.htm
CHSWC Report on the Division of Workers’ Compensation Audit Function (1998) – available at www.dir.ca.gov/chswc


Costs

Workers’ Compensation Premium

While the overall rates charged for workers’ compensation insurance have dropped an estimated 5%-6% since the high in 1993, the total amount of earned workers’ compensation premium increased slightly in the latter part of the decade.

This increase in total premium appears to be reflective of

California Workers' Compensation Toatal Earned Premium

A history of the workers’ compensation advisory pure premium rate recommendations and approvals is depicted on the following page.


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: An 8.5% increase in the pure premium rate for 2002.
Insurance Commissioner: The Commissioner’s hearing is scheduled for September 26, 2001.


Workers’ Compensation Expenditures – Insured Employers

Indemnity Benefits

According to the Workers’ Compensation Insurance Rating Bureau of California (WCIRB), total of $3.5 billion in workers’ compensation indemnity benefits were paid during 2000 by insured employers, an increase from the $3.1 billion paid in 1999:

Indemnity Benefit 1999 2000
Temporary Disability $1,190,731 $1,380,151
Permanent Total Disability $75,413 $59,561
Permanent Partial Disability $1,303,199 $1,500,412
Death $42,581 $44,007
Funeral Expenses $1,880 $1,775
Life Pensions $24,801 $28,404
Vocational Rehabilitation $431,796 $462,074
  $3,070,401 $3,476,384

Note: Figures are in thousands of dollars

 

 

Indemnity Benefits Paid by Insured Employers-2000

 


Medical Benefits

As reported by the WCIRB, workers’ compensation medical benefits paid during 2000 by insured employers totaled $2.9 billion, an increase from the $2.5 billion paid in 1999. The overall increase in medical benefits paid was 16%, while pharmaceutical benefits increased by 37% from 1999 to 2000.

Medical Benefit1999 2000
Physicians$1,471,411 $1,704,319
Capitated Medical$849 $5,519
Hospital$657,971 $752,475
Pharmacy$155,587 $206,233
Payments Made Directly to Patient$155,399 $168,887
Medical-Legal Evaluation$93,640 $109,754
 $2,534,857 $2,947,187

Note: Figures are in thousands of dollars

Paid Medical Costs for 2000

 


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. The biggest percentage increase was in carpal tunnel/repetitive motion injuries.

Average Cost 
per Claim by Type of Injury

 


Workers’ Compensation Expenditures - Private Sector Self-Insured Employers

Number of Employees

Employees of Private Sector Self-Insured Employers

 


Number of Indemnity Claims

 

Number of 
Indemnity Claims

 


Incurred Cost per Indemnity Claim

Incurred Cost per Indemnity Claim

 


Incurred Cost per Claim – Indemnity and Medical

Incurred Cost per Claim – Indemnity and 
Medical

 


Outcomes

Injury and Illness Rates in California

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

This is the lowest rate since collection of these statistics began in 1971.

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.

 

OSHA Injury and Illness Rates in California

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.


Occupational Injury and Illness in California Sector

Source: Division of Labor Statistics and Research


Lost Time Injury and Illness Rates in California by Sector

Source: Division of Labor Statistics and Research


Occupational Injuries 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 1989 and 1999. The largest decreases in rates over the decade were seen in the agriculture, mining, wholesale trade, and manufacturing industries with rates of decline of 62%, 61%, 58% and 56% respectively.

California Injury and Illness Rates by Industry 1989 and 1999

Source: Division of Labor Statistics and Research


Profile of Injury and Illness Statistics

Data for the following analyses 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

California’s most recent work injury and illness statistics (1999) indicate an injury and illness rate of 5.9 cases per 100 full-time employees in the private sector in 1999. This is a 37% decline from the 1990 peak level of 9.4 and a 6% decline 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 1999, the work injury and illness rate across the US fell from 8.8 to 6.3 cases per 100 employees in the private sector although the national decline of 28% 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.

Days away from work cases (cases involving days away from work with or without restricted activity) dropped from 2.7 to 1.8 cases per 100 full-time employees from 1994 to 1999 in the private sector. This also mirrors the national trend with the number of days away from work cases falling from 2.8 to 1.9 in the national private sector with a similar decline as that of California.

Industry Data:

Types of Injuries

The drop in work injuries since 1994 has been broad-based with the number of reported cases down for every category of injury with the exception of amputations over the past five-year period. (94-99). The number of sprains and strains continue 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 injuries have increased since 1997: fractures and carpal tunnel syndrome have increased by 12% and 9% respectively between 1997 and 1999.

Demographics


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.

 

Work Status at Vocational Rehabilitation Plan Closure

 

The total numbers of vocational rehabilitation plans approved increased slightly from 1991 to 1992, then rose dramatically from 1992 to 1993 and stayed on that high level through 1994. From 1994 to 1997, the total number of plans closed declined each year until reaching the 1991 level.

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. The numbers of plan terminations remained fairly constant before declining from 1996-2000.


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.

 

DWC Vocational Rehabilitation Plan Outcome

 

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.

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:

Overview of All CHSWC Projects and Studies

Permanent Disability

Initial Wage Loss Analysis

Status: Completed
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)

Enhancement of Wage Loss Analysis – Private Self-Insured Employers

Status: Completed
For further information…
           
& CHSWC Report: Permanent Disability, Private Self-Insured Firms (RAND, 2001)

Enhancement of Wage Loss Analysis – Public Self-Insured Employers

Status: In process
For further information…
          
Ä See the project synopsis following.

Impact of Local Economic Conditions on Wage Loss

Status: In process
For further information…
           
ÄSee the project synopsis following.

Permanent Disability Rating Tool

Status: In process
For further information…
           
ÄSee the project synopsis following.

 

Return to Work

Analysis of Wage Loss and Return to Work in Other States

Status: In process
For further information…
           
Ä See the project synopsis following.

‘Best Practices’ Encouraging Return to Work

                           Status: In process
                            For further information…
                                      
Ä 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…
           
ÄSee 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…
               
ÄSee 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…
           
ÄSee the project synopsis following.
           
& CHSWC Report: ‘Evaluating the Reforms of the Medical Legal Process’

Vocational Rehabilitation Study

Status: In process
For further information…
            
ÄSee "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…
            Ä See the project synopsis following.

California Partnership for Young Worker Health and Safety

Status: Ongoing
For further information…
          
ÄSee 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…
           
ÄSee the project synopsis following.

California Forum for Workplace Health and Safety - February 2001

Status: In process
For further information…

          
ÄSee the project synopsis following
          
& CHSWC Report: Proceedings of the California Forum for Workplace Health and Safety (Publication pending)
            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…
           
ÄSee the project synopsis following.

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…
            Ä
See the project synopsis following
  & 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…

  
         Ä
See the project synopsis following
  & 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

Pilot Project – Shared Research Database

Status: In process
For further information…
           
Ä See the project synopsis following.

 

Community Concerns

Benefit Simulation Model

                Status: Completed
                For further information…
                           
Ä See the project synopsis following.
                   
: 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…

  
        
Ä See the report section "Workers’ Compensation and the California Economy"
        
& 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 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 Pharmaceutical Costs Study

Status: Completed
For further information…

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

Workers’ Compensation Anti-Fraud Activities

Status: Completed
For further information…

  
        
Ä See the project synopsis following
           
& 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)

Study of Workers’ Compensation Benefit Utilization

Status: In process
For further information…

  
        
Ä See the project synopsis following.

Workers’ Compensation Premium Calculations – Evaluations of Alternative Factors

Status: In process
For further information…

  
        
Ä See the project synopsis following

School District Workers’ Compensation Liability - Labor Code §3368

Status: In process
For further information…

  
        
Ä See the project synopsis following.

Inpatient Hospital Fee Schedule and Outpatient Surgery Study

Status: In process
For further information…
          
Ä  See the project synopsis following.

 


Synopses of Current CHSWC Projects and Studies

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)


Policy Advisory Committee                            

Goals Established by the CHSWC Permanent Disability Advisory Committee

  • Efficiently decrease uncompensated wage loss for disabled workers in California.
  • Increase the number of unjured workers promptly returning to sustained work.
  • Reduce transaction and friction costs, including "costs" to injured workers.

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.

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)


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 2001 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?


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.

This report is intended to address the issue of the impact of the recession on the estimates in the original report. It updates the estimates at insured firms to include data on claims files through 1997. This report is currently being technically reviewed, but the preliminary findings include the following:

· Losses have declined for permanent disability claimants during the 1990s. In particular, they declined during the period 1991-1993 from over $40,000 per PPD claimant to approximately $35,000 per PPD claimant. This decline in losses led to increases in before-tax replacement rates to approximately 55 percent. After-tax replacement rates are approximately 70 percent.
· The decline in losses was more significant for low-rated claimants, but replacement rates remain low for this group.
· High-rated claimants have been left behind. Improving economic conditions and other changes that occurred in the workers’ compensation system over the 1990s do not seem to have improved outcomes for the highest rated claimants (those with disability ratings over 30).


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?

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.

Expected in 2001 is a report on improving disability ratings in California, 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

This project will compare the wage loss experience of other states to the results for California. Estimation of the wage loss experience of other states can improve the ability to understand the causes of wage loss. Differences in wage losses across states can be analyzed so that reforms can be identified that will be effective. A focus of this analysis will be on differences across states in return-to work. In addition, the effectiveness of the policies of other states can be evaluated and the impact of other differences in the workers' compensation system can be examined.

The report comparing earnings losses and replacement rates in several states is expected in late 2001. In this report, we will:

· Compare earnings losses for permanent disability claimants in California to comparable workers (in terms of industries and pre-injury earnings) in New Mexico, Washington, Oregon, Wisconsin, and Florida.
· Compare replacement rates of earnings losses across these six states.
· Compare return to work and post-injury employment of PPD claimants in the six states.
· Examine the approach to permanent disability compensation in the six states.
· Suggest recommendations for improvement in the California workers’ compensation system based on practices that appear to improve outcomes in states that have better replacement rates, lower losses, and better return to work.

Preliminary Findings

The preliminary results of the study among others indicate that California has higher wage losses and lower replacement rates than Wisconsin or Washington. Also, higher income workers in California and Washington have lower replacement of losses and higher rated cases have much higher replacement rates. A report of the study is expected in late 2001.


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 2001, 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:

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.


Return to Work

Policies and Strategies to Help Injured Workers Return to Sustained Employment

Background

Injured workers who are permanently disabled face personal and physical problems as well as sustained financial losses even after receiving benefits in the California workers’ compensation system. According to RAND, workers with permanent partial disability experience losses exceeding 30% of the after-tax income that they would have earned over a five-year period if uninjured. These losses might be preventable through programs and practices that prevent workplace injuries and illnesses and that accommodate and support workers who become injured. However, many obstacles hinder successful and sustained return to work such as financial disincentives, communication problems and other obstacles.

Because of the serious physical, financial, and personal problems confronting workers with permanent disability, the Commission on Health and Safety and Workers' Compensation has recommended continuing efforts by the workers' compensation community to promote injured workers' prompt return to work in sustained employment. This project is designed to assist the Commission and the workers' compensation community in achieving this goal.

Research Activities

The primary objective of this project is to collect in-depth, qualitative data about experiences and insights regarding medical practices, employer policies, and workers' compensation claims programs that help injured workers return to long-term, sustained employment. The data were collected through a series of discussion-group sessions.

These sessions focused on the perspectives and insights of the following types of persons who are involved in the earliest stages of a claim:

  1. injured workers,
  2. claims administrators,
  3. union representatives,
  4. management representative, and
  5. health care providers.

The sessions were held in the period June 2000 through April 2001.

Planning Activities

The project team met with the Commission's Construction Industry Task Force on February 16, 2000. At this meeting, representatives from labor and management discussed return-to-work problems and issues that are of particular concern in the construction industry in California. The participants then brainstormed on potential solutions.

The team formed an advisory committee for this project. The committee includes representatives from labor, employer organizations, the claims industry, applicants' attorneys, health care providers, injured worker support groups, rehabilitation counseling, community legal services, the Department of Industrial Relations, the Division of Workers' Compensation, the Industrial Medical Council, RAND, and the Survey Research Center. The first meeting was held on March 31, 2000. At this meeting, the participants reviewed the scope and activities of the project. They also reviewed the ideas discussed by the Construction Industry Task Force and further discussed and elaborated on problems and solutions that might be applicable in a broad range of industries. Finally, the participants were invited to advise on methods to recruit participants for the discussion-group sessions.

Ideas generated in the meetings of the Construction Industry Task Force and the Project Advisory Committee were used in the planning of the discussion-group sessions, described above.

Advisory Review

Because of the multidisciplinary nature of this project, the project team formed an Academic Advisory Panel consisting of faculty and researchers from UC Berkeley. The panel is advising the project team on the methods to collect, analyze, and report on the data.

The second meeting of the Project Advisory Committee was held on May 10, 2001. At this meeting, the advisory committee members reviewed activities completed in the project and some of the major themes that had begun to emerge from an initial review and analysis of the five discussion-group sessions. The committee members gave advisory input on practical strategies that had been suggested in the discussion-group sessions.

Status

Completed

For further information...
           
& CHSWC Report: ‘Return to Work in California: Listening to Stakeholders’ Voices’ (2001)


Return to Work

Primary Treating Physician Effectiveness in RTW After Low Back Injuries

Background

Low back pain is the leading cause of disability for people under the age of 45 and the second leading cause of industrial absenteeism. There appears to be a wide variation in the time workers stay on disability benefits and remain off work even if they had suffered similar injuries. A goal of the PD Policy Advisory Committee is to increase the numbers of workers promptly returning to sustained work. The Commission wants to facilitate injured workers’ recovery and subsequent return to the workplace as soon as it is consistent with recovery from their injuries.

Description

The study was organized in two phases. The first phase of the study served to investigate the impact of specific physical workload factors on the duration of disability and return to work after a low back injury controlling for demographic, injury-related, psychosocial, and other job related characteristics. The second phase of this project will identify characteristics of the primary treating physician which help to facilitate a safe and timely return to work after low back injury.

Status

The first phase of the study is completed and the results were published in March 2000. The next phase of the study, dealing with physician factors that influence return to work rates, is in process.

Findings from the First Phase of the Study

  • Heavy physical work and an increase in psychological demands are barriers to return to work during all phases of disability.
  • High job control and high work schedule flexibility doubled return to work rates during the subacute phase of disability (the phase which extends beyond the first 30 days of disability). Also people in the subacute phase who have had a previous low back injury had a higher chance of returning to work than those who did not.

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


Workers’ Compensation Reforms

Update of Treating Physician Presumption Study

Background

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.

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 has contracted with the University of California at Berkeley and is utilizing the California Workers’ Compensation Institute’s (CWCI’s) ICIS data for this evaluation.

Findings

Initial results of this study indicate 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.

In addition, 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.

The current study is examining how the presumption has affected costs of the workers' compensation system. Preliminary findings indicate that there was a 15-day increase in duration of temporary disability when the worker is represented and has control of the doctor than when the worker is represented and does not have control.

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)



Workers’ Compensation Reforms

CHSWC Response to Questions from the Assembly Committee on Insurance

Background

In preparation for its legislative session, the Assembly California Legislature Committee on Insurance requested that the Commission on Health and Safety and Workers’ Compensation prepare responses to several workers’ compensation research questions. The questions included the following topics:

  • Benefit Increase for Low End Permanent Disability Claims
  • Vocational Rehabilitation
  • Federal and Alternate State Compensation Programs
  • Ergonomics and Return to Work

Status

This project is completed.

The Commission on Health and Safety released the responses to the Committee’s questions in a report entitled "CHSWC Responses to Questions from the Assembly Committee on Insurance" in March 2001. The responses provide where applicable: factual, statistical and background information to support findings, suggest alternate proposals as well as advise on their feasibility and workability.

For further information…   
           
& CHSWC Report: ‘CHSWC Response to Questions from the Assembly Committee on Insurance’ (2001)


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

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.

Status

So far, the CORA consortium has

A report is expected in 2001 which will include: more detail about the CORA proposal and information about the need for CORA including an analysis of current data on occupational injury and illness in California, a survey of current California occupational health researchers, a report on focus groups with key stakeholders about perceived occupational health research needs, and information about occupational health research programs in other states.

Preliminary Findings


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

The Commission funded the Labor Occupational Health Program (LOHP) at UC Berkeley to convene the California Study Group (now called the California Partnership for Young Workers’ Health and Safety) 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 your workers. LOHP successfully recruited members representing 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.

This unique California effort has put our state on the cutting edge of an issue that is gaining national prominence.

Status

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

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.


 

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.

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.

Findings

Among the preliminary findings of Phase 1 of the project was an indication that loss-control regulation outside California is very limited and the work done in California in the loss control area can be very important to other states.


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:

Status

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

The Commission received endorsement and/or funding from the following organizations in support of this effort.

Recommendations from the Forum

For further information…        
           
& CHSWC Report: ‘Report on the Proceedings of the California Forum for Workplace Health and Safety’ (Publication pending)
               
: 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

Background

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.

Some of the 1993 reform changes sought to reduce judicial discretion and increase the consistency of case outcomes. However, some changes may have had unintended consequences which have made the system increasingly complicated to administer.

In 1999, the legislative debate continued over the operation of the judicial process, which prompted a legislative proposal to make major changes to the organizational structure of the workers’ compensation trial courts in Senate Bill 320 (1999). This proposal contemplated that a "Chief Judge", appointed by the Governor with the powers of the head of a department, would be responsible for the supervision of the judges, support staff, and the rules of court.

During the 1999 legislative debates over SB 320, the Department of Industrial Relations entered into discussions with the California workers’ compensation community about the possibility of proceeding with a study. Clearly, there seemed to be consensus that significant change was necessary, yet no one knew whether the SB 320 "court administrator" proposal for the Division of Workers’ Compensation would effectively address the concerns.

DIR, DWC and the Commission believe that an independent study and evaluation of the DWC judicial process would be very helpful in addressing problems.

Description

At the urging of the Division of Workers’ Compensation and others in the workers’ compensation community, the Commission 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.

The study will identify possible statutory changes to make the system work more efficiently and look at rules and practices that other judicial jurisdictions follow that have addressed problems such as calendaring, casefile movement, and staffing. The study will look at practices, case management systems, administration systems and rules used in other relevant judicial systems, as well as studying what is occurring in the DWC district office adjudication system at this time.

The goal of this study is to evaluate how well the judicial process of the California Workers’ Compensation Appeals Board fulfills its constitutional duty to accomplish substantial justice in all cases in an expeditious, inexpensive, and fair manner.

Status

Since the beginning of the project, the study team has familiarized itself with the WCAB on-line system, has made on-site visits to WCAB district offices and established a resource group comprised of representatives involved in California’s workers’ compensation court system. The project team has also established a website particularly for this study as a way of keeping interested members of the public up-to-date. (www.rand.org/centers/icj/projects/wccm).

In May 2001 the project team began the second phase of the project. This phase included a review of actual case files and six intensive site studies of representative WCAB courts (Sacramento, Stockton, Los Angeles, Van Nuys, Pomona, and San Bernardino) selected for comprehensive week long visits. Each site study involved an evaluation of how efficiently and fairly the court functions based on a time study of the judges’ execution of their professional duties. Also, the team surveyed judges, administrators, local attorneys and office personnel at each site.

The data from the above activities is being analyzed and the research team has drafted its preliminary findings. The findings will be broadly distributed and roundtable meetings will be held in both northern and southern California to enable stakeholders to comment.

Final report of the study is expected in 2001.


Information Needs

Benefit Notice Simplification

Background

When an employee files a claim for worker’s compensation, the employer or insurer is responsible for communicating the status of the claim to the employee by means of a series of benefit notices. The benefit notice program is intended to be a key communication tool between the claims administrator and the injured worker, keeping the worker informed about important changes in the status of his or her workers' compensation claim.

The workers' compensation community has long criticized the benefit notice system as confusing and ineffective. Through its various studies and analyses, the Commission has confirmed that:

Description

The Commission has contracted with the Labor Occupational Health Program to assess the needs and explore methods for improving benefit notices to injured workers. The project team will review and make recommendations on streamlining the Benefit Notice process, clarifying requirements, and ensuring that notices accurately and effectively communicate with injured workers in a format and language that is comprehendible.

To improve the pertinent laws and regulations, the project identified the statutory and regulatory requirements that cause the greatest problems with notices from the injured worker's perspective, and proposing practical changes in laws and regulations to improve basic information for noninsured and newly injured workers and to improve information in benefit notices for injured workers. An analysis of problematic statutes and possible legislation to improve benefit-notice information for injured workers was completed in May 2000. In May and July 2000, researchers conducted discussion-group sessions in English and Spanish with injured workers focusing on regulatory requirements and desirable improvements in governmental and other materials that are given to injured workers. The latter analysis was an extension of the Benefit Notices Simplification project and is called "Project to Improve Laws and Regulations Governing Information for Workers."

Status

The final report was completed in December 2000 and was approved by the Commission in January 2001.

Recommendations for legislative language specifying information to be provided have been developed. The primary purpose of the proposed legislative changes is to make uniform the Labor Code provisions regarding notices to injured workers. The intent of the recommendations are to improve the information given to employees by employers prior to and soon after injury, information available at state Information and Assistance offices, information from claims administrators, the content and clarity of benefit notices, and the timing of some of the most problematic benefit notices.

Findings from Discussion Groups

  • There was a need for a clearer design and content with relation to the notices.
  • "Notice of Potential Eligibility for Benefits" about medical care should include information about where to obtain care, the role of the treating physician, etc.

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 Project

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

Description

The Commission undertook a project to develop prototype informational materials on the workers’ compensation program, benefits, and procedures.

The Advisory Committee worked closely with the project team in creating and refining the informational materials. The Executive Committee reviewed and approved the materials before they were submitted to the Commission for final approval.

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.

The fact sheets are entitled:

"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"

The video, entitled "Introduction to Workers’ Compensation", follows the cases of three injured workers and describes the steps to take when an industrial injury takes place as well as available resources to get further assistance. The fact sheets are available in both English and Spanish and in black and white or in color.

Status

The fact sheets and video were completed March 1998 and subsequently distributed at meetings and conferences of the workers’ compensation community statewide.

In June 1999, CHSWC distributed the factsheets to about 3,000 employers and labor organizations with a letter explaining how to use the material. Information and Assistance Offices of DWC distribute approximately 30,000 copies of the English version factsheets yearly.

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.

Further Information

These informational prototype materials may be obtained at no charge by writing, faxing or phoning the Commission office. The fact sheets are also available on the internet at www.dir.ca.gov/chswc

For further information about the CHSWC study on the injured worker experience which led to the development of the prototype informational materials, see the 1996 project report entitled "Navigating the California Workers’ Compensation System", available from CHSWC and on the internet.


Community Concerns

Pharmaceutical Costs Study

Background

The Commission requested a study of the potential savings from modifications to California’s current approach to regulating workers’ compensation pharmaceutical costs under the Official Medical Fee Schedule.

Preliminary research indicates that California’s workers’ compensation system for paying pharmaceutical bills results in higher costs than retail, non-occupational, and federal and other workers’ compensation programs.

Description

CHSWC conducted a study to assess workers’ compensation pharmaceutical costs and identify potential savings.

Under the current California Official Medical Fee Schedule (OMFS) pharmacies are allowed to charge the lower of their customary charge or the maximum under the OMFS. The OMFS maximums are significantly higher than limits imposed by other states’ workers’ compensation systems, other regulatory systems (Medicare, Federal Workers' Compensation) and private negotiated contracts (HMOs, non-occupational insurance).

Findings

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

Based on the research team’s projections, pharmaceutical costs in workers’ compensation will be $212 million in 2000, rising to $374 million in the year 2005. Because pharmaceutical costs are rising more rapidly than overall medical costs, the percentage of medical costs represented by prescription drugs is also increasing. In 1996, pharmacy costs accounted for 3.8% of medical costs. In 2000, pharmaceuticals are estimated to represent 5.8% of medical costs and by 2005 pharmacy costs wll comprise 7.3% of the medical benefit expenditures.

If the fee schedule were reconstructed to achieve approximately the average of the reimbursement rates accepted by pharmacists in four other systems reviewed, employers would pay approximately 70% of the current cost. This translates into $64 million in savings on pharmaceuticals in the current year, which will rise to an estimated $112 million savings in the year 2005. Of these excess costs, 17% is a result of premiums paid for incentives to dispense generics, which were approximately $12 million in 2000 and $21 million in 2005. The rest is due to the choice of the Average Wholesale Price (AWP), which is the most generous baseline, and because California pays a multiple of the AWP where other systems pay a fraction of the AWP.

California pays pharmacists a substantial premium to steer workers to generic substitutes. Assuming that the difference in the multiple of AWP (1.4 vs. 1.1) paid for generics over brands and the difference in dispensing fees ($7.50 vs. $4.00) represents the generic incentive to pharmacists, employers are paying approximately a 37% premium on each generic prescription to pharmacists when the fee schedule was the controlling factor on paid amounts.

Consideration should be given to resetting the fee schedule. In considering reducing the fee schedule reimbursements, thought should be given to improving the efficiency of the process. This could be accomplished by increasing employers’ ability to negotiate network agreements with pharmacies. In addition, insurers and employers should consider guaranteeing payment for at least the initial prescription when the doctor indicates that the injury arose out of work, even if the claim has not been processed or accepted.

For further information…   
           
& CHSWC Report: Study of the Cost of Pharmaceuticals in Workers’ Compensation (2000)



Community Concerns

CHSWC Roundtable on Anti-Fraud Activities

Background

The Commission is committed to fighting workers’ compensation fraud efficiently, effectively, against all perpetrators. It has engaged in several activities to support those efforts.

Description

In November 2000, the Commission voted to host a roundtable on workers’ compensation fraud. One of the primary goals of the roundtable was to continue the dialog and update information presented at CHSWC’s public hearing on workers’ compensation anti-fraud activities in 1997.

Prior to holding the roundtable the Commission also issued a call for information in November 2000. The call asked that the workers’ compensation community and interested members of the public respond with their suggestions to six issues:

  • Whether Workers’ Compensation fraud is a major problem
  • The scope of the anti-fraud program
  • Focus and priority of anti – fraud campaign
  • Sources and level of funding for anti – fraud activity
  • Inter – agency coordination
  • Ideas, innovations, new approaches

Recommendations:

· The Legislature should consider raising the criminal penalty for knowing failure to secure the payment of compensation.

The Legislature should consider making statutory changes to increase the identification and pursuit of illegally uninsured employers, including possible changes to the existing anti-fraud laws.

· The Fraud Division of the Department of Insurance and district attorneys should 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.

· The Fraud Division should work with insurance company SIUs, as well as self-insured employers and third party administrators, to insure that all cases involving suspected "insider fraud" are referred to law enforcement authorities for investigation.

· Due to their economic impact, the foremost targets of fraud program budgets and resources should be medical provider fraud and employer premium fraud.

· The Fraud Division and district attorneys should also 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.

· To the extent permitted by law and regulation, private and public agencies should share information that may assist in the detection and investigation of suspected fraud.

· Private and public employees should be encouraged to report suspected fraudulent activities and to cooperate in the investigation of those activities.

· The Legislature should consider amending Insurance Code section 1872.83 to include employee representation on the Fraud Assessment Commission.

The Division of Workers’ Compensation should 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.

· Consideration should be given to changing the form generally used for reporting suspected fraud to make it more "user friendly" to injured employees.

· CHSWC should conduct a further review of the role of insurer special investigation units (SIUs) in reporting suspected workers’ compensation fraud.

· The Fraud Division should make full restitution to the victims of workers’ compensation fraud a more important aspect of the anti-fraud program.

· CHSWC should continue to study issues raised by the community with respect to the anti-fraud program.

Status

Completed. A roundtable was held in April and a draft report on the Workers’ Compensation Anti-Fraud Program was issued. Another roundtable was held in June 2001 to discuss the proposed recommendations and other proposals.

A report was presented to and approved by CHSWC at its August 2001 meeting.

For further information…
           
& CHSWC Report: ‘Report on the Workers’ Compensation Anti-Fraud’ Program (2001)



Workers’ Compensation Benefit Simulation Model

Background

A Commission-DIR-UC Berkeley project team developed a Benefit Simulation Model to assist in the analyses of potential legislative changes to the workers’ compensation benefit levels for Temporary Disability, Permanent Partial Disability, Permanent Total Disability and Life Pensions. The model, currently undergoing technical review, will estimate the cost to employers and the impact on wage replacement rates for injured workers.

Description

The model makes explicit the assumptions that are generally invisible in the estimates of statutory changes on system costs. It also allows individuals or groups of individuals to make real time estimates of the impact of changing the numerous parameters that determine individual benefits. This micro-simulation model, based on an underlying claim level database, was developed to run on a personal computer.

The model incorporates as parameters research done for the Commission and the California Workers' Compensation Insurance Rating Bureau (WCIRB) that estimated the impact of benefit changes on claim frequency and claim duration. Of particular interest, the model also incorporates the research done for the Commission by RAND on benefit replacement rates. The replacement rates are calculated for 25 groups of workers (five quintiles of permanent impairment severity x five quintiles of wage level). RAND finds that wage loss replacement rates vary greatly across both of these dimensions. The model lets policymakers and the legislature test the impact of any benefit change or combination of benefit changes on the distribution of benefit replacement rates for each group.

Status

The benefit model has undergone technical and legal review and is available for distribution to the public through the Commission.

For further information…

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


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 Workers’ Compensation Insurance Rating Bureau (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 was initiated in June 2000 and is in process.

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.

Workers’ Compensation Premium Calculations – Evaluation of Alternative Factors

Background

There are alternative factors that could perhaps be utilized in workers’ compensation premium calculations, such as payroll, the number of hours worked, dual classifications, and other premium adjustment programs.

The Commission approved a joint feasibility study in October 2000 with the WCIRB to identify additional classifications in the construction industry that might benefit from a dual- classifications rating system. The workers’ compensation dual-wage classification system in California is a program where particular construction classifications are segregated based on the wage paid by employers in the class

Description

The purpose of the study was to identify the greatest gain and the pros and cons of expanding this kind of program to other classifications and industries. An evaluation of key criteria (i.e. rate level, size, proportion of small employers, variation in wages) was used in the study to determine if the segregation by wage level is appropriate for certain classes.

Status

A draft report was completed in December 2000 and the Commission approved the circulation of the Draft Paper on "Workers' Compensation Premium Calculation based on Dual Wage Classifications" to the community and the public for comment.

Findings

  • Using ‘hours worked’ as a basis of premium was not satisfactory since it is difficult to independently verify the hours worked in an audit.

  • The construction industry and, in particular, the current dual-wage classifications best meet the criteria established. The other classification to meet the test criteria developed by WCIRB was trucking.

  • It was determined by WCIRB that the dual wage program generally has worked to address premium inequities due to wage level. However, the program is costly and time-consuming to implement and increases cost and time of insurer payroll audits. Moreover, competitive rating also allows the insurer to reflect wage differences without the dual-classification program. The WCIRB does not recommend a wholesale expansion of the dual-classification program at this time, but individual classes can be reviewed as appropriate.


Study of Workers’ Compensation Coverage Liability for Persons in Training Programs- Labor Code §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.


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

The Commission’s study will evaluate the adequacy of the Inpatient Hospital Fee Schedule in California. It will include a description of current difficulties with the IHFS, an analysis of the cost impact, a modeling analysis of outcomes of possible IHFS changes, and recommendations for revising the IHFS and establishing an outpatient surgery fee schedule.

Status

This project is in process and draft results were presented to CHSWC in August 2001. CHSWC voted to release the draft report to the public for comments.

Findings

Preliminary findings have shown that:

While the draft of the study is being finalized, The Division of Workers’ Compensation has thus far proposed two changes to the hospital fee schedule, both of which will sunset on December 31, 2001. The first allows for the costs of surgical implantables for DRGs 496-500 to be paid for separately from the DRG overall rate. 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. When the draft of the study is finished, the Commission and DWC plan to convene an advisory committee of interested parties to review the study’s conclusions and recommendations and come up with a consensus on the proposal for an overall revision to the Hospital Fee Schedule.


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)
       
Barry Carmody, President
        Doug Widtfeldt, Vice-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)
       
William A. Herreras, President
        Mark Gerlach, EsqDoug 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
        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
        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
        Ramon Cruz
        Zagros Madjid-Sadjadi, PhD
        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
        Michael Alvarez, Area Manager, Cal OSHA Consultation
        Richard DaRosa, Sr. Industrial Hygienist, Cal OSHA Consultation
        Kelly Howard, Area Manager, Cal OSHA Consultation
        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
        Linda Rudolph, MD, Manager, Managed Care Unit
        Bob Wong, Manager, Information & Assistance
        John Hopper, Manager, Claims Unit
        Jackie Schauer, Counsel
        James Robbins, Counsel
        Nancy Fox, Associate Governmental Program Analyst
        Glenn Shor, PhD, Research and Evaluation Unit
        Rich Stephens
        DWC Staff

Industrial Medical Council (IMC)
   
Hubert Greenway, Jr. MD, Council Member
    Robert C. Larsen, MD, Council Member
    Marvin H. Lipton, 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
    Richard Pitts, D.O., Co-Chair
    Glenn R. Repko, PhD, Council Member
    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
    D. Allan Mackenzie, MD, F.A.A.O.S., Executive Medical Director
    Susan McKenzie, Associate Medical Director
    Anne Searcy, MD, Associate Medical Director
    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
    Colleen S. Casey, Commissioner
    James Cuneo, Commissioner
    Janice Jamison 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 Insurance (DOI and/or CDI)
   
Harry W. Low, Insurance Commissioner
    N. K. (Keith) Newman, Special Asst. to Insurance Commissioner, Fraud Division
    Dick Ross, Assistant Deputy Commissioner

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 Alarcón, 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)
   
Nona Grancell

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)
   
Bonnie Binder-Wilson, 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
    Edward C. Woodward (1942-2000)

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

Kaiser Permanente
  
Linda Morse
    Nancy Lindgren

Law Office of David Leonard
   
David Leonard, Attorney

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

Liberty Mutual Insurance Group
   
Amber Baur
    Elaine Konstan
    Carol Rose
    George Lively, General Contractor

Marin Association of Public Employees, SEIU 949
   
Josie Jenkins

Tom McCauley

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 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

Preferred Works
   
Luisa Gomes

Public Health Institute
   
Lisa Dasinger, PhD

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

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

Maggie Robbins, Health and Safety consultant

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)
   
K. C. Bollier, President
    Dianne Oki, Executive Vice-President
    Donna Gallagher
    Gideon Letz, Medical Director
    Lisa Middleton, Manager, Claims Rehabilitation
    John Robeson, Unit Manager, Claims Rehabilitation
    Brenda Ramirez, Claims Operations Consultant

Stoneturn Consultants
   
Knut Ringen, PhD, Consultant

Travelers Insurance
  
John Cheffer

United Auto Workers Local 2244
   
Joe Enos

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
    Elaine El-Askari, Program Coordinator, LOHP
    John W. Frank, MD, CCP, MSc, FRCP, School of Public Health
    Frank Neuhauser, Project Director, UC Data/Survey Research Center (SRC)
    Barbara Plog, COEH
    Robert C. Spear, PhD, Director, Center for Occupational & Environmental Health
    Laura Stock, Associate Director, LOHP
    Juliann Sum, Esq., IIR
    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)
   
Marianne Brown, Director, Labor Occupational & Safety Program (LOSH)
    John Froines, PhD, Director, Center for Occupational and Environmental Health
    Dr. Gerald Kominski, Center for Health Policy Research
    Quintin Robinson, Program Coordinator
    Dr. Linda Rosenstock, Dean of the School of Public Health

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 Center
   
Jay S. Himmelstein, MD, MPH, Program Director

Washington Department of Labor and Industries
   
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)
   
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
    Kirsten Strömberg, Research Program Specialist
    Irina Nemirovsky, Research Program Specialist
    Janice R. Yapdiangco, Staff Services Analyst
    Oliva A. Vela, Office Technician
    Chellah A. Yanga, Office Assistant
    Thomas J. McBirnie, Consultant
    Charles Lawrence Swezey, Consultant


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.
    Alliance of American Insurers
    Executive Officer speech
    American Insurers Association
    Executive Officer speech
    California Applicants’ Attorneys Association
    California Assembly Insurance Committee
    Executive Officer presentation
    California Association of Rehabilitation and Reemployment Professionals:
    Managing Employees with Disabilities: The Expanding Scope of State and Federal Law
    Program Research Specialist participation
    California Policy Research Institute - California Program on Access to Care
    Program Research Specialist participation
    California Department of Industrial Relations
    Division of Workers' Compensation – 8th Annual Educational Conference
    Executive Officer presentation
    California Department of Insurance
    Fraud Advisory Committee
    Fraud Assessment Group
    California Coalition on Workers’ Compensation/California Self-Insureds Association
    Executive Officer presentation to the Symposium
    California Manufacturers and Technology Association
    42nd Annual Conference
    Executive Officer speech
    California State Council of Laborers
    California Workers’ Compensation Institute
    Executive Officer presentation to the Claims Committee
    Executive Officer presentation to the Research Committee
    Annual Conference
    International Association of Industrial Accident Boards and Commissions
    86th Annual Convention
    All Committee Conference
    Executive Officer presentation
    National Institute on Occupational Safety and Health
    NORA Symposium
    Program Research Specialist presentation
    Robert Wood Johnson - Worker Injury National Survey Meeting
    Research Program Specialist participation
    Workers’ Compensation Research Group
    WCRG Meeting
    25th Annual National Symposium on Workers’ Compensation
    Research Program Specialist presentation
    Workers’ Compensation Research Institute
    Compscope Multistate Advisory Committee