Recent Workers' Compensation News for Mar 10, 2010
DWC Proposes Regulations for Electronic Medical Treatment Billing Standards
Tue, 9 Mar 2010 06:56:06 - Pacific Time
The Division of Workers' Compensation (DWC) has issued a notice of rulemaking to carry out provisions requiring the adoption of standardized paper billing forms and electronic billing standards. The regulations also propose amendments to conform the current medical billing and payment provisions to statutory amendments. This rulemaking is the next step in the division’s 12-point plan to help control medical and administrative costs announced last fall. "Implementing electronic billing eliminates unnecessary paper from the workers’ comp system and brings us into the 21st century. Our goal is to ensure doctors are paid promptly and accurately for services they provide, which will also help lessen the burden of liens on the system." said DWC acting Administrative Director Carrie Nevans. "Our 12-point plan allows us to monitor costs more effectively and take decisive action as needed." The proposed regulations satisfy Labor Code section 4603.4 requirements and amend title 8, California Code of Regulations section 9792.5, and would adopt new sections 9792.5.0, 9792.5.1, 9792.5.2, and 9792.5.3. The use of standardized billing forms for paper billing would be mandatory 90 days after adoption of the regulations. Claims administrators would be required to accept submission of electronic bills 18 months after adoption of the regulations. The use of electronic billing by medical providers is optional under the statute and the proposed regulations. The proposal regulations have been forwarded to the Office of Administrative Law for publication in the California notice registry and are posted on the DWC Web site . Public hearings on the regulations have been scheduled for:April 23 in Northern California, and April 26th in Southern California. It would be a good idea for the industry to read over these regulations before they become law, and attend either public hearing if there is language in the proposed regulations that causes any concern. Read More...
Common Pain Meds Linked to Hearing Loss
Tue, 9 Mar 2010 06:41:05 - Pacific Time
The adverse effect of treatment can become a compensable consequence of an industrial injury. Loud music or noise isn't the only thing that can damage your hearing. A new study in men hints that popping over-the-counter painkillers regularly can also lead to hearing loss, especially in younger men. In the study, researchers found that men younger than age 50 who regularly took acetaminophen more than two times a week had roughly double the risk of hearing loss compared to men who did not take acetaminophen regularly. Acetaminophen is the active ingredient in Tylenol and certain other pain relievers. The researchers also found that men younger than age 50 who regularly took ibuprofen (the main ingredient in Advil) or other non-steroidal anti-inflammatory drugs (NSAID) at least twice a week had a nearly two-thirds higher risk of hearing loss than men who took NSAIDs less often. Men who took aspirin twice a week had a one-third higher risk. So should middle-aged men empty the medicine cabinet of these pain relievers? Not necessarily, because each individual's actual, or absolute, risk of hearing loss with these medicines is likely fairly small. The overall absolute risk of hearing loss in the population is 1 percent per year. Those who take an analgesic have an increased risk beyond the 1 percent, Dr. Sharon G. Curhan, of Channing Laboratory and Brigham and Women's Hospital, Boston explained in an email to Reuters Health. "But if you consider that people continue to take the analgesic for years, then after 10 years the risk would be 10 percent in the overall population and the risk in those taking an analgesic would be proportionately higher," Curhan said. The findings, published in the American Journal of Medicine this month, stem from nearly 27,000 men enrolled since 1986 in the Health Professionals' Follow-Up Study. As part of the study, the men, who were between 40 and 74 years old at the outset, provided information on analgesic use, hearing loss and other relevant factors every 2 years for 18 years, during which time 3,488 men were diagnosed with hearing loss. In the group as a whole, the risk of hearing loss, after factoring out relevant risk factors, was 12 percent higher in men who used aspirin at least twice a week relative to men who used aspirin less than twice a week. The risk was about 21 percent higher in those who used NSAIDs or acetaminophen at least twice a week. Read More...
Division of Workers’ Compensation Posts Proposed Pharmacy Benefit Network Regulations
Mon, 8 Mar 2010 03:49:46 - Pacific Time
The Division of Workers' Compensation has posted an online forum for members of the public to review and comment on draft proposed pharmacy benefit network regulations. The regulations are formally called the contracted provision of medicines because they cover more than pharmaceuticals. These draft regulations represent the division’s next step in its 12-point plan to monitor and help control medical costs in California’s workers’ compensation system. The plan includes regulations recently enacted, regulations underway, and a set of proposals to be implemented in 2010. The regulations will be contained in Title 8, California Code of Regulations, article 3.7, sections 9769.1 et seq., and article 8.5, sections 9880 and 9881, and include:
- Section 9769.1, which establishes definitions
- Section 9769.2, which requires plans to comply with standards of the administrative director
- Section 9769.2, which establishes standards of access
- Section 9769.3, which provides for a notice to employees
- Amendment to section 9880 to amend the notice provided to new employees
- Amendment to section 9881 to amend the notice required to be posted
- Amendment to the form DWC-1, to include a mention of how to obtain drugs and supplies.
Postal Service Letter Carrier Indicted for Workers’ Comp Fraud
Mon, 8 Mar 2010 03:43:26 - Pacific Time
Nicki Lee Buxmann, 46, of Sacramento, who has been a letter carrier for the U.S. Postal Service, has been indicted by a federal grand jury on 15 counts of falsely claiming to have been injured on the job and falsely denying that she had outside employment and income. Prosecutors say she illegally got $278,000 in workers’ compensation benefits. The indictment alleges that Ms. Buxmann defrauded the United States Postal Service by first claiming that she had injured her back, neck, and shoulder while on the job, and then falsely denying that she had outside employment and income in order to continue receiving benefits. The indictment alleges that she owned and operated “TNT Takeover/MMA Boxing” and “Fitness 180” in Elk Grove and Roseville, which generated income, according to Assistant U.S. Attorney Laurel Loomis Rimon, who is prosecuting the case. It might be an interesting defense effort, since Ms. Buxmann is shown in a YouTube video showing off her gym. Ms. Buxmann is also charged with separate counts of theft of United States property and false statements or fraud to obtain federal employee’s compensation related to the false statements she made to the government in seeking compensation payments. "While the vast majority of postal employees who collect compensation benefits have legitimate claims, a small percentage abuse the system and cost the Postal Service millions of dollars," says U.S. Postal Service Area Special Agent in Charge Nichole Cooper. If convicted, Ms. Buxmann faces a maximum sentence of 20 years in prison for mail fraud, 10 years in prison for theft of U.S. property and a five-year term for false statements. Read More...
Employers Holdings Reports Full Year Income Decline
Fri, 5 Mar 2010 06:20:30 - Pacific Time
Employers Holdings Inc. reported a decline in their net income for the full year of 2009 to $83 million, compared with $101.8 million net income in 2008. Their fourth quarter 2009 net income of $11.3 million compared with $15.9 million in the same period in 2008, a decrease of $4.6 million. Pre-tax income in the fourth quarter increased $13.8 million in 2009, compared to $12.8 million in the same period in 2008. The company said tax benefits related to the favorable development of pre-privatization reserves drove the resulting higher net income after tax in the fourth quarter of 2008. "We are pleased that, despite these difficult times, we have benefited from our now fully integrated acquired operations in terms of geographically diversified premium and increased human capital," said Douglas D. Dirks, president and CEO. "Unlike some of our peers, we have continued to invest in the drivers of growth in our business, while returning 131.7 percent of 2009 earnings before the LPT (loss portfolio transfer) to shareholders through share repurchases and dividends. ... We recognize that our performance is short of our expectations for this business and we intend to actively manage our operations to improve these results." Dirks noted that the company faces pressures by higher levels of unemployment, declines in payrolls, competitive market conditions and the impacts of disciplined underwriting. In California, which represented nearly half of the Reno, Nev.-based workers' compensation insurance provider's business, Employers saw a positive net rate in the last half of the year with little change in policy count, Dirks said. He noted the company will raise rates an additional 3 percent in California that will take effect on March 15. Read More...
Injuries Among Public Sector Employees Increased for the First Time in Five Years.
Thu, 4 Mar 2010 21:02:56 - Pacific Time
A California Workers' Compensation Institute (CWCI) review of work injury and illness data compiled by the state from employer's OSHA 200 reports finds that California's statewide work injury and illness rate fell to a record low in 2008, but in a troubling sign for public sector employers, the rate of reported injuries among state and local government workers did an about-face and increased for the first time in five years.The Institute analysis found that since OSHA recordkeeping rules were last revised in 2002, the overall incidence rate of nonfatal work injuries and illnesses per 100 full-time employees (FTEs) in California has dropped nearly 27% from 6.0 in 2002 to 4.4 in 2008. That 7-year decline has been fueled by a 31% reduction in the rate of cases involving "days away from work, restricted work or job transfer" (commonly known as DART cases), which are usually more serious injuries, though the incidence of other recordable cases is down as well, off nearly 20% since 2002. Results for 2008 - the most recent year for which data are available - show a continuation of the downtrend in California's overall job injury and illness rate, which fell 6.4% from the rate noted for 2007. Breaking the results out by employment sector, however, the CWCI found troubling news for California's public sector employers. Unlike the private sector, where the work injury and illness rate per 100 employees declined from 4.4 in 2007 to 3.9 in 2008, the rates for both state and local employees, which had declined steadily since 2002, were up in 2008. Among state workers, the job injury and illness incidence rate per 100 FTEs increased 5.6% from 5.4 cases in 2007 to 5.7 cases in 2008; while among local government workers the rate climbed 16% from 7.3 to 8.5. Taking a closer look at the data, CWCI found that the 2008 increase in the work injury and illness rate among state workers in California was due to a growing incidence of more serious DART cases, which rose from 2.7 to 3.1 cases per 100 FTEs, while the rate of other recordable cases was unchanged. In contrast, the big increase in the job injury and illness rate in the local government sector reflected both a growing incidence of DART cases (which rose from 3.6 in 2007 to 4.0 in 2008) as well as growth in the rate of other recordable cases (which rose from 3.7 in 2007 to 4.5 in 2008). The Institute notes this does not bode well for local governments in California, many of which are already facing severe budget problems and have already seen big increases in their workers' compensation losses since 2005. Read More...
CIGA Prevails Against City of Laguna Beach in Reimbursement Case
Thu, 4 Mar 2010 01:17:10 - Pacific Time
Continental Casualty Company issued a workers‟ compensation policy to the City of Laguna Beach providing coverage from May 1, 1998, to May 1, 1999. The policy was excess to the City's $275,000 self-insured retention and covered cumulative injury only if it first manifested during the policy period. Reliance National Indemnity Company issued a policy to the City for the period May 1, 1999, to July 18, 2001. This policy, too, was excess to the City's $275,000 self-insured retention. But it differed from Continental's policy in that it was triggered by cumulative injury if the last date of exposure to the conditions causing the disease occurred during the policy period. A City employee filed a workers‟ compensation claim for cumulative injury from 1986 to June 18, 1999. The City incurred workers' compensation liability that exceeded its self-insured retention and sought reimbursement from Continental. In addition, because Reliance was insolvent, the City sought reimbursement from CIGA. Continental and CIGA both determined that they did not have to pay the City's claim. The City sued CIGA and Continental and requested a declaration that they owe the City reimbursement. CIGA filed a motion for summary judgment. CIGA argued that the City's self-insured status and the Continental policy constituted other insurance under Insurance Code section 1063.1, subdivision (c)(9) and therefore CIGA had no statutory obligation to pay any portion of the benefits that were due under the Reliance policy. The trial court granted CIGA's motion. The pivotal question presented on appeal was whether the City's claim is a covered claim under section 1063.1, subdivision (c)(13) or barred under subdivision (c)(9) because its self-insured status qualifies as other insurance. The trial court relied upon Denny’s Inc. v. Workers’ Comp. Appeals Bd. (2003) 104 Cal.App.4th 1433 which held that the self-insured retention was other insurance which precludes contribution from CIGA to justify their decision. The City contends on appeal that the Denny decision was abrogated by the addition of subdivision (c)(13) to Insurance Code section 1063.1 after the Denny case was decided. The Court of Appeal rejected the City's argument in their published opinion. They reasoned that Denny’s held that CIGA does not have to provide a safety net for an employer to the extent it gambled on self-insuring without private insurance for any portion of the cumulative injury period. Thus, section 1063.1, subdivision (c)(13) and Denny’s can be harmonized when an employer has excess insurance for the entire year of liability, the excess insurer becomes insolvent and a claim is then made to CIGA. But they held there is a difference in the present case where the employer took a gamble for part of the period of cumulative injury. The judgment in favor of CIGA was affirmed. Read More...
Calif. Construction Company Sued for Misclassifying, Underpaying Workers
Thu, 4 Mar 2010 01:17:02 - Pacific Time
California Attorney General Edmund G. Brown Jr. has filed a lawsuit against Livermore-based Country Builders Inc. after he said the company "cheated workers out of wages," falsified the company's payroll records to hide under payments, deliberately misclassified workers to reduce the company's workers' compensation premiums and violated state prevailing wage laws. The company has won several public works contracts that required it to pay the prevailing wage. In late 2008, Brown's office launched an investigation into Country Builders to determine why some workers reported receiving a lower rate of pay than what was shown on their pay stubs. The investigation found that the company inflated the pay rate of some workers to lower its workers' compensation premiums, while paying others below the $32 to $34 an hour, the rate required under the prevailing wage laws of California. The state's prevailing wage laws require workers on public work projects to be paid at rates equal to the wage and benefit rates established by the Department of Labor Standards Enforcement. The public works projects covered by law are construction projects performed by private contractors for state or local governments to further a public purpose.Despite its collective bargaining agreement with workers that set the prevailing wage, the company hired workers to work on the public projects for significantly less per hour than the union rate. Between 2005 and 2008, timesheets reveal that 124 employees received less than the hourly rate on at least one occasion. Some employees were regularly paid less than the prevailing wage, the attorney general's office said. Brown's investigation further revealed that Country Builders officers falsified company payroll records to various public entities to cover up the underpayments. Brown's office estimates that in 2007 and 2008, Country Builders was able to save approximately $1 million in wages by failing to pay workers the prevailing wage and the pay rate set forth in the collective bargaining agreement. In 2007, the company's gross revenues were $21 million. In addition, Country Builders intentionally misclassified lower-wage workers as higher-wage workers to its insurance carrier, the State Compensation Insurance Fund. the attorney general's office said.The hourly pay rate is used as a basis to calculate workers' compensation insurance premiums for businesses. By falsifying payroll records and inflating the hourly rate of pay of its workers, Country Builders illegally lowered its insurance premiums, Brown said. The investigation found that Country Builders underpaid its premiums to the State Compensation Insurance Fund by at least $136,000. Read More...
DWC Proposed Changes to MPN and Employee Information Regulations
Wed, 3 Mar 2010 04:14:11 - Pacific Time
The Division of Workers' Compensation (DWC) has modified its medical provider network (MPN) and employee information regulations. A first 15-day notice of modification was distributed to interested parties and the revised regulations are posted on the DWC Web site. Members of the public may comment on the revisions until 5 p.m. on March 17, 2010. The proposed revisions to MPN and employee information regulations are authorized by Labor Code sections 4616, 3550, and 3551. These Labor Code sections require the administrative director to adopt regulations for medical provider networks and employee information on workers’ compensation benefits.The revisions in this draft of the regulations include the following:
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Streamlined and clarified MPN application requirements
- Clarified and further specified material modification filing requirements
- Amended MPN notices to be in English and Spanish
- Clarified notice language regarding the right to predesignate
- Eliminated the requirement to include an MPN contact name in specified notices
- Amended provider listing requirements for accessibility and accuracy
- Clarified MPN information to be included in the Notice to New Employees and the Employee Poster
- Minor edits for clarification to DWC Employer Poster
Often after regulations have been adopted, industry professionals complain about unclear language, unworkable situations, and unintended consequences of regulatory language. The best way to circumvent these after-the-fact problems is to read proposed language before it becomes law and participate in the public input process. Now is the time to read the proposal, and voice your concerns. After March 17, objections cannot be addressed. If you have interest in commenting about these changes, you may visit the DWC website for further information. Read More...
CWCI Scorecard Examines Restaurant Claims in the California Workers' Comp System
Wed, 3 Mar 2010 04:14:04 - Pacific Time
The California Workers' Compensation Institute has issued its latest "Industry Scorecard" which provides detailed data on claims filed by restaurant workers in California for job injuries that occurred between January 2000 through the end of 2008. The new Scorecard is based on an analysis of 137,339 restaurant sector claims, more than 90 percent of which were filed by employees working in restaurants and taverns, though other food and beverage service workers employed in facilities such as wineries, country clubs and hotels were also included in the sample. Total medical and indemnity benefit payments on these claims amounted to just under $1.1 billion. The Scorecard shows that for the 8-year span ending in 2008, restaurant workers accounted for 6.1% of all California job injury claims, but only 4.1% of the state's workers' compensation benefit payments, though with the ongoing job losses in other employment sectors, those proportions have been growing, with the most recent data showing restaurant claims up to 8.0% of 2008 claims and 5.6% of all claim payments. The number one injury diagnosis for restaurant workers is minor wound/injury to the skin. These represent nearly 1 out of 3 restaurant claims, but only 4.4% of the loss payments, as they tend to be relatively inexpensive cases in which the worker is treated quickly and returns to work with no lost time. On the other hand, medical back problems without spinal cord involvement (typically sprains and strains) make up less than 1 in 5 restaurant claims but because they can require extended treatment and often result in lost time, they carry a much higher average cost and consume almost 1/3 of paid losses in this sector. Rounding out the top 5 injury categories among restaurant workers are shoulder, arm, knee and lower leg sprains (10.4% of the claims, 8.8% of paid losses); other injuries, poisonings and toxic effects (8.1% of the claims, 9.4% of the payments); and ruptured tendons, tendonitis, myositis and bursitis (3.8% of the claims, 6.0% of the payments). Notably, 2nd or 3rd degree burns, or burns over at least 20% of the body represent 3.6% of the restaurant claims, which is about 5 times the proportion found for all industries, though fortunately, many of these are relatively minor injuries, so burn injuries accounted for only 1.4% of the total dollars paid on restaurant claims. Read More...
Past Week News Archive
Talk Therapy Reduces Back Pain?: Tue, 2 Mar 2010 06:28:33 - Pacific Time: Read More...
Contractor Guilty of Workers' Comp Fraud: Tue, 2 Mar 2010 06:34:09 - Pacific Time: Read More...
Court Orders End to Furloughs for DWC, WCAB and Other State Workers: Mon, 1 Mar 2010 07:04:03 - Pacific Time: Read More...
AIG Pumps $2.3 Billion Into "Long-Tail" Loss Reserves: Mon, 1 Mar 2010 03:12:46 - Pacific Time: Read More...
Court of Appeal Confirms WCAB Position on SSSOP: Fri, 26 Feb 2010 07:11:31 - Pacific Time: Read More...
Court of Appeal Reviews Requirements for Independent Contractor Status: Fri, 26 Feb 2010 06:51:26 - Pacific Time: Read More...
Investor Lawsuit Filed Against Zenith National Insurance Corp. Board: Thu, 25 Feb 2010 05:44:06 - Pacific Time: Read More...
DWC Posts Proposed Amendments to Benefit Notice Regulations and Opens Discussion Forum: Thu, 25 Feb 2010 05:37:24 - Pacific Time: Read More...
The Court of Appeal, Sixth Appellate District Grants Writ in Guzman Case: Wed, 24 Feb 2010 05:53:15 - Pacific Time: Read More...
SCIF Prevails in Claim for Premiums Against Employer in Court of Appeal: Wed, 24 Feb 2010 05:09:17 - Pacific Time: Read More...