Office Safety Training CA, Office Injury Prevention

Our April 14^th blog was a snapshot of the current scope of workers’ compensation – from the employers’ perspective.  This article goes into specifics defining what a “combined loss ratio” is and how rising insurance premiums are significant to your business strategy.  Insurance company loss ratio data compares insurer premium income to losses combined with costs of insurer expenses that fund insurance company operations.

Loss ratios are no longer inching up … they’re increasing at a very alarming rate.  When the “combined ratio” is significantly over 100, insurers begin to experience financial stress.  Ratios up to about 108 can be covered by investment income, but with current low interest rates, investment returns fall way short and drive the insurers to raise their rates.

The 2003-2007 “combined ratio” results in California Workers’ Compensation have dramatically risen.  In fact, the increase went to 110 in 2008 and to 127 in 2009.  And, 2010 is tracking to be higher when final results are reported.

Based on the trend, we predict that loss ratios will increase in 2010.  Unfortunately, these elevated ratios necessitate higher premium rates from workers’ compensation insurers (for employers like you).  (Source of data: Workers’ Compensation Insurance Rating Bureau WCIRB).  https://wcirbonline.org/wcirb/

Workers’ compensation medical costs for “indemnity” workers’ compensation claims (one involving an employee who loses time from work and requires payment of temporary or permanent disability) continues to increase.  As you would expect, costs of insurance claims from 2005-2009 have doubled the “combined ratio” results, as seen below (Source  WCIRB):

Summarizing details of over 557,000 claims from many different insurers, the California Workers’ Compensation Institute (CWCI) published a major study in March, 2011.  In two years, there was an 18.9% increase, specifically in the payments for medical treatment for workers’ compensation claims.  Alarmingly, there was an even higher 33.7% in the cost of prescription drugs and durable medical equipment. (Source CWCI No.11-03).

Employers do have options.  They can monitor and manage their worker’s compensation costs by getting involved:

• Understand the worker’s compensation landscape
• Understand the worker’s compensation regulations
• Educate/inform employees about their rights
• Protect the company and employees
• Seek advice from an expert if they are unsure if they are compliant

Ask an expert to get you on a realistic course for dealing with workers’ compensation costs.

Don Dressler -  dondressler1@hotmail.com

One of the things that drives many employers crazy is a workers’ compensation claim which, from their perspective, is minor or perhaps not even an injury at all.   Still, the claim goes on and on and on.  Often, these cases start with a sprain or strain, and the “injured “worker obtains care from a medical provider who gives them a “medical release” indicating they are totally unable to work for weeks or even sometimes months.  Frequently, these medical providers are the result of a referral from an attorney hired by the injured worker to handle litigated workers’ compensation claims.

These instances where an employee is reported as unavailable for work are particularly frustrating because often the “best practices” of medical treatment for the type of injury is NOT extended rest, but moderate, supervised activity.  So, how can an employer deal with these situations that are completely out of their control?  The news isn’t all bad.

In a recent court decision, Scudder vs. Verizon California Inc. the CA Workers’ Compensation Appeals Board denied admissibility of medical reports, as well as payment, to two doctors who treated and evaluated the extent of injury and disability of a worker, as a result of a referral from the attorney for the injured worker.  These “lawyer referred” medical providers  where disregarded because the employer in this instance had implemented a Medical Provider Network, given the appropriate notices to employees and posted notices to that effect.

This case demonstrates the value of using a Medical Provider Network (MPN), a process under California workers’ compensation law which allows an employer to retain medical control of a workers’ compensation case for the life of the case.  Without using the MPN procedure, in almost all instances, an employer only has control of medical services for the first 30 days after injury.  After the 30 days, without an MPN, the injured worker may be treated by a physician of his or her own choice.

When a lawyer has chosen the doctor in a workers’ compensation case, and that doctor says an employee is “totally unable to work” even if it is on a temporary basis, it s very hard for the employer do stop the costs of a case, even if it strains credulity that the worker should be off work.

Employers do have options and can monitor and manage their worker’s compensation costs, while defining which medical professional treats their employees.  Our final blog deals with how employers can gain an advantage and take action.  For a copy of the complete article, call
Don Dressler at  (949) 533-3742.