California Workers’ Comp Board Submits Amended Rate Filing to Department of Insurance

October 4, 2016

The WCIRB has submitted a pure premium rate filing to the California Department of Insurance proposing Jan. 1, 2017 advisory pure premium rates lower than the corresponding industry average and less than the average approved rates.

In an original filing in August the WCIRB submitted a rate filing that averaged $2.26 per $100 of payroll, but indicated that it would evaluate June 30, 2016 experience once it is received as well as any legislative changes that are adopted prior to the public hearing on this filing and, if appropriate, amend the pure premium rates proposed in the filing.

The legislation the WCIRB was evaluating were Senate Bill 1160 and Assembly Bill 1244.

AB 1244 is designed remove from the workers’ comp system doctors found to have committed a felony or misdemeanor involving fraud or abuse of the Medi-Cal program, Medicare or the workers’ comp system itself. The bill would also keep those doctors from filing liens.

According to the Department of Workers’ Compensation, 10 percent of liens filed between 2011 and 2015 were filed by providers with fraud indictments or convictions.

california-workers-comp-lower-mid-year-filingThe other bill, SB 1160, places limitations on the utilization review process, and also would stay any physician or provider lien upon the filing of criminal charges against them for specified offenses involving medical fraud.

Impact projections from the WCIRB shows an estimated reduction in UR costs from SB 1160 but an increase in medical costs.

The WCIRB said it has completed its evaluations of June 30, 2016 experience and of the cost impact of SB 1160 and AB 1244 that were recently enacted by the California Legislature and signed into law by Gov. Jerry Brown last month.

As a result of these evaluations the WCIRB submitted an amended filing to CDI. The advisory pure premium rates proposed in this amended filing average $2.22 per $100 of payroll. This is 32 CENTS, or 12.6 percent, less than the corresponding industry average filed pure premium rate of $2.54 as of July 1, 2016 and 10 cents, or 4.3 percent, less than the average approved July 1, 2016 advisory pure premium rate of $2.32.

Insurance Commissioner Dave Jones has scheduled a public hearing to consider the WCIRB filing on Oct. 10 at 10 a.m. at the California Department of Insurance on 45 Fremont St. in the 22nd floor hearing room in San Francisco.

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