2010 in Review… and What to Look for in 2011

The economy and high unemployment rates made 2010 a challenging year for the workers’ compensation industry. While workplace injuries and illnesses were down, claim costs (especially medical benefits) were up. A variety of issues continue to impact the workers’ compensation industry. However, reform was not high on the list this year. Only a handful of bills were successful in reaching the Governor’s desk.

A brief recap of some of the important industry-related events in 2010:

Legislative Bills Approved in 2010

  • AB 933 – Physicians who perform utilization review must be licensed in California
  • AB 1696 – Continues payment of death benefits for children of certain public safety workers up to 19 years of age while still in high school
  • AB 2253 – Extends the current cancer presumption for certain public safety workers up to
    10 years

Industry Newsworthy Events

  • Continued implementation of the Division of Workers’ Compensation (DWC) 12-Point Plan
  • Ongoing dispute over Governor Schwarzenegger’s furlough program that includes state employees working for the DWC
  • In an effort to reduce the backlog of cases at the WCAB, the DWC expanded the use of its Electronic Adjudication Management System (EAMS)
  • Los Angeles WCAB held “Lien Fiestas” in an effort to reduce the backlog of medical liens
  • Debate over failure to amend the Permanent Disability Rating Schedule as required by 1/1/10
  • New Posting Notices went into effect 10/8/10
    (http://www.athensadmin.com/athensnews/news/new-dwc-regulations/)
  • California Supreme Court declined to review the Almaraz/Guzman II decision. The WCIRB estimates this will increase claim costs by 5.8%
  • New Democratic governor elected – Jerry Brown

Benefit Rate Changes for 2011

  • Temporary Disability Weekly Rate – No change due to a decline in the State Average Weekly Wage (SAWW) of .5%. The maximum TD rate will remain at $986.69 per week
  • Cost of Living Adjustments (COLA) – No change
  • Medical Mileage Reimbursement Rate – Increases $.50 per mile. New rate will be $.51 per mile
  • Pure Premium Rates – No change

What’s Ahead for 2011

  • Medicare Reporting begins 1/1/11
  • Watch out for a new round of reform legislation that may drive up costs
  • Expect changes and new dynamics in Sacramento with the arrival of the new governor