California Here We Come
Apr 6, 2016

LEAD STORY

The California Commission on Health and Safety and Workers' Compensation (CHSWC) recently released its 2015 Annual Report on California's Health and Safety and Workers' Compensation Systems.  In the report, the CHSWC continues to recommend further investigation of the integration of workers' compensation medical care with group health care so that services are delivered by the same group of providers under a coordinated insurance package.

24-HOUR CARE

California has looked at integrated care, or 24-hour care, for decades.  In 2004, CHSWC partnered with RAND to publish a report on the Assessment of 24-Hour Care Options for California.  Last year, A.B. 1170was introduced to create a pilot program that would be in place for up to three years and pay for medical, surgical, and hospital treatment for occupational and non-occupational injuries and illnesses incurred by agricultural workers.  CHSWC's research supports that integration will save significant administrative costs by no longer maintaining separate medical systems.

CONCERNS

Under an integrated system, it's possible that employees might have co-pays or deductibles for medical care that arouse out of a workplace accident or illness. The same research also notes employers are incentivized to invest in workplace safety.  Would reducing this incentive have negative consequences in the decades-long decline in the incidence rates of occupational injuries?  Some of the biggest concernsrelate to exclusive remedy, which ordinary protects employers from civil suit.  It's possible that the integrated system would then fall under Federal control through ERISA exposing employers to risks different than the individual state work comp programs.

SEEMS FAR-FETCHED?

A Colorado ballot initiative, Amendment 69, would create ColoradoCare, the first single payer health care system in the U.S., which would also replace the medical care portion of workers' compensation.  If the measure passes, both employers and employees would see a payroll tax increase but there would be no deductibles or copays.  However, employers would still have to carry workers' compensation coverage to provide indemnity benefits.  We're watching how this debate will shake out and if the measure passes in November.

STAYING IN THE GOLDEN STATE

REVIEWING UTILIZATION REVIEW

The Audit and Enforcement Unit of the California Division of Workers' Compensation (DWC) issued a press release stating it will conduct more target audits in 2016 to address utilization review (UR) complaints.  UR is the required process used by employers or claims administrators to review treatment to determine if it is medically necessary.  This program is used to decide whether or not to approve medical treatment recommended by a physician, which must be based on the medical treatment guidelines.

ACCREDITING UTILIZATION REVIEW

The State Senate recently introduced legislation (S.B. 1160) that would require each UR program to be accredited by July 1, 2018.  The measure would also require that the UR program be re-accredited every five years.  This is just one of four bills focusing on UR in the legislature.  The other bills would prohibit financial incentives to physicians for denying treatment (S.B. 563), call for the CHSWC to study a paperless UR system (A.B. 2883), and require the contact information of the claims administrator or UR organization that the request for authorization for medical treatment should be sent (A.B. 2503).

MAKING OUR WAY AROUND THE COUNTRY

ALABAMA

The Alabama House of Representatives unanimously passed a bill (H.B. 270) that would update the state's 10-year-old Alabama Captive Insurers Act to make Alabama more competitive in the formation of captive insurance companies.  The bill would revise the licensure requirements of captives, allow risk retention groups to operate as a captive, allow captives to be formed as a series limited liability corporation, and allow captives to obtain a 60-day provisional license.  The bill also caps the annual premium tax assessment at $100,000 and would no longer require a premium tax until the captive is licensed for 12 months.  The bill is now awaiting a vote in the Senate.           

NEW YORK

The New York Workers' Compensation Board introduced a new Voluntary Binding Review (VBR) process that is designed to provide litigants a faster way to decide appeal decisions involving determinations of compensation (DOC).  The VBR process offers an alternative resolution that would provide the same level of finality as a Section 32 waiver agreement.  It is strictly voluntary and both parties have to agree, but the VBR process is expected to only take approximately 60-75 days (compared to the current average of 270 days).  The VBR process became effective March 28, 2016.

ONE SHINING MOMENT

If you gave up watching the NCAA Tournament games because your bracket was busted on the second day, watch the highlight 'One Shining Moment', which always brings a tear to my eye.

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