March 18, 2009
Insurance Commissioner Poizner CALLS FOR HEARING TO DETERMINE CAUSE OF
SKYROCKETING MEDICAL COSTS IN WORKERS’ COMP SYSTEM
by Richard Boggan JD
I recall a report a few years ago where the percentage of medical costs of about 30% went to bill review
companies and outside firms defending against Lien Claimants. I image that cost is where the increase in
medical costs are including, “Silent PPOs” that gets fees in ridicules amounts hopefully this will be
brought up at the meeting.
The April 28 hearing is scheduled to be held in San Francisco.
Insurance Commissioner Poizner stated
“California’s unemployment rate is skyrocketing and more than 1 in 10 are jobless. In January alone,
nearly 80,000 jobs in the state were lost.
Insurance Commissioner Poizner stated
“Before transitioning into public service, I spent 20 years starting companies and creating jobs in Silicon
Valley. I know how hard it is to make a payroll and the impact that workers’ compensation insurance costs
have on businesses. The last thing that California’s employers need is increasing workers’ compensation
costs when so many of them are struggling to keep the employees they have.
Insurance Commissioner Poizner stated
“Over the past two years, I have carefully scrutinized WCIRB’s proposed rate increases and rejected or
reduced every single unwarranted increase in the benchmark. In 2008, I cut a 16 percent increase in the
benchmark to just 5 percent. In 2007, I rejected a 4.2 percent increase and held rates steady.
Insurance Commissioner Poizner stated
“I will give this WCIRB recommendation the same level of careful scrutiny I have given previous requests. I
will not allow California’s job creators to be burdened with unnecessarily high workers’ compensation
costs. Additionally, I will convene a hearing of all those in the workers’ compensation system – doctors,
insurance companies, applicant attorneys, labor, etc. – to determine why workers’ compensation medical
costs are increasing. These soaring costs are unsustainable and must be controlled if we are to prevent a
repeat of the workers’ compensation crisis we saw earlier this decade.”
From Insurance Commissioner Poizner media release stated the following
Commissioner Poizner has also expressed concern about the quality of data provided by the WCIRB and
is in the process of completing a top down review of the bureau’s operations. This report is expected in
June.
After WCIRB recommends a rate to the Department of Insurance, the Insurance Commissioner holds a
hearing to solicit feedback about the proposed change. The April 28 hearing is scheduled to be held in
San Francisco. After the hearing, the Commissioner can accept or revise WCIRB’s recommended change
in the Claims Cost Benchmark.
The California Department of Insurance has no authority to set workers’ compensation insurance rates.
The Workers Compensation Claims Cost Benchmark, formerly known as the Pure Premium Rate, is the
estimated change in claim costs over the next 18 months.
Since its high in 2003, the Workers Compensation Claims Cost Benchmark has fallen 63.4 percent.
###
Insurance Commissioner Poizner CALLS FOR HEARING TO DETERMINE CAUSE OF
SKYROCKETING MEDICAL COSTS IN WORKERS’ COMP SYSTEM
by Richard Boggan JD
I recall a report a few years ago where the percentage of medical costs of about 30% went to bill review
companies and outside firms defending against Lien Claimants. I image that cost is where the increase in
medical costs are including, “Silent PPOs” that gets fees in ridicules amounts hopefully this will be
brought up at the meeting.
The April 28 hearing is scheduled to be held in San Francisco.
Insurance Commissioner Poizner stated
“California’s unemployment rate is skyrocketing and more than 1 in 10 are jobless. In January alone,
nearly 80,000 jobs in the state were lost.
Insurance Commissioner Poizner stated
“Before transitioning into public service, I spent 20 years starting companies and creating jobs in Silicon
Valley. I know how hard it is to make a payroll and the impact that workers’ compensation insurance costs
have on businesses. The last thing that California’s employers need is increasing workers’ compensation
costs when so many of them are struggling to keep the employees they have.
Insurance Commissioner Poizner stated
“Over the past two years, I have carefully scrutinized WCIRB’s proposed rate increases and rejected or
reduced every single unwarranted increase in the benchmark. In 2008, I cut a 16 percent increase in the
benchmark to just 5 percent. In 2007, I rejected a 4.2 percent increase and held rates steady.
Insurance Commissioner Poizner stated
“I will give this WCIRB recommendation the same level of careful scrutiny I have given previous requests. I
will not allow California’s job creators to be burdened with unnecessarily high workers’ compensation
costs. Additionally, I will convene a hearing of all those in the workers’ compensation system – doctors,
insurance companies, applicant attorneys, labor, etc. – to determine why workers’ compensation medical
costs are increasing. These soaring costs are unsustainable and must be controlled if we are to prevent a
repeat of the workers’ compensation crisis we saw earlier this decade.”
From Insurance Commissioner Poizner media release stated the following
Commissioner Poizner has also expressed concern about the quality of data provided by the WCIRB and
is in the process of completing a top down review of the bureau’s operations. This report is expected in
June.
After WCIRB recommends a rate to the Department of Insurance, the Insurance Commissioner holds a
hearing to solicit feedback about the proposed change. The April 28 hearing is scheduled to be held in
San Francisco. After the hearing, the Commissioner can accept or revise WCIRB’s recommended change
in the Claims Cost Benchmark.
The California Department of Insurance has no authority to set workers’ compensation insurance rates.
The Workers Compensation Claims Cost Benchmark, formerly known as the Pure Premium Rate, is the
estimated change in claim costs over the next 18 months.
Since its high in 2003, the Workers Compensation Claims Cost Benchmark has fallen 63.4 percent.
###
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