Tag: Workers Comp

California Gov. Gavin Newsom signed insurance bills that will affect insurance agent licensing and bonding procedures.

S.B. 1242 requires mandatory training that agents and brokers must complete to receive or renew a license, including at least one hour of study on insurance fraud. The law also requires them to report suspected fraudulent applications for coverage to the Department of Insurance and to report to the insurer suspected fraud on an active policy.

A.B. 2154 aims to simplify the bonding authority for California Insurance Guarantee Association, the state’s backstop against insolvent insurers, and provides a statutory mechanism for CIGA to impose a surcharge on new licensees and current licensees that begin writing a new line of business.

The CIGA board of directors is required to report specific information to insurance committees in both the Senate and Assembly upon request if the board asks the California Infrastructure and Economic Development Bank to issue bonds to pay claim obligations.

WorkCompCentral is a sister publication of Business Insurance. More stories here.

 

The workers compensation market will likely experience its eighth year of profitability, yet there remain issues that could affect the future of comp, according to a report released Tuesday by Chicago-based Risk Placement Services Inc.

Among the highlights, insurers will continue to see rate decreases through the remainder of 2022, anticipating a slowing of the already 40% to 60% overall rate decreases seen in most jurisdictions over the past decade, and competition will be an issue as insurers and managing general agents continue to expand into more states.

The report named work-from-home arrangements, high hazard industries’ mega claims and worker shortages as areas that could affect the industry.

Telecommuting or hybrid work-from-home arrangements have made work a 24-hour exposure for employers and could have implications for the coming-and-going rule in comp and what constitutes a workplace injury, according to the report.

Mega claims are also a concern, as those working in high-risk industries such as construction, logging, and mining and are injured disproportionately have the highest dollar claims, often in excess of $3 million and mostly due to medical costs, according to the report.

And companies eager to get the workforce back on the job have been “rushing” their training programs — “an accident waiting to happen,” according to the report. 

 

 

Bermuda-based insurer and reinsurer SiriusPoint Ltd. said Wednesday it has teamed with Insurate, a newly launched insurtech managing general agent to offer workers compensation insurance to companies with above-average safety performance.

The partnership will offer coverage to companies in medium- to high-hazard industries such as manufacturing, transportation, energy and construction, SiriusPoint said in a statement.

A spokesman for Omaha, Nebraska-based Insurate said the MGA uses proprietary predictive analytics to identify companies that are consistently safer than their peers.

SiriusPoint is providing capacity and working with Insurate to underwrite the risks, according to the statement.

Citing wage inflation and increasing medical costs, the Washington State Department of Labor and Industries on Tuesday announced it is proposing a 4.8% increase in the average price of workers compensation insurance for 2023.

If adopted, the increase would mean employers and workers would jointly pay an additional $61 a year, on average, for each full-time employee within a business. Workers will continue to pay on average about a quarter of the premium, a similar percentage to that paid in 2022.

In 2021 and 2022, L&I said it tapped its contingency reserves to avoid a larger increase in premium rates. L&I said it wants to take a similar approach to prevent a larger rate increase for 2023. Under the current proposal, L&I will use contingency reserves to cover any gap between premiums and costs to keep rates steady and avoid a larger increase.

“After keeping rates steady to help businesses that were struggling during the pandemic, we’re now proposing a modest rate increase that’s in line with our goal of stable and predictable rates for businesses to ensure the long-term health of the workers compensation fund,” L&I Director Joel Sacks said in a statement. “Even with the increase, the average hourly rate businesses will pay will be about the same as what they were paying in 2016.”

Following a series of public hearings in October, final rates will be adopted on Nov. 30 and go into effect Jan. 1, 2023.

 

 

 

 

A group of insurance companies is asking the Florida Division of Administrative Hearings to analyze the validity of proposed hospital reimbursement rules and determine whether the methods used by the Division of Workers’ Compensation to establish maximum reimbursement allowances were “arbitrary and capricious.”

Normandy Insurance Co., Zenith Insurance Co., Bridgefield Employers Insurance Co., Bridgefield Casualty Insurance Co., BusinessFirst Insurance Co. and RetailFirst Insurance Co. are asking the Administrative Hearings Division to review certain provisions of the proposed 2020 edition of the Florida Workers’ Compensation Reimbursement Manual for Hospitals, which has not become effective.

The challenge specifically addresses the newly proposed inpatient maximum reimbursement allowances and the definitions and criteria for their application. The insurers are also challenging as overly vague a provision dealing with emergency services and care.

The proposed fee schedule would pay $7,000 per day for hospitalizations not involving surgery or intensive care, $11,000 per day for every day of a stay where surgery was performed and $13,000 per day for intensive care.

The current hospital reimbursement manual authorizes payments ranging from $2,283.40 per day to $3,850.33 per day. It also includes a “stop loss” provision that requires the insurer to pay 75% of the billed charge if a hospital charges more than a certain threshold amount.

The Three-Member Panel endorsed the new methodology in December 2020.

The insurers say they generally agree with the proposed reimbursement model, but not the proposed daily payments.

WorkCompCentral is a sister publication of Business Insurance. More stories here.

 

 

 

 

 

 

Pie Insurance, an insurtech specializing in workers compensation insurance for small businesses, said Wednesday it raised $315 million from investors to fund its growth and expansion into new lines of business.

The Series D round of funding was led by Centerbridge Partners and Allianz X, the digital investment arm of Allianz Group, Pie said in a statement.

Pie said it has now raised more than $615 million.

White Mountains Insurance Group participated as a new investor, joining previous investors that include Gallatin Point Capital, Greycroft and Acrew Capital.

Pie declined to identify the new lines of business it plans to enter.

 

 

 

 

The elimination of a metric for diagnosing mental disorders from the American Medical Association’s guide on disability ratings is a welcome change for those addressing workers compensation mental injury claims, experts say.

An analysis released Sept. 12 by the National Council on Compensation Insurance said the effects of changes made last year to the AMA’s guide are “uncertain” when it comes to diagnosing and determining disability. The Boca Raton, Florida-based ratings agency said that “the only significant content and methodology changes were for mental and behavioral disorders.”

The changes appear in the sixth edition of the guide, which had been last updated in 2008. The new version aligns with the “most current (guidelines) in medicine and provides a basis for fair and consistent evaluations and impairment ratings.”

Most states use the AMA guide by law to determine comp-related disability.

The overhaul was proposed by the American Psychiatric Association and the American Psychological Association to align with the “Diagnostic and Statistical Manual of Mental Disorders,” or the DSM, considered the authoritative guide to the diagnosis of mental disorders, according to the AMA.

The new guidelines, in both the DSM and the AMA guides, eliminated the Global Assessment of Functioning scale as a means of determining impairment.

The GAF provides a score between zero and 100 based on a person’s function — the higher the score the higher the function — and the ratings are grouped in tens. Experts say the GAF is too imprecise and creates confusion and conflict when determining disability.

“From a clinician perspective, the GAF was always problematic,” said Mark Debus, Chicago-based clinical manager of behavioral health with Sedgwick Claims Management Services Inc., adding that he expects little to no changes in comp claims as a result of its removal. “When they removed it the therapist community had a huge sigh of relief because it’s just kind of a silly score. To begin with, it’s extremely subjective.”

Les Kertay, a psychologist who helped draft the latest AMA guide and senior vice president of behavioral health with Axiom Medical in Chattanooga, Tennessee, said the GAF was removed from the DSM because it “had some significant reliability problems” and that “taking it out, especially because it was no longer in the DSM, made some sense. If it’s bad enough that the American Psychiatric Association doesn’t want to use it anymore then we probably shouldn’t use it.”

“You and I might have rated someone quite differently on the GAF,” he said, adding that the AMA still relies on other measures for diagnosis and disability determination for mental injuries.

As part of their research, Mr. Kertay and other medical professionals examined what disability ratings would be without the GAF measurement. There were few or no differences in diagnoses and ratings without the GAF, he said.

While most states require medical professionals to rely on the most recent AMA guide, California is holding on to the previous version, according to Ron Heredia, a psychologist and director and founder of Los Angeles-based Good Mood Legal, which specializes in reviewing psychology reports in insurance claims.

The GAF score is “another piece of information” for a claim and one of the reasons for the state’s adherence to the 5th AMA guide, he said.

Mr. Heredia agreed that the score’s subjectivity is a concern. When so-called “psych claims” are challenged, medical records are often found lacking in concrete details — such as what the injured worker is experiencing — and the GAF score leaves much out, he said.

“The GAF score is essentially the doctor picking a number zero to 100, and if they wanted to, they could very well just pick a number out of a hat and say that’s the GAF score,” Mr. Heredia said.

“And when challenged by either attorney or even a claims examiner about the GAF score that they assigned, all the doctor really has to do is say, ‘Well, I gave that score because it’s my clinical judgment.’ And they could just repeat that like a broken record. There’s really no rhyme or reason, or formula the doctor has to follow to come up with the GAF score.”

 

 

An appeals court in Arkansas upheld a finding that a worker’s injury was causally linked to her tooth decay and her subsequent need for dental implants.

However, the court ruled she was not entitled to recover the cost of the surgery to extract her upper teeth, because she had not sought preauthorization.

Tara Rowland was working for the Evangelical Lutheran Good Samaritan Society at a senior living facility when a patient struck her in the face in 2014, chipping one of her teeth, according to Evangelical Lutheran Good Samaritan Society v. Rowland.

A medical scan showed conditions that required surgery, which was unsuccessful. Two doctors then recommended orthodontic braces and more surgery after the braces were removed. Evangelical Lutheran argued there was no causal connection between the compensable injury and the recommended treatment.

An administrative law judge disagreed. Following more treatment, she developed dental caries and her upper maxilla became infected.

One doctor determined that it was necessary to extract all of Ms. Rowland’s upper teeth and did so without seeking preauthorization. That doctor recommended dental implants.

The doctor also opined that Ms. Rowland’s remaining lower teeth would also require extraction and dental implants, and he attributed her condition to the delays in treatment caused by Evangelical Lutheran’s denying the claim.

The ALJ also found that Ms. Rowland’s dental caries was causally linked to her original injury, and the implants were reasonably necessary. However, the judge found Ms. Rowland was not entitled to recover the cost of the extraction because she failed to obtain preauthorization. The Workers’ Compensation Commission affirmed.

The Arkansas Court of Appeals said there was substantial evidence to support the finding that Ms. Rowland was entitled to additional treatment, as her doctor described dental and jaw problems that were the direct result of delays in treatment due to Evangelical Lutheran’s denying the claim.

However, the court said the commission properly relied on the doctor’s testimony that Ms. Rowland’s condition was not a “life or death” situation and concluded she was not entitled to have the cost of the extraction covered.

WorkCompCentral is a sister publication of Business Insurance. More stories here.

 

The U.S. Department of Labor said last week that it is expanding the criteria to place employers into the Occupational Safety and Health Administration’s Severe Violator Enforcement Program.

The program, which focuses on employers that repeatedly violate federal health and safety laws or refuse to correct violations, has broadened the criteria to include any OSHA violation.

Previously, employers could be placed into the program for failing to meet a limited number of standards.

Among the changes, employers can be placed in the program if they receive citations for at least two willful or repeat violations or fail to correct serious violations.

Employers placed into the program are included in a public list of severe violators and are subject to follow-up inspections.

The U.S. Occupational Safety and Health Administration on Friday announced it has cited Manchester, Connecticut-based Phoenix Environmental Laboratories Inc. for allegedly exposing employees to a carcinogen.

OSHA cited the lab for six willful violations, 10 serious violations and one other than serious violation and proposed a total of $907,253 in penalties. The company has 15 days to contest the citations.

For several months, employees at the laboratory complained to management about faulty ventilation systems and about symptoms – including dizziness, light-headedness, headaches and unsteady walking – all of which can be caused by exposure to methylene chloride, a highly hazardous chemical and a workplace carcinogen, according to an OSHA statement.

An investigation found that due to inadequate ventilation and recurring leaks from equipment in work areas, plus the use of methylene chloride in analyzing environmental samples, employees sustained exposure to the chemical, in some cases above the permissible exposure limit, OSHA said.

“Despite knowledge of these employee complaints that addressed health hazard concerns,” management “took few effective measures to monitor and address the exposures and provide effective safeguards for its employees,” the agency said.