Rates Could Skyrocket if Benefits Increased Without Cutting Costs, Warns Poizner
Sacramento, CA–12/30/2010–Commissioner Poizner sent a letter to Gov.-Elect Jerry Brown today to urge him to preserve the workers’ compensation insurance reforms that have reduced the Workers’ Compensation Cost Claims Benchmark by more than 60 percent since its high in 2003.
“We all witnessed the hostile business climate prior to the 2004 reforms and know that if the California economy is to rebound from this great recession, we must not return to those days,” wrote Commissioner Poizner. “While there is a real need to examine the permanent disability schedule, reinstituting the schedule to pre-2004 reform levels would result in a significant increase in the Workers Compensation Cost Claims Benchmark. This increase would likely be reflected in real world rates paid by employers and could slow a recovery by California’s economy.”
He also urged the incoming governor to implement reforms to the workers’ compensation insurance system that would increase efficiency and reduce costs. These recommendations, which were the result of a June 2009 hearing on ways to improve the workers’ compensation system, included:
All insurers should implement pharmacy networks with or without regulations based upon the example set by Safeway and the fact that the provisions of Labor Code Section 4600.2 do not require regulations as a prerequisite.
- Regulations should be implemented regarding physicians dispensing of pharmaceuticals. Legislation may be necessary to deal with this.
- Require the prescribing and/or dispensing of generic drug equivalents. Utilization Review needs some utilization review of itself. If a majority of medical requests are going to utilization review and are approved, it is not effective.
- Utilization review, as it was intended for health care, was for the outlier circumstance. Require billing and payment at fee schedule in return for restrictions on liens.
- Regulations for electronic billing and a standard medical bill form need to be implemented.
The report can be found HERE. Many of the changes can be made by the Governor’s administration.
A copy of the letter is attached.
Commissioner Poizner has worked to ensure an efficient and effective workers’ compensation insurance market. Last year, he released a top-down review of the Workers Compensation Insurance Rating Bureau and an audit of State Fund, the state’s largest workers’ compensation insurance company. Both reviews included specific recommendations that would make the organizations more efficient and successful at their duties.
Please visit the Department of Insurance Web site at www.insurance.ca.gov. Non media inquiries should be directed to the Consumer Hotline at 800.927.HELP. Callers from out of state, please dial 213.897.8921. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.
Source: California DOI