Friday, June 13, 2014


The message I heard at the California Workers' Compensation Insurance Rating Bureau's Annual Meeting yesterday in San Francisco was a mixed one, but my ultimate conclusion isn't positive.

The bottom line - frictional costs associated with the most recent reform effort seem to have introduced more frictional costs than savings, and the likelihood is that when Oregon does it's rate normalized bi-annual survey, California may just come out on top as the most expensive state with a troublesome delivery history and questionable profitability for carriers.


Here's a sort of good news, bad news synopsis, not necessarily in any particular order:

While there has been a dramatic reduction in claim frequency (fancy insurance-speak for the number of injuries per given period), down some 80% over the past 40 years, California has seen frequency level off and even grow a small percentage where the rest of the nation continues to experience continuing declines. It seems that this frequency deviation is attributable to the Greater Los Angeles area - a geographic bubble driving the state's negative claims picture.

It seems that the frequency trend in indemnity claims in the LA area is attributable to continuous trauma claims. Los Angeles carries the highest percent of CT claims - about 82% higher than rest of state and 50% higher than Bay Area. There's still speculation about why this anomalous situation exists, with blame going to a larger attorney population than the rest of the state, or a larger overall population in the state, or limits on post termination claims driving more creative pleading, or attempts to make up for the decimation of PD indemnity after SB 899's routing, or physician's requirement to report anything apportionable which raises the specter of earlier indications of potential industrial exposure, or ....?

The one exception to the frequency trend is 2010 when both national and California experienced a sudden spike. One industry researcher I spoke with believed that spike is attributable to the recession - as unemployment benefits ran out people suddenly remembered that injury they had at work...

That explained 2010, but what remains troublesome is that after 2010 frequency continued on its downward trend (based on National Council on Compensation Insurance stats) but California frequency, though down from 2010, is bucking the trend.

According to Berkeley Research Group's study more recently, 85% of injured workers in California were able to see a doctor within 3 days of reporting an injury and 80% said they were satisfied with the care and attention they received.

And while the statistics reflect that nearly 90% of all injured workers return to work post injury, the issue is how long it takes them to get there; significantly longer than the national average - California workers are out of work and on temporary disability 36% longer than the national median, based on Workers' Compensation Research Institutes' numbers.

Though California has the third most generous temporary disability payments in the nation, when adjusted for cost of living California is down around 30th of all states.

The average rates carriers charged employers was $2.91 per $100 of payroll, which is just under the those charged in 1978 ... but rates have gone up 35% since 2008 (when rates bottomed) and is 70% higher than the national median.

California's work comp market is by far and away the largest in the nation, which explains the attraction to carriers and others vending to the system, comprising 25% of the total market with an estimated 2014 written premium of $12 billion.

This premium growth is partly from increasing payrolls as the economy recovers and more people return to the work force, but some of it is just carriers increasing rates as investment returns sag and carriers take advantage of the current market's willingness to absorb increases.

In terms of diversification of carriers, there's no threat of monopolization by any single carrier, though State Compensation Fund continues to be the largest, albeit slipping considerably since 2004 with private carriers nipping the heels of SCIF for the top spot.

And since open rating began in 1996 national carriers have come to dominate the California market.

But if the California workers' compensation market were examined by a rational Wall Street it would not survive financier's scrutiny, with a terrible historic return on capital rate, the system being called "return challenged" when the industry is compared to other industries on a return on net worth basis.

Payments on the medical side of the balance sheet comprise nearly 67.5% of all claims dollars now, but California has the sorry distinction of being among the slowest of all states to pay the doctors - with days to payment nearly twice as long as the national average.

But inflation for workers' compensation medical treatment, though existent, has remained far below the inflation experienced in the general health system (where premiums have tripled since 2001).

The system spent $15.5 billion at the last measure, 2/3rds going to benefits and the other third spent on administration of benefits. This ratio is not appreciably changed from prior years though.

Lou Shields, part of the afternoon panel on the real world experience with SB 863, and Vice President IT Application Integration for Maximus Federal Services, corrected the WorkCompCentral report of the other day telling me that while the overall payroll of Maximus' doctors reflected 40% from California, 70% that do the California work are California licensed presently and that they intend to increase that ratio.

So if I had to describe my perceptions of California workers' compensation following this meeting it would be, "troubled."

While Christine Baker, Director of the Department of Industrial Relations and at the meeting but not part of the presentation, said that SB 863 needs to be given time, the short term prognosis is not good.

Still we have to remember that there are a lot of balls up in the air: lien process challenges pending at the appellate court level, adjustments to the IMR process, roll out of the $120 million supplemental fund, interpreter and copy service fee schedules, etc.

From my jaundiced view though, what is pending doesn't represent any meaningful chunk of system savings, and if, for example, the lien fee challenges are upheld costs will actually increase.


  1. David, thank for your reporting on the WorkComp Issues.

    When an injured worker in California is evaluated evaluated evaluated and denied denied denied medical care for nearly 888 days, and the Courts refuse to hear complaints of failure to provide reasonable and appropriate medical care and Attorney and Doctor Fraud, and merely require further evaluations upon big billable hours.... and the only winners are the insurance industry, the defense counsels, and maybe corporate America, and all injured workers are LEFT BEHIND, WE HAVE A PROBLEM.

    Take this case for example, ADJ8181903. It's just been elevated to a hot-shot Partner/Shareholder at a hot shot law firm in Northern California.... "NOVATO" Maybe the applicant used the "F" word too much in communications. "Fraud" utterances are hushed in written and spoken communications.

    BTW, one of your blogs mentioned that the Commissioner was .... distressed over the fraud rampant in WorkComp in California. Well, it's no wonder! Someone from his office sent a note saying to stop bothering them, they can't help and stop wasting time and money keeping them posted. [Ewwwwwww, sounds like a pal of the Assistant Medical Director.....who says basically.... you won't get any medical care, we can't help you, so deal with it. The Offices of the District Attorney have been equally unhelpful, stating that 'there is some merit to your complaints, but not enough to investigate." (Not even when a fake-spinal-fusion UR response arrived! Yikes!!!)

    Some people say that "San Francisco is the Chicago of the West Coast".... so close to Livermore, too, and that crowd, huh? Yikes!

    The nice new lawyer has blocked the in-pro-per TBI survivor/ injured worker, and not even the #CAAA can help find competent legal representation, and let's not get started started about the "Information and Assistance" situations.... The new lawyer demands that the in-pro-per have no communication with the adjuster or the human resources people regarding medical treatment or return to work planning, and has blocked email communication from the worker. Is that like a HUSH order?? Is it legal? So the Judge won't help, the Info & Assistance office is of absolutely no help. What's an injured worker to do besides TAKE IT TO THE STREETS?

    Here's a google search link..... check it out, and please stand by, apparently, this #WorkComp claimant apparently need to "TAKE IT TO THE STREETS"
    SEARCH FOR: ADJ8181903

    1. I have searched the google code captioned above. Found nothing.

  2. ...
    Not only have attempts to find competent WC representation failed, so have attempts to find representation for Civil Rights Violations, Bad Faith Claims, Medical MalPractice and Legal MalPractice, Class Action...... meanwhile, legitimate medical reports and requests for medically necessary treatment since January 2012 have been ignored or denied (with pattern and practice of omission of medical records to ensure continued denied medical care)

    Oh my goodness, the works of fiction the AME Psych and Neurology doctors can conjure up, with a little help from the defense counsel..... They can't seem to get date of injury straight but the fabrications concocted without medical evidence and in an evaluation of 35-65 minutes for several thousands of dollars is ..... sheer Houdiini type magic, huh??

    Might be time for Congressional Task Force Investigations and Hearings into the the National Shame of Work Comp Fraud..... follow the money trail..... you won't find it leading to homeless injured workers, I can assure you and your readers of that. Civilians, Veterans. What difference does it make? They seem to be able to maim and kill us all, without recourse. Bummer. Is anybody in charge?

    Here, see more and draw your own conclusions: ADJ8181903

    Meanwhile, another work comp crowd will be at Disneyland for their annual conference. LOL..... That fits, huh?

    Sincerely, Lucy Occupy & Friends...ACROSS AMERICA AND ACROSS THE GLOBE.

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  4. Ask any Injured Worker in America about the usual suspects, the same usual suspects and firms and law offices and insurance companies come up.... Ought to be some law enforcement, huh?

    WE ARE THE MEDIA NOW.... Tell your friends and neighbors, including anybody with a job, or anybody who had a job or hopes to have a job. It's a billion dollar insurance racket, with a small team of leased/owned doctors and lawyers and adjusters, or so it seems.....

  5. I guess these are TROUBLED times all the way around hey? Thanks for reporting. Sir. and you as well Lucy Occupy. Peace

    I am an injured worker who has been maimed and battered by the medical provider(s) in the workers compensation insurance carrier’s “network of medical providers”. After filing a workers comp claim, injured workers seek treatment. Unfortunately, some injured workers are maimed and battered by the very medical provider(s) that they are sent to. Deliberate harm to a patient is called medical battery and is happening to injured workers. Some of the medical providers offices are "workers comp insurance mills", wherein most of their patients are injured workers. In order for the Doctors to keep their place in the network, they must comply with the insurance carriers and/or employers "needs" so to speak.
    I was forced under anesthesia for simple lumbar epidurals. At the 2nd epidural procedure, after objecting to anesthesia, I was told I had no choice, that it was the policy of the surgery center that all patients must undergo anesthesia. I awakened from that with severe neck pain and slight left arm pain. My Doctor had injected my neck, left side of my spine, left leg with some sort of chemical that tingled and popped like Alka Seltzer. In fact, the tingling went from my lower left lumbar down my left leg all the way up my back and felt like a popping sensation in my head. I was there to receive a lumbar steroid epidural injection and "trigger point shots" in the left side lumbar area.
    The next epidural procedure, I made it clear I that I did not want to be placed under anesthesia not only on the phone (a day prior to the procedure) but also before the procedure in pre-op and I re-stated the same in the operating room for everyone to hear. I restated that I was to get a local pain blocker (just as I had during the first lumbar epidural). Instead, my Doctor abruptly shoved the needle into my back without any pain blocker whatsoever. I could feel the needle going through the textures of my back (not precisely or with care into the spinal area where the disk is). My head flew up as I screamed "Wait!" or "Stop!". He would not relent! As my head hit the operating room table (where a towel and prop to lay my head was), he moved the needle inside me to the nerve in my back next to my spine and held it against the nerve! The pain was so excruciating that I bit into the towel that was for my head to rest on and screamed with the towel in my mouth. Pure agony! He would not stop! I had no choice once again but to give into anesthesia. When I awakened, I thought to myself, Oh my God, they didn't! I had injuries now throughout my back, neck, shoulders and arm. I could feel the nerves firing all over my back and next to both sides of my spine from the injections of some sort of chemical (the Alka Seltzer feeling again) that over the coming months, burned and corroded the ligaments in my spine, tendons and muscles in my back. It felt as though I was being burned from the inside out. PAIN from burning, PAIN from damage and maiming! I can now and then could feel that some of the tissue/muscles were pushed away from my spine creating the feeling of divots or holes on both sides of my spine. I could feel what seemed to be a muscle pushed away and hanging down on to the right mid side of my person. The ligaments that are in my neck and run up into my skull feel damaged, sore. My spine felt "chiseled" in specific areas most prominently in the top of my back and neck and the bottom near the lumbar sacrum area. I now have instability in my spinal column. I can feel the vertebrae in my spinal column moving not in sync with the other vertebrae. There is much more damage that I could continue to describe but will refrain.

    In order to get treatment, I had to see the AME designated for my WC case. I demanded to see him. Efforts to delay that ensued. Eventually, I was able to see him on August 12, 2013, more than 2 months after the procedure described above after my insistent efforts to move the date up from what I was originally informed was the earliest available date of September 9, 2013. Incidentally, I contacted the AME's office and spoke to the appointment desk myself, I was told that there were dates available in July and August however, the insurance carrier and MY attorney agreed that I wasn't to see the AME any sooner than August 26, 2013. Odd? After seeing the AME on 2 occasions and describing to him and his historian what happened to me verbally and via color sketches and in written description, his report indicates, Yes, somehow my neck was damaged during the procedure(s) however, the pain, the holes etc, that I describe in my back and spine is "medically improbable”! Above, is just a little of the battery that has occurred.
    COOPERATION OF MEDICAL PROVIDERS: Not only was the Ortho Surgeon involved. It was also the surgery centers and the anesthesiologists and others that have been involved. After informing my then attorney via e-mail and several conversations, the attorney who runs the WC division in that law office, called me on the phone and begged me not to file a grievance with the California Medical Board and allow him and the AME to handle this! Then, later he called me again and told me to file for permanent disability right away! My attempts to get help through other means have been stalled. What has been done to me and the continued efforts to interfere as I try to seek treatment even outside of the WC system, has been a well-orchestrated effort on the part of more than just the medical providers. Through injured workers associations, I have come to find out that what has happened to me has happened to many other patients through the years but is being ignored due to the outrageous and maliciousness of the crime. To think that a field of medical professionals would participate in the maiming and battery of patients is something out of a movie, but it does exist!
    HELP STOP MEDICAL BATTERY: Now, I'm trying to prevent what has happened to me from happening to others. 1. Please support a medical battery disclosure and law in all workers comp cases! Only a few states have a medical battery law or disclosures. I wish that I had been presented with a disclosure indicating something to the effect of: “Some injured workers have reported having been harmed, maimed or battered while receiving treatment for their injury. The injured worker is advised to educate themselves regarding the prescribed treatment and the results of said treatment.” 2. Please support a law that provides the option for an injured worker to require a patient advocate to be present (NOT AN ADVOCATE FROM THE INSURANCE CARRIER'S MEDICAL PROVIDER NETWORK) should the need for anesthesia arise. I wish I had known that I had the right to remain awake during the 2nd epidural. The third epidural wherein I was forced brutally to accept anesthesia, I don’t know what I could have done differently. I couldn’t scream loud enough that he (the Doctor) would stop pressing the needle against the nerve in my back! I couldn’t get off the table with the needle in my back either. My back is ruined.
    Should you have any ideas or would like to lend a helping hand to injured workers, most importantly to bring to light the horrible and brutal method of harming injured workers for strategic reasons, please contact me. Your help is greatly appreciated by many! I feel confident that I can speak for many injured workers when I say, “We hope that you will help!”

  8. INJURED WORKERS CONTINUED: I have contacted law enforcement 5 times to report the maiming and battery of my person. Twice I went to the Santa Ana Police Station, the last time I was there, the two police officers were very kind and professional, but informed me that there is no way for them to investigate medical crimes. The 1st time that I went to SAPD, I spoke to an officer who said that there is nothing in the penal code. He further began to question me as though I was the criminal. That conversation should be on tape as I was on the phone just inside the doors at the SAPD.
    I have also contacted the FBI at minimum 3 times. The last time, the gal either hung up on me or disconnected the phone ?
    I'm informed that the maiming and battery of injured workers, falsifying of medical records, false entries on surgery reports, falsified phych reports, etc. is commonplace and has been going on for 20 plus years. WHY WAS I NOT WARNED? I was maimed over and over again. The first time I knew it was deliberate - the physical therapist vigorously dug his fingers into the left lumbar (opposite of the herniated disk), it took him at least 3 minutes (I wondered, I hope this guy knows what he is doing) to shove the tissue away from the spine and dig his finger so deep, he began rubbing the spine and popped a ligament that was elastic like a fresh rubber band. I reported him to the California Physical Therapy Board who I had to follow up with over and over again. They kept saying my file was closed due to MY lack of interest. Not true! They continued to say time and again that I didn't sign a document. Not only did I sign it, I mailed, fax and e-mailed the document to them! Eventually, their formal written response was that the PT (located in Irvine, CA) had all of his records in order and that they didn't feel that there was a problem. WHAT? Does anyone think that the PT would have documented that he was instructed by the defense to deliberately harm me or to "create the look of a condition"?
    After my attorney and I went our separate ways (after compromising statements they made to me & I informed them that there was no trust), I was given only part of the file for me to utilize pro-per. Some of the documents that the defense attorney handed to my attorney were missing. How do I know this. In August 2012, my deposition took place. The contract attorney made copies of some of the documents for me. On another occasion, I went to the office for more copies of the file (long before I realized that the new medical staff were deliberately harming me. In the copies, after Nov. 2013, I found a letter from the defense attorney dated August 2012 (after the depo) wherein the defense attorney, "Charles Bentley" of Peterson, Collantani, Collins and Davis, points out to my then attorney that the treatment "looks like it is harming her rather than benefiting her". To me, it reads like a veiled threat. Shouldn't my attorney's have warned me that I may be the target of maiming. I had already informed my attorney what the physical therapist did to me. My former Lawyers were DiMarco, Araujo & Montevido in Santa Ana, CA Lupe Morales and Joel Thomas were my attorneys.

  9. If many others in the WC system know about the maiming and battery of injured workers, false reports, etc, if the OC DA's office is aware of it, also the California Dept. Insurance Fraud unit is also, then one of the biggest names in WC should be warning their clients when they sign them for their protection!
    I have spoken to several people who have been and still are active in positions of the workers comp industry who have informed me that destroying the injured workers credibility is necessary. I have had the most bizarre things happen to me and in my life since I have filed the WC claim also. Too many to spell out here. I believe this is done to mar my credibility.
    In the last 3 days, I have spoken to another WC attorney who I informed of the circumstances and terrible things that have been to me. His response: "You should want to settle then and get out of the WC system." I want what has been done to me shown as part of my case! He said, "Cecilia, even the legislators' have been bought! Was this statement supposed to imbue me to "get out of the WC system and settle for what even my previous attorney indicates was a ridiculous amount?
    We must somehow, at the very least, be able to get a law passed regarding Medical Battery and a disclosure to all injured workers that indicates that they should be aware of maiming and battery, falsified documents and medical reports. Injured workers should know that documents are changed over and above their signatures. {At my 3rd epidural, I signed nothing that indicated I agreed to monitored anesthesia or general anesthesia, yet I was handed a document with my signature on it afterwards that was marked monitored anesthesia!}
    The so-called professionals in the WC system including the Doctors, Attorneys, Insurance carriers, surgery centers, anesthesiologists and more are criminals as they participate in the deceitful and horrific activities all for $$ Money!
    I wish that there weren't the tool of workers comp! Had there not been the WC system, I would not have pain throughout my body. When I was initially injured at work, I had herniated the right lumbar disk L4 or L5. Now my entire back, neck, shoulder's legs, joints and much more hurt on a daily basis.

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    3. The comments were typical corporate pro-industry non-sense, 'change your doctor, ask the Info and Assistance' agent for help....

      When I first read the comments, I thought it was a joke. The writer clearly does not grasp the magnitude of organized crime that permeates California and National Work Comp. It didn't seem malicious, just totally uninformed of the harsh realities and torture and terrorism that injured workers are subject to, while everyday workers in the field merrily collect their checks and don't make any waves, and look the other way at the crimes being waged against the injured.

      Well, at least that my take on the comments. I had planned to respond also, clarifying, but decided to activate some FB groups #IWU Injured Workers United ..... stop by and if you're so moved, join us. We'll make a point to further discussion on David DePaolo's blogs, and other resources. :) Invite your friends too, and tell your friends and neighbors to follow David's blog.....OUR IGNORANCE IS THEIR POWER....

  10. #WorkComp, as David DePaolo clearly illustrated in an earlier blog, is a billion dollar industry.

    Those battered, maimed and killed by these criminals must be brought represented and the criminals must be held accountable.

    Sadly, there is clearly no law enforcement nor enforcers.

    David, can you explain that to the millions of injured Americans being harmed at the hands of the WorkComp Career Criminals?

    The DA won't look, the WCAB appeals Board Won't Look the California Applicant's Attorneys Association won't look... WHAT ADVICE, DAVID, DO YOU GIVE TO THOSE OF US WHOSE LIVES ARE BEING RUINED BY THESE CRIMINALS???

    Here's a list of my blogs, more to come. Ask About Workers Comp Gravy Trains #WorkCompFraud


    How much longer will the professionals look the other way? INQUIRING MINDS NEED TO KNOW..... WE ARE THE MEDIA NOW More here, more on the way.... WE ARE THE MEDIA NOW. EXPECT US.

    Ask About Workers Comp Gravy Trains #WorkCompFraud

    1. Thank you Lucy. I am willing to be part of a class action law suit but I don't know how to facilitate that. Where should I begin?

    2. Regarding a class action, it will take some momentum. There is a DC lawyer with one in progress for civilian personnel injured in Iraq/Afghanistan, with some of the same insurance players as we deal with in corporate America. Scott Bloch, Esq. Maybe he will help us if we can mobilize. Maybe David DePaolo and his friends willl help us! :D

      If you're on FB, check out these groups. Every post makes a difference, as does every social media forum. WE ARE THE MEDIA NOW.

      #WorkCompCrimes: Post questions, photos events about Injured Workers in America and throughout the World. WE ARE THE MEDIA NOW.

      #IWU InjuredWorkersUnited

      #IWA InjuredWorkersAnonymous





      PS Just google ADJ8181903.... it will bring up increasing numbers of results...not sure why the google link stopped working....