At the 2015 California Workers' Compensation & Risk Conference, this panel of industry stakeholders weighed in on the overall condition, including cost drivers and legislation, affecting California's workers' compensation system:
Moderator: Mark Walls, VP communications and strategic analysis at Safety National
David North, CEO at Sedgwick
Kevin Confetti, deputy chief risk officer at University of California
Ann Schnure, VP risk management, claims, at Macy's
Dawn Watkins, AIC, PHR, ARM, director integrated disability management at LA Unified School District
Julius Young, partner at Boxer & Gerson
Richard M. Jacobsmeyer, founding partner at Shaw, Jacobsmeyer, Crain & Claffey
The first question was: How does the California's workers' compensation system compare with other states?
California ranks #1 in costs compared with the rest of the U.S. California simply has more claims that cost more money. That is why California is the most expensive and complicated state. Every time California changes a law, the system gets more complex. What influences workers' comp is far more than just the laws, though. The social norms are different in California. It is a unique culture of employment that affects everything. There are a lot of things that employers and the healthcare community do that are driving these costs.
Why are claims costs so expensive in the Los Angeles basin vs. the rest of California?
Injured employees are transferred away at a larger rate from the primary treating physician of the employer's choice. There is a very different treatment pattern compared with other states, and this medical treatment is driving costs for employers. Litigation rates are higher, which is part of the culture in that area. Very often, LA attorneys try to take medical control and send the injured employees to the doctors that the attorneys prefer. Attorneys and physicians who have had long-lasting relationships are referring almost exclusively to each other. Attorneys are aggressively advertising to injured workers, and workers are responding.
What else is driving workers' compensation costs in California as a whole?
Once an employee gets an attorney referral, it is out of the employer's hands. The employer no longer has the authority to properly take care of the injured worker. California is the only state where, if you do not like what you are paid, you file a lien. This has nothing to do with the quality of care for the injured worker. The root of so many of these issues is the doctor community in the state. Maybe the doctors need to be trained on billing and medical treatment utilization schedule (MTUS), but it's believed that some may be billing higher than the fee schedule to see if someone will actually pay the higher rate billed. The most important person in workers' comp is the injured worker. We should be spending all the money that employers pay on things like bill review on helping the worker heal. Too much of the costs that employers pay are not going to the injured worker.
What concerns do you have about current legislation and case law affecting the system?
We, mistakenly, have allowed legislation to tell us how to comply. It has become much more about the process rather than helping an injured worker get better. Doctors will say how they think they should treat, but have to send the case through utilization review, which sometimes contradicts the doctor's opinion. This deflates that injured worker's confidence on whether he is getting the best care. It is possible that doctors are not trained on the MTUS and keep trying to push things through the system that shouldn't be. We should focus on how to better train doctors on the system. The system is so complicated. What employers need to do is try to stop the employees from getting into the system. We need to intervene fast. Get the employees good, quality medical care quickly and eliminate the potential for them to get stuck in the system.
How do you improve the quality of benefits to injured workers in California?
The least-likely employee to file a claim is the employee who thinks her employer cares about her. Employees are much less likely to litigate cases if the employer is providing them with good care and communication. That's the gold standard for trying to decrease litigation. It is so important for employers to reflect on how they are treating their injured workers. Are you treating them like a member of your team or just another expense? Often, they are afraid that they are going to lose their job. Let them know what workers' comp is and what they should expect. It is so complicated. Make sure they are well-informed and understand that return to work means they are not going to lose their job because of an injury. Claims examiners in California have a tough job. We need to hire smart people and give them appropriate workloads. They are the glue that holds everything together. California currently has a shortage of qualified adjusters, and it is a large problem. The industry, as a whole, needs to contribute to this issue so we can get quality people interested in this career path.