Poizner and Schwarzenegger Insist WC Rates Should Not Rise 
Insurance Commissioner Steve Poizner again rejected a recommendation from the Workers' Compensation Insurance Rating Bureau (WCIRB) to increase the pure premium advisory Rate for workers' compensation insurance rates by 22.8 percent beginning January 1, 2010.
This is the second sizable increase recommended by the WCIRB that has been rejected by the Insurance Commissioner. Poizner is not necessarily arguing that the cost increases cited by the WCIRB do not exist. Instead, he is arguing that the medical cost inflation is avoidable if insurers properly use the tools that are provided to them in the statute.
Poizner again referred to a list of 27 recommendations that would help insurers better control their costs. The list contains both changes that could be made by insurers and changes that would need regulatory or legislative action. It is unclear to what extent insurers have sought to implement the suggested changes identified by the insurance commissioner.
Included in the Insurance Commissioner's list are the following items:
- 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 physician 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.
- Regulations for electronic billing and a standard medical bill form need to be implemented.
Shortly after Poizner's decision to reject the rate increase was made public, Governor Arnold Schwarzenegger issued a statement supporting the decision. "Especially, in our current economic climate, it is important that we are taking positive action to promote businesses and generate jobs in California," said Governor Schwarzenegger. "As we continue our efforts to rebuild California's economy, it's important that we aren't adding additional and unnecessary costs on employers and I applaud Commissioner Poizner's decision today."
While the Insurance Commissioner certainly has the right to reject the recommendation for an increase in the pure premium advisory rate, it may have little impact on the actual rates that are charged by insurers. This is because, as the name suggests, the pure premium advisory rate that is controlled by the Insurance Commissioner is just that --- advisory.
Insurers are free to charge rates based on their own circumstances, and they are. Shortly after Poizner rejected the WCIRB pure premium increase the State Compensation Insurance Fund (SCIF) filed for a 5 percent rate increase effective January 1, 2010. SCIF cited increasing medical costs as the primary reason for the increase in rates.
If the current trend continues, there will be a significant disparity between the pure premium advisory rate and the actual rates being charged by employers. |
Act Now to Support CCWC Advocacy Efforts!
In December 2008, the California Coalition on Workers' Compensation mailed each of you a 2009 Dues Renewal invoice. We want to thank all of you who have already submitted your dollars and renewed your pledge to preserve the 2003 and 2004 reforms.
CCWC is an organization dedicated to aggressively defending the workers' compensation reforms that have led to job creation in the private sector and saved tax dollars at the local level. Without the support of our membership, there would be no advocate in Sacramento representing the broad spectrum of California's public and private, small and large employers.
Your membership dollars are the only way that CCWC can continue to have a voice inside the Legislature and with regulators across the state to ensure that our state's workers' compensation system does not return to the way it was. If you have questions about your dues invoice or did not receive it, please call us immediately at 916.441.4111. |
Visit CCWC on Facebook and Twitter
CCWC 2009 Annual Conference Presentations Online
If you have any problems accessing these documents, please contact Amy Lai at 916.441.4111 or amy@ccwcworkcomp.org. |
