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WCIRB Wire

WCIRB Releases 2013 SB 863 Cost Monitoring Report

October 31, 2013
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On October 28, 2013, the WCIRB released its 2013 Senate Bill No. 863 WCIRB Cost Monitoring Report – Initial Retrospective Evaluation  containing preliminary cost estimates based on emerging post-reform data for many of the key components of the bill. The report was prepared in accordance with the Senate Bill No. 863 WCIRB Cost Monitoring Plan  that was submitted to the Insurance Commissioner earlier this year.

The WCIRB’s report includes the following highlights:

  1. Indemnity claim frequency for the first six months of 2013 is 6.2% above the comparable 2012 frequency, which is significantly above the projected levels. It is not yet clear the extent to which the higher than expected claim frequency in 2013 is attributable to a greater than projected impact of SB 863 permanent disability benefit increases. Nevertheless, the sharp increase in claim frequency is concerning .
     
  2. Early indications on lien filings based on Division of Workers’ Compensation (DWC) data through September 30, 2013 suggest that there may be a greater reduction than the 40% reduction projected by the WCIRB in 2012. Also, as projected, WCIRB lien survey data suggests that the greatest level of reduction is in liens for relatively small amounts.
     
  3. In 2012, based on a California Workers' Compensation Institute analysis, the WCIRB estimated an approximate $20,000 per claim reduction on claims involving spinal implant hardware due to the SB 863 provisions related to duplicate reimbursement for spinal implant hardware. Preliminary WCIRB data suggests savings of more than $15,000 per claim on affected spinal surgery claims in 2013.
     
  4. In 2012, the WCIRB estimated that the revised fee schedule for ambulatory surgery center (ASC) facility fees required by SB 863 would reduce those fees by approximately 25%. Preliminary WCIRB data for 2013 services suggest a 26% reduction in ASC fees.
     
  5. Recent volumes of independent medical review (IMR) requests from DWC data indicate more than 30,000 requests for IMR were filed in August and September. If the volume of IMR requests continues at this level, the number of IMRs conducted will be several times higher than that estimated by the WCIRB in its SB 863 estimated savings published in 2012, raising serious questions as to the anticipated savings in administrative costs as well as potential future savings in medical treatment costs.

The WCIRB’s complete 2013 Cost Monitoring Report is available in the Research and Analysis section of the WCIRB website (www.wcirb.com) or by clicking the link below.

 

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