Posted on 29 Apr 2009
Insurance Commissioner Steve Poizner today urged the Workers Compensation Insurance Rating Bureau (WCIRB) to withdraw its request for an increase in the Workers Compensation Claims Cost Benchmark based on recent Workers Compensation Appeals Board (WCAB) decisions at a hearing in San Francisco on Tuesday.
WCIRB has requested a 23.7 percent increase in the Claims Cost Benchmark, with approximately 6 percent due to the recent Almaraz and Ogilvie decisions.
"Five years ago, skyrocketing workers compensation costs were the bane of the economy," said Commissioner Poizner. "Many jobs left our state and countless companies expanded elsewhere because of the high costs of workers compensation in California.
"Because of SB 899's reforms, the costs in the workers compensation system have fallen by more than 60 percent. However, a number of factors are causing the costs to increase including the recent WCAB ruling in the Almaraz and Ogilvie cases and medical treatment costs.
"WCIRB should withdraw the portion of the increase related to the Almaraz and Ogilvie cases. The Governor has said that he believes the ruling will not survive the appellate process in its current form and that his administration supports the effort to overturn the decisions. I believe that any increase should be considered after the judicial process has concluded.
"While increased medical treatment costs may be justified, information provided at today's hearing did not adequately support the request. Insurers have the ability to control costs through medical treatment guidelines, utilization review and medical provider networks. So rather than explain why costs are going up, all I heard is that they are going up and we should pass them along in the form of rate increases. This is unacceptable and the public deserves better.
"Because of this, I have decided to continue this matter to a special investigative hearing to examine medical inflation. I will call all parties - including insurers and medical service providers - to the table to get a clear answer to why costs are spiraling. When we get those answers, I will ask the Governor and the legislature to make the necessary changes to ensure a stable and effective workers compensation system."
The second hearing on medical treatment costs will be held on June 8 at 1 p.m. in Sacramento.