Workers’ Compensation Updates

Noted below are important decisions/updates made recently within California Workers’ Compensation system:

Medicare Secondary Payer Mandatory Notice and Reporting Requirements 

Centers for Medicare and Medicaid Services (CMS) implementation of Section 111 of the Medicare, Medicaid and SCHIP Extension Act of 2007 (MMSEA) will impose significant mandatory notice and reporting requirements for your workers’ compensation and liability insurance programs effective 7/1/09.

In short, this new law allows CMS to be provided with vital information to determine when Medicare’s financial obligation and responsibility to pay medical bills is primary or secondary.

The responsibility and payment of outlined future medical treatment associated with a work-related injury is the responsibility of the employer through workers’ compensation and not Medicare.

Who is Responsible for Reporting?

CCCSIG, as a JPA is designated as the Responsible Reporting Entity (RRE) and therefore responsible for all compliance and reporting related to workers’ compensation for our member districts.

We are working with our claims software provider AON Risk to implement our electronic reporting process with CMS; the timeframe to submit Claim Input Files for testing has been moved to 1/1/2010.

CMS reporting requirements also pertain to liability insurance so please also contact your liability insurance representative for more information.

  • Workers’ Comp Court of Appeals affirmed the “Benson” decision, which is a significant victory for Employers in CA. That being said, “Benson” overturns the “Wilkinson” decision which defined combined awards of permanent disability for decades. It is expected that the issue will ultimately go before the California Supreme Court for resolution.  For now what does this mean…………the decision could cause lower permanent disability awards in the majority of cases where an injured worker has successive injuries to the same body part that become “permanent & stationary” at the same time. This occurs when the initial injury has a specific date, while the second is cumulative in nature, which districts often experience with long-term employees.
  • Example: under “Wilkinson”, if an injured worker had a 36% disability for a 2007 injury, equaling $39,790, under “Benson” if a doctor asserts that there are two injuries occurring in 2007 each 50% responsible for the disabilities, then we have 18% or $15,065 for each of the 2 injuries, totaling $30,130 versus $39,790, reducing the permanent disability exposure by $9,660
  • Warren Pulley defense attorney, working with CCCSIG on behalf of Mt. Diablo USD argued a case at the Courts of Appeals. The Court issued a favorable decision which will benefit our member districts and schools through out the State of California.

Since 2003 there have been many changes to the California worker’s compensation system. Some of the most prominent changes to the law are as follows:

Workers’ Compensation Fraud
The Workers’ Compensation Fraud Program was established in 1991 through the passage of Senate Bill 1218. The law made Workers’ Compensation fraud a felony, requiring insurers to report suspected fraud and established a mechanism for funding enforcement and prosecution activities.

What is Workers’ Compensation Fraud
Fraud occurs when someone knowingly lies to obtain some benefit or advantage to which they are not otherwise entitled or someone knowingly denies some benefit that is due and to which someone is entitled.

Report Suspected Fraud
CCCSIG is required to report suspected fraudulent claim activity to the CA Department of Insurance (CDI) for criminal investigation.

This benefit has been repealed and replaced by supplemental job displacement benefits voucher up to a maximum of $10,000 depending on the level of permanent disability.

24 Visit Caps
Chiropractic treatment, physical therapy and occupational therapy visits are capped at 24 visits for dates of injury 1/1/04 and after.

American College of Occupational and Environmental Medicine (ACOEM)
ACOEM treatment guidelines are now presumptively correct and every physician must treat all occupational injuries in accordance with these guidelines.

Utilization Review
Every employer must now establish a utilization review process for the purpose of approving, modifying, delaying or denying medical treatment.

Any injury occurring on or after 4/19/04 will have an aggregate temporary disability cap of 104 weeks (two years) beginning with the first payment of temporary disability, except for specified injuries that require more recuperation time such as severe burns, eye injuries and amputations. In those cases temporary disability benefits will be capped at 240 weeks within five years of the first payment of temporary disability.

Generic Drugs and Supplies
Any person or entity dispensing medicines and medical supplies to injured workers to cure or relieve the effects of an injury under workers’ compensation must dispense the generic drug or medical supply equivalent unless the prescribing physician provides otherwise in writing.

Impairment shall now be based upon the causation of the injury and all permanent disability reports prepared by physicians must consider what portion of the disability is work related.

Medical Provider Networks
Employers may establish or modify medical provider networks to treat injured workers on or after 1/1/05. If established the medical provider network will provide all medical care throughout the life of the work-related injury.