California Regulator Orders Audit of State Workers’ Comp System
Insurance Commissioner Steve Poizner (R) on Tuesday proposed a 14.2% reduction in workers' compensation insurance rates and ordered a state investigation into whether injured workers receive proper medical care in a timely manner, the San Diego Union-Tribune reports (Calbreath, San Diego Union-Tribune, 5/30).
Following Poizner's order, the Insurance Department will collaborate with the state Division of Workers' Compensation to investigate the physician review process and ensure that medical care for injured workers is not improperly delayed or denied (Kasler, Sacramento Bee, 5/30).
The review process was part of the 2004 workers' compensation reform package enacted by Gov. Arnold Schwarzenegger (R). Employers support the physician reviews because they lower treatment costs, but Poizner and other regulators are concerned that employers may be using the process to deny necessary care.
Carrie Nevans, interim administrative director of DWC, said her agency was in the final phase of adopting new regulations that would impose fines on insurers if they misused the physician review process (Lifsher, Los Angeles Times, 5/30).
Poizner said he proposed a 14.2% rate reduction because insurers are "reaping tremendous benefits" from the workers' compensation reforms. The new rates would affect policies written or renewed after July 1 (Sacramento Bee, 5/30).
Although Poizner's recommendation is not mandatory, insurers generally have gone along with the rate cuts proposed by the insurance commissioner, according to the Times (Los Angeles Times, 5/30).
Poizner also ordered a state audit of the Workers' Compensation Insurance Rating Bureau of California. The bureau in March recommended a rate cut of 11.3% (Sacramento Bee, 5/30).
Poizner said the audit of the bureau will "improve its data collection and forecast development" (East Bay Business Times, 5/29). He added that the bureau "has been plagued by a 12-year history of forecasting inaccuracy" (Sacramento Bee, 5/30).
Poizner also announced a Workers' Compensation Summit that will seek to recruit new insurers to California. He also created a blue ribbon Advisory Task Force on Insurance Fraud to study and determine best practices for combating workers' compensation fraud (East Bay Business Times, 5/29).