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In Davis v. State of California, Department of Forestry and Fire Protection, 2016 Cal. Wrk. Comp. P.D. LEXIS 611, the WCAB held that a firefighter was not entitled to the presumption under LC 3212.85 for an alleged injury to his “nervous system and respiratory” occurring as a result of his exposure to fire retardant.
In Watkins v. Department of State Hospitals, Atascadero State Hospital, 2016 Cal. Wrk. Comp. P.D. LEXIS 627, the WCAB held that an applicant’s claim was not barred by the statute of limitation under LC 5405 when the defendant failed to prove when it last provided benefits. The California Workers’ Compensation Appeals Board issued its first en banc decision in almost a year, addressing the parameters of acceptable communications with agreed medical evaluators.
Labor Code Section 4062.3 requires that the parties to a comp case must both consent to any “information” being provided to an AME. The California Code of Regulations further imposes an obligation on any party who wishes to provide information to an AME to furnish a copy of the information to opposing counsel at least 20 days before the information is provided to the AME. If the opposing party objects within 10 days, the party cannot provide the information to the AME without an order by a workers’ compensation judge. In the En banc decision of MAXHAM vs. CALIFORNIA DEPARTMENT OF CORRECTIONS AND REHABILITATION; STATE COMPENSATION INSURANCE FUND ADJ3540065 (SAC 0361552) the WCAB held that: 1. “Information,” as that term is used in section 4062.3, constitutes (1) records prepared or maintained by the employee’s treating physician or physicians, and/or (2) medical and nonmedical records relevant to determination of the medical issues. 2. A “communication,” as that term is used in section 4062.3, can constitute “information” if it contains, references, or encloses (1) records prepared or maintained by the employee’s treating physician or physicians, and/or (2) medical and nonmedical records relevant to determination of the medical issues. DIR Combats Workers’ Compensation Fraud, Stays 200,000 Liens with Claim Value of Over $1 Billion Issues report on efforts to reduce medical provider and premium fraud Oakland—The Department of Industrial Relations (DIR) today filed a report on its antifraud efforts in the California workers’ compensation system, and announced it has stayed more than 200,000 liens worth a combined claim value of more than $1 billion. The liens are associated with 75 medical providers facing criminal fraud charges. DIR’s efforts to eliminate medical provider fraud and illegitimate liens were bolstered by two new laws effective January 1: • SB 1160 (Mendoza) requires DIR to automatically stay liens owned by providers who have been indicted or charged with crimes until the disposition of criminal proceedings. • AB 1244 requires the Division of Workers’ Compensation (DWC) Administrative Director to suspend any medical provider, physician or practitioner from participating in the workers’ compensation system when convicted of fraud. DWC has adopted provider suspension regulations and is now issuing notices of suspension to convicted providers. “Over the past year, we have worked to prohibit criminal and indicted providers from lining their pockets through liens,” said DIR Director Christine Baker. “Removing fraudulent providers and their lien claims from the workers’ compensation system will further improve services to injured workers and ultimately reduce costs in the system.” DIR has posted information on its fraud prevention efforts online, including information on indicted medical providers. DIR is leading an effort to identify and address strategies for improved anti-fraud efforts in the workers’ compensation system. DIR and the Department of Insurance convened working groups last June to gather stakeholder input and evidence of fraudulent activity. At the direction of the Secretary of the California Labor and Workforce Development Agency, DIR prepared a report on further recommendations to the Governor and the Legislature. The report identifies premium fraud – through which unscrupulous employers seek to lower costs by underreporting payroll, misclassifying employees, or misreporting workers in high-risk occupations as engaged in low-risk occupation – as warranting the next series of significant anti-fraud policies.§10508. Extension of Time for Weekends and Holidays.
If the last day for exercising or performing any right or duty to act or respond falls on a weekend, or on a holiday for which the offices of the Workers’ Compensation Appeals Board are closed, the act or response may be performed or exercised upon the next business day. A focus on workers’ compensation insurance in California has apparently paid off for Berkshire Hathaway Homestate Cos., as A.M. Best last week affirmed a financial strength rating of A, or superior, for the group of six insurers.A.M. Best also affirmed the long-term issuer credit ratings of “aa ” for BHHC, a group that includes Homestate Insurance Co., Brookwood Insurance Co., Continental Divide Insurance Co., Cypress Insurance Co., Oak River Insurance Co., and Redwood Fire and Casualty Insurance Co.
“Aggressive claims management” was one factor contributing to A.M. Best’s affirmation of BHHC’s ratings. Others were effective loss control services, a history of conservative loss reserving standards, and financial flexibility and support provided by the group’s parent company, Berkshire Hathaway Inc. The ratings reflect BHHC’s “strong risk-adjusted capitalization, historically profitable operating performance and the executive team’s successful track record in managing operations,” A.M. Best said. BHHC is licensed in 50 states and the District of Columbia. In addition to workers’ compensation, lines of business include auto physical, commercial auto liability and commercial multi-peril. Of the group’s $1.3 billion in direct premiums written in 2015, about 80% was from workers’ compensation business. And nearly half of its premium volume comes from the California workers’ compensation market, A.M. Best said. However, the California concentration comes with risk. A.M. Best said BHHC has been expanding its book of business outside the California workers’ compensation line in response to market conditions and as a way to spread out its risk. But the diversification slowed starting in 2010 as California workers’ compensation market grew stronger. A.M. Best said it has some concern about BHHC’s geographic concentration. But it believes the group is “well positioned to continue generating favorable underwriting results due to its familiarity with the niche, and management’s commitment to maintaining underwriting discipline and adequate reserves,” A.M. Best said in its credit report for the group. “A.M. Best will continue to monitor the performance of the group’s workers’ compensation book of business in California to ensure legislative challenges do not materially affect the group’s operating performance.” BHHC’s net income has fluctuated over the last five years, from a $38 million loss in 2011 to profits of $202 million in 2014 and $128 million last year, according to figures from A.M. Best. Berkshire Hathaway has consistently generated underwriting profits that are significantly better than the industry norm in each of its major commercial insurance lines, Fitch Ratings noted in a report on the company last year. Whether Berkshire Hathaway can maintain its level of underwriting profits remains to be seen. Fitch has noted signs of weakening property/casualty premium rates. And in long-tail business lines such as workers’ compensation, there’s always uncertainty about future adverse loss reserve movement. In addition, there’s the question of its California concentration. “California’s a pretty volatile state,” said James Auden, managing director at Fitch Ratings. “And comp is a volatile line, historically.” Berkshire Hathaway has been “quietly expanding” its business in commercial insurance lines over the past several years, Fitch said in its report last year. The largest individual commercial line for Berkshire is workers’ compensation, which expanded substantially over five years to exceed $2 billion in direct written premiums in 2014. In addition to the Homestate Cos., Berkshire Hathaway’s Guard Insurance Group writes a significant amount of workers’ compensation business. And its Applied Underwriters unit, which specializes in workers’ compensation for small and midsize businesses, expanded premium volume by more than 500% in the last five years to approach $700 million in 2014, according to Fitch. Berkshire Hathaway’s increased interest in workers’ compensation comes as other carriers such as American International Group and Liberty Mutual have stepped back somewhat from workers’ comp, Auden said. Berkshire Hathaway and AmTrust Financial Services have both experienced a swift rise in workers’ compensation over the past five years, according to an April market share report from Fitch. AmTrust passed both Liberty Mutual and AIG to become the fourth-largest writer in 2015, and Berkshire Hathaway moved up ahead of Liberty Mutual to become the sixth-largest writer. |
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