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California Workers Comp Costs Growing Quickly

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CA Workers Comp Costs

The quickly growing Workers Comp costs in California places it as the most expensive state.  I was perusing an article from the Workers Compensation Action Network that contained a few astounding statistics. If you are in CA or want to see what your Workers Comp situation may look like in a few years, it is a good website. I receive their email updates frequently. 

Percentage Workers Comp Costs of Health care
Wikimedia commons – Sugar-Baby-Love

Why is CA so important for Workers Comp Statistics? As I have posted many times in the past, what happens in California will be coming to your state very soon if it has not already affected your premiums.

According to the California Workers’ Compensation Institute, individual medical costs per claim between 2005 and 2009 grew by the following amounts:

  • 149 percent increase for physician medical-legal reports
  • 68 percent increase for pharmaceuticals and medical equipment*
  • 29 percent increase for physician ―evaluation and management,‖ driven by more doctors’ office visits and more treatments per visit
  • 23 percent increase for all outpatient services
  • 15 percent increase for physical medicine
  • 9 percent increase for surgery costs
Pill Capsules Workers Comp Costs On US Paper Currency
123RF

The increase in pharmaceutical costs has included a dramatic increase in the prescribing of ―schedule II opioids‖ – narcotics such as oxycodone – and ―compound drugs‖ that include medical foods. Between 2005 and 2009, according to CWCI research, reimbursements for Schedule II drugs increased from 3.8 percent to 23.6 percent of total prescription drug payments in the California workers’ compensation system – an increase of more than 500 percent.

Recent research has found that more than half of these drugs are prescribed by less than three percent of medical providers in California. These providers collect nearly two-thirds of all reimbursements for these drugs. During the same time period, prescribing of compounds, the most common of which are mixtures of topical creams, grew from 2 percent of all workers’ compensation prescription costs in 2006 to 12 percent in 2009 – an increase of more than 400 percent.

This post on Fentanyl in California was a shocker to me. This is a large amount of statistics to digest. Do you track your Workers Comp payouts in this depth – especially on RX’s?

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James Moore

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Mgmt Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications

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