The California Workers' Compensation & Risk Conference in Dana Point opened with a session featuring employers and stakeholders in the industry weighing in on the current state of California Workers' Compensation and future outlook for 2015. Panelists were moderator Mark Walls, VP Communications & Strategic Analysis at Safety National, William Zachry, VP of Risk Management at Safeway, Tim East, Director of Risk Management at The Walt Disney Company, Bill Mudge, President & CEO at WCIRB California, Kurt Leisure, VP of Risk Services/Asset Protection at the Cheesecake Factory, Seeta Ambati , Esq., (defense attorney) Partner at Laughlin, Falbo, Levy & Moresi, LLP, and James Butler, Esq., (plaintiff attorney) Attorney at Law at Butler Viadro LLP.

The panel began with a look at where California Workers' Compensation is today:

• California holds a quarter of the nation's workers' compensation business.
• To date, 80 new carriers have entered the California market since 2004.
• California is among the top three states in terms of average medical costs per claim.
• California has experienced double-digit increases in premiums over the last two years.

Cost drivers to the California Workers' Compensation system include:

• A high frequency of claims handling in the state relative to payroll, with Los Angeles County having the most claims in the region.
• A multitude of expensive permanent disability claims that include attorney involvement.
• An increased frequency of opioid prescriptions, which has doubled.

SB 863 is California's answer to addressing these costs, however, it is too early to provide tangible data that supports if the reform has been successful. Some early data shows that costs related to liens are down but costs related to independent medical reviews (IMR) are significantly higher than expected.

Panelists were split as to whether the SB 863 reforms have been successful. Some say that, although too soon to judge, they are seeing the following positive indications that it is working:

• Generally, rate increases have been cut in half due to costs taking a downward trend.
• The highest costs are coming from old medical claims, rather than recent claims.
• Because this is the first time that California has experienced cost decline in quite some time, panelists thought that the cost cuts may make the state appear more employer friendly and it will encourage companies to return.

Panelists noted that there are still some kinks to work out in the reform. One stated that the Independent Medical Review (IMR) process, which has been designed to take non-medical professionals out of the medical decision-making process, is working well. On the other hand, the opioid decision-making process in place is currently not solving the costly opioid problem. Overall, people are still learning the new process, but they think that outcomes will be positive over time. They think that the measures are in place to help get the injured worker healthy and back to work. Most on the panel felt that that peer-to-peer review is the right approach and the system is better than it was.