CA Insurance Commissioner Calls For Hearing To Determine What Caused Medical Costs To Skyrocket

San Francisco, CA (CompNewsNetwork) - Following the Workers' Compensation Insurance Rating Bureau (WCIRB) Governing Board's vote to recommend a 24.4 percent increase in the Workers Compensation Claims Cost Benchmark, Commissioner Steve Poizner today promised to convene a hearing to investigate why medical costs are skyrocketing in the workers' compensation system:

"California's unemployment rate is skyrocketing and more than 1 in 10 are jobless. In January alone, nearly 80,000 jobs in the state were lost.

"Before transitioning into public service, I spent 20 years starting companies and creating jobs in Silicon Valley. I know how hard it is to make a payroll and the impact that workers' compensation insurance costs have on businesses. The last thing that California's employers need is increasing workers' compensation costs when so many of them are struggling to keep the employees they have.

"Over the past two years, I have carefully scrutinized WCIRB's proposed rate increases and rejected or reduced every single unwarranted increase in the benchmark. In 2008, I cut a 16 percent increase in the benchmark to just 5 percent. In 2007, I rejected a 4.2 percent increase and held rates steady.

"I will give this WCIRB recommendation the same level of careful scrutiny I have given previous requests. I will not allow California's job creators to be burdened with unnecessarily high workers' compensation costs. Additionally, I will convene a hearing of all those in the workers' compensation system - doctors, insurance companies, applicant attorneys, labor, etc. - to determine why workers' compensation medical costs are increasing. These soaring costs are unsustainable and must be controlled if we are to prevent a repeat of the workers' compensation crisis we saw earlier this decade."

Commissioner Poizner has also expressed concern about the quality of data provided by the WCIRB and is in the process of completing a top down review of the bureau's operations. This report is expected in June.

After WCIRB recommends a rate to the Department of Insurance, the Insurance Commissioner holds a hearing to solicit feedback about the proposed change. The April 28 hearing is scheduled to be held in San Francisco. After the hearing, the Commissioner can accept or revise WCIRB's recommended change in the Claims Cost Benchmark.

The California Department of Insurance has no authority to set workers' compensation insurance rates. The Workers Compensation Claims Cost Benchmark, formerly known as the Pure Premium Rate, is the estimated change in claim costs over the next 18 months.

Since its high in 2003, the Workers Compensation Claims Cost Benchmark has fallen 63.4 percent.