Workers Compensation Reform Update

(1)

Office of the Chief Operating Officer

Risk Management and Insurance

Services

Workers

’

_’

Compensation

_Compensation

Reform Update

Presentation to the Presentation to the

Los Angeles Unified School District Los Angeles Unified School District

Committee of the Whole Committee of the Whole

(2)

2

Overview

Challenges/Responses

•

WorkersWorkers’’ Compensation costs continue to Compensation costs continue to increase

increase

•

LAUSDLAUSD’’ss WC reform began in 2003 to WC reform began in 2003 to reduce costs

reduce costs

•

Additional resources have been devoted to Additional resources have been devoted to the program

the program

•

Staff changesStaff changes

•

Improvements and achievements Improvements and achievements

•

(3)

Outline

•

• Workers

Workers

’

Compensation in General

•

• Workers

Workers

’

Compensation Program

Background

•

• Fraud

Fraud

•

• Goals

Goals

•

• Current Initiatives

Current Initiatives

•

• Legislation

Legislation

•

(4)

4

WORKERS

’

_’

COMPENSATION

IN GENERAL

(5)

History of Workers

’

_’

Compensation

_Compensation

•

Work related injuries increased during the Work related injuries increased during the Industrial Revolution

Industrial Revolution

•

EmployeeEmployee’’s only recourse was a lawsuit s only recourse was a lawsuit against the employer

against the employer

•

CaliforniaCalifornia’’s WC system was established in s WC system was established in 1913

1913

•

““No faultNo fault”” systemsystem

•

Employees benefit from prompt, equitable, Employees benefit from prompt, equitable, guaranteed benefits

guaranteed benefits

•

Employees generally may not file suit Employees generally may not file suit against employer

(6)

6

Workers

’

_’

Compensation Statutes

_{Compensation Statutes}

•

• Labor Code

Labor Code

•

• California Code of Regulations

California Code of Regulations

•

• Education Code

Education Code

•

(7)

Benefits Provided Under

Workers

’

Compensation in

California

•

• Medical

Medical

•

• Indemnity

Indemnity

•

• Allocated Loss

Allocated Loss

Expenses

(8)

8

WC Cost Overall Components

•

• Administrative Fees and ChargesAdministrative Fees and Charges

–

– District staffDistrict staff –

– Claims AdministrationClaims Administration –

– Actuarial StudiesActuarial Studies –

– Supplies & OverheadSupplies & Overhead

•

• Direct Program CostsDirect Program Costs

–

– Medical Expense Benefits (payments to doctors, hospitals, and otMedical Expense Benefits (payments to doctors, hospitals, and other her providers)

providers)

–

– Indemnity (temporary disability and permanent disability paymentIndemnity (temporary disability and permanent disability payments)s) –

– Allocated Loss Expenses (legal fees, investigative charges, courAllocated Loss Expenses (legal fees, investigative charges, court t costs, etc. )

costs, etc. )

•

• Indirect CostsIndirect Costs

– – SubstitutesSubstitutes – – MoraleMorale – – ProductivityProductivity –

– Student AchievementStudent Achievement

•

(9)

Is California Different

From Other States?

•

Costs are Costs are highesthighest in Californiain California

•

Major reasons: Major reasons:

-- High use of specific kinds of medical services High use of specific kinds of medical services (chiropractic care, etc.)

(chiropractic care, etc.)

-- Medical visits per claim are 70%Medical visits per claim are 70% greater than other

greater than other states

-- Litigation rate Litigation rate

•

Benefits for injured employees are among the Benefits for injured employees are among the lowest

(10)

Source: CHSWC 2002

Source: CHSWC 2002--2003 2003

Annual Report 10

Median Number of Visits per Workers’

Compensation Claim by Provider Type*

*(1999-2000 Claims with greater than seven days lost time)

+39% +39% 12.2 12.2 17.0 17.0 Physical/ Physical/ Occupational Occupational Therapist Therapist +105% +105% 16.6 16.6 34.1 34.1 Chiropractor Chiropractor +49% +49% 7.8 7.8 11.6 11.6 Physician Physician Difference Difference 12 12--State State Median Median California California

(11)

California WC System

Performance

Costs

Costs--Medical Benefits PaidMedical Benefits Paid

%

Medical Benefits ($000)

Medical Benefits ($000) 20012001 20022002 ChangeChange Physicians

Physicians $2,571,474$2,571,474 $2,941,336$2,941,336 14.4%14.4% Capitated

Capitated MedicalMedical $ 7,561$ 7,561 $ 8,814$ 8,814 16.6%16.6% Hospital Hospital $1,185,651$1,185,651 $1,610,923$1,610,923 35.9%35.9% Pharmacy Pharmacy $ 305,177$ 305,177 $ 423,869$ 423,869 38.9%38.9% Payments Made Payments Made Directly to Patient Directly to Patient $ 330,136$ 330,136 $ 340,019$ 340,019 3.0%3.0% Medical

Medical--Legal EvaluationLegal Evaluation $ 134,030$ 134,030 $ 127,392$ 127,392 5.0%5.0% Medical Cost Containment

Medical Cost Containment Programs*

Programs* $0$0 $ 407,872$ 407,872 N/A N/A TOTAL

TOTAL $4,534,030$4,534,030 $5,860,226$5,860,226 29.2%29.2% *Figures for medical cost

*Figures for medical cost--containment programs are based on a sample of insurers containment programs are based on a sample of insurers who reported medical cost

who reported medical cost--containment expenses to WCIRB. Not available for containment expenses to WCIRB. Not available for 2001.

(12)

Source: CHSWC 2003

Source: CHSWC 2003--2003 2003

Annual Report 12

California WC System Performance

Costs of Indemnity Benefits Paid

%

Indemnity Benefit

Indemnity Benefit 20012001 20022002 ChangeChange (Thousands)

(Thousands)

Temporary Disability

Temporary Disability $2,027,178$2,027,178 $2,482,366$2,482,366 22.5%22.5% Permanent Total Disability

Permanent Total Disability $ 86,456$ 86,456 $ 86,434$ 86,434 0.0%0.0% Permanent Partial Disability

Permanent Partial Disability $2,177,340$2,177,340 $2,328,984$2,328,984 7.0%7.0% Death Death $ 65,980$ 65,980 $ 66,388$ 66,388 0.6%0.6% Funeral Expenses Funeral Expenses $ 2,308$ 2,308 $ 2,429$ 2,429 5.3%5.3% Life Pensions Life Pensions $ 39,462$ 39,462 $ 46,178$ 46,178 17.0%17.0% Vocational Rehabilitation Vocational Rehabilitation $ 663,212$ 663,212 $ 706,675$ 706,675 6.6%6.6% TOTAL TOTAL $5,061,935$5,061,935 $5,719,455$5,719,455 13.0%13.0%

(13)

California WC Costs

Percent Growth By Year

-100.0% 0.0% 100.0% 200.0% 300.0% 400.0% 500.0% 600.0% Medical Paid Indemnity Paid Expenses Change in Total Reserves Total Medical Paid 1.7% 6.6% 19.3% 34.8% 56.9% 70.2% 106.1% Indemnity Paid -3.2% -1.8% 4.3% 10.4% 25.2% 27.3% 43.9% Expenses 2.6% 7.9% 21.8% 33.6% 38.0% 46.3% 97.8% Change in Total Reserves 81.7% 120.6% 150.0% 225.4% 277.8% 401.6% 550.0% Total 18.9% 32.0% 51.3% 81.1% 109.3% 145.9% 220.2%

(14)

14

BACKGROUND

LAUSD WORKERS

’

_’

COMPENSATION

PROGRAM

(15)

History of Risk Management

and WC at LAUSD

•

No standNo stand--alone risk management departmentalone risk management department

•

2 individuals were handling workers2 individuals were handling workers’’ compensation (7000 claims per year)

compensation (7000 claims per year)

•

Actuarial studies conducted only once every 3 Actuarial studies conducted only once every 3 years

years

•

Same WorkersSame Workers’’ Compensation third party Compensation third party administrator for past 10 years

administrator for past 10 years

•

High claims and litigation ratesHigh claims and litigation rates

•

(16)

16 16

PricewaterhouseCoopers Report

Recommendations

Status

•

• Team with an excellent Third Party Team with an excellent Third Party Administrator (TPA)

Administrator (TPA)

•

• Improve quality of data and Improve quality of data and frequency of reports

frequency of reports

•

• Improve communication with Improve communication with employees

employees

•

• Establish comprehensive Stay at Establish comprehensive Stay at Work/

Work/

Return to Work Program

•

• Partner with UnionsPartner with Unions

•

• Partner with Office of Partner with Office of

Environmental Health and Safety

•

• Increase Internal StaffingIncrease Internal Staffing

• • Completed Completed 8/1/03 8/1/03 • • Completed Completed 12/15/03 12/15/03 • • OngoingOngoing • • Effective Effective 2/1/04 2/1/04 • • OngoingOngoing • • OngoingOngoing • • Projected Projected completion completion 2/28/04 2/28/04

(17)

New Third Party Administrator/

Management Reports

•

• Sedgwick Claims Management

Sedgwick Claims Management

Services (SCMS) Effective

8/1/2003

•

• Customer Service Model

Customer Service Model

•

• Information Management

Information Management

Systems

-

-•

(18)

18

LAUSD CURRENT

WC PROGRAM

(19)

Overview Of WC At LAUSD

•

Program has been selfProgram has been self--insured since 1976insured since 1976

•

Approximately 7000 claims are filed each Approximately 7000 claims are filed each year

year

•

2003/04 claims are expected to cost $176 2003/04 claims are expected to cost $176 million

million

•

Estimated outstanding liabilities will be at Estimated outstanding liabilities will be at least $566

least $566 million on June 30, 2004million on June 30, 2004

•

Over 200,000 lost work days annuallyOver 200,000 lost work days annually

•

(20)

20

Overview of LAUSD WC Reforms

•

Labor/Management PartnershipLabor/Management Partnership

•

Accident Prevention/Workplace Safety Accident Prevention/Workplace Safety

•

Claims Management/AdministrationClaims Management/Administration

•

Communication/Training Communication/Training

•

TPA ManagementTPA Management

•

LitigationLitigation

•

Fraud and Abuse PreventionFraud and Abuse Prevention

•

Stay at Work/Temporary Transitional Stay at Work/Temporary Transitional Assignments

Assignments

•

(21)

$0.00 $20,000,000.00 $40,000,000.00 $60,000,000.00 $80,000,000.00 $100,000,000.00 $120,000,000.00

year 2000 year 2001 year 2002 year 2003 Source: Risk Managem ent Board Reports,

January 2000-Decem ber 2003

LAUSD WC Costs

Amount paid per calendar year

Indemnity Medical Allocated total

(22)

Source: Sedgwick CMS 22 2656 1615 2543 2779 1697 2501 2735 1747 2572 2655 1872 2492 1020 821 1096 0 1000 2000 3000 4000 5000 6000 7000 8000 Count 1999 -2000 2000 -2001 2001 -2002 2002 -2003 2003 -2004 YTD Fiscal Year

Total Claims By Fiscal Year Including Incidents

Medical Only

Incident Only

(23)

Los Angeles Unified School District

Open By Fiscal Year in Which Claim

was Filed

2052 721 940 1255 1926 1678 Prior to FY 00 FY 2000 FY 2001 FY 2002 FY 2003 FY 2004

LAUSD total open claims all years = 8,572

(24)

24 24

2003 Paid Amount

By Date of Occurrence

$22,614,903 $10,096,333 $17,722,146 $49,718,088 CY < 2001 CY 2001 CY 2002 CY 2003 Source: SCMS

(25)

Workers’ Compensation Claim and

Staffing Comparison

*Sworn employee cases are handled by a TPA, and civilian employee cases 2,200

2 18,000

San Diego USD

9,100 104*

43,000 City of Los Angeles

12,170 11 97,220 County of Los Angeles 7,258 3 127,280 LAUSD Number of Claims for 2002-2003 Number of FTE Employees in WC Department Number of Individuals Covered Organization

(26)

Source: OEHS 26

Number of Claims Comparison Certificated v Classified Employees

2,673 2,719 2,701 4,345 4,331 4,275 0 2,000 4,000 6,000 8,000 FY 2000-01 FY 2001-02 FY 2002-03 T o tal Nu m b er o f C lai m s Fi le d Certificated Classified

(27)

Claims Rate Comparison

Certificated v Classified Employees

8.12 8.08 8.09 16.37 16.05 _17.50 0.00 5.00 10.00 15.00 20.00 25.00 FY 2000-01 FY 2001-02 FY 2002-03 Cl ai ms Rate Certificated Classified

(28)

28 28 0.00 10.00 20.00 30.00 40.00 50.00 60.00 TRU CK O PER ATIO NS SCHO OL PO LIC E AUTO MO TIVE M AINT ENAN CE SPEC IAL ED UCA TIO N CT RS MAI NTEN ANC E & O PER ATIO NS EAR LY EDU CATI ON CT RS TRAN SPO RTA TIO N SCH OO LS (K-12) CAS/ OCC & SKI LLS C TRS LOCA L D ISTR ICT HQs ALL OTH ERS FY 00-01 FY 01-02 FY 02-03

Locations with Highest Claims Rates

(29)

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Strain Contusion (Bruise, Skin Surface) All Other (Specific) Injuries, NOC

Sprain Fracture Mental Stress Inflammation Carpal Tunnel Syndrome Laceration FY00 FY01 FY02 FY03

LAUSD Most Costly Types of

Injuries

(30)

30 30 0% 5% 10% 15% 20% 25% Low Back Area Multiple Body Parts

Knee Shoulder(s) Brain Wrist Ankle Hand Multiple Upper Extremities Soft Tissue-Neck Multiple Trunk Foot FY00 FY01 FY02 FY03

LAUSD Most Costly Injuries by Body

Part

(31)

LAUSD Source of Funds for

Workers

’

Compensation

•

• Budget

Budget

•

(32)

Source: Sedgwick CMS & Source: Sedgwick CMS &

Armtech 32

Reserve Fund Balance

$-$100,000,000 $200,000,000 $300,000,000 $400,000,000 $500,000,000 $600,000,000 2000-2001 2001-2002 2002-2003 2003-2004 Underfunded Liability Reserve Fund Balance

(33)

Actuarial Evaluation

•

(34)

34

FRAUD

(35)

WC Fraud in California

•

• Scope of ProblemScope of Problem –

– Estimated 20% to 30% of all claimsEstimated 20% to 30% of all claims

2001

2001--2002 2002

•

• 717 cases prosecuted717 cases prosecuted

•

• 3,548 number of fraud cases reported3,548 number of fraud cases reported

•

• cost $174 millioncost $174 million

•

• Fraud vs. AbuseFraud vs. Abuse –

– Knowing misrepresentation of a material factKnowing misrepresentation of a material fact –

– Activity intended to make excessive or improper use of Activity intended to make excessive or improper use of system system • • DetectionDetection • • Fines Fines

(36)

36

Types & Effects of

Fraudulent Claims

•

Types of WC FraudTypes of WC Fraud – – ClaimantClaimant – – ProviderProvider – – PremiumPremium

•

Effects of WC Fraud Effects of WC Fraud –

– Fraudulent claims represent substantial Fraudulent claims represent substantial and unnecessary costs to the district

and unnecessary costs to the district

–

– Adversely impacts academic Adversely impacts academic performance

(37)

Fraud Prevention Initiatives

•

• Investigations by OIG, School Police, and Sedgwick Investigations by OIG, School Police, and Sedgwick SIU

SIU

•

• Fraud Prevention Task Force MembersFraud Prevention Task Force Members –

– ORMISORMIS –

– OIG staffOIG staff –

– School PoliceSchool Police –

– OGCOGC –

– Staff RelationsStaff Relations –

– Sedgwick Special Investigations Unit (SIU)Sedgwick Special Investigations Unit (SIU) –

– District Attorney’District Attorney’s Office s Office

•

• Information received from administrators, managers, Information received from administrators, managers, supervisors, and fellow employees (District fraud

supervisors, and fellow employees (District fraud hotline)

hotline)

•

(38)

38

ORMIS

’

Goals

•

• Provide High Quality Medical Care to

Provide High Quality Medical Care to

Injured Employees

•

• Improve Communication Among

Improve Communication Among

Managers, Employees, Bargaining

Units, Sedgwick CMS, Medical

Providers, and Attorneys

•

• Assist the District in Reallocating

Assist the District in Reallocating

Resources through Cost Control

Programs

(39)

Re

-

Allocation of Resources

•

Estimated Costs of Claims Filed in Estimated Costs of Claims Filed in 2003

2003--20042004

Equivalents:

4,250

4,250 new teachersnew teachers’’ salariessalaries 3.5 M

3.5 M student textbooksstudent textbooks 173 M

173 M student mealsstudent meals 4.7 %

4.7 % salary increase for allsalary increase for all employees

employees

$234

(40)

40

ORMIS

’

Current

Program Initiatives

•

Claims Prevention Claims Prevention

–

– Injury & Illness Prevention Program in Injury & Illness Prevention Program in cooperation with OEHS

cooperation with OEHS

–

– Accident InvestigationAccident Investigation –

– OEHS Serious Incident Response Team (SIRT)OEHS Serious Incident Response Team (SIRT) –

– District Wide TrainingDistrict Wide Training

•

Claims Management Claims Management

–

– Medical Expense ManagementMedical Expense Management –

– Managing Indemnity Costs Managing Indemnity Costs –

– Litigation ControlLitigation Control –

(41)

Injury & Illness

Prevention Program

•

California Code of RegulationsCalifornia Code of Regulations

–

– Requires employers to maintain safe and Requires employers to maintain safe and healthful workplace

healthful workplace

–

– Mandates Injury and Illness Prevention Mandates Injury and Illness Prevention Program

Program

•

LAUSD LAUSD

–

– All accidents are preventableAll accidents are preventable –

– Employers are responsible for providing a safe Employers are responsible for providing a safe work environment

work environment

–

(42)

42

OEHS Safety Program Goals

•

Identify Identify ““SafetySafety”” as a core valueas a core value

•

Injury & Illness Prevention Program (IIPP)Injury & Illness Prevention Program (IIPP)

•

Assist site administratorsAssist site administrators

•

InspectionsInspections

•

Integrated District Safety TeamIntegrated District Safety Team

•

Review StatisticsReview Statistics

•

Corrective Action PlansCorrective Action Plans

•

(43)

MEDICAL EXPENSE

MANAGEMENT

(44)

44

Los Angeles Unified School District

Managed Care Services

Sedgwick CMS

•

• Bill Review Services

Bill Review Services

•

• PPO Network

PPO Network

•

• Utilization Review

Utilization Review

•

• Telephonic and Field Case

Telephonic and Field Case

Management

•

(45)

Bill Review Services

•

Fee Schedule ReviewFee Schedule Review

–

– Savings: Reductions from charged to Fee ScheduleSavings: Reductions from charged to Fee Schedule

•

• $10,832,720$10,832,720

•

PPO NetworkPPO Network

–

– Penetration: 43.5%Penetration: 43.5% –

– Savings: Reductions from Fee Schedule to PPO rateSavings: Reductions from Fee Schedule to PPO rate

•

• $1,104,900$1,104,900

•

Ambulatory Surgery ReviewAmbulatory Surgery Review

–

– Savings: Reductions from charged to U & CSavings: Reductions from charged to U & C

•

• $3,323,122$3,323,122

•

Results of program to date Results of program to date

–

(46)

46

LAUSD Total Savings % of Charges

40% 49% 45% 48% _44% 0% 10% 20% 30% 40% 50%

Aug Sep Oct Nov Dec

Sedgwick CMS Book of Business Average 34%

(47)

Telephonic & Field Case

Management

•

DefinitionDefinition

–

– Assess and negotiate appropriate treatmentAssess and negotiate appropriate treatment –

– Negotiate with provider for early sustainable RTWNegotiate with provider for early sustainable RTW –

– Access Physician Advisors as needed to assist to Access Physician Advisors as needed to assist to evaluate and impact treatment necessity, MMI and

evaluate and impact treatment necessity, MMI and

RTW

•

Telephonic Case ManagementTelephonic Case Management

–

– 264 Cases Closed264 Cases Closed –

– 249 RTW (94%)249 RTW (94%) –

– 177 Cases currently open177 Cases currently open

•

Field Case ManagementField Case Management

–

– 22 Cases Closed22 Cases Closed

(48)

48

INDEMNITY

MANAGEMENT

(Lost Time)

(49)

Effects of Employee Absence

•

• Costs associated with the

Costs associated with the

program

•

• Direct

Direct

•

• Indirect

Indirect

•

• Employee Morale

Employee Morale

•

• Impact on Student

Impact on Student

Achievement

(50)

50

Stay at Work / Return to Work

Program

•

Reduces time lost and improves morale Reduces time lost and improves morale and productivity

and productivity

•

Mandatory program for all injuries and Mandatory program for all injuries and illnesses

illnesses

•

Applies to employees with either temporary Applies to employees with either temporary or permanent work restrictions

or permanent work restrictions

•

Benefits the District and injured employeeBenefits the District and injured employee

•

(51)

Litigation Management

Many District employees retain an attorney Many District employees retain an attorney

and litigate their claims and litigate their claims

•

Refer as few claims to attorney firms as is Refer as few claims to attorney firms as is prudent

prudent

•

Closely monitor the activities of attorneys Closely monitor the activities of attorneys and the fees they charge

and the fees they charge

•

OGC Litigation OversightOGC Litigation Oversight

•

Tymetrix will perform legal bill review Tymetrix will perform legal bill review services by 4/1/04

services by 4/1/04

•

(52)

52

Communication & Training

Change the Culture of the Organization Change the Culture of the Organization

•

• Regular Communication

Regular Communication

•

• ORMIS website

ORMIS website

•

• Written materials

Written materials

•

• Training for employee

Training for employee

groups

(53)

LEGISLATION

(54)

54

Legislation Previously Passed

•

• Major Bills

Major Bills

–

Assembly Bill 749 (Calderon)

_{Assembly Bill 749 (Calderon)}

–

Assembly Bill 227 (Vargas)

–

Senate Bill 228 (

_{Senate Bill 228 (}

Alarcon

_Alarcon

)

₎

–

(55)

Assembly Bill 749 (Calderon)

Effective January 1, 2003

•

Increased Temporary Total Disability Increased Temporary Total Disability (TTD) rate

(TTD) rate

•

Provides automatic increases in TTD Provides automatic increases in TTD

benefits each January 1st through 2007

•

Increases maximum amount of the Increases maximum amount of the “

“average weekly wageaverage weekly wage””

•

Primary treating physician legal Primary treating physician legal

presumption of correctness repealed

(56)

56 56

Assembly Bill 227 (Vargas)

Effective January 1, 2004

•

Employers assessed 100% of funding Employers assessed 100% of funding for Division of Workers

for Division of Workers’’ Compensation

Compensation

•

Repeals Vocational Rehabilitation Repeals Vocational Rehabilitation

Benefit (VR) for dates of injury on or Benefit (VR) for dates of injury on or

after 1/1/04 after 1/1/04

•

Mandates Supplemental Job Mandates Supplemental Job

Disability Benefit (SJDB) for all Disability Benefit (SJDB) for all

injuries occurring on or after 1/1/04 injuries occurring on or after 1/1/04

•

Increases penalty for WorkersIncreases penalty for Workers’’

Compensation fraud from $50,000 to Compensation fraud from $50,000 to

$150,000 $150,000

(57)

Senate Bill 228 (Alarcon)

Effective January 1, 2004

•

• Creates a fee schedule for medical services and Creates a fee schedule for medical services and prescriptions based on Medicare and Medi

prescriptions based on Medicare and Medi--Cal Cal

payment

•

• Fee schedule for outpatient surgery centersFee schedule for outpatient surgery centers

•

• Prohibits referrals to outpatient surgery clinics by Prohibits referrals to outpatient surgery clinics by doctors

doctors

•

• Requires doctors to provide generic drugs when Requires doctors to provide generic drugs when possible

possible

•

• Primary Treating Physician Presumption of Primary Treating Physician Presumption of Correctness repealed for all dates of injury

Correctness repealed for all dates of injury

•

• Caps number of chiropractic and physical therapy Caps number of chiropractic and physical therapy visits

visits

•

• Authorizes establishment of carveAuthorizes establishment of carve--out programs in out programs in any unionized industry

(58)

58

Assembly Bill 1557 (Vargas)

Effective January 1, 2004

•

• Requires employer to establish an

Requires employer to establish an

internal utilization review process

•

• Employee no longer entitled to

Employee no longer entitled to

increase in compensation due to

delays in reviewing process

(59)

Proposed Legislation

•

• Assembly Bill 1 (Maldonado)Assembly Bill 1 (Maldonado)

•

• Assembly Bill 3 (Vargas)Assembly Bill 3 (Vargas)

•

• Assembly Bill 4 (Richman)Assembly Bill 4 (Richman)

•

• AssembyAssemby Bill 10 (Richman)Bill 10 (Richman)

•

• Senate Bill 3 (Senate Bill 3 (PoochiganPoochigan, , AanestadAanestad, et al.), et al.)

•

• Senate Bill 5 (Johnson)Senate Bill 5 (Johnson)

•

(60)

60

ORMIS SPECIFIC PROGRAM

OBJECTIVES

$120 million $120 million $115 million $115 million $110 million $110 million $108 million $108 million Amount Amount Paid Board Paid Board Reports Reports 2800 2800 3200 3200 4000 4000 4730 4730 Number of Number of Litigated Litigated Cases Cases 80,000 80,000 110,000 110,000 140,000 140,000 200,000 200,000 Number of Number of lost work lost work days days 6700 6700 7000 7000 7300 7300 9028 9028 Number of Number of Open Claims Open Claims 6300 6300 6650 6650 7000 7000 7018 7018 Number of Number of Claims Filed Claims Filed 6/30/06 6/30/06 6/30/05 6/30/05 6/30/04 6/30/04 6/30/03 6/30/03 Standard Standard

(61)

ORMIS SPECIFIC PROGRAM

OBJECTIVES

continuedcontinued

$20,000 $20,000 $22,000 $22,000 $23,500 $23,500 $23,500 $23,500 Average Cost Average Cost Per Claim Per Claim $6.5 million $6.5 million $8 million $8 million $9.5 million $9.5 million $11 million $11 million Allocated Allocated- -Litigation Litigation Costs Costs Fully Funded Fully Funded Pending Pending Pending Pending $289 million $289 million Reserve Reserve Fund Balance Fund Balance 50 50 50 50 35 35 None None Workers Workers’’ Comp Comp Training Training 6/30/06 6/30/06 6/30/05 6/30/05 6/30/04 6/30/04 6/30/03 6/30/03 Standard Standard