Aggregate Indemnity and Medical Costs for Calendar Year 2012 (CA-IM-2012) Due Date: April 2, 2013

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1 February 1, Market Street, Suite 800 San Francisco, CA Voice David M. Bellusci Executive Vice President, COO & Chief Actuary To: Primary Contacts for WCIRB Aggregate Financial Data Calls RE: Data Call for Direct California Workers Compensation Experience Aggregate Indemnity and Medical Costs for Calendar Year 2012 (CA-IM-2012) Due Date: April 2, 2013 Section of the Insurance Code, which was added by Assembly Bill 110, requires the WCIRB to report to the Governor and Legislature detailed information on the aggregate cost of medical treatments and medical evaluations. In order to gather current and complete data on medical costs and to meet the WCIRB s statutory responsibility pursuant to Insurance Code Section , it is necessary that the requested data be filed via escad in the exact manner prescribed. This Call must be received by the WCIRB on or prior to April 2, It is incumbent upon each responsible company officer to make certain that this deadline is achieved. Earlier submissions, if possible, would be extremely helpful. The WCIRB has instituted the "Program for Submission of California Aggregate Data" (SCAD), adopted on December 20, 1995 by the Governing Committee, to encourage the reporting of aggregate data in a timely manner. The attached Call, which is due on April 2, 2013, will be subject to the SCAD program. A $250 fee will be incurred for each non-escad submission of WCIRB aggregate data call types that can be submitted directly via the escad application. 1

2 February 1, 2013 Data Call for Direct California Workers Compensation Experience Please address all non-escad data call submissions to: Workers' Compensation Insurance Rating Bureau of California 525 Market Street, Suite 800 San Francisco, CA Attention: Actuarial Department Any questions regarding the SCAD program or this Call should be directed to WCIRB s Actuarial Department by sending an to [email protected]. David M. Bellusci Executive Vice President, COO & Chief Actuary Enclosures: Aggregate Indemnity and Medical Costs Call for Calendar Year 2012 Forms 2

3 Annual Call for Direct California Workers Compensation Aggregate Indemnity and Medical Costs for Calendar Year 2012 (CA-IM-2012) Due Date: April 2, 2013 WCIRBCalifornia PART A (Premium): Calendar Year Earned Premium (This must equal Column (1) total for Item b of the Calendar Year Exhibit of CA-QT-4Q12) PART B (Paid Indemnity): 1. Payments for Death Benefits 2. Payments for Permanent Total Benefits 3. Payments for Permanent Partial Benefits 4. Payments for Temporary Disability Benefits 5. Payments for Education Voucher and Vocational Rehabilitation Benefits 6. Other Indemnity Payments 7. Single Sum Settlement Indemnity Payments 8. Total Aggregate Indemnity Payments: Sum of Part B, (1) through (7) (This must equal Column (1), Line (e) YTD Change in the Accident Year Exhibit of CA-QT-4Q12) PART C (Paid Medical): 1. Payments for Medical Treatment: a. Payments Made to Physicians (Total from next page) b. Payments Made to Hospitals c. Payments for Drugs d. Reimbursements to Medicare e. Other Payments for Medical Treatment f. Total (a) + (b) + (c) + (d) + (e) 2. Capitated Medical Payments Not Otherwise Classified 3. Medical Payments Made Directly to Injured Workers (except for those related to Medicare Setasides) 4. Medical Payments Related to Medicare Set-aside Accounts 5. Payments for Medical Evaluations 6. Payments for Medical Cost Containment Programs (only on claims covered by policies incepting prior to July 1, 2010) 7. Total Aggregate Medical Payments: (1e) + (2) + (3) + (4) + (5) + (6) (This must equal Column (3), Line (e) YTD Change in the Accident Year Exhibit of CA-QT-4Q12) Name: Title: Company: Date Filed: (List all companies included in report) Mailing Address: (Zip Code) Address: Phone: Fax Number: Page 1 of 2 Workers Compensation Insurance Rating Bureau of California. All rights reserved.

4 Annual Call for Direct California Workers Compensation Aggregate Indemnity and Medical Costs for Calendar Year 2012 (CA-IM-2012) Due Date: April 2, 2013 WCIRBCalifornia Payments Made to Physicians: Calendar Year 2012 I. Physicians NOT Holding an M.D. Degree: a. Acupuncturists b. Chiropractors c. Clinical Social Workers d. Clinics (1) e. Dentists f. Marriage, Family and Child Counselors g. Optometrists h. Osteopaths i. Physical Therapists j. Podiatrists k. Psychologists l. Unknown or Not Otherwise Classified Subtotal (I) II. Physicians Holding an M.D. Degree: a. Anesthesiology b. Chest Diseases c. Clinics (1) d. Dermatology e. Emergency f. General Surgery g. General & Family Practice h. Hand Surgery i. Infectious Diseases j. Internal Medicine (2) k. Neurology l. Neurosurgery m. Occupational Medicine n. Ophthalmology o. Orthopedics (3) p. Pathology q. Physical Medicine MDs r. Plastic Surgery s. Psychiatry (4) t. Pulmonary Diseases u. Radiology v. Unknown or Not Otherwise Classified Subtotal (II) Total Payments Made to Physicians [Subtotal (I) + Subtotal (II)] (This must equal line (1a), Part C of Page 1 of this report) (1) Payments made to clinics shall be classified according to the most appropriate specialty if possible. (2) Pulmonary Disease and Infectious Disease sub-specialties are separately classified. (3) The Hand Surgery sub-specialty is separately classified. (4) Neurology is separately classified. Company: Page 2 of 2 Workers Compensation Insurance Rating Bureau of California. All rights reserved.

5 FOR ALL PARTS OF THIS CALL, information reported must be in accordance with the following: a) All data reported on this call must be on a calendar year basis, which means that premiums and losses from all transactions that occurred during year xx must be included, regardless of the effective year of policies or year of accident of claims involved. b) Include experience (premium and losses) from: Deductible policies on a gross (first dollar) basis Standard workers compensation policies Employers liability increased limits Minimum premiums Salvage and subrogation c) Exclude experience (premium and losses) from: Ceded reinsurance Reinsurance assumed Excess insurance USL&H insurance Private residence employee insurance National Defense Project insurance d) Earned Premium (line 1 on Page 1 of this Call) must be identical to the earned premium reported on Part b, Column (1) Total of Section III, Calendar Year Exhibit of the Call for Direct California Workers Compensation Experience, Fourth Quarter of Calendar Year 20xx (CA-QT-4Qxx). (Please refer to the definition of Final Premium in Part 4, Section II of the California Workers Compensation Uniform Statistical Reporting Plan 1995 (USRP), available on the WCIRB website at for a more detailed definition of premium to be reported to the WCIRB.) e) Earned but not billed or booked (EBUB) premium must be included in Earned Premium. f) Exclude the impact of the following items from all reported premiums: Application of any deductible credits Application of any retrospective rating plan adjustments California Insurance Guarantee Association (CIGA) assessments California Workers Compensation Revolving Fund assessments California Workers Compensation fraud surcharges Uninsured Employers Trust Fund Assessment Subsequent Injuries Benefits Trust Fund Assessment Occupational Safety & Health Fund assessments Labor Enforcement & Compliance Fund assessments Any charge for terrorism coverage pursuant to the Terrorism Risk Insurance Act of 2002 as amended by the Terrorism Risk Insurance Extension Act of 2005, or the Terrorism Risk Insurance Program Reauthorization Act of

6 g) Insurers who are members of an affiliated group are encouraged to file on a combined group ( consolidated ) basis. However, all members of the group must be individually listed. All data calls for the same evaluation period submitted to the WCIRB must be made under the same grouping structure. Any changes to the reporting group must be communicated to and approved by WCIRB prior to reporting data under the new grouping. h) Use of the escad web-based application to submit data is highly encouraged. Insurers with access to the escad web-based application should submit this data call online via escad. Non-eSCAD submissions using only WCIRB forms and/or templates are permitted for insurers who do not yet have access to escad, subject to a $250 processing fee for each submission of this data call. For all non-escad submissions: (i) reported amounts must be rounded to whole dollars; (ii) negative amounts must be displayed enclosed within parentheses; (iii) the horizontal and vertical totals must equal their corresponding sum of rounded details shown on the forms, not the rounded sum of actual details. i) This data call is subject to the SCAD Program (program for Submission of California Aggregate Data). Refer to the SCAD Program effective July 1, 2010 for details. A comprehensive listing of the edits used to check the accuracy of submitted call data is available by clicking on the Help link in escad. For PART B (Paid Indemnity), information reported must be in accordance with the following: a) Payments for Death Benefits must be reported payments for death benefits. It must include payments for burial allowance. Payments for temporary, permanent partial and/or permanent total benefits made prior to the death of the injured worker must be excluded. Portions of single sum settlements, which can be allocated to this benefit type, must be included. b) Payments for Permanent Total Benefits must be reported payments for permanent total benefits. Payments for temporary, permanent partial and/or death benefits paid on a claim which had permanent total benefits paid must be excluded. Supplemental vocational rehabilitation maintenance allowances paid to claimants who elect to supplement vocational rehabilitation maintenance benefits by an advance from permanent disability benefits must be included. Portions of single sum settlements, which can be allocated to this benefit type, must be included. c) Payments for Permanent Partial Benefits must be reported payments for permanent partial disability benefits. Payments for temporary, permanent total and/or death benefits paid on a claim which had permanent partial benefits paid must be excluded. Permanent partial benefits paid on death and permanent total claims must be included. Supplemental vocational rehabilitation maintenance allowances paid to claimants who elect to supplement vocational rehabilitation maintenance benefits by an advance from permanent disability benefits must be included. Portions of single sum settlements, which can be allocated to this benefit type, must also be included. d) Payments for Temporary Disability Benefits must be reported payments for temporary disability benefits, including temporary disability benefits paid on claims which had death, 2

7 permanent total and/or permanent partial payments. Portions of single sum settlements, which can be allocated to this benefit type, must also be included. e) Payments for Vocational Rehabilitation Benefits must include reported payments for vocational rehabilitation evaluation, maintenance allowance and training. Supplemental vocational rehabilitation maintenance allowance paid to injured workers who elect to supplement vocational rehabilitation maintenance benefits by an advance from permanent disability benefits must be excluded. Portions of single sum settlements, which can be allocated to this benefit type, must be included. f) Other Indemnity Payments must include other indemnity items, such as payments for workers compensation life pension benefits, claimants legal expenses, defense expenses on employers liability claims, and mileage reimbursements. Portions of single sum settlements, which can be allocated to this benefit type, must also be included. g) Single Sum Settlement Indemnity Payments must be the amounts in indemnity benefits paid as single amounts and which cannot be allocated to a specific indemnity type on this Call. h) Total Aggregate Indemnity Payments must be identical to the paid indemnity losses reported on Column (1), Line (e), YTD Change, in Section II, Accident Year Exhibit of CA-QT-4Qxx. For PART C (Paid Medical), information reported must be in accordance with the following: a) Physicians means physicians as defined in Section (a) of the California Labor Code. Payments to physicians must include all clinic and office visits, diagnostic testing and physical therapy. Industrial medicine must be included in the Occupational Medicine category, and thoracic medicine must be included in the Chest Diseases category. The following specialties must be included in the Unknown or Not Otherwise Classified category: allergy and immunology aviation medicine cardiology digestive endocrinology gastroenterology immunology infectious diseases neuromuscular medicine nuclear medicine obstetrics and gynecology oncology otolaryngology head and neck surgery otorhinolaryngology (ear, nose and throat) pediatrics preventative medicine and public health 3

8 proctology rheumatology urology The Total Payments Made to Physicians from page 2 of this call must equal the Payments Made to Physicians on page 1 of this call. b) Payments Made to Hospitals must be reported payments made to hospitals, including payments for medications used in hospitals. c) Payments for Drugs must be reported payments for medications, excluding those made to hospitals. d) Reimbursements to Medicare must include direct reimbursement payments made to Medicare related to conditional liens intended to recover payments for past medical services. This would exclude medical payments related to Medicare Set-aside accounts. e) Other Payments for Medical Treatment must include reported payments for medical treatment not made to treating physicians, hospitals or for drugs. This would include payments such as those made for custodial care, prosthetic devices, etc. f) Capitated Medical Payments Not Otherwise Classified must include reported payments made on a capitated or per covered individual basis rather than for a specific medical procedure on a specific injury. Capitated medical payments must include amounts contemplated for payments to physicians, hospitals, drugs and other payments for medical treatment. g) Medical Payments Made Directly to Injured Workers (except for those related to Medicare Set-aside accounts) must include the amounts paid directly to injured workers of such lump sum settlements apportioned to medical in recognition of future medical expenses. This must exclude any medical payments related to Medicare Set-aside accounts. h) Medical Payments Related to Medicare Set-aside Accounts must include: costs relating to the evaluation of potential future medical care to determine the amount of the Medicare Set-aside for submission and approval by the Center for Medicare and Medicaid Services (CMS); the cost of the Medicare Set-aside itself (that is paid to a fund to be administered by the injured worker or a third party); and costs involved in the administration of the Medicare Set-aside account. This shall exclude medical reimbursement payments made directly to Medicare related to conditional liens. i) Payments for Medical Evaluations must include reported payments for medical and medical-legal evaluations performed to assess the workers eligibility for benefits, ability to return to work, extent of permanent disability, or need for new or further medical treatment. These include evaluations performed by agreed medical evaluators/independent medical evaluators, evaluations performed by qualified medical evaluators on litigated claims, and evaluations performed by qualified medical evaluators selected from panels established for non-represented workers. 4

9 j) Payments for Medical Cost Containment Programs must include reported payments included as paid medical for medical cost containment programs incurred with respect to particular claims or which can be allocated to specific claims and which can be identified from company records, whether by an outside vendor or done internally. Include only the cost of medical cost containment programs paid during calendar year xx on claims covered by policies incepting prior to July 1, (The paid cost of medical cost containment programs arising from claims covered by policies incepting on or after July 1, 2010 is included as allocated loss adjustment expenses. For more information on costs that are considered part of medical cost containment programs, please refer to the definition of Allocated Loss Adjustment Expenses in Part 4, Section II of the USRP, available on the WCIRB website at k) Total Aggregate Medical Payments must be identical to the paid medical losses reported on Column (3), Line (e), YTD Change, in Section II, Accident Year Exhibit of CA-QT-4Qxx. 5