Speaker: Mawuli Tugbenyoh, Deputy Director, Policy Affairs

Council Comment: None.

Public Comment: None.

Todd Rydstrom motioned to approve the minutes from the meeting held May 8th, 2023. The motion was seconded by Erik Rapoport.

Action: The May 8th, 2023, minutes were approved unanimously.

Workers’ Compensation Director Julian Robinson was called to present the report from the Workers’ Compensation Division.

Speaker: Julian Robinson, Deputy Director, Workers’ Compensation Division

Report on Accomplishments, Challenges, and Initiatives, Return-to-Work Program, Covid-19, Performance Quick Facts, Financials, and Claim Analytics with CWCI Benchmarks.

Julian Robinson greeted the council. He advised the presentation will summarize Fiscal Year 2022-23 Workers’ Compensation Division accomplishments, initiatives, and challenges, followed by an update on the Temporary Transitional Work Program. Next, Dr. Fiona Wilson will present the COVID-19 report. Assistant Director of Finance and Technology, Stanley Ellicott, will then present performance quick facts and financial reports. Lastly, Assistant Director of Claims Operations, Arnold Pacpaco, will discuss claim analytics.

Fiscal Year 2022-23 focused on several themes including staffing, streamlined communication and information sharing, return to work, enhanced training, and workplace safety and health. In terms of staffing, we successfully filled, backfilled, or upgraded 20 positions of which more than 50% were internal promotions. Newly hired and recently promoted staff were asked to stand and be acknowledged. Additional staffing accomplishments in Fiscal Year 2022-23 included:

• Deployment of exams from claim assistants up to assistant director.
• Completion of a formal workload analysis, resulting in a recommendation for eight new positions.
• Development of weekly communication and chargeback reporting for staff and stakeholders.
• Completion of contract with third party administrator Intercare Holdings for needed services, such as special investigations and fraud services, Medical Provider Network access assistant duties, and state filing duties.

We streamlined and increased training for WCD staff and started working on “on-demand” resource training for city stakeholders. We trained staff on Official Disability Guidelines (ODG) to help them better predict optimal disability duration outcomes for Return-to-Work purposes. We involved staff in external WC training with partner organizations to provide exposure to the greater industry. Lastly, we began a footprint for “Grow your Own” training within WCD, beginning with Claims Assistants new to Workers’ Compensation. We are currently in the process of a mock audit to evaluate readiness and to prepare for the 2024 Division of Workers’ Compensation Profile Audit Review (PAR) audit.

Accomplishments in Safety and Health include Workers’ Compensation Division deployment of assault signage citywide in an effort to mitigate workplace assaults. This was a direct response to the MOU between the City and SEIU Local 1021. We also developed a safety and health webpage and produced quarterly health and safety newsletters. Further, we ran OSHA 300 logs for annual safety compliance in all departments. Injury trends can now be analyzed by our citywide safety dashboard. Thank you Tyler Nguyen, Citywide Safety Officer, who put these accomplishments into motion.

Additional WCD accomplishments include a citywide claim closure ratio of 104.8%, closing more claims than the number of claims that came in during FY2022-23. Thank you to the CCSF and Intercare adjusters who brought this number up from a 90% closure ratio the prior fiscal year. Additionally, we have completed critical contract renewals, successfully migrated cash receipt processing to JP Morgan, and completed ADR program third year actuarial analysis. We are also pleased that litigation successfully decreased 57% for Police and 50% for Fire from the prior year in our ADR program.

Key FY 24 initiatives for the Workers’ Compensation Division will address:

• Staffing: Continued Recruitment and hiring to ensure adequate staff resources and to ensure continued succession planning, including filling key positions.
• Streamlined Communication: Consistent and enhanced access to resources and information for our staff and stakeholders, including technology improvements.
• Return to Work: Increased focus and better data tracking with further expansion and deployment of Citywide TTWA Policy and Program.
• nhanced Training: Streamlined and increased targeted training for WCD staff, “On-Demand” resource training for city stakeholders, and further development of ‘Grow our Own’ training program for new WC staff.
• DWC Mock Audit in progress with ALC Claims Services to evaluate Division readiness for DWC Audit in 2024.
• ADR program Ombudsperson contract renewed to add value.
• Investigative services Request for Qualification (RFQ) to expand access and contracting for fraud investigative and special investigative unit services.
• Claims Enterprise System Upgrade pre-planning for Fall 2023.

Workplace Safety and Health Initiatives:

• Partner with departments to ensure OSHA recordkeeping requirements at the department level are met and share best practices on matters that impact workplace safety within the CCSF safety community.
• Citywide RFQ for safety and health, Industrial Hygienist, and training resources for departments to draw upon to address resource gaps.
• Further development of Health and Safety program to centralize safety and health efforts citywide and address program gaps.
• Further training on IIPP and Workplace Violence prevention.
• Increase visibility of Safety and Health Program citywide.

The challenges we face include:

• Hiring and Attrition: Continued challenging labor market for limited workers’ compensation talent at all levels pressures recruitment as the Division prepares for continued staff attrition through retirement in the next several years.
• Further long-term impact of Senate Bill 1127, signed into law by the Governor on 9/29/22, which
  • Reduced decision timeframes from 90 days to 75 days on presumptive claims.
  • Implemented a maximum limit of up to 240 weeks (over 4.5 years) of payable TTD for Cancer claims on dates of injury or after 1/1/23 - a 230% increase from the prior maximum payable weeks.
  • Enacted new Labor Code Section 5414.3 penalties for up to $50,000 for ‘unreasonable denials’ on presumption claims, creating exposure for applicant attorneys to file for such penalties to be adjudicated before the courts.
• Senate Bill 553 (Cortese) pending with California Legislature, which will require all California employers to ‘establish, implement, and maintain…’ a workplace violence prevention plan, and establishes workplace violence prevention standards to be included in employer Injury Illness Prevention Programs (IIPP).
• Assembly Bill 1213 (Ortega) currently pending, adds Labor Code Section 4656(e)(1) which requires that temporary disability paid due to a denial of treatment by a treating physician that was subsequently overturned by Independent Medical Review (IMR) would not count toward the statutory limits for aggregate disability benefits for a single injury. Tracking this data will be an administrative burden. As currently written, this will impact payments until 1/1/2027.

Julian Robinson next discussed current WCD Temporary Transitional Work efforts, early findings, challenges and next steps. We continue to have ongoing meetings with departments, MPN providers, occupational clinics and injured employees to answer questions and set the tone and expectation for the program.

Early TTWA data analysis shows:

• 57% of tracked claims were accommodated for modified duty, and 43% were not
• 120 average lost days for claims that provided TTWA
• 167 average lost days for claims not accommodated
• 5,409 total lost days for claims with TTWA
• 8,996 total lost days for claims not accommodated

WCD has calculated an average of 47 additional lost days per claim which totals 3,587 lost days or 28,696 total lost hours due to unaccommodated modified duty.

Statistics are an early evaluation based on a small population of open claims. However, the early results confirm that not accommodating work restrictions is associated with longer disability duration and higher costs to the City.

We face challenges with the TTWA program because departments continue to struggle with identifying tasks in which to place injured employees. Department culture leads to resistance changing existing approaches to modified duty. We also see physicians take injured employees off work completely without indicating restrictions. Additionally, due to staffing shortages of adjusters, MPN providers, and department personnel, consistent and timely review of modified duty remains a challenge.

To move the Temporary Transitional Work Program forward, we plan to:

• Expand tracking within the claims system for better reporting on the impacts and costs of failure to provide transitional work when eligible.
• Analyze further data and report to stakeholders the impact of not providing modified duty.
• Continue education and communication with MPN providers to better support the TTWA program.
• Continue to work with departments to address their concerns and challenges of returning injured employees to work.

Deputy Director Mawuli Tugbenyoh requested questions or comments from the council about the Return-to-Work report.

Council Comment:

Todd Rydstrom, Deputy Controller, asked can departments view available short-term assignments? Julian Robinson responded there isn’t a current formal citywide dashboard for this purpose. In the future, with additional time and resources, building a citywide task bank is feasible. We would like to see this within five years.

Mawuli Tugbenyoh asked if the unaccommodated TTWA hours were derived from data as of 2022. Julian Robinson clarified that the presented data is more current, derived from 2023.

Matthew Barravecchia, Deputy City Attorney asked who is responsible to find modified duty for the injured worker - the adjuster or the HR representative from the department? Julian Robinson advised the departmental HR representative is responsible to find the modified duty. Departments can, however, ask the adjuster or supervisor for assistance if need be.

Erik Rapoport asked whether or not the city is making any systematic efforts to coordinate with the disability accommodation process on the back end? Julian Robinson replied this depends on whether the restrictions are permanent or temporary. We work with departments and ADA when restrictions are permanent.

Next, Dr. Fiona Wilson was introduced to share COVID-19 and reported what has happened since we last met.

• COVID leave benefits for city workers expired at the end of the calendar year.
• Public health emergency leave ended in February 2023.
• Only five days are now required for isolation and quarantine.
• First responders and health care employees need to test before returning to work, but most other departmental employees do not.
• Outbreak completion is now defined as three or more cases in a seven-day period.

There have been about 6,900 employee cases of COVID, including repeat infections. This is an underestimate because most tests are now done at home and not documented in a lab or updated in People and Pay. There have been about 2200 employee cases noted in FY 2022-23. This fiscal year, the division of Workers’ Compensation has accepted 559, or 86%, of filed COVID claims.

Workers’ Compensation Division spent $14.5 million dollars on COVID of which the bulk of payments are for 4850 disability pay, or time away from work. Dr. Wilson shared data on employee COVID leave and presented a graph showing consistent increases in Workers’ Compensation claims specifically when city leaves expired. We are questioning if employees are turning to Workers’ Compensation claims as a means for time off in lieu of citywide leave benefits.

Dr. Wilson pointed out the cost difference between pre-vaccinated and post-vaccinated COVID claims. CCSF has significantly lower medical costs than others in our industry. Further, COVID claims are often simple, and are closed in a short period of time.

Deputy Director Mawuli Tugbenyoh requested questions or comments from the council

Council Comment:

Todd Rydstrom, Deputy Controller, asked if data is presented in calendar years or fiscal years? Stan Ellicott confirmed the data is presented within the fiscal year and up to date through June 30, 2023. All zero-dollar claims cases were excluded to avoid influence on the overall data average.

Erik Rapoport, Deputy Executive Director, San Francisco Employee Retirement System asked if the newest COVID vaccine will be available to employees this fall. Dr. Wilson confirmed that HSS will offer the most updated flu shot to city and county employees. Respiratory syncytial virus (RSV) vaccine, however, will most likely not be offered. Erik Rapoport asked if anyone has been hospitalized in the past year, and Dr. Wilson replied she does not believe anyone has been hospitalized from COVID during the past fiscal year.

Deputy Director Mawuli Tugbenyoh thanked Dr. Fiona Wilson for her efforts.

Deputy Director Kate Howard thanked Arnold Pacpaco for his presentation and congratulated him on his recent promotion.

Public Comment: None.

Next Stanley Ellicott, Manager of Finance and Information Systems summarized FY23 performance. Our Fiscal Year actuals came in at 97.4% using all our entitled dollars. Claim volume is higher and discussion will follow in the next slides. Indemnity claims have increased, and medical claims remain stagnant. We have managed costs effectively through our programs and initiatives, meeting, not exceeding historical benchmarks. Due to the introduction of COVID cases, our benchmark of average days open of claims now closed is 25% higher than would be had we not had residual pandemic related claims.

A three-year analysis of costs by expenditure category shows a decline just over $3 million dollars, or 3% this past fiscal year. Indemnity costs increased by 1.1%. Temporary disability increases remain an ongoing concern resulting in the creation and citywide focus of the TTWA program. It’s worth noting that the statewide average weekly wage increased by 5.2% within the industry. Salary continuation benefits declined this year in large part to fewer COVID claims. Interestingly, medical expenses have been flat for the year. Hospitalization costs are trending higher industrywide.

Department benefit expenditure trends show a $3.6 million dollar change year over year, with a $1.2 million dollar increase across our top ten departments. Airport and PUC addressed deficits which had not occurred in prior years. The Fire Department produced a $3.5 million dollar surplus in benefit expenditures last fiscal year and more importantly a $1.6 million dollar decrease in year over year workers’ compensation costs.

While pre-pandemic years exhibited a stable trend of 150-200 claims per month with temporary disability expense, the pandemic years saw an increase to 300-350 claims per month. Total expenses remain elevated, attributed to larger volume of claimants receiving ongoing TD benefits compared to pre-pandemic levels. Finding modified duty will help departments lower their expenditures and save the city money in the long run.

Lastly Stanley Ellicott presented costs incurred to deliver benefits to the city. Salaries and benefits take up 42% of expenditures and include new positions along with COLA adjustments. State Assessments for Self-Insurers increased the most with a $2 million dollar increase over last year mainly due to an increase in indemnity benefits. With reductions in indemnity and 4850 payments, we hope next year’s numbers are reduced. Materials and supplies increased by 2% as WCD adjusted the floorplan, creating more cubicles to accommodate an increase in staff. In summary, our historical overhead rate remains in line with previous years at about 33% of the budget, or $0.33 to deliver $1.00 of workers’ compensation benefits.

Council Comment:

Matthew Barravecchia, Deputy City Attorney asked to confirm, looking at the numbers, that the increase of costs is more driven by assessment fees than by the volume of claims. He asked how we can timely send work vouchers and return to work offers to reduce costs. Julian Robinson replied we work closely communicating with departments to respond to vocational rehabilitation requests within the 60-day requirement.

Assistant Claims Director, Arnold Pacpaco next presented detailed claim analytics and statistics. Claims incurred per 100 FTE citywide average is about 10, however due to the nature of their jobs, Police, Fire, and Sheriff average 20 per 100 employees. Claims rose slowly in the first year of the pandemic.

Due to the omicron variant, there was a very steep rise of claims the second year of the pandemic for first responders. Due to super spreader events such as sporting events, and political demonstrations, COVID claims increased, resulting in an increased average of 37 claims per 100 employees. These first responders did not benefit from shelter-in-place orders, due to the nature of their job. Though we have trended downwards, we have not returned to before pandemic levels of FTE.

Compared to 2019, Fire department claim frequency increased by 36%. Police claim filing frequency increased by 13% and Sheriff office claims filing frequency decreased by 40 claims. Overall citywide we rose 10% in new claim filing frequency for FY 2022-23.

At the end of FY 2022-23 open claims inventory, including indemnity and medical only, has leveled off to around 5,000 claims, yet open indemnity case volume exceeds pre-pandemic levels. Factors include long covid, increased PTSD filings by sworn staff, crowd control injuries, and more heart and cancer-based claims.

Costs per one day of lost claims reached $271.00 per day, increasing from $244 in 2021. The highest lost days by department are held by Police, Public Health, Fire, Sheriff, and Public Works.

Focusing on litigation statistics, litigated claims tend to cost more than non-litigated claims because they may include additional body parts or require specialty evaluations and depositions. The citywide average litigation rate is 20% or can be as low as 5% or as high as 51% departmentwide. At the end of FY 2022-23, litigation rates for police were 12% and for Fire were 5%, both reduced from prior years, due to the benefits of the Alternative Dispute Resolution (ADR) program. Rather than going to lawyers, injured workers instead can go to an Ombudsperson who is able to provide clarification and guidance, resulting in reduced litigation rates.

Mr. Pacpaco then returned the meeting to Deputy Director Tugbenyoh, who requested questions or comments from the council.

Council Comment:

Matthew Barravecchia, Deputy City Attorney, asked to see a slide of general costs of the ADR program, including ombudsperson fees, arbitration costs. Erik Rapaport requested data showing employees length of leave from TD, but before MMI.

Todd Rydstrom, Deputy Controller, asked if SB1127 is expected to increase costs within the ADR program. Arnold Pacpaco responded we have not had any SB1127 penalties, and we are fully staffed and continue to train staff to mitigate spending.

Public Comment: None.

Speaker: Jim Radding, San Francisco Municipal Transportation Agency Workers Compensation Manager

Report on Accomplishments & Initiatives, Challenges, Covid-19, Performance Quick Facts, Claim Analytics and Financials

Jim Radding, the Workers’ Compensation Claims Manager for SFMTA, introduced and recognized Andrew Mathews, the manager for third party administrator, Intercare.

Accomplishments:

During the meeting, several key initiatives and accomplishments were discussed. Here is a summary of the main points:

• Lightspeed Program: The investigation company has completed 128 Lightspeed investigations through the 4th quarter. The program facilitates the quick gathering and analysis of information related to claims, providing real-time updates on the status of a claim. It improves the speed, accuracy, and consistency of claims processing, benefiting injured workers, SFMTA, and Intercare. The program also reduces administrative burdens and allows resources to be allocated to other important tasks.
• Early Intervention Program: The program, also known as "Let's Get Back to Work," has opened 383 files since its inception. Nurses contact employees on the day the claim is received, coordinate with doctors, and provide necessary information to facilitate a swift return to work. The program helps prevent medical conditions from worsening, reduces lost time, enhances employee engagement, and generates cost savings.
• Subrogation and Cost Recovery: The subrogation process allows for the recovery of costs associated with a claim from responsible third parties, particularly for vehicle accidents. A total of $612,503 in subrogation recoveries have been recorded in FY 2023.
• Quarterly Claim Reviews with Intercare: These reviews play a crucial role in ensuring smooth claims processing, identifying trends, and addressing any concerns promptly. High-cost claims, claims handling, payments, and cost containment initiatives are all reviewed, with the next meeting set for October 2023.
• Closing Project – Weekly Roundtables with Deputy City Attorney’s office reviewing files with companion claims to pursue final settlements.
• Job Analysis Initiative –Ongoing efforts to update job analysis and descriptions for work-related injuries aim to reduce the risk of reinjuries. Accurate job duty information helps treating doctors and qualified medical personnel ensure safe return-to-work practices.
• Transitional Work Program/Return to Work in 90 Days: The program has been providing an average of 50 transitional jobs per week since its reboot in November 2022. It enables injured employees to work with restrictions, while recovering, to reduce financial impacts, and improve employee morale.
• Roundtable Discussion: A review of claims files was conducted involving nurses, adjusters, and SFMTA to develop strategies for getting employees back to work after being off for 30 days, lessening TD costs.
• Injured Employee Survey Pilot Program: The survey aims to identify areas for improvement, enhance employee engagement, and improve communication between employees and SFMTA management. The survey is expected to provide valuable insights for creating a better work injury experience.
• Increase the mental health provider options for the SFMTA program.
• New hire workers’ compensation safety orientation at SFMTA.

These initiatives highlight the ongoing efforts to improve workers' compensation processes, enhance employee well-being, and create a productive work environment for SFMTA.

Current Challenges:

During the meeting, the following challenges were discussed:

• Rise in TTD Benefits Maximum: The increase in Temporary Total Disability (TTD) benefit maximum has had an impact on SFMTA's costs and budgets. However, the implementation of programs like Lightspeed and Early Intervention, along with other initiatives, is expected to help reduce costs in the long run.
• Assault Claims: Working with managers, SFMTA is we are focused on the continued safety and risk reduction of workplace injuries and illnesses to control costs. The mentioned programs are believed to contribute to cost reduction efforts.
• Enhancing the Medical Provider Network: Adding more doctors to the network can benefit both employees and employers. It provides injured workers with access to a wider range of medical providers, improving the quality of care and reducing recovery time.

These challenges highlight the need for careful management of costs and efforts to enhance the medical provider network to ensure effective and efficient workers' compensation processes for SFMTA.

COVID-19 Report

During the meeting, the following points were discussed:

• 19 COVID-19 Workers’ Compensation Claims filed in FY 2023
  • 17 Indemnity claims, 1 Litigated Claims, 6 Denied Claims
• 330 COVID-19 Workers’ Compensation Claims filed as of 6/30/23
  • 253 Reported claims only, 69 Indemnity claims reported,
  • 8 Litigated claims, 33 Denied claims: Negative test or not occupational in nature
  • Average paid per indemnity claim = $10,501
  • Average Incurred per indemnity claim = $13,362
  • As of 6/30/23, only 9 claims remained open

The average cost of closed indemnity claims in 2023 was $10,96, higher than the 5-year benchmark average of $9,976. New claims indemnity claims this year totaled 570 versus the five-year benchmark average of 545, and medical only claims totaled 42, from a five-year annual average of 54. The fiscal ratio of actuals to budget was at 114% for fiscal year 2023. The average duration for closed claims in 2023 was 342 days, significantly lower than the 5-year benchmark average of 761 days.

• Claim Filing Frequency: The number of workers' compensation claims reported quarterly for indemnity has slightly increased to 153 compared to the average of 139 between 2018 and 2022, and holding stable throughout the year.
• Claims Frequency per 100 FTE: Of 5833 employees, the organization had 10.49 claims per 100 employees, consistent with the previous year.
• Claim Cause Distribution: The top types of claims in the organization over the past 12 months were vehicle incidents, physical/verbal assault, repeated motion, followed by slips, trips, and falls. Addressing these issues through vehicle safety and training, workplace assault prevention, ergonomic reviews, and stress management could help reduce the number of claims and improve employee safety and well-being.

SFMTA continues to prioritize employee well-being by implementing safety protocols, providing training and resources, and fostering a supportive work environment.

CLAIM ANALYTICS:

During the meeting, the following points were discussed:

• Open Claim Cost Stratification: The transportation division has the highest number of open claims (570) with a total incurred amount greater than $100K. This division also accounts for the highest amount of total incurred for these claims, suggesting that the transportation division is more prone to higher value claims due to the nature of the work. SFMTA and Intercare continue to manage these claims for possible early and final resolution.
• Open Claim Stratification: The open claims are categorized based on their total incurred amount. There are different categories ranging from $100K to $150K up to claims greater than $1 million. The transportation division has the highest number of open claims in all categories.
• Open Active Indemnity vs. Future Medical: Open active indemnity claims make up 73% of the total claims, while future medical claims make up the remaining 27%. Future medical claims tend to cost more, while open active indemnity claims are more frequent but cost less. There were 1,122 active indemnity claims and 419 future medical claims filed in FY 2023, with $254 million incurred.
• Litigated vs. Non-Litigated: The litigated rate has remained relatively stable at 20% over the years, with a decrease in the number of litigated claims in FY 2022 and FY 2023.
• Litigated vs. Non-Litigated by Fiscal Year Closed: Litigated claims result in significantly higher amounts being paid out compared to non-litigated claims. The average amount paid per litigated claim is much higher than for non-litigated claims. The average non-litigated claim in 2023 was about $9,000, and the average litigated claim was over $66,000, which is lower than the five-year average. Intercare is resolving non-litigated claims more efficiently, resulting in lower average payments.

These findings highlight the importance of managing and resolving open claims effectively, particularly in the transportation division. Efforts to mitigate and control costs, improve safety measures, and avoid legal disputes will continue to be a focus for SFMTA and Intercare.

FINANCIALS:

SFMTA Expenditures and Trends

In FY 22/23, the budget for SFMTA was less than in FY21/22 at $29,188,709. The actual expenditure was $33,209,260 resulting in a deficit. Indemnity costs were about $23 million or 23% of costs. Medical costs increased by only 3%, and expenses remained stable. The increase year over year was 14%.

The presentation concludes with appreciation for the WC Council time, attention, and engagement. The speaker appreciates their consideration.

Council Comment:

Todd Rydstrom, Deputy Controller, asked about the removal of a non-compliant medical provider. Is the California Division of Workers’ Compensation required to approve terminations of providers? Julian Robinson answered we may terminate providers as long as injured workers still have access to care from other providers in the MPN.

Matthew Barravecchia, Deputy City Attorney, commented he is encouraged with the conversations SFMTA is starting to have with other departments regarding transitional work assignments. What thoughts do you have on offering a new position earlier in the claim cycle to see if there is an interest in the position? Jim Radding referenced the citywide ADA process which is used to fairly transition injured workers who have flexible job skills.

Public Comment: None.

05: Discussion Item - Opportunity to Place Items on Future Agendas

Mawuli Tugbenyoh, Managing Deputy Director

Council Comment: None.

Public Comment: None.

06: Discussion Item - Opportunity for the Public to Comment on any Matters Within the Council’s Jurisdiction

Council Comment: None.

Reminder of next meeting scheduled: November 6th, 2023. Consistent with the city’s shift to in-person meetings, the Workers’ Compensation Council Meetings have returned to City Hall.

Adjournment

Managing Deputy Director Mawuli Tugbenyoh thanked the staff and presenters.

The next Workers’ Compensation Council meeting will be held Monday, August 7th, 2023, at City Hall, in Room 408 at 9:00 a.m.

The meeting adjourned at 10:29 a.m.