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Los Angeles area leads California in workers comp costs

Posted On: Oct. 26, 2016 2:47 PM CST

The Los Angeles region spends the most money in California fighting and closing workers compensation claims, according to a report released by California’s Workers’ Compensation Insurance Rating Bureau.

Meanwhile, Silicon Valley reported the lowest workers comp-related costs in the state, the bureau said Tuesday in a statement.

The Oakland, California-based bureau studied medical data from 2013 for 19 California regions, accounting for differences in wages and industrial makeup, and found that indemnity claim frequencies in the Los Angeles/Long Beach area were 24 % higher than statewide, while indemnity claim frequencies are 26 % lower than statewide in Silicon Valley.

The report also found that the Los Angeles/Long Beach area to be the most litigious region; nearly 29% of indemnity claims in the Los Angeles/Long Beach area involve a medical legal report compared to the statewide average of 23 %.

Meanwhile, pharmaceutical costs also vary by region, according to the report.

The proportion of total paid medical costs attributable to pharmaceutical spending ranges from a low of 4.5% in the Tulare/Inyo region to a high of 9.7% in the San Luis Obispo/Santa Barbara region.

The report also found the median permanent disability rating to be higher in the northern regions of the state — between 20% and 23% — than in the central and southern regions, which mostly show ratings that fall between 15% and 17%.

States use this disability rating to determine the amount of money an injured worker would receive as compensation for an injury or occupational disease. 

“Lower median permanent disability ratings, in most of the regions depicted as experiencing higher costs in the state, suggest that the higher costs may be more related to the greater incidence of permanent disability claims in these regions,” the report states.