Montana Self Insurers' Association

MSIA Update March 2024

  • NCCI Loss Cost / MSF Rate Change
  • MT Dept of Labor Release Red Tape Rules Changes – Hearing on 3/28
  • JAMA Health Forum  - Cannabis Legalization and Opioids
  • Cannabis Legalization & Workplace Injuries
  • WCRI Annual Meeting
  • Kids Chance Scholarship Applications!

What’s Coming Up

  • MSIA Webinar – May 1 @ 10a MDT – Healing Through Virtual Reality
  • MSF Medical Conf – Red Lodge May 15 – 17
  • National Council of Self Insurers Annual Conference June 2 – 5 St. Pete Beach, FLA – MSIA Member Discount!
  • MSIA Business & Annual Meeting & Governor’s Conference – Sept 11 – 13 - Butte

NCCI Loss Cost / MSF Rate Change

The Commissioner of Securities and Insurance (CSI) office has approved an overall average 3% decrease in loss costs to be effective for new and renewal policies as of July 1. The filing is based on data from policy years 2019, 2020 and 2021 – meaning the most recent information in the filing is from December 2022, valued as of the end of 2023. COVID losses, although relatively minor in Montana, are not included in the NCCI filing. The NCCI filing impacts loss costs for individual class codes differently and the 3% change is the overall average of the 600 or so class code changes.

The NCCI filing reflects their prediction of loss costs. Loss costs represent the average costs to pay claims by class code in our system, and the direct expenses related to paying those claims. Loss costs are the basis for rates charged by Plan 2 & 3 carriers in the system. Carriers then add their other expenses, commissions, taxes, licenses, fees and profit to those loss costs to arrive at their rate for the class code. The factor they add to the loss cost, per class code, is the loss cost multiplier (LCM). As an example, an LCM of 1.25 means the carrier adds 25% to the loss cost for the class code to arrive at their manual rate for that class code. Each licensed carrier, and for MSF each rate tier, is assigned an LCM to be used for each class code. Premium starts by multiplying the rate times each $100 of payroll in that class code the employer presents. The experience modification factor (if any) and marketing programs are then added to modify the initial premium calculation. Marketing programs such as group discounts, volume discounts and other factors can have a significant impact on the ultimate premium. 

Carriers then decide how to respond to the loss costs filed by NCCI. Theoretically, each carrier assesses their book of business and files LCMs to reflect their expectations of expenses and profit based per class code. In effect, the theory goes, each licensed carrier, with individual LCMs has a different rate. Some do – most maintain their previously approved LCM and use marketing programs to adjust premium to meet their business needs. Larger carriers – the names we all know, Liberty, AIG, CNA, etc. have a number of different licenses at their disposal (for example Safeco, Colorado Casualty, Ohio Casualty, Liberty Insurance Co and Liberty Mutual are all Liberty companies that may have different LCMs for the Montana marketplace. Liberty underwriters will determine for each piece of business presented, which rate is most appropriate for the risk and premium needed and assign that risk to the carrier. MSF uses five rate tiers to achieve the same purpose since they are permitted only one license. 

MSF drops rates an average of 10%. 

At their regularly scheduled Board meeting held Friday, March 8, the MSF Board accepted the management recommendation to decrease rates by an average of 10%. The politicians will make as much as they can about this change. It also reflects an apparent approach by MSF of seeking to capture as much market share as possible. We have reported in the past on the MSF’s management focus on capturing more business. The MSF Board also approved of an up-front group discount program where policyholder members of their groups can get an up-front discount based on the three years’ prior loss ratios for that group. Along with the other changes MSF has made to their dividend program and aggressive rate cutting, they appear to be going after more market share. 

MSIA’s issue is the role of MSF is to assure a competitive marketplace for Montana businesses – not to drive Plan 2 and self-insurers out of the market. By undercutting responsible pricing, the effect of MSF’s actions is to minimize, if not eliminate, competition. While that perhaps means lower rates in the short term for Montana businesses, what does it mean for the long term? 

If competition is minimized or eliminated, and MSF consolidates more of the market than they have now, what options will Montana business have, when rates go up again? What this means to our members is we can assume MSF will again aggressively approach either group members or individual self-insurers to seek their business. The pricing may well be attractive – in the short run. This is not of course, limited to Montana. The extended soft market has had a significant impact in the marketplace. Many peer self-insured associations have gone out of business because there is not enough of the self-insured market left to sustain an Association. The result, when the market turns, will not be pretty. When options are eliminated, by definition, options for different situations are more limited. 

MSIA has reported on the NCCI loss cost filing, and has the supporting information created by NCCI to support their conclusions and how it willbe applied to the marketplace. If you or your actuaries would like a copy, simply contact us at the MSIA office. 

Dept of Labor Red Tape Rules Changes Proposed

The Montana Employment Services Division of the Department of Labor and Industry (ESD – formerly the Employer Relations Division/ ERD), has released the formal proposed ‘Red Tape Initiative’ rules changes to simplify the rules addressing workers’ compensation. ESD announced at the MSIA Business & Annual meeting in September they were about to release an exposure draft of the changes seeking comment. MSIA provided an extensive review of those proposed changes and offered comment to ESD, prior to the formal rulemaking process. 

Now the formal process has started with the formal release of the proposed changes and announcement of a hearing on March 28 on the changes. More information, the formal changes and information on the hearing can be found here - (once there, click on the Workers’ Compensation button). 

MSIA commented on the exposure draft released by ESD in December. Among the concerns we identified was the proposed language eliminated the identification that repeated use of urgent care or hospital emergency services was not an acceptable alternative to being required to see an assigned physician. MSIA also opposed the proposed requirement that carriers and self-insurers provide proprietary case reserve information upon request for SIF claims. ESD at that time reported they accepted our comments and would change the proposals to reflect our concerns. 

MSIA also opposed permitting minors to be licensed claims examiners having access to personal medical information before they are legally held responsible for their actions, deletion of the statement of purpose for the Montana Utilization and Treatment Guidelines, deletion of the specificity of prohibiting medical balance billing and payment for treatments not covered or after medical benefits have terminated. MSIA also made some suggestions regarding rule construction relating to referencing statutory definitions. 

MSIA will review these formally proposed changes and will provide comment at the public hearing, to be held by Zoom, Public Hearing: March 28, 2024, at 1 p.m. (meeting ID: 833 4166 9516, meeting passcode: 356912). Written comments are due by April 5, 2024 to either or via mail to PO Box 1728, Helena, MT 59624.

  • JAMA Health Forum - Cannabis Legalization

 and Opioids

  • Cannabis Legalization & Workplace Injuries 

Two recently published pieces in the Journal of the American Medical Association Health Forum focused on legalized cannabis. Between 2006 and 202 13 states legalized recreational cannabis and 23 states legalized medical cannabis. 

The first study, published in January, 2024, looked at the potential impact of recreational and medical cannabis legalization and the impact that action may have had on opioid prescriptions and deaths (Nguyen_2024). This study was not limited to workers’ compensation. One of the result of this study is “There was no statistically significant association of recreational and medical cannabis laws with opioid prescriptions or overall opioid overdose mortality across the 15 year study period, although the results also suggested a potential reduction in synthetic opioid deaths associated with recreational cannabis law.”

The second study reviewed information specific to workplace injuries and identified that recreational marijuana laws may result in a statistically significant increase in workplace injuries in workers 20 -34 years old. At the same time Marijuana may have helped older workers manage pain. (Li_2024)

Both studies are preliminary and in reading them, one is left with the impression that this work is just the tip of the iceberg; much more needs to be done. However, given the dearth of published works on the impact of recreational and medical use of marijuana in the US, they are very interesting. 

WCRI Annual Meeting

The Workers’ Compensation Research Institute (WCRI) is a ‘think tank’ on workers’ compensation issues. Their work is routinely held up as objective as possible, complete and credible. WCRI has labor, medical, plaintiff attorney, defense attorney, employers and carriers as part of their decision making process, so they don’t have much choice in being as objective as possible. MSIA is proud to be a member and supporter of WCRI and their work. MSIA members, through our offices, have access to the WCRI work products. 

The most recent, 40th Annual Meeting of WCRI was held in Boston March 5 & 6. Members heard from experts, regardless of their role in the industry on 

What is Happening in Health Care? [And Will It Continue?] - Harvard University Professor David 


WC Medical Payment During the Recent Inflationary Period*

Psychological Risk Factors and Functional Recovery*

How employers have dealt with societal changes in the workforce post pandemic – featuring Publix Markets, Walt Disney and Duke University (Piublix and Disney have been invited to also present at the National Council meeting in June in St. Pete Beach, FLA.)

The Impact of Vertical Integration on Utilization of Medical Services*

Excessive Heat and Work Related Injuries*

The Importance of Positive Socialization in a Workplace and the Impact on Injuries from Boston 

    University Professor Connie Noonan Hadley*

Indemnity Benefits per Claim & the Impact of the Pandemic Related Economic Disruption*, and

A Panel Discussion with Travelers’, MA AFL/CIO/ MA Dept of Industrial Accidents and the WA Self 

    Insurers Association

*Identifies that the presentation package is available from the MSIA for members. 

Harvard Professor David Cutler was very interesting in his perspective on the economics of American health care. With the intricacies of fee schedules, insurance coverages and health care contracts and how medical economics fits in the US economy, this is kind of a meaty topic. His first comment was to gauge the audiences thoughts regarding whether health care in the US would improve and become less expensive, more or less stay the same, or the brakes will fail and we will careen off the road (I was in the fall off the rails category). Professor Cutler provides some interesting thoughts regarding why US health care will get better and less expensive (I’m not sure I agree, yet, but appreciate a different perspective). 

There were a some key points. 

  • We know that workers’ compensation medical is a very low percentage of total US health care spend - - however, it drives a lot of health care profitability (a point also made in our most recent Webinar presented by Joe Paduda on February 13). Health care system financial managers are well aware of that fact. 
  • In the US, the rich are living longer and are generally more healthy. The poor are not. The poor are dying sooner and are generally less healthy. Professor Cutler made the point, graphically demonstrating the growing gap between rich and poor. 
  • The COVID pandemic lead to a significant drop in medical demand (outside of COVID), spending and services. Obviously with the shutdown, many health care services were suspended and telehealth skyrocketed. Telehealth appears to be a wiggle, rather than a trend. We are quickly going back to pre-pandemic telehealth usage rates. However, to the point the decrease in demand and services has lead to a decrease in Medicare spending, for likely the first time in history. Cutler asserts that importantly, since re-opening, some $4 billion in expected Medicare spending has not re-appeared. No one is quite sure why that is – and it is beginning to have an impact on the projections of our economy, let alone overall health care spending. I asked the question regarding the over 1.25 million deaths due to COVID – those trending to the poor, elderly and less healthy. While all agreed that likely had something to do with the decrease and continued depressed spending level, no one quite knew what that impact might have been. 

Cutler’s presentation package is available at your request from the MSIA offices as are those presentations identified in the list above. MSIA will provide additional information regarding the other presentations in additional UPDATE Extras later this month.

Kids Chance of MT scholarship applications now available! 

Kids’ Chance of Montana scholarships are open to children who have had a parent or guardian killed or severely injured in a work accident. New applicants use the Kids’ Chance of Montana 2024 Scholarship Application form; Existing/Returning Kids’ Chance students, use the 2024 Scholarship Renewal form. Kids Chance, as a charity, has become active in all 50 states. MSIA members are active with Kids Chance MT as well as other states. 

Here’s the information & the application:

Applications are due by March 31, 2024.   

What’s Coming Up

Next MSIA Webinar – May 1 @ 10a MDT – Healing Through Virtual Reality

MSIA has just announced the next Continuing Education Webinar, Healing Through Virtual Reality, featuring Dr. Gerry Stanley of Harvard MedTech, set for May 1, at 10a MDT. Registration will open towards the end of March/early April. Advance registration will be rquired. 

MSF Medical Conference – Red Lodge 5/15 - 17

"Bridging the Gap from Medical to Legal in Workers' Compensation" The Montana State Fund 22nd Annual Medical Conference is a three-day event taking place from May 15th to May 17th, 2024 in Red Lodge, MT. The Conference is designed for medical providers, claims professionals, and case managers and offers a platform for education, networking, and discussions on workers compensation in Montana and the country. 

Don't miss this chance to connect with industry experts and expand your knowledge on workers compensation at the Montana State Fund 22nd Annual Medical Conference (note: the MSIA Executive Director was the producer of the first 16 MSF Annual Medical Conferences).This annual conference typically brings speakers who have national as well as Montana specific experience and knowledge. It is among the more specific conferences in the state in dealing with workers’ compensation medical issues. Registration is available here: MSF Annual Medical-Conference

  • The Current Evidence for Ortho-Biologics in the Treatment of Musculoskeletal Injuries 
  • Failure of Non-Cooperative Care 
  • Vocational Rehab Ethics & Return to Work
  • Fight for Life: A Flight Nurse Who Survived
  • Objective Medical Findings: Montana Law vs Medical Opnion
  • Medication Management & Mitigation Strategies
  • Medically Unexplained Symptoms
  • Medical Management 101: Evaluation, Diagnosis, & Treatment of Work-Related Injuries 

National Council of Self Insurers Annual Conference June 2 – 5 St. Pete Beach, FLA

MSIA is a member of the National Council of Self Insurers (NCSI) and sits on their Executive Committee. As a result, all MSIA members have access to the NCSI membership rate for their Annual Conference. This year’s Annual Conference promises to pull out all the stops and features at least two MSIA members – Midland Claims Service and MSIA Secretary/Treasurer Michael Marsh and Sibayne-Stillwater’s Chelsea Yates as featured speakers. 

Other speakers are expected to include Walt Disney, Publix Markets, Chick fil A, Marriott, American Airlines and Wal Mart. This is a Conference well worth putting on your calendar. 

MSIA Business & Annual Meeting & Governor’s Conference – Sept 11 – 13 - Butte

The dates for the MSIA Business & Annual Meeting and the Montana Governor’s Conference have been announced, and the agendas are taking shape. Make sure to block out your calendar to be in Butte September 11 – 13. The meetings will be held at the Copper King Hotel. The MSIA Business & Annual Meeting is tentatively scheduled to start at 8a on Wednesday September 11. The hotel room block will be available on May 1.