The Texas Division of Workers’ Compensation (TX DWC) and the California Division of Workers’ Compensation (CA DWC) each hold a sacred public trust to oversee the treatment of their respective states’ injured workers.

Collecting, analyzing, and publishing workers’ comp data is crucial to that mission.

Unfortunately, only one of these agencies seems to take the job seriously—while the other dithers, deflects, dodges, and disappoints. As we explore in detail below:

• The TX DWC uses an in-house public entity to analyze data—the CA DWC relies heavily on analysis from insurer-funded groups.
• The TX DWC collects workers’ comp data in accordance with state law—the CA DWC fails to collect data, in violation of state law.
• The TX DWC  gives insurers a reason to cooperate with requirements to submit complete data to the state—the CA DWC declares data reporting “voluntary.”

The TX DWC recently released its annual report on workers’ comp health care costs and utilization. This report is only possible because the TX DWC adheres to state law, which requires the agency to research various aspects of the system.

By contrast, the CA DWC treats state laws requiring data collection, analysis, and reporting as optional suggestions. Moreover, the CA DWC takes no steps to ensure the completeness or accuracy of the data insurers submit to the state—instead accepting whatever data insurers choose to share on pure blind faith.

California’s employers, providers, injured workers, and taxpayers deserve better—and the TX DWC offers a better model.

TX DWC: Adhering to State Law (and Higher Standards)

Texas Labor Code Chapter 405 establishes the Workers’ Compensation Research and Evaluation Group (REG), which conducts professional studies and research for the TX DWC and its parent agency, the Texas Department of Insurance (TDI).

The Labor Code tasks the REG with studying, among other things:

• “the quality and cost of medical benefits”
• “rehabilitation and reemployment of injured employees”
• anything else “relevant to the cost, quality, and operational effectiveness of the workers’ compensation system.”

The REG is a government entity whose function is to serve the public interest, not the profits of insurers invested in the system.

While the REG gets its data from insurers, Texas Labor Code Chapter 402 mandates that the TX DWC biannually “assess the performance of insurance carriers” in several areas, including “Timeliness of submission of the EDI [Electronic Data Interchange] medical data” to the TX DWC.

From there, the Labor Code directs the TX DWC to “...focus its regulatory oversight” on carriers “identified as poor performers.”

Best of all, the TX DWC actually adheres to the Labor Code, publicly identifying “poor performers” and publishing its planned schedule of audits, including what violations are being investigated, which specific statutes and rules are carriers violated, and how many carriers they’ll investigate.

In other words, workers’ comp insurance carriers in Texas have a real incentive to show their work—and genuine deterrents to non-compliance with data submission requirements.

CA: Data and Compliance Free-for-All

Contrast the superlative TX DWC with the dismal performance of the CA DWC, which:

• Has been in violation of Labor Code Section 4610, which requires the agency to collect Utilization Review (UR) data for every claim, since 2017
• Has failed to publish UR denial and approval rates in violation of Labor Code Section 138.8, in effect since January 2024
• Declared EDI medical data reporting to the agency’s Workers’ Compensation Information System “voluntary” for claims administrators, in violation of Labor Code Section 138.6, in effect since 2017

So, what data do California workers’ comp stakeholders have to work with? More than any organization, the state relies on the Workers’ Compensation Insurance Rating Bureau (WCIRB)—a group that:

• Gets its funding exclusively from its own insurer members
• “Makes no warranty” as to the quality of its data

In other words, insurance carriers in California are free to contribute whatever data they want, whenever they feel like it—and can expect the state to trust (and parrot) those data without imposing any measure of quality control or data hygiene.

2024 TX DWC Report: Data That’s Worth a Darn

The 2024 Health Care Cost and Utilization in the Texas Workers' Compensation System report generally contains good news regarding workers' compensation costs. As shown above, claims, costs, and treatment utilization all decreased significantly from 2018 to 2023.

The full report “shows the work” in exhaustive detail, including how the REG applied insurer data.

Most tellingly, the TX DWC report’s conclusions do not suggest or imply a need to raise employers’ workers’ comp rates. Compare that with the opaque work of the WCIRB, which recently asked California to increase employers’ rates despite phenomenal national profits on workers’ comp insurance.

There is no way to govern or improve a statewide workers’ comp system—particularly in states as huge as Texas and California—without a serious commitment to data analysis. One state brings the receipts. The other is a black hole of non-information.

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