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Comp reform efforts target old concerns

Medical marijuana, opt-out on sidelines


BOCA RATON, Fla. — Despite the insurance industry's focus on emerging issues such as opting out of state workers compensation systems and medical marijuana, the majority of workers comp bills introduced so far this year involve first responders, medical cost management and the definition of an employee.

Of the 660 relevant workers comp-related bills introduced during the first quarter of 2016, 84 involve first responders, 65 involve medical reimbursements and fee schedules, and 54 involve the definition of an employee, said Lori Lovgren, division executive of state relations for the National Council on Compensation Insurance Inc. in Boca Raton, Florida.

Although medical marijuana is legal in 24 jurisdictions, few insurance companies are reimbursing injured workers for it, sources said. Only in New Mexico have courts ruled that the drug should be classified as reasonable and necessary medical care for injured workers.

Likewise, Oklahoma is the only state affected by opt-out legislation, which took effect in February 2014. Similar bills were introduced in Tennessee and South Carolina last year, but they haven't been revisited in 2016.

However, several states have enacted presumption laws this year, such as Connecticut H.B. 5262, which establishes a firefighters cancer relief program, and Arizona H.B. 2350, which outlines when post-traumatic stress disorder of a peace officer is presumed to arise out of and in the course of employment.

“Ever since 9/11, the expansion of benefits for first responders has been a very popular effort,” Ms. Lovgren said. And more states have pushed for mental health presumption laws covering conditions like post-traumatic stress disorder since the December 2012 shooting at Sandy Hook Elementary School in Newtown, Connecticut, she added.

Meanwhile, Georgia Gov. Nathan Deal this month vetoed H.B. 216, which would have created a cancer presumption for firefighters. And Connecticut S.B. 134, which would have created a presumption for individuals suffering from a severe mental or emotional impairment after witnessing someone's death or maiming, failed in April.

“In most cases, (presumptions) are narrow in scope,” Michael Bourque, senior vice president of external affairs for The MEMIC Group in Portland, Maine, said in an email. “Nonetheless, they are an expansion of benefits, and with more benefits there (are) more (workers comp) costs.”

To keep costs down, legislators have introduced a number of bills regarding workers comp medical reimbursements and fee schedules, sources said.

While prescription drug costs per active claim continue to increase, the average medical cost per lost-time claim decreased 1% in 2015 to $28,500, according to preliminary findings by NCCI, chief actuary Kathy Antonello said earlier this month during the Boca Raton, Florida-based rating and research organization's 2016 Annual Issues Symposium in Orlando.

Ms. Antonello added that the average indemnity cost per lost-time claim “increased slightly” by 1% in 2015 to $23,500.

“When seeking to control costs, naturally you look to where the biggest dollars are,” Mr. Bourque said in the email. “There also remains concern about cost shifting that could result from the implementation of the (Patient Protection and Affordable Care Act). The comp industry is trying to be vigilant in seeking to prevent those shifts.”

Beyond controlling medical costs, a competitive fee schedule helps ensure injured workers don't have an issue accessing quality physicians, said Desiree Tolbert-Render, assistant vice president of national technical compliance for workers comp at Sedgwick Claims Management Services Inc. in Orlando, Florida. It's important “to have doctors in the system who provide quality care and get the person back to work.”

More education surrounding the opioid epidemic is another driving factor, Carlos Luna, Westminster, Colorado-based director of government affairs at MDGuidelines, part of disability case management services firm Reed Group Ltd., said in an email.

“Compassion for those addicted (to prescription drugs) and the humanizing of the suffering caused by this epidemic is the fuel that ignited passionate exchanges around the country,” he added.

In addition, the “boom in the gig economy” — also called the on-demand economy — is leading more states to address the potential for the misclassification of employees as independent contractors, Mr. Luna said.

The definition of an employee has been on the industry's radar since the early 2000s construction boom, which was “partially driven by misclassified construction workers who were illegally labeled as independent contractors to reduce cost to the employer,” Mr. Bourque said in the email.

Companies like Uber Technologies Inc. and Lyft Inc. “are leading some policymakers to re-think the definition of employee yet again,” Mr. Bourque added. “The question is, is this really a new kind of worker, perhaps somewhere in-between an employee and a true independent contractor, or is this just a new face on an employer-employee relationship?”

Overall, Ms. Lovgren said it has been a pretty comparable year to 2015, despite four off-cycle rate filings in Alaska, Florida, Oklahoma and Tennessee.

“With a few exceptions, such as the push for reform in Illinois, this has been a relatively placid year in workers comp legislation so far,” Mr. Bourque said. “There are emerging issues that we're all watching, but few seem ripe for major change this year.”