Differing comp reform bills considered in Florida

Florida legislators continue to attempt to address major Florida Supreme Court decisions last year that have impacted the state's workers compensation system.

The Florida House of Representatives approved House Bill 7085, sponsored by Florida Rep. Danny Burgess, R-Zephyrhills, on Wednesday. The bill is a response to the Florida Supreme Court’s decision in Marvin Castellanos v. Next Door Co. et al. last year that found a cap on workers comp claimant attorney fees was unconstitutional.

The bill would extend total combined temporary wage replacement benefits from 104 weeks to 260 weeks, cap attorney fees at $150 per hour, and allow a Judge of Compensation Claims to award an hourly fee different from the statutory percentage-based attorney fee schedule. The bill passed 82-37 and would be effective July 1 if enacted.

“From the beginning, this reform effort has been a balancing act,” Rep. Burgess said in an emailed statement Monday. “We have been cognizant of the need to pass a bill that provides much-needed strong reforms to Florida's workers comp laws but also to address the four recent court rulings that brought us to this point.”

Rep. Burgess said the reforms envisioned in H.B. 7085, which was vetted by two committees and then amended by the full House, are good for workers and employers alike.

Meanwhile, the Florida Senate also is considering a bill that seeks to reform the state’s workers comp system. Senate Bill 1582, introduced by Florida Sen. Rob Bradley, R-Orange Park, would codify the state high court’s decision in Bradley Westphal vs. City of St. Petersburg by increasing the time limit on temporary partial disability and temporary total disability benefits from 104 weeks to 260 weeks and changing workers comp attorney fees to address the Castellanos decision. On Thursday, the bill was placed on the state senate’s second reading calendar.

A key difference between the two bills is that H.B. 7085 would cap potential hourly attorney fees at $150, while S.B. 1582 provides for an hourly maximum of $250.

“We believe that the higher rate would be inappropriate and essentially become the default rate in the state,” said Ronald Jackson, vice president for state affairs, southeast region, at the Washington-based American Insurance Association in an interview with Business Insurance Monday. Mr. Jackson said this would lead to increased costs.

“The goal is obviously to bring about a reduction in the wake of the court decision and the 14.5% (Florida workers comp advisory rate) increase that was approved by the Office of Insurance Regulation,” Mr. Jackson said.

According to John Korpics, senior vice president of Arthur J. Gallagher & Co.’s Miami brokerage office, H.B. 7085 “takes a more aggressive approach at limiting attorney involvement, which would, in effect, tend to lower costs and rates.”

The bill has drawn support from the business community.

“H.B. 7085 also addresses reimbursement for outpatient hospital and ambulatory surgical center services, which has been a significant cost driver in the Florida workers compensation system for a number of years,” said Trey Gillespie, assistant vice president of workers compensation for the Chicago-based Property Casualty Insurers Association of America, in an emailed statement Monday. “S.B. 1582 provides employers and insurance carriers with almost no protection from inflated claimant attorney fees, imposes financial restrictions on carriers for defending questionable claims and attempting to contain claim costs, and fails to address the outpatient hospital and ambulatory surgical center reimbursement cost driver.”

Gallagher’s Mr. Korpics said the next step is for both sides to whittle down their preferred pieces of legislation via negotiations.

“Word is that the senate will not accept the house version as is and that the two bodies are too far apart to work a deal,” said Mr. Korpics.