Florida began its 60-day legislative session yesterday, March 7, with workers' compensation reform on the mind. Senator Rob Bradley introduced S.B. 1582, which would require insurance companies to file their own rates and would also lift limits on attorney fees in some cases.
FIXING THE RATES
After last year's key Florida Supreme Court rulings, the National Council on Compensation Insurance (NCCI) proposed a nearly 20% rate increase for all workers' compensation policies. Instead, the Florida regulators approved a 14.5% rate increase that went into effect on Dec. 1, 2016. This bill would change the rate-making process to allow each insurer to independently and individually file with the office the rate it proposes to use instead of the current system, in which the state regulators decide the rate for all insurers.
FIXING ATTORNEYS FEES
Although S.B. 1582 would keep the current statutory formula for claimants' attorney fees, the bill would allow compensation judges to award fees up to $250 an hour to claimants' attorneys. The judges could look at a variety of factors when determining the fee amounts, such as the time and skill required and the difficulty of the issues involved. However, business industries, such as the Associated Industries of Florida (AIF), favor a bill that proposes injured workers would be responsible for their own attorney fees and that judges could not award attorney fees that are to be paid by employers or insurance carriers. They believe this bill would address the constitutional issues in the Florida Supreme Court cases as well as avoid unnecessary litigation.
Florida legislators and Gov. Rick Scott kicked off the first legislative day with different tones and priorities. We're keeping watch to see how this all pans out.
Work Comp Limits
Iowa legislators introduced two identical bills, House Study Bill 169 and Senate Study Bill 1770, which would eliminate workers' compensation benefits at age 67. The bills also decrease coverage for any work-related injury connected with a pre-existing injury, allow employers to deny benefits if an employee tests positive for drugs or alcohol, and reduce shoulder injury benefits. The bills have traction with a Republican-controlled House, Senate, and Governor. Both bills proceeded out of their committees this past week.
Arkansas Rep. John Payton introduced H.B. 1586 to amend the state's workers' compensation law to place a 450-week limit on weekly permanent total disability (PTD) benefits and death benefits. Last year, the state approved to phase out the Death and Permanent Disability Trust Fund, which paid the permanent disability and death benefits of injured workers after the insurer or self-insured employer paid the retention amount of $215,000. As introduced, the bill would go into effect for injuries on or occurring after July 1, 2017. H.B. 1586 passed out of the House and is now in the Senate Committee on Public Health, Welfare and Labor. We're tracking this.
Making Our Way Around The Country
The Center for Medicare and Medicaid Services (CMS) released last week technical guidance that appears to pave the way for a new Liability Medicare Set-Aside (LMSA) policy. The technical change outlines a reporting process whereby CMS and its contractors, providers, and beneficiaries will identify an LMSA available to use to pay for injury-related medical care. Testing is scheduled to begin on October 2, 2017. This technical change follows a 2012 Government Accountability Office (GAO) report that recommended improved coordination of benefits and recovery including an LMSA process. We are on the frontlines in Washington this week tracking LMSAs and sparking discussion on Medicare Secondary Payer issues involving prescription drugs.
The Kentucky Legislature approved a bill that would alter the medical malpractice system by creating panels of expert advisory medical providers to review claims of error or neglect. The measure requires the medical review panels to scrutinize the merits of the lawsuits against the health care providers or institutions before cases proceed to court. The bill now advances to Gov. Matt Bevin.
KENTUCKY (ONE MORE)
After passage out of the Kentucky House, a bill that would allow employers and insurers to stop paying workers' compensation benefits if an injury isn't resolved in 15 years (H.B. 296) has stalled in the Senate. The Senate Committee Chair on Economic Development, Tourism, and Labor believes a new version of the legislation might be heard this week.
IN OUR HEART & SOULE
It's with sadness that we want to remember Dwight Johnson. He was an injured worker who suffered the loss of both his legs in separate industrial accidents but kept a positive outlook on life and on the work comp system. We had the pleasure of meeting with him over the years and seeing the force of his positivity on our industry. You will be missed, Dwight.
About The Way
The Way is Gallagher Bassett's weekly governmental briefing on state and federal affairs that affect our industry. We thank you for starting your Wednesday morning with us. Please be sure to follow #GBTheWay for additional news and updates as we make our way throughout the country on the issues affecting our industry. For more information, please connect with GB on LinkedIn, follow us on Twitter, or contact the authors, Greg McKenna or Cari Miller, directly.