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Will the silence be broken?

Proposals To Change State's Workers Compensation System Fall In Lap Of Lawmakers

Twice in as many weeks, State Insurance Commissioner Lee Douglass has put sweeping proposals to reform Arkansas' workers compensation system before legislative committees, and twice they have been greeted with uncomprehending silence.

The silence may be broken Wednesday, Sept. 9, when subcommittees of the Legislative Joint Interim Committees on Public Health, Welfare and Labor and Insurance and Commerce are to meet again.

Or the lawmakers may choose to continue what they have been doing for a year and a half -- railing about what skyrocketing workers compensation insurance premiums are costing Arkansas in jobs and economic development.

Fred Van Driesum, staff aide to the Insurance and Commerce Committee that heard Douglass first, calls the proposals bold. He predicts there will be many changes made in them before a bill goes to the General Assembly, which convenes in January.

Douglass refers to his proposals as a "beginning point."

His reforms, however, speak to every problem in what is a nationwide workers compensation crisis outlined by the National Council of State Legislatures in a videotape many Arkansas legislators have seen.

The most fundamental and so far overlooked change among Douglass' proposals is one that would reverse existing law by commanding administrative law judges, the workers compensation commission and the courts to interpret the law strictly, not liberally.

He also proposes to tighten the definition of a compensable injury or disease so that a worker could receive benefits only if it was "the predominant contributing cause" of a disability or need for treatment.

Compensation would be restricted for mental illnesses. Benefits would flow only if they were diagnosed by a psychiatrist or psychologists as having been caused by a physical injury.

On-the-job injuries for which no compensation could be claimed would be broadened to include those in which there was "clear and convincing evidence" the employee was using alcohol, controlled substances or "negligent or intentional misuse of prescription drugs."

The poultry industry tried unsuccessfully in 1991 to get a drug exclusion clause inserted in the current law.

Douglass' Proposals

Douglass proposes some specific new programs he says are designed to bring runaway costs under control.

They include:

* A Workers Compensation Fraud and Safety Investigation Unit established in his department with a hotline for anyone involved in a claim to report suspicions of fraud.

Evidence of fraud would be called to the attention of the workers compensation commission and then turned over to local prosecuting attorneys. The new unit would have subpoena powers.

* Anyone who "willfully makes a false or misleading statement or representation" to obtain or to defeat a benefit or payment would be guilty of a felony.

* The workers compensation commission would be authorized to write regulations requiring insurance companies to provide consulting services to policy holders on occupational safety and health loss control programs.

These mandatory services could be furnished through independent contractors. The carrier would not be allowed to charge a fee in addition to the premium for this. Penalties for failure to have a work place safety program could reach $1,000 a day.

* An employer, through an insurance company, may be required to pay up to 60 additional weeks of benefits for an employee who cannot return to work but could undergo vocational rehabilitation to train for a job with similar pay.

The workers compensation commission has adopted a medical fee schedule and other cost containment measures for all health providers except hospitals. Those were to go into effect Sept. 15. Commissioner Alyn Tatum now says the effective date probably will be Sept. 30. The commission's executive director, George Harris, has been hospitalized for several weeks.

Douglass proposes to go beyond the commission to curb medical costs, which now account for 56 percent of all workers compensation expenses paid annually in Arkansas.

He wants the commission to establish a statewide network of certified health care providers who can furnish managed care to injured employees -- a kind of health maintenance organization.

He states carefully, however, that to be certified, the doctors and others must prove that they can "provide appropriate financial incentives to reduce service costs ... without sacrificing the quality of service."

Pro Tempore Alarmed

After hearing Douglass' proposals Aug. 27, state Sen. Jerry Bookout of Jonesboro, president pro tempore of the Senate, said he was appalled and alarmed that people were not working together to solve the workers compensation crisis.

Bookout had just heard Tatum say he was seeing Douglass' proposals for the first time even though they had been available for a week. Tatum also said policymakers' neglect of the system was one reason it was in such bad shape. The last major changes in workers compensation came in a 1986 special session.

But the 1991 General Assembly did switch jurisdiction over the insurance portion of workers compensation from the commission to Douglass. Asked by a legislator if the two agencies were working together, Douglass replied they had talked about getting together.

At the earlier Insurance and Commerce Committee meeting, Rep. Dave Roberts of North Little Rock scolded Commission Chairman James Daniels for failing to make any recommendations for changes.

Daniels said his agency stuck to administering the law so that it could stay neutral in the historic warfare between management and labor.

However, Bookout was not just talking about Douglass and Daniels' commission.

He co-chairs Public Health, Welfare and Labor, which traditionally handles workers compensation, and he also serves on the Insurance and Commerce Committee. The two panels are in a turf battle over which will get the thorny issue this time.

The fight has more to do with the race for 1995 House Speaker to be decided in 1993 than anything else. The contestants are Rep. Bobby Hogue of Jonesboro and Rep. Bobby Newman of Smackover. Hogue is on Public Health, Welfare and Labor; Newman is on Insurance and Commerce.

However, now that the two subcommittees have agreed to meet, it appears the turf war between the two is ending.

Yet Bookout's remark goes beyond even this.

Workers compensation is an initiated act in Arkansas. This means a two-thirds vote of the House and Senate is required to amend it. The extraordinary vote has mandated in the past that affected parties get together and submit a compromise to the Legislature.

There has been no movement toward this yet.

Earlier, Bookout urged the state Chamber of Commerce and the Arkansas Medical Society to include organized labor, as they had in the past, during negotiations on the medical fee schedule.

He was ignored. Labor groused about being left out but eventually rolled over and accepted the resulting compromise.
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Title Annotation:Lawmakers to decide on proposed alterations to State Workers Compensation System
Author:Griffee, Carol
Publication:Arkansas Business
Date:Sep 7, 1992
Words:1102
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