Roundup: What’s New on the Workers Comp Front?
There are several new developments regarding the Workers Compensation sector, beginning with a new report released by NCCI Holdings. NCCI, this month in its annual State of the Line workers compensation analysis, described the industry as “encouraging”. The positive outlook, according to the report, is based on the fact that the workers compensation calendar combined ratio was 109 in 2012, a six-point decrease from 2011 and the first decrease since 2006. “By many measures, the industry condition is indeed improving,” said NCCI President and CEO Steve Klingel. “While we are pleased to see that the positives are beginning to outweigh the negatives, there remains great opportunity for improvement. Our optimism is tempered by knowing that external forces such as the economy, healthcare reform, and new legislation may still negatively affect the market. But for now, we view the overall industry condition as encouraging.”
Additional good news from the NCCI includes an improvement in the lost-time claim frequency in 2012, which was down 5% on average in NCCI states. The 5% decline is slightly larger than NCCI’s long-term annual estimate of a 2-4% decline per year.
On the national front, U.S. House Representatives Dave Reichert (R-WA) and Mike Thompson (D-CA) introduced a bill mid-May with the goal of streamlining the claims process for injured workers whose workers compensation claims overlap with Medicare coverage. The bill’s backers said it would benefit injured workers, employers and insurers by creating a system of certainty and allowing the settlement process to move forward while eliminating millions of dollars in administrative costs. Under the current system, Workers Compensation claims that overlap with Medicare are subject to review by the Centers for Medicare and Medicaid Services to determine appropriate set-aside amounts to pay for future medical costs in which Medicare may have an interest. The program has long been criticized by workers, insurers and employers, who argue the existing system is confusing and can often involve lengthy delays that add to the cost paid by all parties involved in the set-aside review process.
States throughout the nation are also implementing changes to their Workers Compensation, as discussed back in our February blog, including New York and California. Here are some additional recent changes that have already been signed into law as well as proposed changes in the works:
In Indiana, Governor Mike Pence recently signed into law workers compensation reform legislation that implements several cost containment measures, including regulations for repackaged drugs. The new law will impose a fee schedule for medical services at 200% of Medicare’s rate, caps the price of medical implants, and mandates that repackaged drugs cannot be sold for a higher price than the average wholesale price established by the original manufacturer.
In Oklahoma, Governor Mary Fallin signed legislation allowing employers to implement an alternative to the state’s traditional workers compensation system. The signing makes Oklahoma only the second state after Texas to allow employers to leave the traditional state workers comp insurance system.
In Minnesota, legislation is expected to be signed into law that would authorize the state’s labor commissioner to require written contracts between doctors who prescribe opioid pain medications and workers compensation claimants who receive the pharmaceuticals. H.B. 1799 and S.B. 1603 would increase the authority of the commissioner for Minnesota’s Department of Labor and Industry to establish various standards and procedures that workers comp health care providers would have to follow, among other changes to the state’s workers comp law. For example, the bills would require the commissioner to adopt rules to help determine whether a health care provider is performing procedures or providing services that are excessive, unnecessary or inappropriate.
The Florida legislature passed a bill that would revise the total reimbursement costs for some of the prescription drugs used by hurt workers. A staff analysis measured that the bill would lower workers’ compensation costs by about $20 million. One of the bill’s key provisions would cap the reimbursement rate for repackaged or relabeled drugs.
Turn to Caitlin-Morgan for your clients’ Workers Compensation needs. Whether your client is a minimum premium account or a tougher to place risk, Caitlin-Morgan is here to help you. Just give us a call at 877.226.1027.
Sources: NCCI Holdings, Business Insurance, Miami CBS