Louisiana: Legislation aimed at improving medical treatment, controlling costs
The Louisiana Legislature passed S. 303 shortly before adjourning. Sen. Neil Riser, R-Columbia, sponsor of the bill, said the legislation requires the director of the Office of Workers' Compensation Administration to establish a medical treatment schedule in accordance with the principles of evidence-based medicine, which must be formally adopted by Sept. 30, 2010. The director will also be responsible for appointing a medical advisory committee. In addition, the director will be given the authority to contract with a medical director in order to oversee the development and mandated biannual review of the treatment schedule.
John Marlow, assistant vice president of the American Insurance Association's southwest region, applauded the move and said the legislation presents an opportunity to help injured workers receive high-quality medical treatment when it's most needed and without bureaucratic delay.
"This legislation is a good first step in reforming Louisiana's workers' compensation system," he said. "S. 303 represents a commonsense agreement between labor, employers, and the medical community as to what's best for Louisiana's workers.
Marlow said the association intends to work with advisory committee members to ensure that the new medical treatment schedule adheres to sound evidence-based medical principles.
"The committee can also take steps to reduce costs by applying Medicare fee schedules to reimbursements, requiring that Medicaid rates be used for pharmaceutical reimbursements, and compelling the utilization of employers' designated physicians and treatment networks," he added. "Louisiana's workers' compensation system now has a significant opportunity to advance access to quality treatment while reducing employer costs."
Gov. Bobby Jindal is expected to sign the legislation.
Insurers ask for veto. A second piece of legislation approved by Louisiana lawmakers hasn't generated the same support from insurers. The Property Casualty Insurers Association of America recently sent a letter to the governor requesting his veto of House Bill 658, which changes the "prescriptive period," or time limits for filing a workers' comp claim. Under the legislation, the prescriptive period of workers' comp claims would expand from two to three years.
Greg LaCost, assistant vice president and regional manager for PCIAA, said the group believes the legislation will increase the likelihood of fraudulent claims, an insurer's exposure to lawsuits, and the need for insurers to maintain higher reserves. These conditions, he said, could lead to higher workers' comp rates for businesses.
"Our members in Louisiana have serious concerns about this legislation that could increase costs and expand their exposure in an economy that needs stabilization," he said. "Essentially, a claim would not have to be filed under Louisiana law until almost three years post-occurrence and still say that it was related to some incident at work. The opportunity for fraud is exponentially increased with this substantial modification of the law."
LaCost said the increase in exposure would force insurance companies to set aside additional reserves which could lead to less ability to write policies in the state or diminish the size of the policies that they can write. Businesses, he said, may also have fewer options under the plan.
"While the bill may sound consumer-friendly, it will have unintended consequences to the businesses and consumers of Louisiana that far exceed any possible benefit that may be derived," he said. "H.B. 658 was allegedly drafted to cover injuries that could not be treated within two years. During the legislative process, the bill was altered to simply expand the prescriptive period of workers' compensation claims. If the trial lawyers wanted to address a problem, then they should have done exactly that instead of asking for the 50 percent extension of a prescriptive period."
Officials said the governor has concerns about the bill but has not indicated whether he will veto it.
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July 16, 2009
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