Oklahoma: Committee discusses major overhaul of state's WC system
"Our current workers' compensation system seems to fail all parties involved except lawyers," he said. "The definition of insanity is to keep doing the same thing over and over and expecting a different result, but that has been our approach to workers' compensation. It's time to enact sweeping, meaningful reform."
Before the Legislature reconvenes in February 2010, lawmakers are conducting a study of the state's workers' comp system. McCullough said that more than a dozen employers have provided testimony and have expressed a deep dissatisfaction with the current workers' comp system. Employers have indicated that the system is plagued by fraud and high costs and "appears incapable of consistently producing fair and equitable results," he said.
McCullough's plan aims to drive down workers' comp costs while improving worker benefits. The plan, he said, is the product of months of collaboration with a working group of longtime industry professionals and The State Chamber of Oklahoma.
"This plan contains multiple safeguards to reduce costs to the employer while expediting worker benefits, including an easier path back to work for injured employees," he said. "Injured workers would get the most benefit from this reform thanks to streamlined access to medical care and a focus on vocational rehabilitation."
About the legislation. The proposed bill will closely mirror legislation McCullough introduced earlier this year but failed to gain traction. Under the plan, the state would create a three-member Workers' Compensation Commission to replace the current Workers' Compensation Court. The commission would be comprised of a doctor, an attorney, and an industry professional with five years experience in workers' compensation issues. The members would be appointed by the governor and would require Senate confirmation. The commission, McCullough said, would make rules, hire and fire all personnel, and hear appeals.
McCullough said the proposal would eliminate unnecessary litigation and waste that has plagued the state. For example, he noted that attorney involvement is 50 percent higher in Oklahoma's workers' comp system than the national average.
"Unfortunately, according to speakers at this study, the insane amount of litigation in our system has led to a dubious distinction for Oklahoma -- our system pays out more than 100 percent of the actual cost of the average claim," McCullough said. "Experts have told us our permanent partial disability rates are the highest in the region, but actual medical costs for claims are 40 percent lower than the nation. That tells you our system does little to help workers but a lot to help lawyers."
McCullough said his proposal would move all workers' comp claims, issues, and hearings to an administrative process. The responsibilities and authority of the Workers' Compensation Commission would include appointing administrative law judges and possibly medical judges to preside over claims hearings.
Ratings and rehab. McCullough said the study made it clear that the state "must have a new approach to objectively determine medical treatment and disability ratings." Under the reforms, administrative law judges would determine compensability while independent physicians would determine all medical matters. Nationally recognized medical treatment and disability rating standards would be mandatory for all health care providers and adjudicators to provide continuity, he said.
McCullough envisions augmenting the vocational rehabilitation program to more aggressively return employees to the job.
"I believe we need to treat injured employees as the most valuable natural resource we have in Oklahoma and a more aggressive stance on vocational rehabilitation would accomplish that goal," he said.
The House Economic Development and Financial Services Committee is also discussing privatizing CompSource Oklahoma, the state's workers' comp carrier. Opponents of a sale, which lawmakers estimate could generate as much as $350 million, said they are concerned that it could lead to significant increases in workers' comp costs for policyholders.
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November 16, 2009
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