A long-awaited report by the Delaware’s Workers’ Compensation Task Force recommends a number of steps to get costs under control.
Premiums have skyrocketed in recent years, after a previous reform effort that had worked for a few years ran out of steam. The task force was headed by Lt. Gov. Matt Denn.
The task force was created last year by the General Assembly and governor and issued a report that year. Some recommendations were passed by the General Assembly. The group stayed together as another large increase went into effect and it became clear that reforming the system would take years.
The task force focused on medical costs for injured workers, which are running at 60% of total spending, compared to 40% in neighboring states.
“It was not easy to get to this point in making changes to the workers compensation payment system,” stated Rich Heffron, president of the Delaware State Chamber of Commerce. “Through the dedication and hard work of my fellow Task Force members – along with Lt. Governor Denn’s leadership – today we are able to propose changes that can be expected to lower Delaware’s workers compensation rates. We still need to determine why Delaware’s cases take longer to settle, and how insurance companies calculate their reserves, but that is for a future Task Force to examine.”
The task force’s recommendations include:
1. Heightened Oversight of Insurance Carriers. These recommendations include consolidating the Data Collection Committee and the Health Care Advisory Panel into a single committee and a Ratepayer Advocate to be hired and overseen by the Workers’ Compensation Oversight Panel, with staff support to be provided by the Department of Labor.
2. Stricter Control on Medical Costs. These recommendations include directing the Workers’ Compensation Oversight Panel to create a new medical fee schedule, using multipliers of medical codes used by the Centers for Medicare and Medicaid Services, which results in a 33% savings from all providers (to be phased in over a three year period) and recommending that the General Assembly (through the Workers’ Compensation Oversight Panel) monitor both the rate impact of these recommendations and their impact upon providers as the recommendations are phased in, and make statutory adjustments in the fee schedule if appropriate.
3. Consideration of New Rating Organization. The task force recommends that DOI undertake a formal assessment of whether there should be a change in the rating organization used by Delaware insurance carriers, and include members of the task force who have expressed concerns about the current situation in that formal assessment.” The organization is based in Philadelphia and there is some concern that it is not attuned to the situation across the line.
State Representative Ruth Briggs King (R-Georgetown), a member of the task force, said, “This bill is the result of months of work with employers, health care providers and insurers. I believe a great deal of thought and consideration went into crafting this legislation, which I believe will help reduce the uncertainty and escalating premiums for Delaware’s small businesses.”
Delaware State Medical Society, while acknowledging the seriousness of the situation, was skeptical of plans to cap medical costs.
Opposition from trial lawyers, medical community and others have been blamed in some quarters for previous reform efforts stopping short of more aggressive efforts to control medical costs.
