Healthcare reform’s impact unclear on comp

Given that healthcare costs account for nearly 50% of total workers’ compensation costs in most jurisdictions, it follows that the impact of wholesale changes in healthcare would also be felt in workers’ compensation. But it is too early to say what that impact will be, according to the National Council on Compensation Insurance and other think tanks.

The NCCI does anticipate direct effects from changes to federal black lung benefit entitlement provisions, enacted as part of healthcare reform legislation. Recent
changes make it easier to get federal black lung benefit claims filed and approved and will increase the benefits payable.

“These provisions will also increase future insurance premium costs (prospective costs) and will give rise to a significant increase in liabilities for claims from prior periods of time (retroactive costs) for which premiums did not reflect the new and higher costs required by these changes. NCCI is analyzing the prospective
cost impact by state in consideration of upcoming rate filings,” the group says.

But beyond these specifics, the crystal ball is hazy. “The ultimate impacts depend on behavioral changes and actions by claimants, attorneys, healthcare providers,
insurers, and regulators,” NCCI says. Widely anticipated changes in Medicare payments to providers are one illustration why observers are unsure how it will all play out.

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Audit will shine light on comp system

The South Carolina Legislative Audit Council has informed the Workers’ Compensation Commission its audit of the agency will focus on attorney fees and how the Commission determines disability, along with reviewing the Commission’s performance in half-a-dozen other areas.

In an April 15, 2010 letter to Gary Cannon, executive director of the commission, the Audit Council sketched out the scope of its ongoing audit, which is expected to be completed this summer. A final report will likely be released this fall.

The Audit Council will review a sample of contested cases to determine what types of benefits are sought by injured workers; the amounts of attorneys’ fees requested by claimants attorneys and approved by the commission; the attorneys’ fees of employers; and the general compliance of files with state laws and regulations.

In a separate bullet, the council said it would also “determine the Commission’s compliance with approving attorney fees and costs. Also, compare attorney fees and costs to those allowed in other states.”

The audit will “compare South Carolina’s method of determining disability (including AMA impairment ratings, age, occupation, restrictions of injured workers,
etc.) to those of other states.” Also, it will examine the Commission’s efforts to prevent employer workers’ compensation fraud.”

The Audit Council routinely audits state agencies at the request of legislators. The current audit of the Commission was requested by a dozen senators who said
they desire “an inquiry into the operations, systems and management practices of the WCC as they relate to the consistency of workers’ compensation awards and the reasonableness of attorneys’ fee awards.”