Louisianans for Workers’ Compensation Reform (LWCR)
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The Issue

CHRISTUS Health has been leading the Louisianans for Workers’ Compensation Reform (LWCR), a coalition of employers, group funds and trade associations dedicated to developing a balanced, cost effective and efficient workers’ compensation system in benefiting employees and employers.

Need for Legislative Reform

Louisiana has made improvements in its workers’ compensation system during recent years. However, when compared to other states that have modernized workers’ compensation systems over the past five years, Louisiana continues to fall behind.

As shown in the chart below, Louisiana employers have one of the longest temporary disability rates and the highest defense costs in the nation. In addition, employers pay more than the national average in workers’ compensation costs due to higher indemnity and medical costs and higher claims management costs.

The adjudication process is costly, lengthy and inconsistent creating an unnecessarily adversarial relationship between employees and employers.

The state’s inability to make substantive changes to the system puts the state, employers and employees at a disadvantage. Higher costs for workers’ compensation are discouraging companies from locating in the state and are forcing existing employers to re-evaluate operating in the state. Louisiana must move in a new direction and modernize the workers’ compensation system.

The need for legislative change in Louisiana is demonstrated in a recent study released by Workers Compensation Research Institute. The study titled CompScope Benchmarks for Louisiana, 8th Edition, is an annual interstate comparison study of 14 states, including Louisiana, which make-up 60 percent of the nation’s workers’ compensation benefit payments. The 14 states used in the study represent the full range of states nationally based on costs per claim.

* Claims with more than seven days of lost time

The Workers Compensation Research Institute is a nonpartisan, not-for-profit membership organization conducting public policy research on workers’ compensation, health care and disability issues located in Cambridge, Massachusetts.

Reform Goals

The goals of the reform are to:

• Create a more efficient workers’ compensation system.
• Improve medical care for employees.
• Improve Workers’ Comp Networks, providing for administration, regulation and oversight.
• Strengthen utilization review guidelines.
• Improve data collection, analysis, reporting and benchmarking.
• Improve workplace safety.
• Lower compensation costs.

Legislative Package:

At the request of the current Louisiana state administration, the coalition will advance legislation in two phases to achieve its goals. Phase one is described below. The phase two legislative package is expected to be filed in the 2009 legislation session and will build upon the reforms passed this year.

In the 2008 regular session, LWCR is supporting HB 1099 by Rep. Eric Ponti and SB 581 by Sen. Mike Walsworth. These two bills will focus on additions and changes to Title 23, Louisiana’s Workers’ Compensation Law. Following is a summary of the bills.

SB 581 and HB 1099 would:

• Implements a purpose statement to create a level playing field by making clear that the law should be applied equally and fairly to all parties; clarifies the applicable burden of proof for workers’ comp disputes.
• Creates more standardized, streamlined way to calculate average weekly wage
• Addresses Independent Medical Examination, so that the IME’s opinion shall not be disregarded by the director, workers’ comp judges or any court without clear and convincing proof of error. Also, after Jan. 1, 2009, the director may contract with an independent medical review organization to conduct IMEs. Expedites the IME process.
• Revises the penalty structure, including providing an opportunity for errors to be corrected before penalties are assessed. It also provides for specific penalties if an employer is found at trial on the merits to have acted in an arbitrary and capricious manner and defines arbitrary and capricious.
• Implements nationally recognized treatment guidelines that must be followed by all medical services providers, including independent medical examiners (IME). The employer’s duty to provide medical services will be based on the medical treatment schedule.
• Provides that restitution may be ordered when benefits are claimed and payments are obtained through employee fraud.
• Clarifies the qualifications for temporary total disability. Statutorily adopts definition of Maximum Medical Improvement. Allows the payor to provide the employee with return to work options or voc. rehabilitation prior to the time the employee reaches MMI. The right to supplemental earnings benefits shall not exceed 416 weeks, and once an employee returns to pre-accident condition, no further benefits are due.
• Allows vocational rehabilitation counselors to determine which jobs are appropriate for injured employee based on the physical limitations determined by medical services providers. Also removes the scheduling of a conference between the voc rehab counselor and the health care provider.
• Adjusts the death benefit to be paid when the employee dies within 10 years of accident. Removes the death benefit to surviving parents of the employee. Clarifies that death benefits payments shall continue until the death or remarriage of the surviving spouse or until 416 weeks, which ever occurs first.
• Outlines requirements for employee to notify employer of accident or compensable injury.
• Requires workers’ compensation judges to base a finding of disability on objective findings.
• Moves Second Injury Fund assessments into a dedicated fund able to earn interest

SB 581 and HB 1099 would NOT:

• Eliminate an injured worker's right to choose his or her own physician.
• Eliminate the current wc reimbursement schedule in favor of reimbursement tied to Medicare.
• Institute provider networks similar to PPO networks that selectively allow (or disallow) doctor participation.
• Eliminate wage loss benefits where patients are paid a percentage of the difference between their wages prior to the injury and their new wage.

TO BECOME MORE ACTIVELY INVOLVED IN LWCR CONTACT BETH MOORE AT BETH@LAWCR.ORG or visit the Coalition’s website at: WWW.LAWCR.ORG