Delaware Lawmakers Eye Proposals to Lower Workers’ Comp Medical Costs

By Randall Chase | May 19, 2014

Delaware lawmakers are expected to act quickly on recommendations from a state task force aimed at lowering workers’ compensation insurance rates.

The task force presented lawmakers a report on May 15 proposing that workers compensation medical costs to be trimmed by 33 percent over the next three years, starting with a 20 percent decrease in January.

The report calls on health care providers to gradually curtail their rates as they move from the current fee-based structure to one based on medical codes used for Medicare reimbursements.

The task force is recommending that the maximum reimbursement for workers’ compensation treatment be no more than 200 percent of the Medicare reimbursement, with exceptions allowing higher reimbursements for radiology and surgery.

Task force members and lawmakers say the changes will help businesses in Delaware while ensuring coverage for workers injured on the job.

John Casey Jr. of the Delaware Contractors Association, which represents the construction trades industry, said the changes are long overdue and will help Delaware companies compete for work with out-of-state contractors.

Democratic Gov. Jack Markell said reducing workers compensation rates is one of the most important issues facing lawmakers this year. Rep. Gerald Hocker, R-Ocean View, said he’s confident that lawmakers will embrace the recommendations to bring down costs.

“It’s totally out of hand,” said Hocker, a small business owner himself. “It’s hurting the economic conditions of this state.”

Task force members adopted the proposals with only one dissenting vote. One of two representatives of the Medical Society of Delaware on the task force voted against the recommendations because the panel rejected higher reimbursement rates for hospitals and stand-alone surgical centers that were built into the formula to bring medical costs down by 33 percent.

The task force is recommending that hospitals and stand-alone surgical centers be subject along with other health care providers to a maximum reimbursement for workers’ compensation treatment of no more than 200 percent of the Medicare reimbursement. The only exceptions to that cap would be reimbursements of up to 250 percent of Medicare for radiology, and up to 300 percent of Medicare for surgery.

In addition to reducing medical costs, the task force is recommending heightened scrutiny of insurance carriers. That includes hiring a ratepayer advocate by a new workers compensation oversight panel. That panel would be formed by consolidating an existing data collection committee with a health care advisory panel that played a key role in the proposed reforms.

The task force also recommends that the state Department of Insurance study whether there should be a change in the rating organization used by Delaware insurance carriers.

The task force was established last year to address double-digit increases in average workers compensation rates over the past two years after five years of steady declines generated by previous reforms.

“We did this before. We’ll probably do it again,” said Senate President Pro Tem Patricia Blevins, D-Elsmere.

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