Report: Improve Benefits for Injured North Dakota Workers

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An unusual North Dakota workers’ compensation law provides reduced benefits when a job injury worsens a medical problem the employee already has, and a consultant told state lawmakers on Friday they should repeal it.

The move would mean about $4.8 million in new benefit expenditures and require a 2.7 percent increase in workers compensation rates, North Dakota’s Workforce Safety and Insurance agency estimates.

The proposal is included in an independent performance report on the agency by Sedgwick Claims Management Services Inc. of Oakland, Calif., which was presented Friday to state lawmakers who are studying potential improvements to North Dakota’s workers compensation system.

“I don’t think there’s another juridiction in the country” that has a similar law, Malcolm Dodge, a Sedgwick assistant vice president, said in an interview.

The provision, often called the “aggravation” law, says a worker’s benefits could be reduced by half after 60 days if he or she suffers a work injury that makes an employee’s existing medical problem worse.

Dodge said the law would come into play if an employee injured his or her back in a car accident away from work, and then suffered a similar back injury on the job. The law says the work injury must substantially accelerate or worsen the existing injury for the employee to be eligible for full benefits.

Bryan Klipfel, the director of Workforce Safety and Insurance, said the agency would draft legislation to repeal the provision.

WSI provides coverage for medical, rehabilitation and wage benefits for employees who are hurt on the job. Businesses are required to buy the insurance, and in turn are protected from employee lawsuits over workplace injuries. WSI, which is a state agency, has a monopoly on workers compensation coverage in North Dakota.

The report showed a gradual increase since 2005 of the number of injury claim denials, from 6.9 percent to 10.4 percent. Klipfel said some denials are later reversed when more information becomes available and that the agency eventually pays benefits on 92 percent of its claims.

Dodge said the national average was about 94 percent. The consultants’ review, he said, showed WSI was applying state law correctly to claims decisions.

Klipfel said he thought the report’s conclusions favored WSI. The agency has been in turmoil in recent years; its former director was forced out of his job and later prosecuted for misspending public funds.

“Things are going good at this agency,” Klipfel said. “There’s a lot of positive things that we have going on … We confirmed that our claims practices are sound.”