Does Georgia need workers’ compensation reform?

Here in Georgia, there is active discussion about reforming workers’ compensation laws very soon. I’m not so sure that this would be the best course of action for us as a state, in light of the recent fallout as the result of heavy-handed, poorly-managed reforms undertaken in Illinois.

Recently, feeling unduly burdened by the way that the Illinois workers’ compensation system was set up, employers began to clamor for reform. Their system was broken, they said, and the Illinois Chamber of Commerce were of the minds that payments to doctors and other medical providers were egregious; benefits doled out to injured workers were unnecessary and often yielded no marked positive results. Issues like fraud, causation, and high awards were cited.

At the same time, and somewhat intentionally overlooked, there was the fact that premiums for workers’ compensation insurance were climbing each year; Illinois businesses and government doled out around three billion dollars in 2009. While these premiums ballooned, insurance company payouts on medical costs and claims decreased consistently. This was due in part to more conscientious safety practices by businesses; there were twenty percent less claims filed in 2009 than in 2000.

For true reform to happen, Illinois attorneys said, insurance premiums wouldn’t decrease unless insurance companies were folded into the reform mix. It was a mystery, too, how premiums were even calculated in the first place. Insurance companies had long escaped any true scrutiny.

Statewide hearings to improve the system were held by legislators in early 2010. Reform legislation was passed in June 2010 and the significant amendments became effective in September of the same year.

As a result, doctors and medical providers were forced to take a thirty percent reduction in fees; this move was to save Illinois businesses between five- and seven-hundred million (just under fifteen percent) off their workers’ compensation premiums. In addition, workers faced reduced disability benefits, restrictions with regard to choice of providers, medical reviews that delayed or restricted needed surgeries, and upping the ante on proof of causation.

Despite all that was being done in the name of cost savings, insurance companies came through the reforms untouched.

The real shame is that less than six months after reform legislation went into effect, the projected millions of savings was gone. Premiums weren’t lowered and, in fact, will be raised yet again. There is a standing recommendation for a 3.5 percent increase in Illinois by the National Council of Compensation Insurance (NCCI). The council, it should be noted, is comprised of insurance company executives.

The physicians, workers and their families sacrificed through this legislation and it turned out to be, essentially, for nothing. Do we want this sort of scenario in Georgia? Do we want the insurance companies to profit further at the loss of funds and benefits necessary to our clients?

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