Workers' Compensation: Congresswoman Woolsey Calls For A GAO Study

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_Workers' Compensation: Congresswoman Woolsey Calls For A GAO Study of

Workers Compensation-Cites Insurance Company Cost Shifti_

(http://workers-compensation.blogspot.com/2010/11/congresswoman-woolsey-calls-fo\

r-gao.html)

Congresswoman Woolsey Calls For A GAO Study of Workers Compensation-Cites

Insurance Company Cost Shifting

Below are the prepared remarks of U.S. Rep. _Lynn Woolsey_

(http://en.wikipedia.org/wiki/Lynn_Woolsey) (D-CA), chairwoman of the Workforce

Protections Subcommittee, for a subcommittee hearing on “Developments in State

Workers

’ Compensation Systems†11.17.2010

-

Thank you all for attending this hearing on “Developments in State Workers’

Compensation Systems.†Here in Congress, we don’t examine these state

compensation programs very often because they are generally under the purview

of state legislatures.

However, there have been some disturbing national trends that may compel a

comprehensive reexamination of these state programs and their impact on

injured workers.

As most of you are aware, workers’ compensation statutes were passed

beginning in the early 20th century to establish a no fault system for

providing efficient redress for injured workers.

_Workers’ compensation_ (http://www.gelmans.co

m/PracticeAreas/WorkersCompensation/tabid/64/Default.aspx) was called the

‘grand bargain.’

Workers waived their rights to bring individual suits against their

employers and in return receive compensation for work-related injuries

regardless

of fault.

Every state and the District of Columbia have workers’ compensation

programs in place.

Most employers purchase private workers compensation policies, but others

self-insure or purchase insurance from a state managed compensation fund.

Beginning in the 1990s, changes in state workers’ compensation

laws--brought about by the lobbying efforts of employers and insurance

companies---have resulted in stricter eligibility requirements and the

reduction in both

the amount and duration of benefits—particularly for those workers with

permanent partial disabilities.

Unfortunately this ‘grand bargain’ of the 20th century is _not so

‘grand’

any more_

(http://workers-compensation.blogspot.com/2010/07/designing-new-federal-workers.\

html) , especially for injured workers.

In addition, there are two other recent developments that merit our

attention

The first has to do with the _American Medical Association’s_

(http://en.wikipedia.org/wiki/American_Medical_Association) (AMA) Guides to

Permanent

Impairment.

And the second concerns a cost-shifting trend away from state workers

compensation programs, where the employer is responsible for an employee’s

injury, to the federal government’s medical and disability programs.

The _AMA Guides_

(http://workers-compensation.blogspot.com/2008/05/opposition-continues-to-swell-\

against.html) have been in effect since 1971 and are

now in widespread use.

Some states even require workers’ compensation programs to use the latest

edition of the Guides.

These Guides were originally designed to be used by physicians in making a

scientific assessment of a worker’s level of impairment---or loss of

function---due to a work-related injury.

The determination of whether a worker is permanently disabled and entitled

to workers compensation is based upon his or her impairment rating, which

is then applied to the specific case of a given worker.

For example, a worker who loses a hand may not suffer permanent disability

if he or she is a teacher, but that same worker would be permanently

disabled if he or she works in construction.

In 2007, the AMA published the 6th edition of the Guides, and witnesses

today will describe how this new edition has dramatically reduced impairment

ratings for many types of conditions, without apparent medical evidence,

and transparency.

The 6th edition has become so controversial that many states, including

Iowa, Kentucky and Vermont have decided not to adopt them.

It also appears that the 6th edition was developed in near secrecy,

without the transparency and consensus which should necessarily accompany the

development of standards that will have widespread use by state governments.

In addition, it appears that the physicians who developed this latest

edition may have ties to insurance companies, and are making a profit training

doctors on the use of the 6th edition, which is complicated and very

difficult to apply.

The National Technology Transfer Advancement Act of 1996 sets forth

minimum criteria for the development of voluntary consensus standards:

openness;

balance of interests; due process protections; and consensus.

The process used for developing the 6th edition appears to significantly

deviate from these standards and is a focus of testimony before us today.

Workers who are wholly dependent on this ‘grand bargain’ when they are

injured on the job, are the ones paying the price.

The subcommittee invited the AMA to testify today, but unfortunately, it

declined.

Another troubling policy issue is that as eligibility for workers’

compensation benefits have become more restrictive, there has been a cost shift

to

Medicare and Social Security Disability (SSDI), placing an additional

burden on the taxpayer.

In addition, costs are being shifted to private health insurance that

should be borne by workers’ compensation policies and employers.

This is particularly worrisome, especially during a time of record

deficits.

Chairman and I believe that this cost-shifting trend warrants

further study.

Therefore, we will be asking the Government Accountability Office (GAO) to

do a study and issue recommendations.

The testimony today will illuminate these problems facing injured workers

and taxpayers, and I look forward to hearing from our witnesses.