Workers’ comp gains threatened

For many years Workers’ Compensation was one of Maine’s worst public policy nightmares. Heated political battles on the issue were divisive, businesses routinely threatened to leave the state because of skyrocketing comp costs, and the public perceived that the crisis of workers’ comp would never be solved. But in 1992, the Legislature and the governor took major action to end the nightmare and as a result Maine’s workers’ comp system is back on track: workplace safety has improved, coverage for injured workes remains strong, and insurance premiums have decreased. In fact, a recent news report indicated three major workers’ comp insurers in Maine, including Maine Employers’ Mutual, are voluntarily lowering premiums for the first time in 30 years.

The last thing Maine’s business climate needs is to have this successful trend reversed. Nevertheless, the federal government is about to undermine Miane’s hard-fought progress because of a little-known and less-debated provision originally contained in the president’s national health-reform bill and still being considered by the Congress.

Known as Title X, this proposal would try to integrate state-based Workers’ Compensation coverage with national health care reform by separating the medical portion of Workers’ Compensation from the disability component of workers’ comp. Medical coverage would then become part of the general health care system while disability would remain part of a state-run Workers’ Compensation program.

The problem with this approach is that it fails to take into account the critical links which are helping restore sensibility to workers’ comp in Maine. The workers’ comp system coordinates medical care, rehabilitation and workplace safety with a focus on providing quality care, getting workers back on the job and creating incentives for workplace safety by basing premium rates on a company’s safety experience — putting responsibility for safe workplaces right where it belongs.

Workers’ comp insurance requires employers and their insurers to pay injured workers for both lost wages and medical care; therefore, employers have a strong incentive to maintain safe workplaces and provide therapy necessary to get people back to work.

By creating a commission whose task is to devise a scheme, to be ratified by Congress, transferring the financing of workers’ comp benefits to the national health care system, Title X would break the connection with workplace issues and end up costing a lot more money. In effect, Title X would make safe employers subsidize unsafe employers while shifting the added costs of Workers’ Compensation from businesses onto employees. In fact, the respected Cambridge-based Workers’ Compensation Research Institute reports comp costs would escalate $8 billion to $9 billion if Title X were enacted.

In addition, Maine’s success in turning around its workers’ comp woes depended on several critical cost containment features which would be eliminated if Congress adopts Title X. Title X would prohibit Maine and other states from using their workers’ comp fee schedules.

Other states have also enacted recent workers’ comp reforms to hold down costs and a major part of the reform movement has been to introduce managed care techniques to control medical costs and help get people back on the job quickly. Managed care essentially means collecting data about what treatments work best and then helping providers apply that information in treating patients. Therefore, expertise in occupational medicine is critical to effective managed care for Workers’ Compensation. Title X would dismantle the state Workers’ Compensation managed care networks and substitute generic networks with no expertise in occupational medicine — another way federal intervention will undermine the growing success of the workers’ comp reforms in Maine and across the nation.

Responsible health care reform is a worthy goal for Congress to enact this year. However, Maine cannot afford federal intervention that hinders progress on our Workers’ Compensation system. Maine’s Legislature, business and labor leaders, and ordinary citizens have worked too hard and compromised too much to let more congressional mandates cost Mainers money and jobs. If you care about preserving Maine’s progress on workers’ comp, tell your congressional representative and Sens. Mitchell and Cohen that Title X should be scrapped.

Christopher J. Hall is the acting president of the Maine Chamber of Commerce and Industry.