Not if, but How’ Repairing the Texas Workers' Compensation System

The question of whether or not to revamp the current workers’ compensation system in Texas is pretty much of a no-brainer, since just about everyone involved thinks it’s broken. The question that remains is how to overhaul it?

At a Jan. 7, 2004, lunch seminar presented by the Southwest Insurance Information Service, panelists discussed how a fix of the state’s system of dealing with injured workers might be accomplished, their comments foreshadowing the unveiling a few days later of the first bill to address the problem.

Senate Bill 5, sponsored by state Sen. Todd Staples, R-Palestine, co-sponsored by Sen. Jane Nelson, R-Lewisville, and supported by Lt. Gov. David Dewhurst, calls for restructuring of the workers’ comp system, which has among the highest costs and worst return-to-work record of any state in the nation.

Dewhurst has said previously that workers’ comp is a priority issue for the 2005 legislative session. “For over a year now, we’ve been talking about the problems in our workers compensation system, but today I’m proud to say that we can begin talking about solutions. The solutions outlined in Senator Staples’ SB 5 will not only lower costs for Texas employers and create more jobs, but more importantly they will help return our injured workers to health, and to work,” Dewhurst stated in an announcement.

According to Staples, workers’ comp in Texas costs 25 percent more than the national average, with poorer results and lower patient satisfaction. “In Texas, we spend far more to treat on-the-job injuries, but we get far worse results,” said Staples, in introducing the bill. “At the same time, our injured employees are off work longer, are less likely to return to work and are often less satisfied with the care they receive.”

The bill would replace the current Texas Workers’ Compensation Commission with an agency led by a single commissioner. It would also employ networks similar to those used for group health care to provide care to injured workers. In addition, benefits for injured workers would be increased while the waiting period for benefits would be reduced to two weeks. The current waiting period is four weeks.

The SIIS luncheon panelists–state Rep. Burt Solomons, R-Carrollton – chairman of the Texas Sunset Advisory Commission, moderator Bo Gilbert – Independent Ins-urance Agents of Texas, Greg Herzog – Texas Medical Association, Lee Ann Alexander – Liberty Mutual Insurance Group, Rick Levy – AFL/CIO, and Larry Hochstetler — NCCI–established right off the bat that the workers’ compensation system in Texas is in crisis.

Solomons explained “it’s obviously a crisis if employees can’t get health care, doctors don’t want to be in the system, business doesn’t want to participate, and insurance companies have to say ‘no’ to almost every other claim that comes in.” He said the Sunset Advisory Commission in its report on the Texas Workers’ Compensation Commission detailed the various aspects of the crisis. “There’s a cost containment problem,” Solomons continued. “Nobody’s getting a bang for their buck. Payments and costs of claims are out of sight, we have a return to work problem, we have a dispute resolution problem–it’s a national disgrace … I think we all ought to be ashamed to have a dispute resolution problem as bad as it is.”

The panelists agreed that the most important aspect of any potential reform is creating a system in which injured workers have access to quality health care.

“The truth is that everyone is trying to figure out what’s the best thing to do for the injured worker,” said Liberty Mutual’s Alexander. “Everyone’s got the best interest of the worker in mind but the question is how do we get there?”

She suggested that networks are the way to go. With networks, Alexander said, “you can ensure that the providers from which injured workers have to choose are qualified to do what they’re doing and have the incentive to do so.” She added that networks would allow carriers and employers to contract with providers, “pay them what they’re worth, …[and] allow them to do what they do without micromanaging them.”

“Physicians in this state have left the system in droves,” said TMA’s Herzog. “Two and a half years ago there were some 25-26,000 physicians participating in the system, now there’s somewhere in the neighborhood of 12,000.” He said the number one complaint of physicians and their staffs about the workers’ comp system as it is now is “paperwork, paperwork, paperwork. The uncertainty about payment, what’s covered, what’s not, who’s responsible?”

Whether they like them or not, health care providers are at least familiar with how group health care networks work, Herzog said, and although many physicians have indicated they won’t return to the system no matter what reforms are implemented, some are “actually willing to talk about” networks.

The AFL/CIO’s Levy noted that although labor agrees the workers’ compensation system as it is serves no one well, least of all injured workers, the concern is that despite the rhetoric reforms will be all about cutting costs, not necessarily helping employees that are hurt. He said the question of who controls the networks is important to workers. The degree of choice of care available to workers within the network, decision-making about which doctors are allowed in the network and the concern that the network might only contain physicians “who work on the cheap” are questions employees will be looking for answers to during the reform process.

Solomons said with the rising cost of health care “you can only do so much in containment of costs.” But, he said, establishing a better system of helping injured workers return to work will provide an incentive to all shareholders, which he said are employees, employers and the State of Texas. He added that the goal is to raise the level of employer participation in the system to 80 percent.

Alexander said the key element in reform is outcome. “Use of networks is not necessarily a cost savings,” she said, but a way to improve outcome. She added that complaints she’s heard from business interests are not so much about the cost, but that employers aren’t getting anything for their money.

Topics Texas Workers' Compensation Talent