Oklahoma Rep. Mark McCullough’s recent study of the state’s workers’ compensation system may lead to reform legislation being filed in the state’s 2008 legislative session, the House of Representatives reported.
McCullough, R-Sapulpa, says despite recent reforms there is “clearly room for improvement” in the system. “Oklahoma’s workers’ compensation market is still too expensive for many businesses and fails to provide proper treatment to injured workers,” he said in the House announcement.
McCullough noted that the rate of permanent partial disability payments (PPDs) in Oklahoma is significantly higher than the rate in neighboring states.
According to Roy Wood, an official with the National Council on Compensation Insurance, PPD claims in Oklahoma are almost twice the regional average and the average lost-time claim frequency is much higher than region and nation – 60 percent higher than the national average.
According to figures in the 2006 Workers’ Compensation Court report and the 2006 National Council on Compensation Insurance report, there were 3,413 court-ordered PPDs in Oklahoma that year with an average payout of $22,299 per claim.
That same year, Oklahoma’s workers’ comp system ordered vocational rehabilitation for only 4 percent of all cases.
The continuing problems with PPD claims may be one reason that Oklahoma experienced its highest payout for claims in 18 years in 2006 – $270 million, a 69 percent increase since 2000.
“Even as the total number of claims is falling, payouts are rising and the system is costing businesses more and more,” McCullough said. “Medical claim severity in Oklahoma is actually among the lowest in the region, yet our partial permanent disability payments are higher than our neighboring states. That creates a very hostile environment for small businesses in Oklahoma.”
McCullough said the system may be failing both workers and businesses by neglecting vocational rehabilitation in favor of litigation.
The lack of worker rehabilitation efforts may be driven by the fact that Oklahoma is one of approximately three states with a “pure adversarial system,” McCullough said, noting that attorney involvement in workers’ comp cases in Oklahoma is 50 percent higher than the national average.
McCullough said Oklahoma’s workers’ comp system could be improved by moving to an administrative system that reduces attorney involvement, by promoting more vocational rehabilitation or other worker benefits, by requiring independent medical treatment and diagnosis, and by providing tax incentives to encourage businesses to implement workplace safety programs.
McCullough is working closely with state Rep. Ron Peterson (R-Broken Arrow and chairman of the House Economic Development and Financial Services Committee) to develop a reform proposal.
McCullough expects to file reform legislation in the 2008 legislative session, which begins next February.
Source: Oklahoma House of Representatives
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