SIIA Reports on Congressional Hearing on State Workers’ Compensation System

November 17, 2010 - The Workforce Protections Subcommittee of the House Education and Labor Committee today held a hearing on the developments in State workers’ compensation hearings. The hearing focused on recent State actions to limit workers’ compensation benefits and how these changes might be affecting publically-funded programs. The hearing also focused on changes to how workplace injuries are evaluated.

Subcommittee Chairwoman Lynn Woolsey (D-CA) began the hearing by emphasizing that while workers’ compensation is not usually under the purview of the Federal government, that there are “disturbing national trends” affecting workers’ compensation programs. The Chairwoman lent her opinion that laws in many States have been changed to allow for stricter eligibility requirements as well as limitations in the amount and duration of benefits.

The Chairwoman went further by expressing her opinion that there has been a cost-shifting trend away from workers’ compensation and into Federal medical and disability programs. It was expressed by numerous Members of the Committee as having harmful effects on the Federal budget as well as having negative outcomes on injured workers.

Another major concern focused on in the hearing was the release of the AMA’s most recent addition of their Guide to Permanent Impairment. These Guides have been intended to give a scientific assessment of a workers’ injury and any resulting impairment from it. The Chairwoman and Members of the Committee expressed concerns that the Guide’s definition of “impairment” focuses too greatly on future production ability as opposed to the workplace injury itself.

Members of the Committee also were concerned about the apparent lowering of impairment ratings, without what they believe is any evidence to do so, which will limit rewards or prevent them all together. A few Members of the Committee even went as far as implying that this edition of the Guide was written by physicians who have financial ties to insurance companies and thus had incentives to increase eligibility requirements to receive compensation.

A majority of the invited witnesses shared in the opinion that recent changes in many State laws have made workers’ compensation more restrictive and less beneficial for many workers. The witnesses also tended to agree, and elaborated on, the belief that the most recent addition of the Guide has made changes to the methodology of impairment ratings and functional productivity and that these changes will negatively affect injured workers.

This hearing served as an initial examination of the issues it addressed. With Congress adjourning in the next few weeks, it is highly-unlikely that anything substantive in this area will take place. It is also worth noting that hearings are dictated by the majority party, in this case, Democrats who will cease to be in the majority in the upcoming term. It is unclear at this point if or how the incoming Republican majority will focus on the issues addressed at today’s hearing.

SIIA’s Government Relations Staff will continue to monitor these issues in Congress and work with Members to ensure that self-insured workers’ compensation plans are protected and regulated fairly.