Federalization of workers comp – part 2

This evening we’ll dig into some of the history of Federal activities related to workers comp, activities that some view as somehow connected, a series of events leading to some greatly expanded role for the Feds in workers comp.
Me, I see this as disconnected, independent, nonlinear – a mishmash of events triggered by politics, publicity around public health problems, and constituent service/appeasement.
But that’s just me…
Let’s start with OSHA and the National Commission
There’s been talk of a federal workers comp system since 1970 when OSHA was created by the Occupational Safety and Health Act of 1970. Chaired by John Burton, the National Commission on State Workmen’s Compensation Laws was tasked with, among other things, evaluating state workers compensation laws, rules, and regulations. When the study was completed in 1972, the commission did not recommend the nationalization of workers comp. The study did make many recommendations adopted by many states, recommendations that many agree were long overdue.
The National Commission deemed 19 of the recommendations as ‘essential’, and noted that at the time of the report’s publication, the average state complied with 6.9 of the 19 essential recommendations. Over the next eight years, average state compliance rose rapidly to 12.0 in 1980.
In a recent hearing before a Congressional sub-Committee, Burton cited as proof of a more recent “counter-reformation” and outright deterioration in state compensation systems the fact that, as of 2004, average state compliance was still only 12.8 of the 19 essential recommendations. With all due respect to Professor Burton, a man who has probably done more than any other single human to improve workers comp, I’d note that a 0.8 increase is not, strictly speaking, a deterioration. It may be a very minor improvement, but it is an improvement nonetheless.
Here’s how Professor Burton addressed the issue: “The extent of the deterioration in adequacy and equity of state workers’ compensation programs in the last 20 years is not reflected in compliance scores with the essential recommendations of the National Commission. Rather, the slippage has occurred in other aspects of the program. A number of states changed their workers’ compensation laws during the 1990s to reduce eligibility for benefits (Spieler and Burton 1998). These provisions included limits on the compensability of particular medical diagnoses, such as stress claims and carpal tunnel syndrome; limits on coverage when the injury involved the aggravation of a preexisting condition; restrictions on the compensability of permanent total disability cases; and changes in procedural rules and evidentiary standards, such as the requirement that medical conditions be documented by “objective medical” evidence.”
I don’t see those changes as a diminution of workers comp, but rather a response to medical conditions based on rather sketchy science, an effort to accurately and fairly allocate employers’ responsibility (and therefore employee responsibility as well), and a response to the assignment of responsibility for degenerative skeletal-muscular conditions to the employer.
If anything, I’d argue there are more conditions covered under work comp now than forty years ago. In my home state of Connecticut, as in several others, public safety employees’ cardiovascular conditions are automatically deemed to be compensable. That’s just a BIT of a stretch.
I’m not clear how an improvement in average state compliance, and the increase in the type of condition covered by workers comp in many jurisdictions, is a ‘deterioration’. And it would appear that almost all of our national legislators don’t see a significant problem, either.
Many would argue that our national legislation is comprised of slick, money-grubbing, intellectually challenged politicians who don’t know a damn thing about much of anything. That’s may be your opinion, but it is irrelevant – the national legislators are the ones who decide what legislation is going to see the light of day, and, as I noted in some detail yesterday, they are very, very uninterested in workers comp.
Tomorrow, some of the other Federal initiatives…

The Federalization of Workers Comp – seriously?

This afternoon I was a lunch time speaker at the IAIABC Conference in St Louis, where I was asked to opine on the chances of a major Federal incursion into the (mostly) state regulated world of work comp. I’ve noted (way) more than once that this is one of those ‘never gonna happen’ things, so here was an opportunity to make my case in front of a very knowledgeable and engaged group. There was a lively and informed discussion after the talk, and I’ll dive into that in a later post.
Here’s the first of several excerpts from that talk. I welcome your comments and contrasting opinions.
Workers comp is a tiny, all-but-insignificant industry that accounts for less than two percent of total US medical spend. Sure, it may be wildly important to you and me, but, really, does anyone else give two hoots about work comp?
Didn’t think so.
Insurance segments that tend to be regulated or addressed (in a meaningful way) on a national basis are those that are so large or complex or federally-specific that only the federal government has the interest and resources and capacity required to address the risk – which is how flood insurance came about, and nuclear plant risk guarantees, terrorism risk insurance, and coverage for the beryllium industry.
WC doesn’t fit the profile. – it’s relatively small, has an active, vocal, and effective group of stakeholders from across the political spectrum and both political parties (plaintiff attorneys and the Chamber of Commerce are two examples), and isn’t perceived by anyone in a position of authority to be anywhere close to broken.
Why would anyone in Congress – except Joe Baca, – have any interest at all in taking on workers comp?
And if they did, which they don’t, where exactly would this fit on the priority list? Above the budget bill? Just below immigration reform? Senior to the medicare physician fee fix bill, or not? More, or less, important than the nuclear non-proliferation treaty? If less, now that the treaty is passed, can we expect some major action?
Somewhat less significant than the Israeli West Bank settlement issue, or more? More critical than the energy bill, or no?
If Congress(wo)man X has to spend time thinking about comp, or Afghanistan, or the US nuclear industry, or Iran, or China’s refusal to adjust its currency valuation, or bank regulation, what do you think s/he will do? Where will s/he spend her time?
As to any interest at CMS in taking over WC, wouldn’t you think they have enough to do what with dealing with Congressional oversight hearings, implementing health reform, expanding Medicaid by a third, revising hospital reimbursement, drastically changing physician compensation, completely redo-ing Part D, developing and implementing over a dozen pilots and trial programs, and revamping Medicare Advantage?
Next, we’ll review a bit of history and discuss some of the new ‘news’ that is generating excitement among those concerned about a federal takeover.