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Regulatory and legislative trends – NCCI reports

To show just how much I need to get a life, one of the more interesting talks at NCCI las week was a very-well attended general session focused on legislative and regulatory reform. It began with an examination of federal actions beginning with the McCarran Ferguson Act and thru Dodd-Frank, both really important and highly significant legislation that are pretty far outside my area of interest/knowledge/focus.
Things got interesting when we moved into specifics on states. Peter Burton of NCCI noted the fall elections made for a much more Republican slant to most state legislatures and governors’ offices. Jeff Eddinger also spoke, starting off by noting the number of rate increases sought last year about doubled, with NCCI looking for increases in 15 states. Eddinger also reiterated frequency was up nine points last year…
Burton and Eddinger focused on four states – Montana, Illinois,Oklahoma, and North Carolina
The Big Sky State has the highest WC premiums in the nation, a condition that led to an aggressive move by both parties, and by both the legislature and governor, to address costs. The impact of the reforms passed and signed in April is pretty significant – a 22.4% rate decrease. Among the changes from reform, Montana is now an employer direction state, terminated medical benefits after five years (except for permanent claims), and codified usage of the 6th edition of the AMA Guides.
The biggie – Illinois.
IL is known throughout the WC world as a basket case. While Montana’s got troubles, there just isn’t that much business in MT, but there sure is in IL. Caterpillar Tractor has already threatened to leave the state due to work comp, and that, plus the Menard Correctional Center scandal moved comp reform to the top of the list.
As of this week, Gov Quinn has said there looks to be a decent chance that reform will pass despite the partisan battles.
OK’s WC system is a mess with costs that are the fourth-highest in the nation. The Governor, along with a GOP House and Senate, are likely to get reform completed and signed into law. The bill tightens pharmacy reimbursement, alters the fee schedule, revises IME regulations and makes other changes that together look to reduce premiums significantly.
North Carolina
This is one of the states where government changed dramatically in the GOP landslide of 2009. As a result there is a bill presently under consideration that would, through a variety of specific measures, reduce work comp costs. It is not clear whether this will become law.
There’s a lot more detail available on NCCI’s website on goings-on at other states that wasn’t presented at the conference – you can access it here.

Joe Paduda is the principal of Health Strategy Associates




A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



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