Speakers Fire Bullets at Workers’ Comp System

May 7, 2004

Texas Workers’ Compensation Commission (TWCC) Executive Director Dick Reynolds was the first speaker at the Insurance Council of Texas 2004 Workers’ Compensation Symposium to say the system wasn’t working properly. He was not the last speaker to echo those sentiments.

More than 200 people attended the symposium that took place in Austin May 5. Other speakers included Larry Hochstetler and Tony DiDonato of the NCCI; Dr. Ron Luke, president of Research & Planning Consultants; Dick Geiger of Thompson, Coe, Cousins and Irons LLP; and Bill Hammond, president of the Texas Association of Business.

Reynolds said the system wasn’t broken, but it was cumbersome, unwieldy, burdensome, slow moving and unhandy. “The system is functioning as designed by the workers’ compensation laws currently on the books,” Reynolds said. Reynolds compared TWCC to the “Good Ship Lollipop.”

“Somewhere along the way, third party pirates jumped on board and took control,” Reynolds said. He said it was time for employers and employees to get back into control and they need legislative help.

NCC’s Hochstetler and DiDonato gave an overview of the workers’ compensation system saying Texas was not alone in fighting rising costs.

Luke offered a no-holds barred assessment of the workers’ compensation system in Texas saying the problem was “due to the profound bad management and leadership failures of the senior executives at TWCC who have been in authority throughout the years.”

Luke cited numerous problems with the system including the highest medical costs in the country. He compared the average medical costs of treating injured workers under workers’ compensation to the treatment of others with the same injuries under group health plans.

“Workers’ compensation treatment costs six times the amount of treatment for any other patient,” Luke said. “Workers’ compensation treatment for lower back pain/neck injury is ten times the amount for any other patient.”

Dick Geiger discussed future legislative issues including possible changes in TWCC’s organizational structure. He called for a mandatory workers’ compensation system saying Texas is the only state where it is optional and that it would be the best solution to fix the system.

Luncheon speaker Bill Hammond disagreed with Geiger saying keeping workers’ comp optional gives businesses a better opportunity to contain costs.

Julie Shank, president of JShank Consulting, gave up an update on medical benefit issues including the status of the ongoing medical fee guideline lawsuit.

Marilyn Hoffmeister of The Hartford and Lisa Hannusch of The Hannusch Group discussed the growing problem with insurance fraud. Hoffmeister said as much as 30 percent of workers’ compensation claims may be fraudulent and the problem would not be corrected until prosecutors finally realize the financial cost to their constituents.

An afternoon panel discussion on workers’ compensation included moderator Lee Ann Alexander, VP of public affairs and legislative counsel at Liberty Mutual Insurance Co., Dr. David Teuscher, an orthopedic surgeon representing the Texas Medical Association, Lucinda Saxon, manager of governmental affairs at the Texas Association of Business, Joe Woods, assistant VP and regional manager of PCI and Rick Levy, legal director of the Texas AFL-CIO. Most of the speakers agreed that the creation of medical networks would help reduce the high medical costs of workers’ compensation.

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