Texas Assoc. of Business Backs Revamp of Workers’ Comp System

August 4, 2004

The Texas Association of Business (TAB) is calling for major organizational reform of the Texas Workers’ Compensation Commission, saying the agency’s current leadership structure undermines its ability to better serve employers and injured workers.

TAB is urging the sunset commission to recommend and state lawmakers to support legislation that would create a single commissioner who would be responsible – and accountable – for the agency that administers the state’s multi-million workers’ compensation system. The agency is currently managed by an executive director and a policy-setting board of commissioners made up of three employer representatives and three employee representatives.

“It is this leadership structure that most thwarts the agency’s effectiveness,” TAB President Bill Hammond commented. “This type of structure was doomed from the start. With an even-numbered board of commissioners who philosophically are split down the middle, it is impossible to expect a majority to support significant change. Tough decisions are not made, compromises aren’t reached and employers continue to pay more for workers’ compensation medical costs than any other state in the country.”

Instead, TAB recommends a single paid commissioner be appointed by the governor and held accountable by legislators for oversight of the agency. The single commissioner would replace the agency’s current volunteer board and executive director position. A majority of the states currently use a single commissioner to manage their workers’ compensation systems.

Reforming the Texas workers’ comp system is reportedly at the top of TAB’s agenda for the 2005 legislative session.

According to the state Research and Oversight Council on Workers’ Compensation, Texas has the highest average medical costs per claim in the country and some of the worst satisfaction rates among injured workers. These costs, a council report determined, are largely driven by abuses in the system, primarily those involving over-treatment of injured workers.

“This crisis has been brewing for years, costing employers and hurting injured workers at the same time,” Hammond said. “It’s imperative that we take the steps necessary to overhaul this system and tackle not only escalating costs but also the quality of care our system provides. As it now stands, the quality of care is mediocre at best.

“Change should start at the top of this agency,” Hammond said. “Reforming the leadership structure at the commission should be paramount when it comes to changing this system. The current structure hamstrings the system’s effectiveness. It’s a big part of the problem.”

Hammond’s comments come on the heels of the release of The 2004 State Report Cards for Workers’ Compensation by the California-based Work Loss Data Institute. The report illustrated that Texas still remains at the bottom of the pack among state workers’ comp systems.

The study found:

* While the workers’ comp commission implemented a major return-to-work education program several years ago, Texas remains last in its ability to get injured workers back on the job.
* Texas has the greatest percentage of delayed recoveries and the longest median disability duration.
* Outcomes of back sprains are far worse in Texas than any other state.
* Limiting provider choice seems to result in a very large positive difference in ranking, with states going up in the ranking by 9.5 when provider choice is limited.

According to the Texas Workers’ Compensation Commission 2005-2009 Strategic Plan, 27 states implement a single commissioner or a single administrator. Among the 27 states are some of those receiving the highest marks for workers’ comp outcomes from the Work Loss Data Institute. These states include Florida, Alabama, Iowa, Kansas, Minnesota and Utah.

“Change in the system cannot be made when the system is set up to fail,” Hammond added.

Other Texas agencies such as the Texas Department of Insurance have already proven that a single commissioner is effective, according to Hammond.

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