PCI Supports Legislation to Reform Workers’ Comp System in Texas

February 16, 2005

The Property Casualty Insurers Association of America (PCI) reported it testified before the House Business and Insurance Committee in support of legislation to overhaul the Texas workers’ compensation system.

“House Bill 7 is a huge step in the right direction for getting control of a workers compensation system that has developed into a major problem for employers, labor, and insurers,” said Joe Woods, assistant vice president and regional manager for PCI.

The bill would abolish the Texas Workers’ Compensation Commission, establish the Office of Employee Assistance and transfer the duties of the commission to the Texas Department of Insurance, the Texas Workforce Commission and the Office of Employee Assistance. In addition, the legislation would address dispute resolution and medical networks.

“PCI supports abolition of the six-member Texas Workers’ Compensation Commission and placing control of workers compensation in the hands of one person who is accountable to the governor and the Legislature. We also applaud the streamlined dispute resolution process and the changes to medical networks for medical care within the system,” Woods said.

HB 7 reflects the recommendations of the Sunset Advisory Commission, which were focused on helping injured workers get quality health care and return to work, while controlling costs. The recommendations included restructuring the workers compensation system to operate similarly to group health insurance, and instituting a variety of cost containment practices.

“Over the past few years, perhaps the biggest problem with the Texas workers compensation system has been abuses in the delivery of medical care. This has resulted in Texas having the highest per injury medical costs and one of the worst return-to-work outcomes in the United States.

“We believe the network approach will result in quality care at a reasonable cost and will return employees to work in an appropriate amount of time. If done right, the move to medical networks will provide substantial savings in the medical cost incurred in the system and we think that using the PPO regulatory structure is the appropriate framework for these networks,” Woods said.

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