Despite ongoing issues and a multitude of adversarial stakeholders, the state of the workers’ compensation system in Texas is “pretty good,” according to the head of the state division with regulatory oversight of the system.
“I don’t know any line of insurance where there are as many adversarial stakeholders as in workers’ compensation. That’s not necessarily a bad thing. But it is a challenge and it is tough to balance all of those interests,” says Texas Commissioner of Workers’ Compensation Rod Bordelon. “Everybody’s got an issue. And everybody’s got an important issue that has to be addressed.”
But with changes to the workers’ compensation system in the last decade, particularly the implementation of rules and practices mandated by state legislators in 2005, premium rates have dropped, employer participation has increased and return-to-work rates for injured employees have improved, Bordelon said at a conference held by the Insurance Council of Texas in early September.
The Texas workers’ compensation insurance market is one of the largest in the world, with 264 insurance companies writing workers’ compensation policies generating more than $2 billion of annual direct written premium.
From September 2003 to January 2010 workers’ compensation premium rates declined 40.2 percent. More than half of that rate reduction — 23.6 percent — has occurred since 2007, Bordelon said.
“That’s huge,” he said. “I don’t know too many lines of insurance that have that kind of a decline. When I was in my previous role as a consumer advocate for rate matters I would have loved to have had this in every line of insurance.”
Bordelon was named commissioner in August 2008. He previously served as public counsel and executive director at the Office of Public Insurance Counsel.
Texas is the only state in the nation where employers are able to opt out of, or nonsubscribe to, the workers’ compensation system. The rate reductions and system improvements have led to the lowest nonsubscribers since 1993, Bordelon said. The nonsubscriber rate dropped from 37 percent in 2006 to 33 percent in 2008.
Injury rates and claim filings have also been declining in recent years, although Bordelon said he expects that trend to eventually level out. Texas, he said, continues to be below the national average for workforce injury rates, which have fallen in the state by 16 percent since 2004.
“Claims are down 22 percent since 2004, despite the fact that Texas has a growing work force and one of the strongest economies in the country,” Bordelon said.
Return-to-work results have improved since 2005, as well. Currently 80 percent of employees receiving temporary income benefits (TIBs) are back at work within six months. In 2004 the six-month return-to-work rate was 74 percent. Since 2005 the median number of days off work has dropped from 26 days to 22 days.
Still, Bordelon said he’s concerned about fatality rates in Texas work environments, which are among the highest in the country. “Our fatality rates have declined steadily over the last several years but we still have one of the highest numbers and rates of fatalities in the country,” Bordelon said. “In 2009 we had 480 workplace fatalities in the state of Texas. These are not all workers’ compensation … 13 of those by the way were the Fort Hood shootings, so again not all workers’ compensation but nonetheless it is a snapshot. That’s up slightly from 463 in 2008.”
An Access to Care Surprise
“Access to care also has improved. This is something that seems to surprise some people but the numbers that we have seen based on billing data and billing records, access to care has improved as measured by the average number of claims treated per physicians,” Bordelon said.
With an uptick in the number of physicians treating patients or billing in the workers’ compensation system and a decline in the number of claims, Bordelon noted that it’s “easier to find a doctor in the workers’ compensation system today than it was prior to reforms — 22.1 claims per physician in 1999; today, or in 2008, there were15.6 claims” per physician.
The increase is generally across all specialties, he said, although some specialties and some areas of the state still present difficulties in terms of access to particular types of care.
There are a number of areas where the system still needs improvement, Bordelon acknowledged, and many of those issues are reflected in recommendations put forth by the state’s Sunset Advisory Commission. Problem areas include a backlog of medical fee disputes, physician enforcements and the medical quality review process.
Bordelon did say the backlog of medical fee disputes is being trimmed. The number of disputed cases now stands at about 11,000, down from a high of around 17,000. He explained that many cases were waiting on court decisions concerning medical necessity and fee standards, and those rulings are now beginning to come from the appellate courts.
The Texas Legislature is required periodically to pass legislation to approve the ongoing existence of state agencies. The Division of Workers’ Compensation, as well as the Texas Department of Insurance, will be up for review and re-approval in the coming 2011 legislative session.
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