WCRI: Miss. Comp System Stable, Characterized by Delays in Dispute Resolution and Low Maximum Weekly Benefit Level

June 13, 2005

Although the Mississippi workers’ compensation system has been relatively stable in the past 10 years, both public and private observers noted that improvement was needed, particularly in speeding up the delivery of benefits to injured workers, according to a new study by the Workers Compensation Research Institute (WCRI).

Most workers’ representatives also believed that the statutory maximum weekly benefit level – two-thirds of the statewide average weekly wage instead of the typical 100 percent – should be raised.

The study, Workers’ Compensation in Mississippi: Administrative Inventory is the 36th in a series of Administrative Inventories of state workers’ comp systems published by the Cambridge, Mass.-based WCRI.

The study found that total incurred benefits per employed worker (adjusted for inflation) were relatively stable from policy years 1997 through 2001. However, this stability masked two offsetting factors – a decrease in the annual number of lost-time claims and a rapid increase in average incurred benefits per indemnity claim.

The number of incurred indemnity claims per 100 employed workers dropped a total of 24 percent, or 7.5 percent annually on average from policy years 1997 through 2001.

Since this decrease was seen in numerous states, some observers speculated that a driving factor was the state of the general economy at the time.

Over the same period, the inflation-adjusted average incurred indemnity benefits per indemnity claim showed rapid growth: 8.4 percent from 1997 to 1999; 8.2 percent from 1999 to 2000; and 11 percent from 2000 to 2001. Indemnity payments are wage replacement payments for lost-time injuries.

Similarly, inflation-adjusted average incurred medical benefits per indemnity claim also grew rapidly over the same period, particularly in the most recent year: 4.7 percent from 1997 to 1999, 7.5 percent from 1999 to 2000 and 13.2 percent from 2000 to 2001.

Study respondents speculated that the increase in average incurred medical and indemnity benefits per claim was due to a change in the way scheduled permanent partial disability (PPD) benefits were resolved, an increase in the duration of temporary disability, doctors ordering more diagnostic tests, providers requesting more functional capacity evaluations, payors requesting more defense medical exams, increased use of pain management services, and rising hospital costs.

The study reported that formal hearing delays in Mississippi were long relative to those in other states that WCRI has studied in the past ten years.

The average statewide interval from petition filing to the judge’s order was 19.6 months in Mississippi in 2004. This interval was next to the longest among eight other states (for which comparable data were available) studied by WCRI.

Rules and docketing practices of the Mississippi Workers’ Compensation Commission allowed considerable time to prepare for and schedule a hearing.

For example, WCRI’s examination found 23 days for both sides to file an answer to a request for formal dispute resolution, 120 days for both sides to complete discovery and 30 days for both sides to file pre-hearing statements indicating that discovery has been completed and depositions have been taken or scheduled.

In all, between 214 and 225 days were allowed from petition filing to setting the hearing date, said the WCRI study.

Further, the commission frequently received requests for extension of the 120-day discovery period and granted almost all initial requests.

The study noted that the dispute resolution delay potentially gave payors additional leverage when settling claims. When this leverage was applied, workers’ representatives believed that injured workers, given the typical dispute resolution delay, might choose to settle their claims for less than the appropriate amount of benefits.

WCRI reported that the statutory maximum weekly temporary total disability benefit in Mississippi – as a percentage of the statewide average weekly wage (SAWW) – is among the lowest in the country.

At 66 2/3 percent, Mississippi’s $341.11 maximum weekly benefit as of January 1, 2004, as a fraction of the SAWW, was tied with Delaware’s as the fourth lowest in the nation.

The most common statutory provision, effective in 22 states, sets the maximum weekly benefit at 100 percent of the SAWW. Mississippi is one of the 10 states that link this benefit to less than 100 percent of the SAWW.

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