WORKERS' COMP BILL GETS MIXED REVIEWS FROM MISSOURIANS

Workers' compensation legislation approved this year by the Missouri General Assembly is receiving mixed reviews.

It's considered more far-reaching than the measure approved last year but is still unlikely to bring immediate relief to businesses burdened by skyrocketing premium increases.

"Eventually I think this bill will be helpful in containing rates, but it will be more long term," said Rep. Mary Kasten, R-Cape Girardeau. "The definitions of accident are not as precise as they should have been."

Rep. Larry Thomason, D-Kennett, added, "I have some doubts what its impact is going to be. There are those who suggest it will have a significant impact on rates; I hope they are right, but I'm not sure of that. We owe it to small business people of the state to do something about rates, but at this point only time will tell where it impacts."

Chris Wrigley, vice president of Associated Industries of Missouri, said the bill will not dramatically control workers' comp rates overnight.

"Business, however, will see beneficial changes as a result of the passage of this bill. We now have a new, stronger definition of accident; stringent controls on fraud, non-compliance and system abuse; as well as the establishment of a mutual insurance company which will make it easier for small employers to obtain affordable workers' compensation insurance."

Wrigley also points out that legislators this year took the first steps toward controlling medical costs, which he noted "are the true driving force behind the costs being absorbed by employers today."

The Missouri Chamber of Commerce portrayed Senate Bill 251 as a measure with many good provisions, offset by bad provisions. Chamber officials complained that other business groups did not stick with the chamber, and as a result, there will be no immediate impact on rates. On the other hand, chamber leaders say there won't be a quick increase in rates either.

Chamber officials stress the need to take action at reducing rates in the 1994 legislative session, because action taken by other states to reduce rates could cost Missouri jobs. Legislation passed in Kansas recently negated a 23 percent increase, and one enacted in Arkansas brought about a 12 percent rate decrease.

Rep. Dennis Ziegenhorn, D-Sikeston, said no problem as complex as workers' comp will be solved overnight.

Said Ziegenhorn: "I think it is going to take some time to see changes. It took us a long time to get in the shape we are in now and it can't be solved without time. But, I feel this is a start in the right direction."

Just about everyone agrees the issue will have to be re-visited in 1994, including Sen. Peter Kinder, R-Cape Girardeau, who feels only minor progress was made this year.

"I believe we made a small step toward reform," said Kinder, who along with many House members preferred that the Senate bill remain basically intact because it dealt with a limited definition of accident and occupational disease.

"Although I supported the bill in final passage, I am extremely disappointed about the outcome of the bill," said Kinder. "When the bill moved to the House the trouble began. Many of the Senate reforms were cast aside and the final conference committee report did not include enough of the reforms into the final product that the Senate had worked so hard to attempt to pass.

"As a result, the people of Missouri will continue to pay the skyrocketing costs of a workers' compensation system that still cries out for reform ... we must do better next year. We have applied a bandage to a bleeding wound that is driving business out of the state of Missouri."

Curt Long, president of Associated Industries, agrees that another try will have to be made at workers' comp next session, but he sees the results this year as a signal that all sides can work together.

Said Long: "While not an immediate cure-all, SB-251 proves that management and labor can come together and identify mutually agreeable reforms to the workers' compensation act. However, there is still much work that needs to be accomplished before business can gain complete relief from the problem of rising workers' comp costs."

Kinder, Thomason and other lawmakers complained that trial attorneys had too much influence in the final draft of this year's bill.

Kinder said the bill does little to slow down the amount of litigation in the system and noted, "I fear the group that benefits from final passage of this bill is the trial attorneys."

Added Thomason: "There is no question that trial attorneys played a significant obstructionist role in meaningful reform. Last year's bill helped hold down medical rates and what could be changed, and this year's bill, though it really didn't go very far, it did make some effort to control the insurance end of workers' comp. But at no time have we been able to address the other high cost factor, which is the litigation side of it."

Thomason contends that Missouri's system is tainted by excessive litigation. In most of Missouri, Thomason explained that about 40 percent of the disability claims involve the legal profession; in St. Louis the figure is 60 percent.

But last year, a group surveyed 12 midwestern states on workers' comp and found that the average for the states was 17 percent on disability claims involving lawyers.

"You don't have to be a rocket scientist to understand there is something wrong in Missouri," said Thomason. "It should not be a necessity that the employee go to a lawyer when they have a disability claim. But they are having to do it in far greater numbers in Missouri.

"What this tells you is the system is not working, otherwise we wouldn't need the attorneys. A lot of money that should be going to the employees is being siphoned off by the legal profession."

During debate on workers' comp on the House floor, Thomason offered an amendment to reduce the necessity of lawyers, which was defeated.

"It was a fair compromise, it treated the employee fairly and reduced his need for litigation. But what was telling on the floor of the House, that of the dozen people who talked against my amendment, all were lawyers except for one."

At one point in the debate during the last day of the session May 14, Rep. Pat Secrest, R-Manchester, who operates a small company with her husband, lashed out at the influence wielded by special interest groups in writing legislation. In particular, Secrest said organized labor and attorneys wrote too much of the final workers' comp bill.

Secrest said writing legislation should be done by legislators, and that if members of those groups wanted to write bills they should run for seats in the General Assembly.

The Missouri Association of Trial Attorneys is considered one of the most influential lobbying groups in the Capitol.

Thomason noted that MATA's PAC and board members contributed $20,000 to one representative's race last year. "When you have that much money backing a candidate, it is pretty easy to get lawyers elected," said Thomason. "They have so much influence because they have so much money."

Ziegenhorn said he is looking forward to seeing the impact of open competition in setting workers' comp rates that is included in the bill. Companies will have the right to set rates on the basis of what the National Commission on Compensation Insurance recommends, or set their own standards and rates.

Ziegenhorn also believes the mutual insurance companies is an option the state has to help get rates lower for smaller companies, if current insurance companies are not willing to provide it.

Kasten said she believes workers' comp will be addressed as an ongoing issue. "Last year was just a very first step, pointing some directions where we need to do something about workers' comp," said Kasten. "We will need to continue working very hard on it again to see if we can get a very strong bill passed. This could be the ruination of a lot of small businesses if we don't get something worthwhile done soon."

Added Thomason: "I don't think this has completed all the reforms by any means. Several bordering states have passed significant legislation in this area and we need to do the same in order to stay competitive with them."

Overall costs of the workers' compensation insurance have increased from $200 million annually in the early 1980s to more than $700 million now. Many busi~nesses are being forced to close or are unable to expand because of the rising premium costs. There is also a backlog of cases to deal with.

Because decisions of the Missouri Supreme Court has broadened the definition of accident, workers' comp claims have nearly doubled to 200,000 a year in the last decade.