House committee revises, approves workers’ comp reform bill
NASHVILLE (AP) — One of the cornerstones of Gov. Phil Bredesen’s proposed revisions to the workers’ compensation system was changed in a House committee Thursday to benefit workers, and could throw the plan out of balance.
The change approved by the House Consumer and Employee Affairs Committee concerns the “multiplier” that determines how much money an injured employee who returns to work receives in workers’ comp benefits — easily the most divisive aspect of the legislation.
Currently, a judge is allowed to increase a doctor’s determination of impairment by up to 2.5 times. Bredesen’s original bill would have reduced it to 1.5, which the governor says would bring Tennessee more in line with neighboring states and make the system more predictable. Achieving greater stability for businesses is the main goal of the legislation.
But the committee, on a 7-4 vote with all Democratic members and one Republican in favor, voted to raise the multiplier to 2.0 — a move Labor Commissioner Jim Neeley said “destroys everything we’ve tried to do.”
Neeley said the change would wipe out savings of $50 million to $60 million for businesses through declines in workers’ comp insurance premiums and payouts, although there are no guarantees.
“They made a major change in the policy, we’ll just have to wait and see what happens,” Neeley said. “I think the governor’s been very clear about where he’s at on the issue.”
“The governor has clearly stated that he wants a multiplier of 1.5 because it puts predictability into the system and that’s what the system is lacking right now,” Bredesen spokeswoman Lydia Lenker said.
Advocates for injured workers say the governor’s original proposal would have reduced benefits by at least 40 percent for permanently injured workers.
John Summers of the Tennessee Trial Lawyers Association called the committee’s change a “major improvement.”
“It still means injured workers are going to receive less benefits, but it’s a much less drastic cut than what the administration had proposed,” Summers said.
Rep. Mike Turner, who proposed the amendment to restore a portion of the multiplier, said the change would mean only a “20 percent cut for employees if we do it this way. I think that’s fair.”
Jerry Lee, president of the state’s AFL-CIO union, said he was pleased with the committee’s revision but wasn’t confident the higher multiplier would remain in the bill’s final version.
“With the amendments that are leaving here, I’m pretty satisfied,” he said. “But I anticipate they’ll be taken off in (a later committee).”
The committee’s vote disappointed members of the business community, who had been pleased with the governor’s plan to reduce the multiplier.
“The administration had worked very hard to craft a bill that balanced two competing interests — making Tennessee cost competitive to create jobs and insuring adequate protections for workers,” said Deb Woolley, president of the Tennessee Chamber of Commerce. “Changing the bill as they did today destroys that delicate balance.”
Bill sponsor Kim McMillan, D-Clarksville, said revisions to the bill will have to be carefully studied, but that “with a piece of legislation that is this complex, that concerns an issue that’s as complicated as workers’ compensation, I personally never expected it to sail through the process without having amendments taken on, taken off.”
The bill moves on for consideration by the House Finance Committee.
The Senate version of the legislation is scheduled for debate next week in the Commerce Committee. Chairman Jerry Cooper, D-Morrison, said he wants the bill to first be considered by the Workers’ Compensation Advisory Council, like all other workers’ comp bills. That could delay action by the full Senate for two more weeks.
Other aspects of the bill approved Thursday include:
— The development of a medical fee schedule to go into effect July 1, 2005, to control medical costs. Forty-one states currently have medical fee schedules.
— Funding for a new mediation system that requires most employees and employers to participate in an impartial benefit-review conference before going to court to seek judgment.
— Penalties imposed on employers equal to a percentage of the award if timely payment is not made.
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On the Net:
Read SB3424/HB3531 at Tennessee General Assembly: http://www.legislature.state.tn.us