ASHINGTON, D.C., – The American Insurance Association (AIA) was the only insurance trade to testify recently before the North Carolina House Select Committee on Tort Reform in support of HB 709, legislation that would impact important aspects of the Workers’ Compensation Act. The bill, introduced earlier this month by North Carolina’s business community, would provide much needed reform to the workers’ compensation system in the Tar Heel State.
“AIA strongly supports HB 709, which we believe is necessary, reasonable and modest in scope,” said AIA senior counsel, Kenneth Stoller. “Recent studies have suggested that, of a group of benchmark states, North Carolina had the highest overall per-claim costs as well as the highest rate of surgery. AIA’s own research of the region (Georgia, South Carolina, Virginia, Tennessee, and Kentucky) has shown that North Carolina has the highest total indemnity costs per claim and the highest incidence of permanent and total disability (PTD) cases.”
Among its provisions, HB 709 eliminates the ability of claimants to choose their own physicians. Of the southeastern states mentioned above, North Carolina is the only one of the states with a loophole permitting claimants to see a physician of their own choosing. Employer choice of physician is important in the workers’ compensation setting because medical treatment is different than in the group health setting.
“The need to quickly and successfully return people to work calls for more expertise in occupational medicine, and employers and insurers have extensive experience in selecting doctors in this area of expertise,” said Stoller.
Another critical provision of the bill is the employer’s ability to communicate openly with the treating health care provider. Most states do not impose restrictions on this communication, since it is inappropriate to import adversarial tort litigation concepts into workers’ compensation administrative, no-fault construct. Workers’ compensation’s less formal processes, including the ability to obtain information without authorization and ability to communicate with treating providers are intended to facilitate communication and expeditious decisions involving treatment in the interest of the injured worker.
“Given the statutory obligation of employers and insurers to promptly assess compensability, pay benefits, provide medical treatment, and find employment within a claimant’s physical limitations, it is important that the employer have accurate information and lines of communication with those administering services and treatment to the claimant,” Stoller continued. “North Carolina’s practice of imposing on employers and insurers formal communication rules impedes communication and is adverse to worker interests.”
Lastly, the bill would place a 500-week cap on temporary total disability (TTD) benefits also increase the period of permanent disability benefits from 300 to 500 weeks. To put this cap in perspective, southeastern states such as Virginia and South Carolina have a 500-week cap, and Tennessee and Georgia have a 400-week cap. Many states nationwide have a much shorter duration of TTD — California and Florida at 104 weeks, and Massachusetts at 126 weeks.
“We are encouraged that the bill addresses indemnity issues such as TTD, although the 500-week cap may be overly cautious,” said Stoller. “Overall, AIA supports this bill and we look forward to working with North Carolina lawmakers as they consider HB 709,” concluded Stoller.