The Florida Office of Insurance Regulation intends to increasethe region's workers' compensation rates by 6.1 percent effectiveJan. 2013, the state's insurance commissioner announced onMonday.

The decision to approve the hike was based on testimonyoffered by the National Council on Compensation Insurance (NCCI) inan October 4 hearing, which followed the Council's latestrate filing.

 "NCCI has provided sufficient evidence to support arate increase based on a variety of cost factors experienced in themarketplace," says Florida Insurance Commissioner Kevin McCarty."Even with this rate increase, Florida's rates are still 56 percentbelow the rates prior to the 2003 reforms, and are competitive withother states nationally. However, I look forward to working withFlorida's policymakers during the upcoming legislative session toaddress cost-drivers in the system."

According to the evidence submitted by the NCCI, addressingFlorida's physician drug dispensation issue would decrease rates by1.1 percent. The Workers' Compensation Research Institute (WCRI)reports that Florida has the second-highest level ofphysician-dispensed prescriptions among the states studied by theInstitute, and that such drugs represent almost half of allworkers' comp prescriptions in the state.

Another 5.5 percent would be saved if Florida aligned its costswith the rest of the states for in-patient hospital, out-patienthospital and ambulatory care center (ACS) reimbursements.Currently, 68 percent of the sunshine state's total benefit costsare medical, compared to the countrywide average of 59 percent formedical benefits, and higher than the national average for theservices listed above.  

A seven-year rate decline trailed Florida's 2003 workers' compensation reforms, although the Office signedoff a premium increase of 7.8 percent for new and renewal businessin 2010, an increase of 8.9 percent in 2011, and this most recentproposal of a 6.1 percent increase. 

In 2010, McCarty similarly reasoned that Florida would stillhave the "lowest rates in the southeast" after seven years ofconsecutive cumulative declines.