The 2014 International Association of Industrial Accident Boards and Commissioners (IAIABC) Annual Conference in Austin offered a forum for regulators from around the country to discuss common issues and potential solutions. The IAIABC is an association of government agencies that administer and regulate their jurisdictions’ workers’ compensation acts.
At this year’s conference, held Sept. 29-Oct. 2, regulators highlighted a variety of complex issues that they are currently facing. Among them were:
1. Hospital Fee Schedules. In states that do not have hospital fee schedules, the standard for payment is usually “reasonable and customary” charges. The question becomes, how do you determine what is reasonable? Providers push for billed charges to be the standard; however, payers feel that this is an unfair standard because it is significantly higher than what providers ultimately accept as payment. On the other hand, payers are pushing for paid charges to be the standard, but the providers argue that PPO contracts dictate much of this and those contracts are based on volume. If someone doesn’t have a contract, they do not believe that they should get the benefit of that discount.
2. Benefits for Illegal Aliens. Nearly all states extend benefits in some form to illegal alien workers. In some states this is limited to medical benefits, while other states limit this to medical and total disability. In most states, there are no limitations to what benefits these workers can receive.
The overall concern is that some states are awarding these injured workers permanent total disability benefits because they cannot be put through vocational rehabilitation and returned to work. Thus, their status as an illegal alien is factoring into the permanent disability award. Attorneys are also arguing that total disability benefits should continue when a light-duty release is obtained because that person cannot legally return to work. States are trying to strike a balance between protecting illegal-alien workers but at the same time not rewarding them additional benefits simply because of their inability to legally work in the U.S.
3. Ride-sharing Services. The explosion of ride-sharing services such as UBER is causing concern with regulators around the nation. The big concern from a workers’ compensation standpoint is whether these drivers should be classified as employees of UBER or whether they are independent contractors. Owners of taxi companies argue that allowing these drivers to be classified as independent contractors creates an unfair competitive advantage. States are challenged with whether they can classify these drivers by statute or whether this should be done by the courts interpreting the current statutes.
4. Treatment Guidelines. Several states, including Washington, Texas and Colorado, have pushed out treatment guidelines for issues such as opioids and lower back injuries. These guidelines have resulted in significantly lower medical costs on claims. The medical community tends to resist implementation of such guidelines, as they feel this impedes their ability to render appropriate medical care based on the specifics of the patient. Those that argue for treatment guidelines point to significant research on the effectiveness of certain treatment modalities and the dangers associated with opioids above certain dosage levels.
5. Large Deductible Policies. Regulators feel that there is confusion on the differences between large deductible policies and self-insurance, with many employers assuming that the two are interchangeable. In some states, the courts have ruled that employers under a large deductible policy cannot have influence over the claims-handling process so they cannot access items like adjuster files. It was stressed that, under deductible policies, the carrier is ultimately responsible for payment of the claims and compliance with the statutes. If the carrier is unable to collect the deductible from the employer, the regulators do not have jurisdiction over the issue. The deductible agreement is outside the parameters of the insurance policy.