Workers Comp insurance rate increase sought

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Florida businesses could see an 8.9 percent increase in workers-compensation insurance rates next year, as costs slowly creep up after a 2003 overhaul of the system.

The National Council on Compensation Insurance, an organization that tracks workers-compensation information for the industry, submitted the proposed increase Thursday to state regulators.

Businesses also were hit with an overall hike of 7.8 percent in 2011, after enjoying years of rate cuts that stemmed from lawmakers passing the 2003 overhaul. The total effect of those cuts was 64.7 percent.

NCCI said insurers have seen more claims during the past two years and also face higher costs because of a controversial practice that involves doctors dispensing drugs to workers-compensation patients. Also, it said the changes that lawmakers made in 2003 have effectively played out.

“As a result, it has been necessary to adjust the very optimistic outlook, or trend, underlying rates to reflect that significant ongoing experience improvements are no longer occurring and are no longer expected,” NCCI said in a summary of the filing.

The Office of Insurance Regulation will hold a public hearing in October about the rate proposal and could make changes. Spokesman Jack McDermott said in an e-mail that the office will conduct a “thorough and comprehensive review” but couldn’t comment on details because it had only received the filing Thursday.

Paul Anderson, a Tallahassee attorney who represents injured workers, questioned NCCI’s contention that claims have been increasing. Anderson said he sees fewer workers filing claims, which he attributes to people being afraid of losing jobs during the tough economic times.

William Stander, a Florida-based official of the Property Casualty Insurers Association of America, pointed to conflicting arguments about the economy’s effect on the workers-compensation system. While some people think fearful workers are less likely to file claims, others argue that workers might file claims because they are hurting for money.

Regardless, Stander said insurers have seen an increase.

“I don’t think it (the NCCI rate proposal) is a surprise,” he said. “We’ve heard the claims have been going up.”

The 2003 overhaul included a series of steps that combined to drive down rates, including limiting the fees of attorneys who represent injured workers. But critics contend that the changes made it harder for workers to get the care they need.

NCCI said in the summary Thursday that Florida is among the 20 states with the lowest workers-compensation rates and has the lowest rates in the Southeast. It indicated Florida’s spot in those rankings likely would not change even if the proposed rate increase is approved.

Business lobbyists have unsuccessfully sought further workers-compensation savings during the past two years by trying to limit how much doctors can charge when they dispense drugs to injured workers. Former Gov. Charlie Crist vetoed such a proposal in 2010.

The issue involves drugs that are repackaged in small amounts and dispensed in doctor’s offices, as opposed to pharmacies filling the prescriptions. That affects the drug pricing, with doctors able to charge more than pharmacies would.

NCCI argues that the workers-compensation system could save $62 million if lawmakers placed new restrictions on what doctors can charge.

Doctors, however, have opposed the idea and contend that in-office dispensing is a convenience for injured patients and can help improve compliance in taking medications. Also opposed has been Automated HealthCare Solutions, a Miramar-based company that sells technology used in dispensing and is a large Republican donor.

Edie Ousley, a spokeswoman for the Florida Chamber of Commerce, said it is difficult for businesses to absorb workers-compensation rate increases such as the NCCI proposal. She indicated that lawmakers need to address the drug-dispensing issue.

“Until Florida addresses this loophole, proposed rate increases like this one could simply be a drop in the bucket,” Ousley said.

Peter Schorsch is the President of Extensive Enterprises and is the publisher of some of Florida’s most influential new media websites, including SaintPetersBlog.com, FloridaPolitics.com, ContextFlorida.com, and Sunburn, the morning read of what’s hot in Florida politics. SaintPetersBlog has for three years running been ranked by the Washington Post as the best state-based blog in Florida. In addition to his publishing efforts, Peter is a political consultant to several of the state’s largest governmental affairs and public relations firms. Peter lives in St. Petersburg with his wife, Michelle, and their daughter, Ella.