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Business Seeks Worker's Comp Changes

State Capital Bureau

January 16, 1995

JEFFERSON CITY _ A man who has been smoking all his life has a heart attack on the job. There is little evidence that the fact he was at work contributed to the medical condition, but still the employer gets stuck with the bill.

This incident actually occurred in 1994, according to Missourians to Restore Fair Worker's Compensation. And legislators packed a room last week (the week of Jan 9) to listen to that lobbyist group and others seeking changes in the Worker's Compensation system that pays health and health-related costs for workers injured on the job.

For some time, business leaders have complained the costs they have to pay to finance the system are rising too rapidly.

``This is an economic development issue, a jobs issue,'' said Sheelah Yawitz, president of Missourians to Restore Fair Workers Compensation. ``If premiums do not go down businesses can not grow.''

Yawitz, who represents nearly 40,000 businesses in Missouri, has already captured the attention of some high-profile legislators.

Sen. Franc Flotron, R-St. Louis County, and Sen. John Scott, D-St. Louis, have introduced a bill that contains a variety of measures to reduce the cost of workers compensation to employers.

One of the most controversial provisions would change what injuries would be covered by the program.

Currently, if the injury occurred on the job, the worker's health costs resulting from the injury and lost job-time are covered by the Worker's Compensation program regardless how the injury occurred.

It does not matter whether the injury actually arose from one's job activities.

In exchange for this ``no-fault'' coverage, employees give up their right to sue their employer.

Under the Flotron-Scott bill, the injury would have to be clearly and convincingly linked to the job environment in order to draw Workers Compensation. A pre-existing condition would be covered only to the extent that the job made the condition worse.

Supposedly, for the fictional heart attack victim who smokes and and never exercises, the legislation would make it more difficult to collect Worker's Compensation.

But simply because this is the aim of the bill, does not necessarily mean it will be the result, said Duke McVey, president of Missouri's AFL-CIO. McVey said added stipulations will drive more cases into court and force costs to skyrocket.

``It will provide an opposite effect of what they want,'' he said. ``In Workers Compensation there are tradeoffs. They are distorting the issues to simple anecdotes, that don't really explain the issues.''

McVey said his organization will work to defeat the legislation.

However, Yawitz's business-financed group presented research saying the current definition of covered injuries is driving up the costs for business of Worker's Compensation coverage.

``Total costs rose rapidly between 1989 and 1991 and the cost of an average claim exploded,'' said Researcher Richard Victor. Yet, 85 percent of the growing costs between 1989 and 1993 were controllable, Victor said.

Victor's organization, Workers Compensation Research Institute in Cambridge, Ma., has completed studies on eight states. Among the states studied, Missouri is one of the worst off, second only to Florida.

In other states, it is common that people assume that money-hungry lawyers are pushing costs up. In only Missouri, this assumption is correct, Victor said.

``This is something special to Missouri,'' he said, adding that 62 percent of controllable costs in the state are attributable to lawyer involvement.

Increased outreach by attorneys, certain systematic features that encourage litigation and more serious injuries are some of the reasons that Missouri's lawyers contribute to increasing costs.

Another factor that adds to the cost of workers compensation is the rising price of medical treatment to those employees collecting workers compensation, Victor said.

Currently, in Missouri doctors treating patients who get workers compensation receive 67 percent more than doctors caring for those on Medicare.

In the past, Missouri has relied on a measure that allows employers to pick the doctor to contain costs.

Other states have enacted medical fee schedules, that dictate how much the employer will pay for a medical procedure.

``In Pennsylvania, they passed a bill that says businesses will only pay Medicare plus 13 percent, this has helped bring down costs,'' Victor said.