Georgia’s Board of Workers’ Compensation’s recent Annual Report shows:
- A decrease in the total yearly expenditures for workers’ compensation benefits in both indemnity claims and medical only claims reported in 2018, as compared to the 10-year average.
- Total workers’ compensation benefits reported to the State Board in 2018 show that income benefits and medical expenses incurred for indemnity claims decreased by greater than $1,300.00, as compared to the 10-year average. The reported total benefits paid in “medical only” claims decreased by $80.00.
- Due to the enforcement of the requirement to file a WC-1, Employer’s First Report of Injury (effective 1/1/2019), it is not surprising that over 1,900 more claims were reported to the Georgia State Board in 2018, as compared to the 10-year average.
- It is reasonable to anticipate an increase in the total exposure for indemnity claims i n 2019 due to the increase in the maximum compensation rate.
*Georgia recently removed the 400-week cap for certain specific medical benefits in non-catastrophic claims filed on or after July 1, 2013, including prosthetic devices, spinal cord stimulators, intrathecal pump devices, durable medical equipment, orthotics, corrective lenses and hearing aids if the treatment is originally prescribed by an authorized treating physician before the expiration of the 400-week cap.
Over the past three years, the number of lost-time work-related injury claims reported to the Mississippi Workers’ Compensation Commission (MWCC) has decreased, while the number of controverted claims (i.e., litigated claims) remains relatively unchanged. Controverted claims compromise approximately 24% of the lost-time injury claims filed.
- The chart above shows the typical cost breakdown as medical benefits in lost-time injury claims in Mississippi consistently exceed the amount of indemnity benefits paid. In 2018, insurance companies and self-insureds paid a total of $303,656,109.71 in compensation and medical benefits as a result of workplace injuries. The increased medical costs do not appear to be on target to change.
- The increased use of opioids in the work-related injury claim is problematic. According to data from the National Council on Compensation Insurance (NCCI), in 2016, injured workers who were prescribed at least one prescription received three times as many opioid prescriptions as the overall US opioid prescribing rate. The average cost of an opioid prescription claim is approximately four times that of a non-opioid prescription claim.
For the three-year period between 2016 and 2018, here are a few trends our North Carolina Workers’ Compensation practice group has noted.
12.49% reduction in average cost per claim
Why? Our firm emphasizes the reduction of costs by promoting and implementing a practice management system in which as much work as possible is performed by paralegals.
What impact has this had?
9.25% average reduction in attorney usage
9.11% average increase in paralegal usage
- Reducing client costs is a priority for MGC. We incentivize our attorneys to reduce cycle time, resulting in a 15.96% reduction of cycle time between 2015 and 2018. We have also documented a 21.38% reduction on indemnity benefits paid on NC claims handled by our group between 2015 and 2018. While we don’t have any empirical data to explain this decrease, we have observed a more conservative group of Deputy Commissioners administering decisions over this same time period, as well as a reduction in the eagerness of plaintiff’s attorneys to litigate claims.
- While a decrease in indemnity benefits paid has been the trend over the past three to four years, we anticipate that there may be an increase in the monetary amount requested in settlement demands, as well as litigated claims, in the coming years as we expect plaintiff’s attorneys will now begin to litigate older claims to obtain an extension of benefits beyond the 500-week statutory period.
For the three-year period between 2016 and 2018, our SC Workers’ Compensation practice group has maintained a steady average cost per claim on files that arrive with a pending request for hearing filed by claimant’s counsel; we have reduced the average cost per claim on files with issues being premature for litigation.
The firm emphasizes the reduction of costs for our clients by promoting and implementing a practice management system in which as much work as possible is performed by paralegals to reduce the amount of time spent by attorneys on each file.
As a result, we have seen a:
12.49% reduction in average cost per claim
21% average reduction of partner usage
In an effort to further reduce client legal costs, the firm incentivizes attorneys to reduce cycle time and we have seen cycle time remain fairly constant
Tennessee continues to be the national leader in reduction of workers’ compensation loss costs dating back to the state’s adoption of workers’ compensation reform in 2013, effective July 2014.
- Since reform was enacted, Tennessee’s loss cost has dropped 45% based upon NCCI filings with the Department of Commerce and Insurance (2014 rate filing = 1.00).
- The 2019 filing by NCCI outpaced the remainder of the Southeastern states with a 19% reduction, effective March 1, 2019.
In addition to a reduction in the loss cost, reported claims have fallen by over 50%, from 7,777 in mostly pre-reform 2014 to 3,311 in post-reform FY 2017, the last year in which data has been published. Similarly, settled cases have fallen from a peak of 3,084 for FY 2014 to 1,355 in FY 2017. Coupled with those reductions, the average permanent partial impairment paid per claim has fallen from a peak in FY 2012 of approximately $31,000.00 to approximately $21,000.00 for FY 2017.
As the data demonstrates, the Workers’ Compensation Reform Act of 2013 has had a noticeable effect on both the volume of claims and the cost per claim. However, there have been several changes to the law, including the adoption of an attorney’s fee provision, that were accepted by the business and insurance representatives to the General Assembly’s Workers’ Compensation Advisory Council. Bureau personnel have also indicated in recent months that they are anticipating proposed legislation in 2020 to increase benefits and encourage greater attorney involvement on behalf of claimants.
However, given the significant reduction in loss cost over the past five years, perhaps the greatest fear of all stakeholders would be a dramatic reversal of fortunes, similar to what occurred in Florida in 2016 when legal challenges and appellate decisions resulted in an emergency loss cost increase of 19.6% as recommended by NCCI in December 2016.
This legal update is published as a service to our clients and friends. It is intended to provide general information and does not constitute legal advice regarding any specific situation. Past success does not indicate likelihood of success in any future legal representation.