Workers' Comp recommendations pass General Assembly

July 5, 2014

The Delaware Senate passed Workers’ Compensation legislation June 25 to stop the large workers’ compensation rate increases that are burdening Delaware businesses. HB 373 was developed by incorporating recommendations of the Delaware Workers’ Compensation Task Force over the last 18 months. It passed the House earlier in June.

Workers’ compensation rates have been a major concern for Delaware employers for a number of years. House Bill 373 will make the system more efficient and will result in relief for Delaware businesses that have had to endure such significant premium increases over the past few years.

"I applaud the lieutenant governor’s work on this extremely important issue for Delaware’s business community,” said Gov. Jack Markell. “His leadership ensured the task force acted swiftly and effectively to address the high rates that have burdened our employers."

The Workers’ Compensation Task Force was created Jan. 30, 2013, by the Delaware General Assembly and the governor, and charged with an expedited review of Delaware law relating to workers’ compensation, the impact the 2007 amendments to that law had upon workers’ compensation premiums, the reasons for recent increases in those premiums, and whether any additional changes to statutes, regulations, or practices are required to control growth in premiums. As detailed in the task force’s prior report, Delaware’s workers’ compensation premiums had risen by calendar year 2006 to be the third most expensive in the country.

The task force delivered its first set of recommendations in May 2013, and those were consolidated into House Bill 175, which passed the Delaware House of Representatives and Delaware Senate unanimously. Its second set of recommendations was released with a report for the General Assembly in May 2014, and House Bill 373 was a result of those findings and suggestions.

The recommendations for House Bill 373 focused almost exclusively on medical costs, as they make up 65 to 70 percent of every dollar spent on workers’ compensation premiums in Delaware, and make up 100 percent of the increase in premiums. The most substantial provision in this bill is a significant reduction in the reimbursements paid to healthcare providers for treatment of workers’ compensation patients. The task force has revealed that reimbursements for treatment of workers’ compensation patients in Delaware had evolved to be among the highest in the country - in some cases three, four, or even five times the reimbursement for exactly the same procedure compared to what is allowed in other states.

Broadly, the recommendations fall into three areas: heightened oversight of insurance carriers; stricter control on medical costs, including directing the Workers’ Compensation Oversight Panel to create a new medical fee schedule; and consideration of a new rating organization.