Friday, January 18, 2013

OK to Provide the Drama in 2013

As anticipated, workers' compensation is at the top of legislative agenda items in Oklahoma this year.

House Bill 1362 by Rep. Arthur Hulbert, R-Muskogee, was introduced before Thursday's filing deadline for the 2013 session.

The bill seeks to create an administrative workers' compensation system as the Division of Workers' Compensation under the Oklahoma Insurance Department, effective Jan. 1, 2015.

This is an idea that has been floated before in the state but did not make it out of the legislature, because, as Oklahoma Senate President Pro Tempore Brian Bingman, R-Sapulpa, has said, "the devil is in the details."

I'm not sure which devil Bingman is referring to, but Oklahoma remains one of the few states where workers' compensation disputes are handled in the civil courts.

As workers' compensation advances with various amendments declaring different constrictions on qualifications and benefits, the complexity increases. Workers' compensation is a product of statutory law and has no basis in "common law." Because of these characteristics, workers' compensation tends to become a complex area of the law, and the civil courts, frankly, are not in a position to deal with such specialization.

Civil courts are structured to deal with many preliminary procedural matters, and more rigid rules of evidence.

Workers' compensation on the other hand plays by much more liberal rules.

The contrast can be difficult for civil courts to deal with in a quick, efficient, manner.

HB 1362 includes provisions for:

  • Designating the Insurance Department as the state agency to oversee the workers’ compensation system.
  • Creating the Division of Workers’ Compensation within the department.
  • Specifying the duties and authority of the division, the department, the insurance commissioner and the workers’ compensation commissioner.
  • Providing for appointment of the workers' compensation commissioner by the governor with the advice and consent of the Senate.
  • Setting procedures for promulgating rules and handling complaints.
  • Establishing goals for the workers’ compensation system, including fair treatment of injured employees, promoting workplace safety and prompt return to work, providing quality medical care and minimizing disputes.
The switch to an administrative adjudication system is supported by the Oklahoma State Chamber, the state Labor Commissioner and the state Insurance Commissioner.

They point to the Oregon Department of Consumer and Business Services that ranked Oklahoma as the sixth-most expensive state for workers' compensation. Arkansas was ranked 49th.

Oklahoma has many more issues to deal with that make it the 6th most expensive work comp state other than where claims are adjudicated, but in my opinion moving to an administrative system should help increase the efficiency in which disputes are resolved - so long as employers are willing to abide by what will likely be an increase in the liberality of rulings!

Administrative systems, as noted, tend to become much more liberal and loose in the name of efficiency. Rules of evidence are lax. Procedural penalties are more rare. But, because fighting over non-substantive issues are minimized, the real underlying issues, e.g. AOE/COE, get to hearing much more quickly. So employers are going to have to endure a cultural shift for several years before such a system becomes accepted.

Because of the likely increase in liberality, Oklahoma is going to have to amend its benefits in order to realize any significant savings. I suspect that a change in the amount of and qualification for benefits will also become part of the negotiations.

And Oklahoma is also going to see another attempt at an opt-out system.

Nathan Atkins, spokesman for Bingman, told WorkCompCentral that Bingman has filed several "shell bills" that can be revised to carry specific proposals, one of which may be the "Oklahoma Injury Benefit Option" (OIBO).

I have it on good authority that the OIBO is in the process of making its way to legislative review, adding another element of drama in the Sooner State.

Oklahoma, is the 29th largest economy in the US, according to the US Department of Commerce with economic output of $146 billion in 2008. 

I think what is most interesting is who will benefit from these changes. The biggest player in the state's economy is the government itself, which contributed $23 billion in economic development in 2008, or 15.7% of the total economic output of Oklahoma.

Mining comes in second at $20.9 billion or 14.3% of the Oklahoma economy in 2008, Manufacturing accounted for 10.8% of the economic output with a contribution of $15.7 billion, fourth and fifth biggest sectors in the state were real estate $11.3 billion and healthcare $9.9 billion, respectively.

How these interests line up in the work comp arguments before the Oklahoma legislature is going to make for some good political drama.

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