Workers' Compensation: Congressional Action on Workers’ Compensation

From coast to coast, the patchwork of state workers’ compensation systems remains under constant scrutiny for change. The problems seem global in character as the frustrations continue to rise. The fate of the entire system may hinge on efforts to enact or defeat legislation establishing a new national commission on workers’ compensation.

The States universally enacted Workers’ Compensation in 1911 in an effort to replace civil litigation with an administrative system. The approach was to provide a remedial system to injured workers in a summary manner while providing a cost-effective approach for employers. Despite efforts to reduce benefits and limit access, States are struggling to maintain the system in some form. Rumors are spreading that New York, a former industrial jurisdiction, may join the list of states that are radically modifying their systems.

Once touted as a “no-fault” system, the nation’s workers’ compensation system has been besieged by efforts to impose more restrictive benefit requirements. Medical delivery has stagnated in a complex world of etiology and evidential proof of occupational claims.

The cost of soaring medical care, once shifted easily to collateral health insurance companies and the Social Security system, has been met with convoluted reimbursement efforts. Large corporations and public entities that in the past were able to provide an additional stream of revenue to injured workers are now rapidly drying up and or becoming non-existent under bankruptcy laws. State governments, which maintain the administrative system, are now facing a monumental revenue shortfall and are closing down operations and converting some to criminal and economic sanctions to merely benefit general state revenues. The few remaining second injury funds have become insolvent, and the future remains bleak as the premiums committed to finance these agencies and programs become depleted.

On January 22, 2009, Representative Joe Baca, a Democrat from California, introduced legislation (HR635) to establish a second National Commission on State Workers' Compensation Laws [Commission]. The first Commission was established under the Nixon administration in accordance with the Occupational Safety and Health Act. The new legislation, now supported by representatives of injured workers, lacks co-sponsors. Opposing the legislation is a long line of industry-based employers, including the American Manufacturing Association and the National Chamber of Commerce.

In a recent interview, John Burton, the former chair of the 1971 Commission, commented that many of the present systems do not even meet the original Commission's threshold recommendations and that many of the present programs face serious challenges.

Patrice Woeppel, Ed.D., author of Depraved Indifference: The Workers' Compensation System, has called for a single-payer medical system to cover both work-related and non-work-related injuries. By allowing the employer and insurance carrier to control the medical care she receives, she indicates that this results in "restricting treatment to the cursorily palliative" or in the delay or denial of treatment to the injured worker. Additionally medical plan administrative costs of duplicative and wasteful.

As the national health care debate continues and the final legislation unfolds, the workers’ compensation medical delivery issues and wage replacements for temporary and permanent disability may become incorporated into direct or ancillary legislation. A second Commission, in one form or another, aimed at nationalizing the workers' compensation system, may indeed become a reality.