Louisiana comp law 'out of sync' By James Ronald Skains "Louisiana businesses have lost their competitiveness with other states because of the out of control workman's comp cost in Louisiana," Gary Patereau, Executive Director of the Louisiana Association of Self-Insured Firms known as LASIE, told the Piney Woods Journal. "The entire workman's comp system in Louisiana is out of sync due in part to potential litigation exposure regarding discount medical providers (Preferred Provider Organizations (PPO) which caused most PPO's to pull out of Louisiana," Patereau elaborated. "This has greatly increased the cost of medical care to the insured in Louisiana." "The PPO scenario is not the only problem with worker's comp in the state, but potential litigation exposure has cost the industry between $250 million and $350 million in recent years," Patereau explained. "These litigation costs were not related to the care of injured workers but were centered around reporting requirements and discount contractual terms." The lead plaintiff attorney on this workman comp scenario has posted on his website that his firm has collected $262 million in settlements through class action litigation exposure. Both the Timbermen Self-Insured Fund and the Louisiana Loggers Self-Insured Fund in Winnfield are longtime members of LASIE. In addition, the Louisiana Restaurant Association has a self-insured workman comp fund as does the Louisiana Home Builders Association. Also, several major Louisiana corporations such as Martin Timber Company, Union Tank Company, Hunt Forest Products and Brookshire Brothers Grocery chain have their own self-insured workman compensation funds. At the recent LASIE annual conference held in Lake Charles, Wayne Fontana, attorney with Fontana and Seelman of New Orleans that handles legal issue for LASIE members, told those in attendance; "The goal of our organization members is to take care of our injured workers in the best manner possible and get them back on the job as soon as possible." "The self-insured employers and Funds in Louisiana who are members of LASIE have no greater resources than their qualified and trained employees," Fontana told the Conference attendees, "so we work closely with the medical community in Louisiana to provide the best possible medical care to make it possible that our injured workers can return to work as soon as is medically possible." "An employer has a great deal of money tied up in training each worker for their jobs, so they have every incentive to provide injured workers with the best possible care for to them to return to their jobs," Fontana elaborated. Governor Bobby Jindal was the keynote speaker at the
Lake Charles LASIE conference and pledged to work with
LASIE on Workman's Compensation reforms in the 2012
legislative session. The Governor had this to say about
Workman Comp rates in Louisiana: "We are not looking for special favors for our members," Patereau pointed out to the Journal. "All we want is a level playing field in which Worker's Comp rulings are fair and consistent." "Out of about 20,000 doctors in Louisiana, only about 2,000 handle workman comp cases," Patereau noted. "The same is true with attorneys in Louisiana; only a small portion handle workman comp cases." "There are many small things that are contributing to the high cost of Workman Comp in Louisiana," Patereau explained. "For instance, there is no firm reporting requirements of job related injuries. We have reports of injuries filed two years after the alleged injury occurred." "Many times injuries are reported long after the employee has separated from the employer," Patereau elaborated. "This places the employer at a distinct disadvantage in trying to resolve a claim." "Also, we would like to see a more streamlined workman comp process like they have in Arkansas," Patereau said. "In Texas, they have established a medical review board that at some point reviews the comp case from a medical standpoint to determine a course of action." "Another cost saving system that both Texas and Arkansas have implemented is a standardized method to calculate average weekly wages," Patereau added. "In Louisiana, there are dozens of different methods that can be used to calculate average weekly earnings." "The primary goal of all those in our industry is to get our injured employees the very best medical care possible immediately after an injury occurs," Patereau explained. "This allows us to get the worker back on the job sooner, being productive for the employer." "During tough economic times, this is more important than ever," Patereau noted. "Productivity of employees counts more than ever." "With such a vested interested just in the training of employees, an employer's number one goal is to get the injured employee the best medical treatment that will result in the employee returning to work as soon as possible," Patereau reiterated. "Companies who have operations in other states, quickly realize how out of sync the Workman Comp program in Louisiana is with other states," Patereau stated. "For instance, compressors built by Alliance Compressors in Natchitoches cost more than compressors built at Alliance facilities in other states because of Workman Comp rates," Patereau emphasized. "At the present time there is no oversight of the Workman Comp program in Louisiana," Patereau explained. "Workman Comp judges are known as Administrative Judges who are actually Civil Service employees under the Louisiana Workforce Commission." "These Administrative Judges have tremendous leeway in deciding cases and no one reviews their decisions," Patereau acknowledged. "A Workman Comp Judge in one part of the state may rule one way on an issue, and another Judge in different part of the state will interpret the same issue in another manner." "There are no consistent guide lines to follow in ruling on Workman Comp cases," Patereau noted. "These are the kind of things that other states have streamlined and we need to do the same here in Louisiana to be competitive." During the 1990's, workman comp rates through insurance companies became so high, that the logging industry was crippled. This time frame of high workman comp rates with little competition in among insurance companies to write workman comp policies for the logging industry, led to the founding of the Timbermen Self-Insured Fund and the Louisiana Loggers Self-Insured Fund, both headquartered in Winnfield. "Now, medical costs, along with the lack of a comprehensive standardized regulatory system on the state level which leads to litigation exposure, have pushed workman comp costs in Louisiana to a level that has made us noncompetitive with other states for economic development and is threatening our own financial future," Patereau concluded. |