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Bar News - August 23, 2013

Workers’ Compensation & Personal Injury: Two Bills Seek to Contain Workers’ Compensation Medical Costs


For more than a century, the New Hampshire workers’ compensation system has worked essentially the same way – in exchange for immunity from lawsuits by injured workers, employers (generally through insurance) must pay certain benefits to injured workers regardless of fault.

These certain, but modest, benefits include weekly payment of a fraction of lost income, additional money if there is a permanent impairment, vocational rehabilitation if needed, and full payment of all reasonable medical care, which is generally chosen by the worker.

The National Council on Compensation Insurance is a trade group that keeps track of workers’ compensation insurance trends across the country. The council reports that New Hampshire spends a greater share of benefits on injured workers’ medical care than almost all other states.

Nationwide, 59 cents of every benefit dollar to injured workers goes toward medical care (the other 41 cents goes to disability pay and so forth). But in New Hampshire, 73 cents goes to medical care, and only 27 cents to all the rest. Moreover, medical benefit costs in New Hampshire are generally increasing faster than in the country as a whole.

In response to this perceived problem, there are several legislative initiatives to examine and address medical expenses in the workers’ compensation system. I highlight here some active efforts, so interested parties can make their thoughts known to those studying the issues. However, I emphasize that neither the Department of Labor nor I have any leanings on the wisdom of these efforts.

The Workers Compensation Advisory Council, created 25 years ago by RSA 281-A:62, has worked on several ideas to contain medical costs. Many of the council’s ideas are incorporated into a bill currently in the NH House Labor Committee. House Bill 255 was introduced last spring, but it was retained by that legislative committee for further examination over the summer and action during the second session of the Legislature.

HB 255 proposes several different methods to control medical costs in the state workers’ compensation system. First, it proposes that less-expensive generic drugs be routinely substituted for name brands in every injured worker’s prescription. This idea was also simultaneously introduced in Senate Bill 147, which passed on its own. Effective Jan. 1, this will become statutory law at RSA 281-A:23, VII.

The second idea of HB 255 is to allow the employer to select the injured worker’s health care provider during the first 10 days following injury. In theory, the employer would know the best treatment options for the most common injuries in its industry.

Early effective treatment should lead to better recoveries with shorter disability time. The counter-theory is that employers and employees are inherently in opposition about workers’ compensation claims, and allowing the employer to control such a fundamental part of the process jeopardizes the injured worker’s rights.

A third idea in HB 255 is a pilot program (involving only three counties) to allow employers to establish treatment networks similar to the current managed care systems. However, these networks would provide the exclusive treatment for every injured worker, but only during the first 90 days following injury. Again, the thought is that the employer’s interest in thorough, effective treatment and quick recovery would lead to the best early care options being offered.

A fourth concept in HB 255 is the use of pharmacy benefits management. It is hoped that this process, which has become common in health insurance – using benefit cards, immediate review, and mail-order drug delivery – will also curb costs in workers’ compensation. But note that regardless of pharmacy benefits management, the injured worker will surely have the right to choose his or her own pharmacy or pharmacist, according to Senate Bill 95, which takes effect Jan. 1, 2014.

Finally, the Workers’ Compensation Advisory Council’s fifth idea in HB 255 is to change the current language of RSA 281-A:24, regarding disputes about injured workers’ medical bills. The emphasis would be to establish the “reasonable fee” for medical services, rather than the expectation that the full amount of the bill should be paid unless there is just cause otherwise.

The House Labor Committee will be working on all the ideas in this bill over the next few months, with a target to report it out of committee by Nov. 22. There are no meetings of the committee noted on the House calendar on the day I write this, but anyone interested should keep a sharp eye on the House calendar.

There is another legislative group actively working on an issue of medical costs in workers’ compensation – the legislative committee established by Senate Bill 71 to study the use and misuse of prescription drugs in workers’ compensation cases.

By the terms of that bill, which took effect June 28, “the committee shall study the extent of misuse and abuse of opiates and other commonly abused prescription medications by injured workers and the direct and indirect social and economic costs of such misuse. The committee shall evaluate the effectiveness of laws in other states and consider possible enhancement of the controlled drug prescription health and safety program, possible establishment of a closed formulary, promulgating establishment of interagency opioid dosing guidelines and pain treatment guidelines governing utilization, and such other areas of inquiry the committee deems relevant to its purpose.”

Again, there is no schedule of meetings currently listed on the Legislature’s website, but by terms of the law, this committee should hold its first meeting by Aug. 13 and report its findings and any recommendations for proposed legislation by Nov. 1.

Martin Jenkins has been an attorney in New Hampshire for 35 years. Currently, he is legal counsel for the NH Department of Labor.

Supreme Court Rule 42(9) requires all NH admitted attorneys to notify the Bar Association of any address change, home or office.

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