Proposed cuts to benefits for injured employees in Oklahoma could amount to $145 million in savings in workers' compensation costs for employers each year, according to an analysis released Tuesday.
But a cap on medical reimbursements included in an earlier draft of the legislation — missing from Senate Bill 1062 — could have increased savings by as much as $12 million more.
Nathan Atkins, spokesman for Senate Pro Tem Brian Bingman, said he won't comment on earlier versions of the legislation. But the final version — proposed last week and set for a vote by the full Senate on Wednesday — includes cost savings that will have a substantial impact on reducing costs for state employers.
“This is a game-changing piece of legislation,” Atkins said. “This is something that could be a national model.”
The cost analysis released Tuesday was prepared by National Council on Compensation Insurance, a licensed rating organization used by Oklahoma and 37 other states, and will have no bearing on actual premium changes instituted should the bill become law.
According to the analysis, savings associated with workers' compensation — including the shortening of deadlines for an employee to file for benefits and reductions in both benefit amounts and duration of eligibility — would constitute almost 99 percent of explicit employer savings.
Other savings, including a switch from a court-based system to an administrative one and an allowance for some employers to opt out of the system altogether, could bring total annual savings to $969 million each year, according to the analysis.
But critics said they are skeptical of a bill that attempts to reduce workers' compensation costs — up to a billion each year, according to some estimates — without approaching steepening medical costs.
Medical costs comprise more than 46 percent of total costs to the state, according to the council analysis. The proposed Senate bill would reduce those costs by only $1.9 million, or about 0.2 percent.
“Are we looking at saving money on the medical or are we just taking money from injured workers? That's the question I'm going to have,” said Senate Minority Leader Sean Burrage.
Burrage, D-Claremore, has proposed an amendment to the bill that would cap reimbursements for medical expenses at 150 percent of the Medicare reimbursement rate.
A similar cap was included in working drafts of the legislation as recent as Feb. 4, according to a State Chamber of Oklahoma document obtained by The Oklahoman last week.
A council analysis prepared in late January but not released to the public indicated savings under that cap could amount to as much as $14 million.
Bingman, R-Sapulpa, said there are other ways the proposed legislation will reduce medical costs, including a more rigorous fee schedule for doctors — and new rules, set by system commissioners instead of judges.
“They will adopt the rules that the system will operate under and that also will include the fees for the doctors,” he said.
Atkins said cuts to compensation awarded to injured employees will bring the state in line with its neighbors.
Only about 44 percent of compensation benefits currently awarded by the state go toward actual medical costs, Atkins said. The remaining 56 percent is spent on nonmedical expenses, such as time off work, he said — the highest in an eight-state region.
This is a game-
changing piece of legislation. This is something that could be a national model.”
spokesman for Senate