By Tom Humphrey,
January 2, 2012

NASHVILLE — Lt. Gov. Ron Ramsey says legislators have been “tinkering around the edges” of Tennessee’s workers’ compensation law for a long time and the state “is getting behind the eight ball” in comparison with other states.

But it appears that 2012 will be another year of legislative tinkering on the topic as Gov. Bill Haslam, who has expressed keen interest in changes as part of efforts to promote a business-friendly environment, has decided to continue studying the best way to a comprehensive revision. The 2013 legislative session now appears the goal.

Still, there is some movement afoot.

During the 2011 legislative session, the lead workers’ comp tinkering legislation, pushed by Senate Majority Leader Mark Norris, basically enacted a deal struck by interested parties including lobbyists for business, labor and trial lawyers. Overall, it was seen as business friendly.

The measure tightened the legal definition of what constitutes an injury under the law and simplified the procedure for communication between an injured employee’s doctor and the employer, among other things.

Haslam feels those changes — combined with the 2010 revisions — could make a difference in operation of the system and wants to let them settle before embarking on substantive changes through legislation, said spokeswoman Yvette Martinez.

“The governor and administration officials continue to discuss workers’ compensation issues with business leaders across the state,” Martinez said in an email. “He believes it is appropriate to give (recent revisions) time to make an impact and that there are things we can look at improving on the administrative side of the program versus legislatively at this time.”

Ramsey and other legislators have indicated a willingness to go along with Haslam’s delay. That includes a House Republican Small Business Task Force, which heard a number of business complaints about workers’ comp during a round of fall hearings.

It seems at this point that the lead topic in 2012 will be recommendations from a task force set up as part of the 2010 legislation. The panel has been reviewing compliance and enforcement of workers’ compensation laws.

Of particular concern are reports of companies — perhaps a lot of them — classifying incorrectly employees into groups that have lower insurance premiums as a means of saving money. There is also continuing worry about abuses of the “independent contractor exemption” to dodge purchase of the insurance.

The task force report is due on Feb. 1. According to the political newsletter the Tennessee Journal, there is a general consensus on the panel to raising penalties for violations while hiring more inspectors to enforce the laws.

As things stand now, unscrupulous employers may see little risk of being caught by the short-staffed enforcement efforts and, if they are caught, face penalties so light they can be easily paid from savings on premiums from violating the law.

Meanwhile, there are changes underway on the administrative end — most notably a 6.3 percent increase in average premiums.

There is also a move to reduce the fees paid to physicians for treatment of workers’ compensation patients. The Department of Labor and Workforce Development moved in September to implement the reduction — 11 percent in some key cases — via an “emergency rule” that initially was to take effect Dec. 1. That was withdrawn, however, amid protests from the Tennessee Medical Association, which says a significant number of doctors may stop treating workers’ comp patients if the cuts are implemented.

The proposal is still moving forward on a non-emergency basis and should be resolved in a couple of months.

In the longer term, Ramsey said he would like to see a commission system for workers’ compensation in Tennessee. So would some business groups, believing this would hold down costs and speed up the process.

Currently, Tennessee is one of the last states to still send compensation cases through the court system — though a 2004 change enacted as part of former Gov. Phil Bredesen’s workers’ comp reform package requires parties to go through a “benefit review conference” to try resolving any disputes before going to court.

There is disagreement on whether the conferences have reduced litigation costs, with some saying they have simply created another hurdle to clear and made the process take longer.

There’s also been some attention to a Texas law that allows some companies with a lot of employees and good safety records to insure themselves without participating in the statewide system of workers’ compensation.

Those are some of the things the governor and his staff will be thinking about for the next year or so.

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