Watchdog group decries workers' compensation bill

Posted: Thursday, June 10, 2004

JUNEAU A sweeping rewrite of the state's Workers' Compensation law could make an already dysfunctional and underfunded claims process worse, a labor watchdog group said Wednesday.

Republican Gov. Frank Murkowski, who earlier called the GOP-controlled Legislature into a June 22 special session, is demanding the bill's passage.

The Murkowski administration complains that escalating workers' compensation claims rates are approaching a crisis level and a rewrite is needed to lower costs.

But the Alaska Injured Workers' Alliance, a nonprofit watchdog group representing injured workers, said such a rewrite would have a chilling effect on claims.

''It's going to give insurance companies a second bite at injured workers benefits,'' said executive director Barbara Williams.

Williams said the state's workers' compensation program already is dogged by problems that make it difficult for injured workers to receive benefits.

Budget cuts and reform legislation in the late 1980s have left injured workers at a disadvantage when they are seeking payment on their claims, Williams said.

Murkowski's proposal would change the appeals process to make it more difficult for workers to get an independent review of their claims, Williams said.

Currently, injured workers take their case to a three-member panel of the Alaska Workers' Compensation Board. Each panel consists of a board member representing labor and one representing management and a hearing officer who represents the labor department.

The panels are divided regionally into judicial districts and their decisions can be appealed to a state superior court judge in that district.

The Murkowski administration wants to eliminate superior court judges from deciding cases, and instead create a three-person panel of labor attorneys.

Administration officials said superior court rulings from judges in different regions have contributed to a history of inconsistent outcomes.

For example, a judge from Southeast Alaska may decide a similar injured worker dispute differently than a judge in Anchorage.

Murkowski wants the three-person panel to hear appeals from the Workers' Compensation Board.

Their opinions would be binding on future similar claims and provide more guidance for workers and their employers, the administration said.

''I think the hope is that it will reduce the need to litigate claims and that there will be more certainty going into it,'' said Paul Lisankie, director of the Division of Workers' Compensation.

But critics contend the proposal creates more bureaucracy that will cost the state about $627,000 more each year. It would also politicize the process since the governor would appoint attorneys to the panel on staggered terms of between one to three years.

Superior Court judges now hear only about 36 workers' compensation appeals per year on average, according to testimony before a Senate Finance Committee. Those decisions currently favor injured workers in about half the cases, said Sen. Hollis French, D-Anchorage.

''The appeals commission looks like an expensive, unnecessary addition that I suspect is there to tip cases ever so slightly in favor of employers,'' French said.

The Alaska Senate approved the bill 11-9 with the lone Republican vote against it coming from Kenai Sen. Tom Wagoner. The House Labor and Commerce Committee was considering the bill when the Legislature adjourned in May.

So Murkowski included the measure as part of his special session call, saying lawmakers must pass the bill this year.

Greg O'Claray, commissioner for the state Department of Labor and Workforce Development, said the bill is needed to keep the state's workers' compensation system solvent.

Currently, the medical costs of workers' compensation claims outstrips rates insurers collect making it unprofitable for insurance companies to offer such protection.

And this three-person panel could resolve complaints faster, reducing the estimated $11 million in legal costs now being spent, O'Claray said.

The track record for decisions would be more consistent under a panel, eventually reducing the number of claims, O'Claray said.

O'Claray defended the appointment process, saying critics who contend it would be politicized are wrong since a governor would not have the power to fire those he appoints.

''Quick, swift justice on these claims and decisions are better for the injured worker so they can make quick, informed decisions about their life,'' O'Claray said. ''There's no real loss of anyone's individual rights to due process.''

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