Labor advocates said Thursday that a workers' compensation reform bill advanced by Gov. Frank Murkowski could mean injured workers will be denied medical services.
Barbara Huff-Tuckness represented an ad-hoc group Thursday during a Senate Labor and Commerce Committee hearing and relayed concerns about the bill capping medical fees at December 1999 levels.
"We don't believe that this is reasonable," Huff-Tuckness said, adding that the rollbacks may cause physicians to stop serving injured workers.
The ad-hoc committee, an assortment of Alaska union leaders and employers, was invited to participate in drafting a workers' compensation bill at the request of the Alaska Department of Labor and Workforce Development.
Administration officials say the proposed rollbacks are a proposal pending findings from a medical review committee who will suggest their own guidelines.
On average, industries statewide have seen their insurance rates increase 36 percent with rising medical costs. For instance, knee reconstruction surgery has more than doubled from $5,225 to $10,697 in 2004, according to the Department of Labor and Workforce Development.
Copy Express, a small duplication and office supply business in Juneau, has seen its workers' compensation rates rise from $5,900 in 2002 to $10,232 in 2005.
Private insurance companies base their rates on each industry's expense history, not on individual injury records. That is why rates continue to rise for companies with no history of injuries.
The bill is trying to reform workers' compensation from several different angles to cut medical and legal costs, and time spent on litigation.
This is the governor's third attempt to pass this reform; it failed in last year's regular and special summer sessions.
"We should have a big sign on this that says, 'Construction: Work in Progress,'" said Labor Commissioner Greg O'Claray.
Rep. David Guttenberg, D-Fairbanks, also a former union member, strongly agrees workers' compensation needs reform, but said the governor's approach will do more harm than help.
Going after the cost of medical fees for injured workers will not lower costs in general, he said. And nothing in the bill requires physicians to treat these injured workers.
"What you may see are signs on hospital front desks saying, 'We don't accept workers' comp," he said.
A Bartlett Regional Hospital official said costs have increased because patients demand specialized doctors and the latest equipment.
"They want Cadillac service for Ford prices," said Barb Sharp, Bartlett's workers' compensation coordinator.
Bartlett also suffers from high insurance rates, she said.
Workers' compensation insurance rates in Alaska are the second highest in the nation, next to California, whose Legislature recently passed its own reform.
The ad-hoc committee wants to review why California is having problems with insurance companies complying with the new law and why workers are now being denied medical services, Huff-Tuckness said.
Alaska's reform bill also wants to set up an appeals commission to hear contested claims, instead of sending them to the Supreme Court.
O'Claray said employees and employers now wait up to 18 months to book a courtroom, considering the Supreme Court is overloaded with cases. With the appeals commission, parties would only wait a few months, he said.
Workers would not be allowed to earn more in benefits than wages while on disability leave. O'Claray said 80 percent is an ideal rate so workers have a disincentive to commit fraud.
Kevin Smith, executive director of the Alaska Municipal League Joint Insurance Association, said 10 Alaska municipalities have canceled their insurance due to rising rates.
"We obviously do have a few issues to deal with. The good news is I don't think there's anybody happy with the current system," said Sen. Con Bunde, R-Anchorage, at the meeting's closing.
Andrew Petty can be reached at email@example.com.