Gov. Frank Murkowski's proposed revision to state workers' compensation laws was approved Monday by the Senate Finance Committee and now heads to the full Senate.
The workers' compensation bill aims to lower medical and litigation costs in the workers' compensation system. But it faces opposition from doctors, organized labor and some lawmakers.
Sen. Ralph Seekins, R-Fairbanks, said the state must do something to control rising workers' compensation rates that threaten businesses throughout the state.
"We have small companies (whose) rates have gone so high over the last four or five years that they're now dropping health insurance and other benefits for their employees because they can't afford to pay for this state-mandated program," said Seekins, who presented the bill to the finance committee.
Department of Labor Commissioner Greg O'Claray has said some businesses have seen their workers' compensation rates more than double over the last five years.
Doctors in Alaska argue that the bill would force them to pick up some of the cost through a provision in the bill capping medical fees paid for injured workers. The bill originally capped the fees at levels from 1999, but an amendment to the bill sets the cap at 2004 levels.
Doctors say the proposed cap should be removed completely.
"How would you like it if you were a car dealer and the sticker price was set at 2004 levels," said Jim Jordan, executive director of the Alaska State Medical Association.
Jordan said doctors would be less likely to accept workers' compensation patients if they are required by law to charge them less for care. He said there already is a shortage of physicians in the state and the cap could make it worse.
Doctors would like the bill to set a firm date when the cap would be removed, said Rod Betit, president of the Alaska State Hospital and Nursing Home Association.
Betit said he hopes a legislative task force created under the bill would present a credible assessment of the workers' compensation system.
The 11-member task force would be made up of state lawmakers, and members of the legal, medical, insurance, labor and business communities. The task force would be charged with holding public hearings a providing recommendations to the Legislature by Dec. 1.
Betit acknowledged that problems exist in the system, but said the state has not clearly laid them out to the medical community.
"We did suggest that they have some actuarial analysis done," he said. "We don't have any data to be able to really understand what's going on here."
Sen. Hollis French, D-Anchorage, said the bill has improved as it has moved through the Legislature, but he still has concerns with its effect on employees. A new provision requires injuries caused at work to be the "major contributing cause" for the need for medical treatment.
That means those with a pre-existing condition who are further injured on the job might not be eligible for workers' compensation benefits, French said.
"There are a pretty good number of claims out there that suddenly won't get covered under the new definition," he said.
Another change in the bill establishes a job dislocation benefit, allowing injured workers to take a check of up to $13,500 - depending on the severity of their injury - rather than receive training for a new job.
This could leave workers untrained and in need of public assistance, French said.