S.C. Legislature Passes ‘Watered Down’ Workers’ Comp Bill to Senate

The American Insurance Association is calling H. 4427, passed by the South Carolina Legislature, a “watered down” version of workers’ compensation reform and “reform in name only;” while the Property Casualty Insurers Association of America says that key reforms will “help contain costs.”

“More significant reforms that would have translated into real cost savings were either removed from the bill at the committee level or defeated on the House floor,” explained Raymond G. Farmer, AIA assistant vice president.

As approved, H. 4427 includes the following: Second Injury Fund reform; limited use of AMA (American Medical Association) guidelines by workers’ compensation judges to make disability determinations; more restrictive standards for defining injuries; and reversal of the state Supreme Court decision in Brown v. Bi-Lo, to allow employer communications with the injured employee’s physician.

“We are disappointed that a majority of legislators have not yet come to the realization that it will take major, system-changing reforms to put the workers’ compensation market back on a sound footing for both employers and insurers,” Farmer said. “AIA will continue to support a comprehensive package of reforms that will stabilize the market, reduce unnecessary costs and streamline operations of the system.”

H. 4427 now goes to the Senate, where debate on a companion bill, S. 1035, is already underway in the Senate Judiciary Subcommittee

PCI in the meantime, is pleased to see some of the reforms included in the bill, including the repeal of the Second Injury Fund, which is among the top legislative priorities for Gov. Mark Sanford, the business community and insurers.

“Although some important provisions were removed from the House bill, essential reforms to the Second Injury Fund and legislative corrections to state Supreme Court decisions remain.”

The House debated workers compensation reform April 5 and approved several amendments to HB 4427, the bill subsequently received final approval and was then sent to the Senate.

PCI said a Senate Judiciary Subcommittee held a hearing on workers compensation reform legislation SB 1035.

“As the focus of workers compensation reform shifts to the Senate, we will continue to work with legislators to achieve comprehensive reform that will reduce costs, protect injured workers and encourage business development and job creation,” Herlong said. “We are encouraging lawmakers to eliminate the use of subjective factors by the Workers’ Compensation Commission in determining benefit awards.

“By using objective standards such as American Medical Association guidelines, excessive and inconsistent commission awards can be minimized,” Herlong explained. “In addition, limiting the use of subjective factors will help to curtail needless litigation and better control costs. It is only through achieving these comprehensive reforms will we be able to begin the process of regaining control of runaway costs.”

House Bill 4427 now reduces the number of conditions that qualify for the Second Injury Fund and will require the fund to sunset if assessments exceed $8 million by 2012. The bill repeals the state Supreme Court ruling in Brown v. Bi-Lo that made the exchange of medical information from injured workers and employers and insurance carriers more difficult.

According to PCI, this decision prevents employers and insurance carriers from discussing an employee’s workers compensation claim with his or her medical providers without the worker’s permission. The legislation also contains a provision that will help to reduce the impact of the state Supreme Court decision in Tiller v. National Health Care Center of Sumter, which held that expert testimony is not required to establish the cause of a medical condition in workers compensation cases. This ruling allows opinions and unsubstantiated theories to overcome scientifically valid evidence.