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Lifting The Hood On Workers’ Comp May 15, 2007

Posted by fitsnews in SC Politics.
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AN INSIDER’S GUIDE TO THE WORKERS’ COMPENSATION REFORM FIGHT AT THE S.C. STATE HOUSE

FITSNews – May 15, 2007 – Let’s face it, dissecting workers’ compensation reform isn’t the sexiest chore we’ve ever undertaken here at FITSNews. It’s got nothing to do with Paris Hilton, first of all, and a lot to do with numbers. But since you have to finish your vegetables if you want dessert, we started poking our noses around the S.C. State House in an effort to figure out what workers’ compensation reform is, why it’s so important and what our state elected officials are doing about it.

What we discovered, we have to admit, was pretty surprising even by our standards. As it turns out workers’ compensation reform is not only a critical economic development issue with a profound impact on South Carolina’s bottom line, but (surprise) yet another example of important legislation that’s being driven not by its merits but rather by internal power struggles at the South Carolina State House.

At the center of the fight is House Labor, Commerce and Industry Chairman Harry Cato, the Upstate “Republican” who joined over fifty Democrats in gutting last year’s workers’ compensation reform bill and who recently made news by throwing his weight behind a Democratic Judge for the S.C. Supreme Court.

For the past two legislative sessions, Cato has done everything within his power to make sure that cost-saving “AMA standards” – or injury award guidelines similar to those currently used by over 30 states – were kept out of South Carolina’s workers’ compensation reform package. Without AMA standards or some other objective measurement, South Carolina’s workers’ comp commissioners can continue handing out exorbitant settlement awards, which is the driving force behind insurance premium increases that have jumped by 17, 12, and 18.4 percent in South Carolina over the last three years, respectively.

With those spiraling insurance rates comes a tremendous competitive cost – and we’re not just talking about the $277 million in increased premium charges forked over by South Carolina businesses over the last four years. Existing businesses are not only starved of the capital they need to hire new workers and expand infrastructure, but companies looking to relocate or open new businesses are bypassing South Carolina and taking their jobs and capital investment elsewhere.

Not exactly a recipe for success in a state already saddled with low income levels and high unemployment.

Ironically, some of the same trial lawyers making millions of dollars off of these exorbitant awards claimed this week that South Carolina “has one of the most efficient and effective Workers’ Compensation systems in the country.”

In fact, a recent flyer-advertisement from the law firm of McWhirter, Bellinger & Associates accuses business and insurance lobbyists of “trying to convince your lawmakers to take away your rights so they can make more money at your expense.”

Of course, what the mailing conveniently neglected to mention was that workers’ compensation law is McWhirter’s bread and butter, with the 33% cut it takes from most workers’ comp settlements frequently accounting for up to 50% of its annual revenues.

We’ve reported previously on how the campaign finance reporting of Democrat-turned-Republican Senator Luke Rankin reads like a who’s who of the S.C. Trial Lawyers’ Association, and how Rankin and four of his trial lawyer colleagues in the S.C. Senate worked to water down that chamber’s reform bill at the same time they were admitting conflicts of interest in voting to appoint workers’ comp commissioners.

Combine the influence of this “Trial Lawyer’s Caucus” in the Senate and Cato’s stonewalling efforts in a seemingly leaderless House of Representatives and it’s easy to see why real reform in the Legislature has gone nowhere … once again.

Some argue that Cato is simply in bed with the trial lawyers. Others attach more sinister motivations to his maneuvering, arguing that he is intentionally weakening the bill in order to make the case against House Speaker Bobby Harrell that much easier to sell when he decides to run for Speaker himself.

After all, Cato’s stripped-down House bill would have a negligible impact on reducing premium increases (according to a recent report by the National Council on Compensation Insurance), and House members who go home to their districts this summer claiming to have “passed workers’ compensation reform” are likely in for a rude awakening when the next double-digit premium increase hits.

Still others under the Capital Dome are waiting on S.C. Gov. Mark Sanford to use the so-called “nuclear option,” i.e. issuing an Executive Order instructing the state’s Workers’ Compensation Commissioners (all of whom he appoints) to use AMA guidelines in dispensing awards. Those who disobeyed the governor’s order would simply be replaced.

In fact, certain workers’ comp reform advocates are so sure that the governor is planning such a move that they have all but given up on negotiating with Cato, telling supporters that his watered-down bill is to be passed without amendments.

Whatever the case, tomorrow’s floor fight on the issue promises to provide more than its fair share of fireworks …

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Comments»

1. Jim Corbett - May 17, 2007

We Republicans can not afford to make a claim and ask for help and then have people find out the facts e use to support our stance are wrong. Will Folks, and Sanford Chief of Staff Will Folkes twice before, have publicly stated incorrect facts. South Carolina DOES use the AMA guidelines in worker’s comp cases, but the Commissioners can take a 10% impairment to the arm (“I can only raise my arm so high now”) and apply it to that worker’s job to find the disability raiting. Without this ability to make a judgement of the effect of the injury the Doctor picked exclusively by the insuracne carrier is deciding the case based on a scale that does not consider the effect on the human being.

2. Jim Corbett - May 17, 2007

We Republicans can not afford to make a claim and ask for help and then have people find out the facts used to support our stance are wrong. Will Folks, and Sanford Chief of Staff Tom Davis twice before, have publicly stated incorrect facts. South Carolina DOES use the AMA guidelines in worker’s comp cases, but the Commissioners can take a 10% impairment to the arm (“I can only raise my arm so high now”) and apply it to that worker’s job to find the disability rating – the actual effect of the injury on the perons’s ability to earn wages. Without this ability to judge the effect of the injury the Doctor, picked exclusively by the insurance carrier, is deciding the case based on a scale that does not consider the effects on the human being. Is that “Pro-Life, Whole Life?” The Doctor, picked and paid by the insurance company, is then Judge and Jury. With what training? As for the “exorbitant awards” the Governor picks the Commisisoners and there are lots of appeals available. Remember checks and balances? Any payments are based on 2/3’s a workers average weekly wage to “encourage” them to return to work as soon as possible. As for attorneys fees, the maximum is 33%, no higher, and no one ever asks how much insurance companies make, should make, or how many lake houses the top level executives buy for family members. They build big buildings in Illinois wiith our money and never give rebates in a good year, even when the company does a damn good job and has no accidents. How about supporting small business and asking big business a few questions about how much money they make versus how much they think they are entitled to make? As Republicans, we believe people should earn it, not have it handed to them with government protection. By going to our roots we can reform a system that every so often needs adjustement and exists to ensure businesses don’t get sued by employees to remove potential conflicts between employer and employee. If you want unions in S.C. , just keep on this path but it will be your fault not ours because we long time Republicans use correct facts to support our positions.


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