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FITSNews Exclusive – Sanford To Step Up On Workers’ Comp Reform August 8, 2007

Posted by fitsnews in SC Politics.
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Sanford Handshake

GOVERNOR’S AGGRESSIVENESS ON KEY PRO-BUSINESS INITIATIVE A WELCOME CHANGE

FITSNews – August 8, 2007 – In one of his boldest moves in years, S.C. Gov. Mark Sanford will announce later this month that our state’s Workers’ Compensation commissioners will either start applying cost-saving American Medical Association (AMA) guidelines to their future rulings or face dismissal from their posts. The AMA guidelines – variations of which are already used in over 30 states – will crack down on exorbitant judgments by requiring that commissioners adhere to uniform medical standards in determining disability and impairment in workers’ compensation claims.

Over the last four years, South Carolina businesses have spent $277 million on premium increases for workers’ comp insurance, due in large part to excessive awards based on a lack of objective criteria.

Sources also tell FITSNews that the AMA itself has purchased advertising time on South Carolina TV stations during the month of August, although it is unclear whether or not the organization’s ad buy and the governor’s impending decision are related.

The governor’s move – which we first hinted at back in May – will save South Carolina businesses millions of dollars annually and dramatically improve our state’s business climate overnight. It will also draw a stark contrast between the governor’s pro-business leadership and the decidedly anti-business leanings of the state legislature, which roundly rejected including AMA guidelines in its version of workers’ compensation reform.

Sanford’s ability to insist on the guidelines hinges on the 1997 Rose v. Beasley case, in which the S.C. Supreme Court upheld a state law requiring that public officials “immediately furnish to the Governor, in such form as he may require, any information desired by him in relation to [the officer’s] affairs or activities.”

Accordingly, if commissioners did not “immediately furnish” to the governor information showing that they have applied the AMA guidelines per his instructions, they would be guilty of “misfeasance” and subject to removal at his authority.

While the governor’s forthcoming Executive Order to that effect is sure to spark a stern rebuke from South Carolina’s anti-reform legislature – and possibly another Supreme Court case – Sanford’s bold move nonetheless puts the General Assembly in a difficult box.

Businesses overwhelmingly support his decision because it saves them money – which they can in turn invest in new jobs and operational expansions. On top of that, it improves South Carolina’s ability to attract out-of-state jobs and capital investment by making our state’s business climate more competitive.

That means legislators (whose pro-business credentials are at an all-time low) would now be forced to uproot a positive pro-business change as opposed to merely preserving the status quo, a risk which may prove too much for them to stomach in an election year.

Of course given the potential for future litigation, the governor’s decision could put legislative Republicans in another box – or more accurately reintroduce them to the one in which they put themselves after handing an open seat on the State Supreme Court to an anti-business Democrat earlier this year.

Either way, it’s bold, brilliant politics on the part of the governor, and something we certainly hope to see more of as he deals with an increasingly business-unfriendly legislature.

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Comments»

1. Some one who cares - August 8, 2007

I think you (and the Gov) over read the Rose case. While it may be “bold, brilliant” politics, its probably also illegal. Certianly Toal, Beatty, Waller, Pleconious and Moore will see it as such.

2. Joshua - August 8, 2007

If you will recall, this legislature came within one vote of passing those standards (twice!) when they took up workers comp last year. One more good legislator could’ve made this fight moot.

Hopefully we can find at least one more good legislator after next year’s primaries…

3. Steven - August 8, 2007

So, if an person with a desk job has an AMA impairment of 10% to the hand, that person should get the same as a carpender who relies on his hands with the same impairment?

Didn’t the legislature just pass reform the Governer praised. If he did not like it, why did he not veto it?

4. fred - August 8, 2007

Cool Take over the Government

5. Tom - August 8, 2007

This AMA provision was voted out of the Workers’ Comp Reform Act that Governor Sanford just signed into law only five weeks ago. If the governor thought it was such a bad law, why didn’t he veto it then rather than go around the state praising it as “good for business”?

6. FITSNews - August 8, 2007

Tom & Stephen,

First of all, why can’t you guys be “Tom & Jerry?” Because that would be cuter.

Second, we’re not saying the workers’ comp bill the Legislature passed was terrible, it just wasn’t enough. Of course leave it to lawmakers to half-ass the one thing they did right all damn year.

Third, we can’t tell you what was in the governor’s head when he signed it (probably a hankering for some pickles) but his thinking was probably something along the lines of getting half of a loaf now and coming back for the other half later.

-FITSNews

P.S. – He-he, he-he … we said “loaf.”

7. JR - August 8, 2007

Tom,

Why veto an entire bill when you can backdoor the policy that was excluded from the legislation?

8. Palmetto Observer - August 8, 2007

Did no one here take civics ? There are three branches of governement and last I checked only 1 could make law, and it wasn’t the executive branch. Sorry for the long post to follow, but it is VERY IMPORTANT and is from the AMA itself

Impairment, is an artificial construct to attempt to quantify the person’s diminution in health. Specifically, “An impairment is a deviation from normal in a body part or organ system and its functioning,” according to the fourth edition of the AMA Guides. However, normal is a vague term that varies greatly depending on many factors, such as age and sex. Normal is not a fine point or an absolute reference in terms of physical and mental functioning or good health. Most often, normality is a range or a zone, as it is with vision and hearing.

As a practical example, an individual may have minor impairment and still be considered totally disabled. For example, an uneducated bricklayer may have 5% impairment due to lumbar strain. His physical restrictions may make it impossible for him to continue working in his field. If he does not have the education to be retrained, he is effectively unable to return to work. Therefore, the extent of his impairment may be only 5%, but he is l00% disabled in terms of employment. In another example, a noted author and lecturer may have sustained a catastrophic injury causing thoracolumbar paraplegia. His impairment rating may be 70% according to the AMA Guides. However, because he can continue his work with little to no interruption, he may be considered to have no vocational disability.

In summary, the impairment rating alone, without a consideration of the extent of disability and loss of function, does not provide a complete picture of the effect of illness or injury on a particular individual.

SC has a schedule and it is imperative we continue to use that, because if we resort to using AMA guidelines, then any manual laborer will be SOL. The system is a no-fault system, why not attack the insurance companies that are continuing to make hundreds of millions, while continously raising the rates.

9. FITSNews - August 8, 2007

PO-

Jeez. We just had a “thoracolumbar paraplegia” trying to read all that.

-FITSNews

10. the voice of reason - August 8, 2007

The governor’s executive order would presumably direct the commissioners to follow existing law which (per state supreme court cases) requires them to use objective standards in making awards. As the chief executive and the one responsible for making sure our laws are faithfully executed, issuance of an EO (in light of the fact that some commissioners openly reject use of objective standards) would seem warranted. I will be interested to see what happens. Besides, it’s always fun to see the trial lawyers’ ox gored.

11. Chip - August 8, 2007

Just another example of how our Governor wants to help the rich get richer (i.e. the workers compensation insurance companies in this instance) at the expense of the little guy (i.e. the injured worker.) Why doesn’t the Governor just issue an executive order that no one employed in South Carolina can get hurt on the job. Then, he could abolish the Workrs’ Compensation Commission altogether. That’s just about as silly as what he’s proposing.
Better yet, why doesn’t the Governor just come right out and admit that he’s bought and paid for by corporate America and he will get behind any proposal they come up with to fatten their bottom line now matter how ridiculous it sounds. Oh yeah, and the South Carolina Constitution and the concept of seperation of powers be damned.
Why doesn’t the Governor propose legisation limiting insurance companies from charging exorbinate rates and making gargantuan profits off the backs of those same workers that he now wants to short change when they are injured on the job? That might acually make some sense and do something practical to lower insurance rates that the “business community” in this state is so upset about.

12. Geeezzzz - August 8, 2007

Geeezzzz, a n o t h e r FITS “exclusive.”

Where is the deep blue sea are Will’s sources? Given the governor’s not so high regard for Will, even if there is anything to this he’s likely to back out now rather than give Will any credibility.

Will, any chance of getting reliable sources on this one? Right.

We’ll be watching to see if this is really an “exclusive” or just another one of Will’s rumors. He’s suckered you before. Again?

13. The Muser - August 8, 2007

Great piece, Will. I am going to outdo Palmetto Observer with the length of my post. Sorry!

When the legislature first passed the workers comp law, it intended to provide a quick way for an injured worker to receive fair benefits for on-the-job injuries without having to hire a trial lawyer. The injured worker didn’t need to prove negligence and judges had to award compensation based on objective standards. There was no need to hire a trial lawyer in such a straightforward process and no need to provide the lawyer with a percentage of the award. Instead, the money went into the injured worker’s pocket.

But the system has become corrupted over time with complex loopholes and injured workers now have to hire expensive lawyers to navigate it. With the involvement of trial attorneys came increased awards which, in turn, have led to the higher workers comp premiums now paid by our state’s businesses. But the injured workers are no better off since the extra money paid out by the system thanks to the trial lawyers is soaked up by the trial lawyers themselves in fees and legal costs.

If commissioners were compelled to follow the law, their power to make awards based on non-objective factors – such as the influence of the trial lawyers (who often just happen to be state senators) appearing before them — would be limited. This would not only limit the overall amount of the awards – and decrease workers comp insurance premiums paid by businesses – but also allow injured workers to keep more of the compensation since they would not have to share with a trial lawyer.

Of course, it would be cleaner if the legislature passed a law expressly directing commissioners to employ objective standards. Unfortunately, certain state senators won’t let that happen. And why should they? They feed on the fat in the system. For example, one reform opponent, Sen. Luke Rankin, was paid $421,417.24 in fees and costs by judges in workers comp cases last year alone.

But he’s a mere piker compared with Sen. John Land. In the past three years alone, Sen. Land and his business associates have been paid $3,885,567.30 in attorney fees and costs by judges in workers comp cases. When asked about the whopping amount of workers comp fees paid to him, Sen. Land was quoted in The State as saying, “In a way, it’s good advertising for me. If you look at my forms, you’ll see I do pretty well with workers’ compensation.”

Perhaps the EO being contemplated by the governor will do what the legislature would not — and “the voice of reason” is correct when she/he says existing case law by the South Carolina Supreme Court requires the use of objective standards. I suspect the trial lawyers now squealing on your message board know that, too.

14. yes - August 8, 2007

I agree with PO. People get upset when their premiums go up and the industry loves to blame their problems on lawyers and faking employees. What they don’t tell you is that premium prices are more likely to correspond to the stock market than claim statistics. Here goes:

Insurance companies immediately invest cash from premiums. The return that they make on that cash is profit. If they don’t invest well then they raise premiums and make a fuss about claims. Who is supposed to be insuring who? Investment risks are minimalized because losses pass straight through to the insured. Would anyone like a hot slice of price gouging?

Why are so many people ready to take money out of the pockets of the hurt employee rather than the trillion dollar insurance industry? I can understand why lawmakers would do it. (Not a whole lot of money in the injured employee lobby) The mystery is how the insurance industry has convinced the “screwed” public that they aren’t doing the screwing. Go ahead, screw the poor and disabled. Ten years from now when you see that costs have not gone down maybe at least your daughter will marry the son of an insurance executive.

15. mr business - August 8, 2007

The rightness or wrongness of the AMA is not the issue and therefore not a pro or anti business issue. The issue is the constitution of our state and adherence to the concept of separation of powers. The gov clearly does not have the power to amend law by executive order nor should be able to intimidate judges to rule a certain way by threat of removal. I think the governor’s allegiance to insurance companies will hurt him again (autism, coastal insurance). He should have taken 85% of the loaf with special orders and declared victory.

16. Top Posts « WordPress.com - August 8, 2007

[…] FITSNews Exclusive – Sanford To Step Up On Workers’ Comp Reform [image] GOVERNOR’S AGGRESSIVENESS ON KEY PRO-BUSINESS INITIATIVE A WELCOME CHANGE FITSNews – August 8, 2007 – In […] […]

17. Jackpot Justice - August 8, 2007

The uneducated bricklayer is not without employment opportunities. While it’s hard for some liberals to believe, the uneducated bricklayer can find other work if they are willing to do some searching. Just look in the newspaper. Believe it or not there are other jobs the uneducated bricklayer could do. This idea that the uneducated bricklayer will forever be a bricklayer is absurd. They may one day go back to school and get some education. They may decide to join another profession. The uneducated bricklayer should be compensated for their lost wages and medical expenses period. Workers’ comp has become a competitor to the South Carolina Lottery: jackpot justice.

18. Silence Dogood - August 8, 2007

Mr Business, ditto, if a worker’s comp. commissioner is applying the S.C. Code of laws and if the AMA is NOTcurrently the law in S.C. then Sanford’s defacto changing of the law to encompass the AMA is “legislation of from the executive” if I can coin a really great ridiculous phrase. The great thing about laws and regulations is we or even WC Commissioners can look them up, this becomes very helpful in cases of disputes. The problem with Sanford deciding to sac a WC Commissioner that doesn’t follow the AMA – since it isn’t the law in S.C. – and maybe one tomorrow who doesn’t follow a perhaps even thrifter act of Uniform Worker’s Comp. standards tomorrow, is that it can be really, really, really ,really tough for employee’s, employers, attorneys, commissioner and judges to know just what in the hell Mark is thinking on a day to day basis – despite whether or not it is “pro-business.”

19. Carolina Observer - August 8, 2007

couple of quick notes on this:

-Still over 80% of comp claims are handled without lawyers (just ask comission)

-Everybody hates a lawyer until it’s them or a family member doing the suing, so I propose that when we register to vote we also state whether we favor the right to be able to file suit in a personal injury matter..and if you say no, you loose your right if something happens to you

– the unemployment system in this state is abused daily, but why isn’t business rasing hell over this, they pay unemployment tax….answer..no lawyers to attack, just the system, and that would be to tough

– finally it goes back to government 101 – Sanford can no make law

20. Carolina Observer - August 8, 2007

wow jackpot justice – with thinking like yours no wonder we stay at the bottom in education…a no fault system with built in caps has no “jackpot” as you say…you are maxed out…so go do some research and come back and play with the big kids when you complete this weeks homework assignment

21. New S.C. Lottery??? - August 9, 2007

Jackpot Justice, you think worker’s comp is where all the litigation money is coming from? Have you every practice law in the area of worker’s comp, plaintiff’s or defense, my understadning was the highest award one could get was 500 weeks worth at 2/3 of the average wage for the state in the previous year. That is if you are deemed permenantly and completely disabled (might be except for para-or quadrapalegic?) which comes to a grand total of about 322,000 IF the max.comp rate of $645 (www.wcc.state.us) is 2/3 or LESS of your total salary and you are completely AND permenantly injured in an on the job accident. What do attorney’s get 30% or or 33% so the biggest award you are going to get 107,000 dollars for a case like? Hardly the Vioxx millions or the 10 million dollar McDonalds’ verdict. I am not a workers comp. attorney nor have I ever argued in a court room, but even with my limited knowledge I would have to say workers comp is not the new S.C. lottery by any stretch of the imagination.

22. The Law - August 9, 2007

Silence, your premise is wrong. Applying objective standards is the law in South Carolina. The great thing about state supreme court decisions is you can look them up. Problem is, some commissioners do not apply objective standards, or to phrase it differently, do not faithfully execute the law. As chief executive, it is the governor’s job to ensure such faithful execution.

23. mr business - August 9, 2007

If you look at the Senate bill, objective standards were included that would have required a commisioner to use them on rendering a verdict. That would have given objectivity and consistency in verdicts. But the business community didn’t want it. Why? Because injured workers would be compensated for their disability and not their impairment. Insurance rates would have gone down for businesses because jackpot awards based on feelings rather than evidence would have gone away. Also open ended supreme court cases were closed. This sounds like greed

SC is a disability state by law. Look what it says on the cover of the AMA guidelines.

24. Silence Dogood - August 9, 2007

The Law, glad you’re commenting here (I’m sure we all have a lot of really interesting and complex questions to ask you), while applying an objective standard is “the law” from the supreme court (I’ll take you at your word), my question for you would to be look to the statute or promulgated regulation and see if the AMA is indeed that objective standard (apparently it is not), And if not Sanford is incorrect in his mandating of it, especially when it was considered but did not pass the General Assembly – even by a slim marjin. Consider; a radom air blowing ping pong ball lottery machine would be objective (i.e. non-biased) however, Sanford ensuring the ping pong ball test was the standard used, despite being objective, would still not be “the law.” Especially if the legislature has considered and explicitly not passed that ‘law.’

Mr. Law, “Know they self”

P.S. If the legislation, not the court ruling, had said “an objective standard must be used to be implemented by the governor” then you would be correct if that standard is the one Sanford wanted to use, and set it down in a WRITTEN directive/decree AND nobody coudl successfully challenge the validity of such “objectivity” (which might be possible since as noted here lawyers may well be disliked, but they are also a crafty bunch).

25. Pee Dee Pen Pal - August 10, 2007

There was a time here in S.C. when the Governor knew the difference between a neighbor and a N.Y. Ins. Co. That time is passed. We have sold our souls to the carpetbaggers. The out of state and foreign industrialists now call the tune and our people are being required to dance their dance. The good people of S.C., the working people whose sole ambition is to go to work, do a good job, and get a pay check at the end of the week are being hammered.
What have our people done wrong that they should be treated this way? I can’t speak for the Governor but I like my neighbors. They are people like me. They go to church with me. Their kids play ball with mine. I want them to be protected if they get hurt on the job. The way things are now people starve slowly on their weekly checks. One can only imagine the suffering to come so we can “imporve the bottom line” for the Wall Street crowd.


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