New Data Suggests Tennessee Workers’ Compensation Reforms Slashed Benefit Payments and Claim Duration

September 22, 2017 - 12:19 pm

            In 2013, Tennessee Governor Bill Haslam signed into law the legislative changes applying to workplace injuries occurring on or after July 1, 2014. Among the law’s provisions was revamping the entire dispute-resolution process by moving it from civil courts to a purely administrative system and creating the Court of Workers’ Compensation Claims. Moreover, to be found compensable injuries must “primarily” arise out of, and in the course and scope of, employment instead of a prior liberal construction that employers and carriers said favored injured workers. A preponderance of the evidence must show that the injury was more than 50% attributable to the job. New medical treatment guidelines were also implemented. Permanent partial disability multipliers were replaced with those based on age, education and the unemployment rate in the country where the claimant lives.

            Insurance industry claimed that the new reforms brought positive changes to the workers’ compensation system. The industry argued that the reforms brought a more centralized system from which the judges come and which they get direction. The change in legal (causation standard has also been more reasonable than prior standard. Employers reaped thousands in savings. The Tennessee Department of Commerce and Insurance announced earlier that Tennessee workers’ comp rates have dropped a cumulative 36% since passage of the reforms. Supporters of the reforms said that the reforms make it easier for claimants’ attorney to get fees and costs if an employer/insurer fails to give the workers appropriate benefits in timely manner.

However, the statistics revealed otherwise. The median number of weeks from the date of maximum medical improvement to the date of case conclusion was 30 weeks for post-reform cases, and 79 weeks for pre-reform cases in 2016. The median amount paid for medical benefits when the worker returned to the work was $12,384 for post-reform cases in 2016, compared to $26,646 for preform cases that year. The percentage of employees returning to their old jobs was 77.8% for post-reform cases in 2016 and 51.9% for pre-reform cases last year.

These numbers do not show positive changes brought by the reforms. Nationally, experts say that there is not am increasing trend in workplace injuries yet there is not a decrease either. The number of workplace injuries remain steady over the years. Nonetheless, after reforms, Tennessee experienced a drastic change in the number of injuries, amount of medical payments, and length of treatment. This could mean that injured workers got benefits cut off. The new standard makes it harder for injured workers to get access to workers’ compensation system. The reforms are so new so it is difficult to accurately predict its real impact, but the initial data shows that the reforms might not work effectively. If this trend is going on for the next few years, then it will be time for Tennessee legislature to step in again.  It is a good trend for Georgia to fight against.

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