Workers’ Comp Rewrite Rolls Through Senate, Bearing Down on House Floor

While Gov. Bill Haslam’s workers’ compensation reform bill has had bumpy hearings in House committees, the track was clear and the ride mostly smooth on the Senate floor Monday night as SB200 passed 28-2.

Currently, the Volunteer State is one of only three states that adjudicate workers’ compensation claims in court. If the legislation passes, an independent agency run by an administrator chosen by the governor would oversee the process.

Supporters say the new system will process claims faster and cost less while opponents say it doesn’t address the real issue of higher medical costs and that workers will receive smaller awards and have more difficulty getting claims approved.

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Republican Senate Majority Leader Mark Norris, of Collierville, who carried the bill in the upper chamber, said he feels the reforms “are not only going to keep Tennessee competitive, but are going to benefit the workers of this state.”

Only Sen. Doug Overbey rose to speak in opposition to the sweeping legislation, which House Democratic leaders called “just wrong,” “shameful” and “immoral” during a show of solidarity with labor-union protesters on the steps of the Capitol last Tuesday.

“There are many good provisions in this bill,” said the Maryville Republican. “The part of the legislation I’m troubled about, though, is the part where we are creating new positions in state government.”

Overbey named 28 new positions outlined in the bill’s fiscal note, noting that there are already “spread all across the state” court clerks to file claims and judges “who have been adjudicating these claims since the workers’ compensation law came into effect.

“So my problem is that we have the processes in place in the status quo. If we were making only the substantive changes, or many of the substantive changes, I could support those, but to create all of these new positions, I cannot support it,” he continued.

While less concerned about the size of state government, groups opposing the reforms have raised similar doubts about the wisdom of moving the dispute resolution process away from the court system. The governor’s plan would place the new agency under the state Department of Labor, the subject of recent negative attention. A state comptroller’s audit found the DOL issued $73.4 million in overpaid unemployment benefits over the past six years.

Mary Mancini, of Tennessee Citizen Action, a group fighting the legislation, cited the comptroller’s findings Tuesday, telling TNReport that the DOL’s poor handling of unemployment benefits should give lawmakers pause.

“It’s being mismanaged, and it’s just completely plagued with problems now,” Mancini said of the Department of Labor. “It doesn’t make sense to add this entirely new system, an entirely new department within there without them fixing what’s wrong with it first. This is not good for working people and their families. It’s certainly not good for the state of Tennessee.”

Asked about these concerns Tuesday afternoon, Gov. Haslam told reporters that he thought the comptroller’s audit had no bearing on workers’ comp.

“I think it’s a whole separate deal,” Haslam said. “One of those is about processing claims, and one of them is about adjudicating workers’ comp issues, so those are two very, very different issues. They’re in the same department, I admit, but they’re two very different issues.

During discussion on the Senate floor, Sen. Jack Johnson noted that most of the new positions added under the bill would be converted from existing positions.

“For example, 20 existing attorney positions in the workers’ compensation division will convert to 16 workers’ compensation judge positions, as well as one chief judge position and three administrative review board judge positions,” said the Republican from Franklin.

Johnson did not address Overbey’s other concerns, that an administrator would appoint the judges deciding claims and that payments to injured workers who return to work would not be much higher than payments to those who do not.

“I am concerned there is not an incentive to get employees back to work, which is a very important incentive under the status quo,” Overbey concluded. He, along with Democratic Sen. Lowe Finney, of Jackson, both voted no, while Republican Sen. Stacey Campfield, of Knoxville, and Democratic Sen. Jim Kyle, of Memphis, did not vote at all.

At the protest rally last week, House Democratic Leader Craig Fitzhugh said the legislation would create “another administrative branch, basically, to government, which is something that we certainly don’t need to do. We have the court system that’s working well.”

The Ripley representative also noted that the real costs to employers “are coming from medical costs, and this bill doesn’t even touch those at all. It only looks at the already reduced benefits to an injured employee.”

On Tuesday, HB194, the companion to SB200, passed the House Finance, Ways & Means Committee along party lines. The bill is now headed to the House Calendar & Rules Committee.

Despite his best efforts, the six amendments offered by Fitzhugh all failed without discussion. Each one was met with a tabling motion to kill it without discussion.

Saying that he supported previous workers’ comp reforms, Fitzhugh urged committee members to not pass the bill, but to study it and look at the medical costs involved, which he believes “are the real drivers of cost in Tennessee.”

He also stated that he didn’t think that now is the appropriate time “to ramp up an entire new department,” given that the Department of Labor and Workforce Development is without a commissioner.

John Klein Wilson contributed to this story.

Amelia Morrison Hipps may be reached at amhipps@downhomepolitics.com, on Twitter @DwnHomePolitics or at 615-442-8667.