Audit: Mo. workers comp claims fell after 2005 law

JEFFERSON CITY, Mo. -- The number of workers compensation claims has gone down since a 2005 Missouri law made it harder to prove workplace injuries. Insurance premiums also have declined for businesses.

Republican Gov. Matt Blunt touts that as a success. But Democratic Auditor Susan Montee said Monday that injured workers may now be at a disadvantage.

Montee's audit notes the 2005 law also did away with state legal advisers for injured workers. That either leaves workers uninformed or causes them to hire attorneys, which can drag out cases and increase costs, Montee said.

Missouri's workers' compensation system began in 1926 as a way to resolve injury claims through administrative proceedings rather than the courts. The intent was to provide aid more quickly to injured employees while sparing employers from the costs and uncertainties of trials.

System revamped

Blunt and the Republican-led legislature revamped the workers compensation system three years ago because of concerns it had become tilted against employers and was hurting Missouri's economy.

Among the more significant changes, the 2005 law requires workers to show a "specific event during a single work shift" to be compensated for an accident, no longer allowing a "series of events" to qualify. It also requires the accident to be "the prevailing factor" in an injury, instead of the previously lesser standard of a person's employment as "a substantial factor."

Montee's audit cited the new law as part of the reason for a decline in the number of reported injuries and completed workers compensation cases from 2005 to 2007. Payments to injured workers declined by 3.8 percent from 2005 to 2006 and remained relatively steady in 2007, the audit said.

Citing state insurance department data, the audit said workers compensation insurance premiums declined by 2.2 percent in 2006 and 3.6 percent in 2007 -- and 74 percent of Missouri employers experienced rate reductions last year.

"Some of the changes contributed towards bringing down the number of claims and the amount of payout," Montee said while evaluating the 2005 law. "But it also created a system that's inefficient and not working for the employees."

She noted the 2005 law abolished 23 legal adviser positions in the Department of Labor and Industrial Relations. Administrative law judges that preside over workers compensation cases no longer provide legal guidance either because of an interpretation of the 2005 law, Montee said.

"As a result, unrepresented injured workers have been placed at a disadvantage" and have seen a decline in permanent partial disability settlements awarded, the audit said.

Montee said that may lead more injured workers to hire attorneys, though her audit said department data on that is inconclusive so far.

Good for employers

After the audit was released, Blunt issued a news release stating the National Council on Compensation Insurance has noted a continued downward trend in Missouri's overall workers compensation costs in 2008.

"The effects of workers' compensation reform are having a positive impact on Missouri employers, while providing essential protections for Missouri workers," Blunt, who was visiting National Guard troops in Kosovo, said in a written statement released by his office.

The audit recommended the department should designate some attorneys to provide limited legal guidance to injured workers.

In a written response included in the audit, the Department of Labor and Industrial Relations raised six concerns about doing so and instead said it could publish additional brochures explaining the rights of injured workers and employers.

Among other things, the department said that providing legal advice would go against the intent of the 2005 law. It would be unethical for agency attorneys "to exhibit bias" toward employees by offering legal guidance while ignoring the employer and insurer, the department said.

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On the Net:

Audit: http://auditor.mo.gov/press/2008-57.pdf

Workers Comp: http://www.dolir.mo.gov/wc/