LEGISLATORS URGE QUICK WORKERS' COMP ACTION

State Senator Peter Kinder is calling for swift action by his colleagues on a workers' compensation reform bill that was introduced this week by Senate Minority Leader Franc Flotron of St. Louis County.

"Current workers' compensation laws have forced a crisis situation upon Missouri employers," said Kinder. "Businesses face no choice but to move jobs to other states unless we fix a broken workers' comp system."

Kinder serves on the Senate Labor and Industrial Relations Committee, which will hear the bill.

Flotron said his bill is aimed at "halting runaway cost drivers before they drive more business from Missouri. Without passing these serious and much needed reforms in workers' comp, we might as well tell Missouri businesses to pack up and head for the border. We must address the root causes that drives workers' comp costs or we will inevitably face the loss of jobs throughout the state."

Flotron's Senate Bill 717 is co-sponsored by Sen. John Scott, D-St. Louis, and was developed with a coalition of 17 major business organizations in the state.

"Never before have the job producing businesses of Missouri been so unified in a cause," added Flotron. "That speaks volumes for the importance of this issue."

Earlier this week, business leaders from around the state came before the labor and industrial relations panel to share stories of how the current workers' compensation laws are adversely affecting their businesses.

The General Assembly passed workers' comp reform laws in 1992 and 1993, designed to address some of the problems that have led to an 80 percent increase in rates over the last three years. Over the last decade, employer costs of workers' comp premiums have risen from a total of $200 million to $800 million.

Flotron and House Minority Leader Pat Kelley, have been critical of Gov. Mel Carnahan and Democratic leaders in the legislature for failing to make further reforms in workers' comp a priority of the 1994 session.

Kinder, and most other Republicans, agree with their assessment that bills passed the last two sessions are a long way from meaningful reforms.

Sen. Scott termed the 1993 bill "an important first step," but he stressed, "we must continue and go much further to prevent the erosion of our economy at the hands of crippling workers' comp costs."

Scott pointed out that legislation approved in 1993 addressed price control issues by implementing open competition in pricing premiums and creating incentives for employer safety.

Among the businessmen testifying before the Senate committee was Roger Mainor of Cape Girardeau, who owns Magnetic Collectibles, a firm with about 100 employees. Mainor said he is considering sending jobs out of the state due to upwardly spiraling insurance rate increases.

Also testifying was Robert Hayden, who moved his two businesses from California to Sedalia in 1990 in part because of problems in the workers' comp system in California.

For the last two years, Kinder explained that businessmen like Hayden and Mainor have had no recourse for appealing rate increases, which are determined by a Florida-based company NCCI.

Besides the lack of an appeal process, the Cape Girardeau Republican said there are other serious problems in workers' comp.

Said Kinder: "Our current laws foster an overly litigious climate that often rewards unnecessary claims. Although the business owners are the first party hit, it is eventually the employee and the community that pays the ultimate costs: jobs leaving Missouri."

Kinder maintains that SB-717 will restructure laws to meet the goals of previous legislation attempts.

"We want workers to receive the best possible coverage for the lowest possible cost when legitimate injury is caused at the workplace," Kinder said. "We want to create a win-win scenario for the employer and employee through common sense reform."

Some provisions of the bill include:

-- Reducing attorney involvement through methods such as attorney fee schedules and the establishment of a benefits review committee.

-- Increasing the penalty for workers' comp fraud to a Class D felony.

-- Addressing medical cost containment by requiring the Division of Workers' Compensation to establish medical practice protocols, objective evaluation of impairment, and medical utilization review procedures.

-- Creating a prompt pay provision for temporary total injury by alleged accident or occupational disease at any time following the injury.

-- Removing elements of Missouri law in issues such as subrogation and reopening claims that are costly to the system.

-- Ensuring that the Missouri Workers' Compensation Act shall be "strictly" and not broadly construed.

-- Changing the definition of accident and occupational disease so that employment must be the "major cause" of the accident or disease, rather than "a substantial cause" under the current law.

Flotron said many of the reforms in his bill are based on similar, successful efforts in Kansas, Oregon, and Colorado. He warned that unless these measures are implemented, Missouri could face the same kind of workers' comp insurances crises that have occurred in Maine, Rhode Island, and Louisiana, where the "states turned a deaf ear to the financial cries of business."

Among the participants in the coalition that helped develop the legislation are several city chambers of commerce, including the Cape Girardeau Chamber. Some of the other participants are the Missouri Chamber, Associated General Contractors, Associated Industries of Missouri, the Missouri Merchants and manufacturers' Association, the National Federation of Independent Businesses, Missouri Retailers Association, and the Missouri Restaurant Association.