Senator Josh Brecheen
and guest columnist
Senator Anthony Sykes
Intro: Addressing Oklahoma’s workers compensation system is going to be one of the top priorities of the 2013 legislative session. President Pro Tempore Brian Bingman has asked Senator Anthony Sykes (R-Moore), Chairman of the Senate Judiciary Committee, to be the point person in our efforts. Senator Sykes asked me to accompany him on a fact-finding mission to Arkansas to study their worker’s compensation system. After Senate organizational day, Senator Sykes and I left the Capitol and traveled to Little Rock to meet with their Worker’s Compensation Commission.
The Senate is interested in Arkansas’ Workers Compensation System because of the dramatic results they have achieved over the last twenty years. In 1993, Arkansas began a transformation of their Worker’s Comp System. Prior to these reforms, Workers Comp in Arkansas had been a mirror image reflection of Oklahoma’s current system.
Our system is the fourth most costly system in the nation and the most costly in the region. This is an issue that is costing our state dearly by driving businesses away while keeping others from locating in our great state. Only a handful of companies are even willing to write worker’s compensation insurance in Oklahoma.
Oklahoma is one of only three states that use a legal system for work-related injury cases. Tennessee and Oklahoma are the last two states to have an adversarial system. Tennessee is making plans to switch to an administrative system as well. While in Arkansas, we obtained a copy of a report prepared by consultants hired by Tennessee to switch their current system to an administrative system.
Arkansas has a cost-effective system that many of our colleagues believe will serve as a great model for Oklahoma. Since creating their system in the early 1990’s, the state has seen premium rates decline to well below the national median, while benefits to injured workers have increased.
We learned that there are 112 employees in their Administrative system – 12 of which are administrative law judges who serve at the pleasure of their Administrative Commission. The Governor appoints the three commissioners who serve six-year terms that are staggered. One commissioner has to be an employer representative while another has to have at least five years of legal or business experience and the third is suggested to the Governor by AFL-CIO (the Labor Union).
Arkansas’ system contains checks and balances including measurements on what efforts are being made to return the injured worker to work and the Commissioners have relieved an administrative law judge in the past that was recommended by the Governor.
Last year, the operating expenses of the Administrative Commission were $10 million, which was three percent of their premiums. Premiums are decided annually and the agency does not receive appropriations from the Arkansas legislature. The commission rolled over $10 million last year past their operating budget. They have the authority to set the premium up to three percent, which they did last year, but in had been at two percent in the past.
For those companies that have the resources to self-insure, there is a self-insured division that calculates what people would pay if not self-insured. They have a medical fee schedule that physicians in the state are comfortable with. It’s only the special health groups that don’t like the schedule.
Supporters of the status quo will decry any efforts at changing Oklahoma’s system. Heavy resistance is expected across Oklahoma from those profiting from the current system. Outrageous misinformation will be spread throughout the legislative session to protect their “cash cow.” Those opposed to any change would have you believe that mass waves of refugees have been flooding eastern Oklahoma fleeing Arkansas’ oppressive workers comp system. On the contrary, for the past twenty years businesses (and jobs) are moving into Arkansas.
As legislators, we must do all we can to encourage job growth and the best way to do that is to reform our current workers comp system.